IowaHF 263591st General Assembly (2025–2026)HouseWALLET

A bill for an act relating to health carriers standards of conduct; utilization review organizations, artificial intelligence, audits, and prior authorizations; certificate of need processes; and including applicability provisions. (Formerly HF 2438.) Effective date: 07/01/2026.

Sponsored By: COMMITTEE ON HEALTH AND HUMAN SERVICES

Signed by Governor

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 7 benefits, 2 costs, 2 mixed.

Fewer approval barriers for urgent care

Beginning January 1, 2027, covered plans cannot require prior approval or extra utilization review for two types of care. Cancer screenings must be provider-recommended under the latest National Comprehensive Cancer Network oncology guidelines designated category 2A or lower. The second exception covers diagnosis and treatment of emergencies that arise or become clear during inpatient care meeting inpatient standards. A provider must reasonably determine that delaying immediate assessment and treatment creates a life-threatening risk. These protections cover specified Iowa insurance, health service, HMO, and public employee plans, plus Medicaid and Hawki. They apply to requests from January 1, 2027, and contracts delivered, issued, continued, or renewed from that date; Medicaid and Hawki contract extensions also qualify. The private-plan rules exclude accident-only, specified-disease, short-term, dental, vision, Medicare supplement, long-term care, disability income, workers’ compensation, and auto medical payment coverage.

Stronger safeguards against automated care denials

Beginning July 1, 2026, review organizations cannot use artificial intelligence alone to deny, delay, or downgrade care based on medical necessity. The insurance commissioner can use enforcement remedies and suspend review authority for a pattern of noncompliance. For covered plans and requests starting January 1, 2027, medical-necessity denials and downgrades require qualified clinical review. Physician requests need a qualified physician reviewer; other requests need a clinical peer. Written notices must explain the coverage and clinical reasons, provide reviewer attestations, and explain appeals. On request, the organization must offer consultation within seven business days after notice of denial. A different qualified reviewer must handle an appeal and consider clinical records and relevant medical literature. These January rules cover specified Iowa insurance, health service, HMO, and public employee plans delivered, issued, continued, or renewed from January 1, 2027. They exclude accident-only, specified-disease, short-term, dental, vision, Medicare supplement, long-term care, disability income, workers’ compensation, and auto medical payment coverage.

Providers gain referral and contract protections

Beginning July 1, 2026, health carriers cannot punish providers for out-of-network referrals or affiliations. Banned actions include financial penalties, lower payments, administrative fees, and ending network participation for those reasons. Carriers cannot interfere with provider staffing or referral decisions, except where another law allows it. Carriers must also offer providers a chance to negotiate before offering or enforcing agreements or amendments.

Faster application checks for health projects

Beginning July 1, 2026, Iowa ends the preliminary letter-of-intent process for certificate-of-need applicants. The Department of Health and Human Services must check applications for form and completeness within 15 business days. It may reject an application only for information missing under department rules. Applicants can correct and resubmit a rejected application once without another fee, within 30 calendar days after it is returned.

Higher review thresholds for health projects

Beginning January 1, 2027, certain facility projects and equipment acquisitions for new services face higher certificate-of-need thresholds. These review triggers apply above $4 million from January 1, 2027, through December 30, 2031. The threshold is above $4.5 million from January 1, 2032, through December 30, 2036, and above $5 million from January 1, 2037. Facility capital spending, leases, and donations are measured over a consecutive 12-month period; leased buildings count at market value. For new-service equipment acquisitions, contract-based mobile services do not count as previously provided services. Separately, beginning July 1, 2026, the mobile health service trigger rises from above $1.5 million to above $4 million.

More health services avoid state approval

Beginning July 1, 2026, more services are exempt from certificate-of-need approval, Iowa’s review of certain health service projects. Exempt services include open-heart surgery, organ transplants, radiation therapy, and cardiac catheterization. Qualifying outpatient behavioral health facilities are also exempt, including substitution-based opioid treatment centers; state rules define qualifying services. Certain service deletions or relocations, replacement equipment, spending on services not regularly offered, and irregular air transportation lose independent review triggers. These changes remove specified review requirements, not every possible approval requirement.

Providers gain audit deadlines and remedies

For covered audits started January 1, 2027, review organizations must notify providers within 15 calendar days after selecting a claim. They must decide within 45 calendar days after receiving all requested records. Providers have 30 calendar days after an adverse decision to appeal; appeal decisions are due within 30 calendar days after receipt. Providers can appeal adverse audit decisions to the insurance commissioner and opt into electronic notices and decisions. If the commissioner finds a violation after a hearing, the claim must be approved and paid promptly with 10% annual interest. The rules cover specified Iowa insurance, health service, HMO, and public employee contracts delivered, issued, continued, or renewed from January 1, 2027. Claims under active state or federal fraud investigation are excluded. Excluded coverage includes accident-only, specified-disease, short-term, dental, vision, Medicare supplement, long-term care, disability income, workers’ compensation, and auto medical payments.

Health project comments replace public hearings

Beginning July 1, 2026, Iowa replaces certificate-of-need application hearings with written comments before the department finishes its evaluation. After accepting an application, the department must notify affected people electronically; consumer and payer notices may also be electronic. The department also loses authority to call a public hearing on extensions of expired certificates. Affected people can still submit relevant information before an extension is granted.

Providers must send approval requests electronically

For requests made on or after July 1, 2027, providers must submit prior authorization requests electronically. This applies to health carriers and Medicaid managed care organizations, which must accept electronic submissions by that date. Providers must use a standards-based application programming interface or another carrier-supported electronic method that meets federal interoperability rules.

Health project refunds favor early withdrawals

Beginning July 1, 2026, certificate-of-need applicants who voluntarily withdraw within 30 calendar days receive a 75% fee refund. The law removes previous refund provisions for withdrawals after 30 days. Application fees are 0.3% of expected project cost, with a $600 minimum and $21,000 maximum, credited to the state general fund. Certain intermediate care facilities serving people with intellectual disabilities or mental illness are exempt from the fee.

More facilities covered by health rules

Beginning July 1, 2026, Iowa clarifies and broadens the health facilities covered by chapter 135P. The definition expressly includes birth centers, hospices, home health agencies, assisted living programs, clinics, and community health centers. It also includes University of Iowa Hospitals and Clinics and entities made up of covered facilities. A related institutional-facility definition includes hospitals, health care facilities, organized outpatient facilities, surgery centers, and community mental health centers. Public or private ownership and for-profit status do not change whether a facility fits that institutional definition.

Sponsors & Cosponsors

Sponsor

COMMITTEE ON HEALTH AND HUMAN SERVICES
Affiliation unavailable

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 225 • No: 1

House vote • 3/5/2026

Passed House

Yes: 87 • No: 0

Senate vote • 3/4/2026

Passed Senate

Yes: 44 • No: 0

House vote • 3/3/2026