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