(a) Using the quality-based outcome and process measures developed under Section 543A.0002 and after consulting with appropriate stakeholders with an interest in the provision of acute care and long-term services and supports under the child health plan program and Medicaid, the commission shall develop and require managed care organizations to develop quality-based payment systems for compensating a physician or other health care provider participating in the child health plan program or Medicaid that:
(1) align payment incentives with high-quality, cost-effective health care;
(2) reward the use of evidence-based best practices;
(3) promote health care coordination;
(4) encourage appropriate physician and other health care provider collaboration;
(5) promote effective health care delivery models; and
(6) take into account the specific needs of the enrollee and recipient populations.
(b) The commission shall develop the quality-based payment systems in the manner specified by this chapter. To the extent necessary to maximize the receipt of federal funds or reduce administrative burdens, the commission shall coordinate the timeline for developing and implementing a payment system with the implementation of other initiatives such as:
(1) the Medicaid Information Technology Architecture (MITA) initiative of the Center for Medicaid and State Operations;
(2) the ICD-10 code sets initiative; or
(3) the ongoing Enterprise Data Warehouse (EDW) planning process.

(c) In developing the quality-based payment systems, the commission shall examine and consider implementing:
(1) an alternative payment system;
(2) an existing performance-based payment system used under the Medicare program that meets the requirements of this chapter, modified as necessary to account for programmatic differences, if implementing the system would:
(A) reduce unnecessary administrative burdens; and
(B) align quality-based payment incentives for physicians and other health care providers with the Medicare program; and
(3) alternative payment methodologies within a system that are used in the Medicare program, modified as necessary to account for programmatic differences, and that will achieve cost savings and improve quality of care in the child health plan program and Medicaid.
(d) In developing the quality-based payment systems, the commission shall ensure that a system will not reward a physician, other health care provider, or managed care organization for withholding or delaying medically necessary care.
(e) The commission may modify a quality-based payment system to account for:
(1) programmatic differences between the child health plan program and Medicaid; and
(2) delivery systems under those programs.

Text of section effective on April 01, 2025