HOUSE BILL NO. 443

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Bill Status



H0443...............................................by REVENUE AND TAXATION
IDAHO HOSPITAL ASSESSMENT ACT - Adds to existing law relating to the Idaho
Hospital Assessment Act to provide a short title; to set forth legislative
intent; to define terms; to establish the Hospital Assessment Fund; to
provide for assessments; to provide for review of the annual assessment
amount; to provide for inpatient and outpatient adjustment payments; to
provide for timing of payments and assessments; to provide for exemptions;
to provide for multihospital locations, hospital closures and new
hospitals; and to provide applicability.

01/31    House intro - 1st rdg - to printing
02/01    Rpt prt - to Health/Wel
02/15    Rpt out - rec d/p - to 2nd rdg
02/18    2nd rdg - to 3rd rdg
02/20    3rd rdg - PASSED - 65-0-5
      AYES -- Anderson, Andrus, Barrett, Bayer, Bell, Bilbao, Black, Block,
      Bock, Boe, Bolz, Bowers, Bradford, Chadderdon, Chavez, Chew, Clark,
      Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Harwood,
      Henbest(Burgoyne), Henderson, Jaquet, Killen, King, Kren, Labrador,
      Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
      Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould,
      Ringo, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02), Shepherd(08),
      Shirley, Shively, Smith(24), Smith(30)(Stanek), Snodgrass, Stevenson,
      Thayn, Thomas, Trail, Vander Woude, Wood(27), Wood(35), Mr. Speaker
      NAYS -- None
      Absent and excused -- Bedke, Brackett, Patrick, Roberts, Wills
    Floor Sponsor - Wood(27)
    Title apvd - to Senate
02/21    Senate intro - 1st rdg - to Health/Wel
02/26    Rpt out - rec d/p - to 2nd rdg
02/27    2nd rdg - to 3rd rdg
03/04    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Geddes, Goedde,
      Hammond, Heinrich, Hill, Kelly, Keough, Langhorst, Little, Lodge,
      Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Gannon, Jorgenson
    Floor Sponsor - Darrington
    Title apvd - to House
03/05    To enrol
03/06    Rpt enrol - Sp signed
03/07    Pres signed
03/10    To Governor
03/14    Governor signed
         Session Law Chapter 91
         Effective: 07/01/08;
         07/01/11 Sunset Clause

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                              IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 443

                             BY REVENUE AND TAXATION COMMITTEE

  1                                        AN ACT
  2    RELATING TO THE IDAHO HOSPITAL ASSESSMENT ACT; AMENDING TITLE 56, IDAHO  CODE,
  3        BY  THE  ADDITION  OF A NEW CHAPTER 14, TITLE 56, IDAHO CODE, TO PROVIDE A
  4        SHORT TITLE AND TO SET FORTH  LEGISLATIVE  INTENT,  TO  DEFINE  TERMS,  TO
  5        ESTABLISH  THE  HOSPITAL  ASSESSMENT  FUND, TO PROVIDE FOR ASSESSMENTS, TO
  6        PROVIDE FOR A REVIEW OF THE ANNUAL ASSESSMENT AMOUNT, TO PROVIDE FOR INPA-
  7        TIENT AND OUTPATIENT ADJUSTMENT PAYMENTS, TO PROVIDE FOR  TIMING  OF  PAY-
  8        MENTS   AND  ASSESSMENTS,  TO  PROVIDE  FOR  EXEMPTIONS,  TO  PROVIDE  FOR
  9        MULTIHOSPITAL LOCATIONS, HOSPITAL CLOSURES AND NEW HOSPITALS AND  TO  PRO-
 10        VIDE APPLICABILITY; AND PROVIDING A SUNSET DATE.

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

 12        SECTION  1.  That Title 56, Idaho Code, be, and the same is hereby amended
 13    by the addition thereto of a NEW CHAPTER, to be known and designated as  Chap-
 14    ter 14, Title 56, Idaho Code, and to read as follows:

 15                                      CHAPTER 14
 16                            IDAHO HOSPITAL ASSESSMENT ACT

 17        56-1401.  SHORT  TITLE  --  LEGISLATIVE  INTENT. (1) This chapter shall be
 18    known and may be cited as the "Idaho Hospital Assessment Act."
 19        (2)  It is the intent of the legislature to encourage the maximization  of
 20    financial resources eligible and available for medicaid services by establish-
 21    ing  a  fund within the Idaho department of health and welfare to receive pri-
 22    vate hospital assessments to use in securing federal matching funds under fed-
 23    erally prescribed upper payment limit programs  available  through  the  state
 24    medicaid plan.

 25        56-1402.  DEFINITIONS. As used in this chapter:
 26        (1)  "Governmental  entity" means and includes the state and its political
 27    subdivisions.
 28        (2)  "Hospital" is as defined in section 39-1301(a), Idaho Code.
 29        (3)  "Political subdivision" means a county, city,  municipal  corporation
 30    or  hospital taxing district and, as used in this chapter, shall include state
 31    licensed hospitals established by counties pursuant to chapter 36,  title  31,
 32    Idaho  Code,  or  jointly by cities and counties pursuant to chapter 37, title
 33    31, Idaho Code.
 34        (4)  "Private hospital" means a hospital that is not owned by a governmen-
 35    tal entity.
 36        (5)  "Upper payment limit" means a limitation established by federal regu-
 37    lations,  42 CFR 447.272 and 42 CFR 447.321, that disallows  federal  matching
 38    funds  when state medicaid agencies pay certain classes of hospitals an aggre-
 39    gate amount for inpatient and outpatient hospital services that  would  exceed
 40    the amount that would be paid for the same services furnished by that class of
 41    hospitals under medicare payment principles.

                                       2

  1        56-1403.  HOSPITAL  ASSESSMENT  FUND ESTABLISHED. (1) There is hereby cre-
  2    ated in the office of the state treasurer a dedicated fund to be known as  the
  3    hospital  assessment  fund,  hereinafter  "fund,"  to  be  administered by the
  4    department of health and welfare, hereinafter "department."  The  state  trea-
  5    surer  shall invest idle moneys in the fund and any interest received on those
  6    investments shall be returned to the fund.
  7        (2)  Moneys in the fund shall consist of:
  8        (a)  All moneys collected or received  by  the  department  from  hospital
  9        assessments required by this chapter;
 10        (b)  All  federal matching funds received by the department as a result of
 11        expenditures made by the department that are attributable to moneys depos-
 12        ited in the fund;
 13        (c)  Any interest or penalties levied in conjunction with the  administra-
 14        tion of this chapter; and
 15        (d)  Any  appropriations,  federal  funds, donations, gifts or moneys from
 16        any other sources.
 17        (3)  The fund is created for the purpose of receiving moneys in accordance
 18    with this section and section 56-1404, Idaho Code. The fund shall not be  used
 19    to  replace any moneys appropriated to the Idaho medical assistance program by
 20    the legislature. Moneys in the fund shall be  distributed  by  the  department
 21    subject to appropriation for the following purposes only:
 22        (a)  Payments  to  hospitals  as required under Idaho's medical assistance
 23        program as set forth in sections 56-209b through 56-209d, Idaho Code;
 24        (b)  Reimbursement of moneys collected by the  department  from  hospitals
 25        through  error  or  mistake  in performing the activities authorized under
 26        Idaho's medical assistance program;
 27        (c)  Payments of administrative expenses incurred by the department or its
 28        agent in performing the activities authorized by this chapter;
 29        (d)  Payments made to the federal government to repay excess payments made
 30        to hospitals from the fund if the assessment plan is deemed out of compli-
 31        ance and after the state has appealed the findings. Hospitals shall refund
 32        the payments in question to the assessment fund. The state in  turn  shall
 33        return  funds to both the federal government and hospital providers in the
 34        same proportion as the original financing. Individual hospitals  shall  be
 35        reimbursed based on the proportion of the individual hospital's assessment
 36        to  the total assessment paid by all hospitals. If a hospital is unable to
 37        refund payments, the state shall develop a payment plan and deduct  moneys
 38        from future medicaid payments;
 39        (e)  Transfers  to  any  other  fund  in the state treasury, provided such
 40        transfers shall not exceed the amount  transferred  previously  from  that
 41        other fund into the hospital assessment fund; and
 42        (f)  Making refunds to hospitals pursuant to section 56-1410, Idaho Code.

 43        56-1404.  ASSESSMENTS. (1) All hospitals, except those exempted under sec-
 44    tion  56-1408,  Idaho Code, shall make payments to the fund in accordance with
 45    this chapter. Subject to section 56-1410, Idaho Code, an annual assessment  on
 46    both  inpatient and outpatient services is determined for each qualifying hos-
 47    pital for state fiscal years 2009, 2010 and 2011, in an amount  calculated  by
 48    multiplying  the  rate, as set forth in subsection (3) of this section, by the
 49    assessment base, as set forth in subsection (4) of this section.
 50        (2)  The department shall calculate the  private  hospital  upper  payment
 51    limit  gap for both inpatient and outpatient services. The upper payment limit
 52    gap is the difference between the maximum allowable payments eligible for fed-
 53    eral match, less medicaid payments  not  financed  using  hospital  assessment
 54    funds. The upper payment limit gap shall be calculated separately for hospital

                                       3

  1    inpatient  and  outpatient  services. Medicaid disproportionate share payments
  2    shall be excluded from the calculation.
  3        (3)  The department shall calculate the assessment rate for  state  fiscal
  4    years  2009,  2010  and 2011 to be the percentage that, when multiplied by the
  5    assessment base as defined in subsection (4) of this section, equals the upper
  6    payment limit gap determined in subsection (2) of this  section,  but  is  not
  7    greater than one and one-half percent (1.5%).
  8        (4)  The  assessment  base shall be the hospital's net patient revenue for
  9    the applicable period. "Net patient revenue" for state fiscal year 2009  shall
 10    be determined using the most recent data available from each hospital's fiscal
 11    year  2004  medicare cost report on file with the department on June 30, 2008,
 12    without regard to any subsequent adjustments or  changes  to  such  data.  Net
 13    patient  revenue for state fiscal year 2010 shall be determined using the most
 14    recent data available for each  hospital's  fiscal  year  2005  medicare  cost
 15    report  on  file  with  the department on June 30, 2009, without regard to any
 16    subsequent adjustments or changes to such data. Net patient revenue for  state
 17    fiscal year 2011 shall be determined using the most recent data available from
 18    each hospital's fiscal year 2006 medicare cost report on file with the depart-
 19    ment on June 30, 2010, without regard to any subsequent adjustments or changes
 20    to such data.

 21        56-1405.  REVIEW OF ANNUAL ASSESSMENT AMOUNT. Each state fiscal year, hos-
 22    pitals  shall have at least thirty (30) days prior to implementation to review
 23    and verify the assessment base, rate, and the estimated assessment amount.

 24        56-1406.  INPATIENT AND OUTPATIENT  ADJUSTMENT  PAYMENTS.  All  hospitals,
 25    except those exempted under section 56-1408, Idaho Code, shall be eligible for
 26    inpatient and outpatient adjustments as follows:
 27        (1)  For state fiscal year 2009, the inpatient upper payment limit gap for
 28    private  hospitals  shall  be  divided by medicaid inpatient days for the same
 29    hospitals from calendar year 2007 to establish an average per diem  adjustment
 30    rate. Each hospital shall receive an annual payment that is equal to the aver-
 31    age  per  diem adjustment rate multiplied by the hospital's calendar year 2007
 32    medicaid inpatient days. For purposes  of  this  section,  "hospital  medicaid
 33    inpatient  days"  are  days of inpatient hospitalization paid for by the Idaho
 34    medical assistance program for the applicable calendar year. For  fiscal  year
 35    2010, calendar year 2008 inpatient hospital medicaid days shall be utilized to
 36    determine  the  hospital  inpatient  adjustment payment. For state fiscal year
 37    2011, calendar year 2009 hospital medicaid inpatient days shall be utilized to
 38    determine the hospital inpatient adjustment payment. In the event that  either
 39    the  inpatient  upper payment limit gap for private hospitals or the available
 40    hospital assessment funding is lower than anticipated,  the  department  shall
 41    apply  an  across-the-board factor such that the inpatient payment adjustments
 42    are maximized, financed entirely from hospital assessment funding, and do  not
 43    exceed the Idaho inpatient upper payment limit for private hospitals. Payments
 44    shall be made no later than seven (7) days after the due date for the hospital
 45    assessment required in section 56-1404, Idaho Code.
 46        (2)  For  state  fiscal  year 2009, the outpatient upper payment limit gap
 47    for private hospitals shall be divided by medicaid outpatient  hospital  reim-
 48    bursement  for    the  same  hospitals from calendar year 2007 to establish an
 49    average percentage adjustment rate. Each hospital, except those  exempt  under
 50    section  56-1408, Idaho Code, shall receive an annual payment that is equal to
 51    the average percentage adjustment rate multiplied by the  hospital's  calendar
 52    year  2007  hospital  medicaid  outpatient reimbursement. For purposes of this
 53    section, "hospital outpatient reimbursement"  is  reimbursement  for  hospital

                                       4

  1    outpatient  services  paid for by the Idaho medical assistance program for the
  2    applicable calendar year. For state fiscal year 2010, calendar year 2008  hos-
  3    pital  medicaid  outpatient  reimbursement  shall be utilized to determine the
  4    outpatient hospital adjustment payment. For state fiscal year  2011,  calendar
  5    year  2009  hospital  medicaid  outpatient  reimbursement shall be utilized to
  6    determine the outpatient hospital adjustment payment. In the event that either
  7    the outpatient upper payment limit gap for private hospitals or the  available
  8    hospital  assessment  funding  is lower than anticipated, the department shall
  9    apply an across-the-board factor, such that outpatient adjustment payments are
 10    maximized, financed entirely from hospital  assessment  funding,  and  do  not
 11    exceed  the  Idaho  outpatient upper payment limit for private hospitals. Pay-
 12    ments shall be made no later than seven (7) days after the due  date  for  the
 13    hospital assessments required in section 54-1404, Idaho Code.

 14        56-1407.  TIMING  OF  PAYMENTS  AND  ASSESSMENTS. (1) The department shall
 15    establish an annual assessment schedule for all payments  created  under  this
 16    chapter.
 17        (2)  If  a  hospital  fails  to pay the full amount of an installment when
 18    due, including any extensions granted, there shall be added to the  assessment
 19    imposed  by  section  56-1404, Idaho Code, unless waived by the department for
 20    reasonable cause, a penalty equal to the lesser of:
 21        (a)  An amount equal to five percent (5%) of  the  assessment  installment
 22        amount  not  paid on or before the due date, plus five percent (5%) of the
 23        portion thereof remaining unpaid on the last day of each month thereafter;
 24        or
 25        (b)  An amount equal to one  hundred  percent  (100%)  of  the  assessment
 26        installment amount not paid on or before the due date.
 27        (3)  For  purposes  of  subsection  (2) of this section, payments shall be
 28    credited first to unpaid installment amounts rather than to penalty or  inter-
 29    est amounts, beginning with the most delinquent installment.

 30        56-1408.  EXEMPTIONS.  (1)  A  hospital  that  is  a  governmental entity,
 31    including a state agency, is exempt from the assessment  required  by  section
 32    56-1404,  Idaho  Code, unless the exemption is adjudged to be unconstitutional
 33    or otherwise invalid, in which case the hospital shall pay such assessment.
 34        (2)  A private hospital that does not provide emergency  services  through
 35    an  emergency  department  and  is  not  categorized  as  "rehabilitation"  or
 36    "psychiatric"  as  provided  in section II.C. of the "application for hospital
 37    licenses and annual report -- 2007" by the bureau of facility standards of the
 38    department of health and welfare, is exempt from the  assessment  required  by
 39    section 56-1404, Idaho Code.

 40        56-1409.  MULTIHOSPITAL LOCATIONS, HOSPITAL CLOSURE AND NEW HOSPITALS. (1)
 41    If  a  hospital  conducts,  operates  or  maintains more than one (1) hospital
 42    licensed by the department, the hospital shall pay  the  assessment  for  each
 43    hospital separately.
 44        (2)  A hospital, subject to assessments under this chapter, that ceases to
 45    conduct  hospital  operations or maintain its state license or did not conduct
 46    hospital operations throughout a calendar  or  fiscal  year,  shall  have  its
 47    required assessment adjusted by multiplying the assessment computed under sec-
 48    tion  56-1404, Idaho Code, by a fraction, the numerator of which is the number
 49    of days in the year during which  the  hospital  conducts  hospital  business,
 50    operates  a  hospital and maintains licensure, and the denominator of which is
 51    three hundred sixty-five (365). The hospital shall pay the required assessment
 52    computed under section 56-1404, Idaho Code,  on  the  date  and  in  pro  rata

                                       5

  1    installments  as required by the department for that portion of the state fis-
  2    cal year during which the hospital operated and maintained state licensure, to
  3    the extent not previously paid.
  4        (3)  A hospital, subject to assessments under this chapter, that  has  not
  5    been  previously  licensed  as a hospital by the department and that commences
  6    hospital operations during a fiscal year, shall pay  the  required  assessment
  7    computed  under section 56-1404, Idaho Code, and shall be eligible for payment
  8    adjustments under section 56-1406, Idaho Code, only  after  two  (2)  complete
  9    state  fiscal  years  have  elapsed and two (2) full fiscal year medicare cost
 10    reports are filed with the center for medicare  and  medicaid  services  (CMS)
 11    after  the  commencement  of  operations  and  on  the date as required by the
 12    department beginning on the first day of the next state fiscal year.

 13        56-1410.  APPLICABILITY. (1) The assessment required by  section  56-1404,
 14    Idaho Code, shall not take effect or shall cease to be imposed, and any moneys
 15    remaining  in  the  fund  shall  be refunded to hospitals in proportion to the
 16    amounts paid by such hospitals if:
 17        (a)  The appropriation for each state fiscal year 2009, 2010 and 2011 from
 18        the general fund for hospital payments under the Idaho medical  assistance
 19        program is less than that for fiscal year 2008;
 20        (b)  The  department  makes  changes in its rules that reduce the hospital
 21        inpatient or outpatient payment rates, including adjustment payment rates,
 22        in effect on January 1, 2008; or
 23        (c)  The payments to hospitals required under  section  56-1403(3),  Idaho
 24        Code, are changed or are not eligible for federal matching funds under the
 25        Idaho medical assistance program.
 26        (2)  The  assessment  required  by  section 56-1404, Idaho Code, shall not
 27    take effect or shall cease to be required if the assessment is not approved or
 28    is determined to be impermissible under title XIX of the social security  act.
 29    Moneys  in  the  fund derived from assessments required prior thereto shall be
 30    distributed in accordance with section 56-1403(3), Idaho Code, to  the  extent
 31    federal  matching  funds  are  not  reduced due to the impermissibility of the
 32    assessments, and any remaining moneys shall be refunded to hospitals  in  pro-
 33    portion to the amounts paid by such hospitals.

 34        SECTION 2.  The provisions of this act shall be null, void and of no force
 35    and effect on and after July 1, 2011.

Statement of Purpose / Fiscal Impact


                          STATEMENT OF PURPOSE

                                RS 17560 C2

This legislation will increase federal Medicaid funding by assessing
certain private hospitals the amount necessary to match the federal funds
available for reimbursement to private hospitals.  These dollars will enhance
existing below-cost reimbursement to hospitals, thereby reducing the losses
hospitals incur when they treat Medicaid patients.  Additionally, the
mitigation of some of these losses will lessen the impact of cost shifting to
private payers and insurers.

This legislation creates a fund to collect the assessments which are then
used as the state match to access available federal funds.  When the federal
funds are secured, they are paid to the assessed hospitals based upon the
number of Medicaid patients they care for within a given year.

This mechanism is allowable under federal regulations which set a
limitation, called the "upper payment limit (UPL)," on how much state Medicaid
programs can reimburse hospitals.  Simply put, the limit is the amount Medicare
would have paid for the same services.  In Idaho, Medicaid reimburses hospitals
less than Medicare, creating a "gap" between what is reimbursed compared to
what could be reimbursed.

To otherwise increase reimbursement to hospitals, the state would need to
appropriate additional state funds to leverage the federal funds.  Through this
legislation, private hospitals, not the state, will provide the funds necessary
to obtain the federal funds.                        


                                FISCAL NOTE       

There is no fiscal impact on the state general fund.




Contact
Name: Representative Fred Wood, District 27 
Senator Denton Darrington, District 27
Phone: 208.332.1000
Steven A. Millard, President, Idaho Hospital Association
Phone: 208.338.5100 x 203
Toni Lawson, Vice President, Idaho Hospital Association
Phone: 208.338.5100 x 207


STATEMENT OF PURPOSE/FISCAL NOTE                                  H 443