20june91.....3383h
1991 SESSION 3328L
91-1234
10
HOUSE BILL NO. 1-FN-A (CHAPTER 299, LAWS OF 1991)
INTRODUCED BY: Rep. Burns of Coos Dist. 5; Sen. Dupont of Dist. 6
REFERRED TO: Ways and Means
AN ACT relative to a medicaid enhancement tax, creating a medicaid enhancement fund and making an appropriation therefor.
AMENDED ANALYSIS
This bill establishes a medicaid enhancement fund. A medicaid enhancement tax is imposed at the rate of 8 percent upon the gross patient services revenue of every hospital for the hospital's fiscal year ending during the preceding calendar year. The first taxable period ends June 30, 1991, and the first payment of the tax is due and payable on or before June 28, 1991. Moneys paid into the fund from the tax are expended as follows:
(a) No less than 50 percent of the moneys paid into the fund shall be used to pay Disproportionate Share Allocations to the hospitals.
(b) No less than 3 percent of the moneys paid into the funds shall be utilized to pay enhanced disproportionate share medicaid payments to hospitals, based upon each hospital's pro rata share of medicaid utilizations and shall be used by the hospitals to support services to medicaid and other low income patients.
(c) One percent of the moneys paid into the fund shall be placed in a separate PAU reserved for the expenses of the health and human services department in administering the medicaid enhancement program.
The bill also makes appropriations to the department of revenue administration for fiscal years 1992 and 1993 for the administration of the new tax.
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EXPLANATION: Matter added appears in bold italics.
Matter removed appears in [brackets].
Matter which is repealed and reenacted or all new appears in regular type.
3328L
91-1234
10
HB 1-FN-A
STATE OF NEW HAMPSHIRE
In the year of Our Lord one thousand
nine hundred and ninety-one
AN ACT
relative to a medicaid enhancement tax, creating a medicaid
enhancement fund and making an appropriation therefor.
Be it Enacted by the Senate and House of Represen-
tatives in General Court convened:
1 Statement of Purpose and Findings. The general court determines that gross patient services revenue, as defined in section 2 of this act, is a distinct class of property for the purpose of the special tax imposed by this act, because it provides a fair base for measuring the contribution of eligible health care providers to the special programs authorized by this act. The general court also determines that it is appropriate to authorize and direct the commissioner of health and human services to revise portions of the state medicaid plan to assist eligible health care providers in making services available to medicaid qualified recipients and to qualify the state for receipt of additional medicaid matching funds from the federal government.
2 New Chapter; Medicaid Enhancement Tax. Amend RSA by inserting after chapter 84 the following new chapter:
CHAPTER 84-A
MEDICAID ENHANCEMENT TAX
84-A:1 Definitions. In this chapter:
I. "Commissioner" means the commissioner of revenue administration.
II. "Gross patient services revenue" means the amounts recorded by the hospital at the hospital's established rates for services provided to patients, regardless of whether full payment of such amounts is expected or paid.
III. "Hospital" means general hospitals and special hospitals for rehabilitation required to be licensed under RSA 151 and receiving medicaid diagnosis related group (DRG) payments, but not including government facilities.
IV. "Medicaid enhancement tax" means the tax imposed upon gross patient services revenue pursuant to this chapter.
V. "Taxable period" means a 12-month period beginning July 1 and ending June 30.
84-A:2 Imposition of Tax. A tax is imposed at the rate of 8 percent upon the gross patient services revenue of every hospital for the hospital's fiscal year ending during the first full calendar year preceding the taxable period.
84-A:3 Tax Due.
I. For the taxable period ending June 30, 1991, each hospital shall pay 100 percent of its medicaid enhancement tax due and payable for the taxable period on or before June 28, 1991. Notwithstanding any provision of this chapter or any other law, no penalty or interest shall be imposed
for failure to make payment of tax when due if such payment is made on or before August 31, 1991.
II. For the taxable period beginning July 1, 1991 and ending June 30, 1992, and for every taxable period thereafter, each hospital shall pay 1/4 of its medicaid enhancement tax due and payable for the taxable period on the fifteenth day of the fourth month of the taxable period; 1/4 of the tax due and payable for the taxable period shall be paid on the fifteenth day of the sixth month of the taxable period; 1/4 of the tax due and payable for the taxable period shall be paid on the fifteenth day of the ninth month of the taxable period; and 1/4 of the tax due and payable for the taxable period shall be paid on the fifteenth day of the twelfth month of the taxable period. Notwithstanding any provision of this chapter or any other law, no penalty or interest shall be imposed for failure to make payment of tax when due if such payment is made on or before the last day of the month in which such payment is due.
III. If the return required by RSA 84-A:4 shows an additional amount of tax to be due, such additional amount is due and payable at the time the return is due.
84-A:4 Returns. Every hospital shall on or before the tenth day of the month following the expiration of the taxable period make a return to the commissioner. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the form of such return and the data which it must contain for the correct computation of gross patient services revenue and the tax assessed upon such amount. All returns shall be signed by the taxpayer or by its authorized representative, subject to the pains and penalties of
perjury. If such return shows an overpayment of the tax due, the commissioner shall refund or credit the overpayment to the hospital in accordance with RSA 21-J:28-a.
84-A:5 Method of Payment and Deposit of Tax.
I. The payments required by RSA 84-A:3, I and II shall be made by electronic transfer of moneys to the state treasurer and deposited to the medicaid enhancement fund established by RSA 167:64.
II. The state treasurer is authorized to establish an account or accounts and to take all steps necessary to facilitate the electronic transfer of moneys required in paragraph I. The state treasurer shall provide the commissioner a record of any moneys so transferred and deposited.
84-A:6 Additional Returns. When the commissioner has reason to believe that a hospital has failed to file a return or to include any part of its gross patient services revenue in a filed return, the commissioner may require the hospital to file a return or a supplementary return showing such additional information as the commissioner prescribes. Upon the receipt of the supplementary return, or if none is received within the time set by the commissioner, the commissioner may find and assess the amount due upon the information that is available. The making of such additional return does not relieve the hospital of any penalty for failure to make a correct original return or relieve it from liability for interest imposed under RSA 21-J:28 or any other additional charges imposed by the commissioner. This section shall not be construed to modify the statute of limitations provided in RSA 21-J:29.
84-A:7 Extension of Time for Returns. For good cause, the commissioner may extend the time within which a hospital is required to file a return, and if such return is filed during the period of extension no penalty or late filing charge may be imposed for failure to file the return at the time required by this chapter, but the hospital shall be liable for interest and late payment charges as prescribed in RSA 21-J:28 or 33. Failure to file the return during the period of the extension shall void the extension.
84-A:8 Taxpayer Records.
I. Every hospital shall:
(a) Keep such records as may be necessary to determine the amount of its liability under this chapter.
(b) Preserve such records for the period of 3 years or until any litigation or prosecution hereunder is finally determined.
(c) Make such records available for inspection by the commissioner or his authorized agents, upon demand, at reasonable times during regular business hours.
II. Whoever violates the provisions of this section shall be subject to the penalties imposed under RSA 21-J:39.
84-A:9 Administration.
I. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to:
(a) The administration of the medicaid enhancement tax; and
(b) The recovery of any tax, interest on tax, or penalties imposed by this chapter or by RSA 21-J.
II. The commissioner may institute actions in the name of the state
to recover any tax, interest on tax, additions to tax or penalties imposed by this chapter or by RSA 21-J.
III. In the collection of any overdue tax, penalties or interest imposed by this chapter or RSA 21-J, the commissioner may use all of the powers granted to tax collectors under RSA 21-J and RSA 80 for the collection of taxes.
84-A:10 Confidentiality of Records. Notwithstanding the provisions of RSA 21-J:14, the commissioner shall not be prohibited from providing tax information to the commissioner of health and human services with respect to the tax imposed by this chapter, provided that the commissioner of health and human services and his agents and employees shall be subject to the provisions of RSA 21-J:14 with respect to any tax information provided by the commissioner.
84-A:11 Protection of Tax Exemption. Nothing in this chapter shall be construed to limit or impair the availability of tax exemptions currently provided under RSA 72:23.
84-A:12 Automatic Rescission Provision. In the event that federal matching funds for the payments authorized under RSA 167:64, I are no longer available to the state, the tax imposed by RSA 84-A shall be rescinded at the end of the taxable period in which an amount equal to all payments made under RSA 167:64, I are recovered.
3 Application of Penalty for Failure to File Return. Amend RSA 21-J:31 to read as follows:
21-J:31 Penalty for Failure to File. Any taxpayer who fails to file a return when due, unless an extension has been granted by the department,
shall pay a penalty equal to 5 percent of the amount of the tax due or $10, whichever is greater, for each month or part of a month during which the return remains unfiled. The total amount of any penalty shall not, however, exceed 25 percent of the amount of the tax due or $50, whichever is greater. This penalty shall not be applied in any case in which a return is filed within the extended filing period as provided in RSA 77:18-b, RSA 77-A:9, [or] RSA 83-C:6, or RSA 84-A:8, or the failure to file was due to reasonable cause and not willful neglect of the taxpayer. The amount of the penalty is determined by applying the percentages specified to the net amount of any tax due after crediting any timely payments made through estimating or other means.
4 Application of Substantial Underpayment Penalty. Amend RSA 21-J:33-a, I to read as follows:
I. If there is a substantial understatement of tax imposed under RSA 77, RSA 77-A, RSA 78-A, RSA 78-C, RSA 82-A, [or] RSA 83-C, or RSA 84-A, for any taxable period, there shall be added to the tax an amount equal to 25 percent of the amount of any underpayment attributable to such understatement.
5 New Subdivision; Medicaid Enhancement Fund. Amend RSA 167 by inserting after section 62 the following new subdivision:
Medicaid Enhancement Fund
167:63 Definitions. As used in this subdivision:
I. "Commissioner" means the commissioner of health and human services.
II. "Department" means New Hampshire department of health and human
services.
III. "Disproportionate Share Allocations" means payments made to hospitals as defined in the Omnibus Reconciliation Act of 1990, Pub. L. No. 101-508, section 4703, as amended, and the New Hampshire state medicaid plan.
IV. "Hospital" means general hospitals and special hospitals for rehabilitation required to be licensed under RSA 151 and receiving medicaid diagnosis related group (DRG) payments, but not including government facilities.
V. "Medicaid" means the New Hampshire medicaid assistance program as described in RSA 161 and RSA 167, and in Title XIX of the Social Security Act as amended.
167:64 Medicaid Enhancement Fund.
I. There is hereby established in the state treasury a medicaid enhancement fund which shall consist of the moneys collected pursuant to RSA 84-A. Investment earnings of the fund shall be credited to the fund. Moneys paid into the fund shall be exempt from any state budget reductions, and the commissioner is authorized to expend these funds, together with matching federal funds, as follows:
(a) No less than 50 percent of the moneys paid into the fund shall be utilized to pay Disproportionate Share Allocations to the hospitals in accordance with rules adopted by the commissioner, pursuant to RSA 541-A.
(b) No less than 3 percent of the moneys paid into the fund shall be utilized to pay enhanced disproportionate share medicaid payments to
hospitals, based on each hospital's pro rata share of medicaid utilization in accordance with rules adopted by the commissioner pursuant to RSA 541-A, and shall be used by the hospitals to support services to medicaid and other low income patients.
(c) One percent of the moneys paid into the fund shall be placed in a separate PAU reserved for the expenses of the department in administering this subdivision.
II. Moneys in the medicaid enhancement fund shall be continually appropriated to the department for the purposes of this subdivision.
III. The balance of the moneys remaining in the fund at the end of each fiscal year shall lapse into the general fund.
167:65 Duties of Commissioner. The commissioner shall:
I. Develop a medicaid enhancement reimbursement system consistent with the requirements of Title XIX of the Social Security Act as amended.
II. Ensure payments to hospitals without disruption to hospital finances.
III. Ensure that each hospital receives no less than 100 percent of the tax imposed by RSA 84-A.
IV. Adopt rules pursuant to RSA 541-A to implement this system.
6 Emergency Rulemaking Authorized. Notwithstanding RSA 541-A, the commissioner of revenue administration, the commissioner of health and human services, and the state treasurer shall adopt emergency rules under RSA 541-A:3-g implementing the provisions of sections 1-5 of this act relating to the administration and collection of the medicaid enhancement tax and the protection and distribution of the medicaid enhancement fund as soon as possible.
7 Appropriation. The sums of $2,000 for the fiscal year ending June 30, 1991, and $2,000 for the fiscal year ending June 30, 1992, are hereby appropriated to the department of revenue administration for the purpose of administering the tax imposed in section 2 of this act. These sums shall be in addition to any other funds appropriated to the department of revenue administration and said sums shall not lapse, but whenever the amount available exceeds $2,000, the excess shall be paid over to the state treasurer. The governor is authorized to draw his warrant for said sums out of any money in the treasury not otherwise appropriated.
8 Effective Date. This act shall take effect upon its passage.
LBAO
LSR 91-1234
6/18/91
FISCAL NOTE for an act creating a medical assessment revolving fund and continually appropriating such a fund.
FISCAL IMPACT:
The Department of Health and Human Services estimates that state revenue will increase by $116,904,300 in FY 91, by $136,874,305 in FY 92 and by $136,874,305 in FY 93. State expenditures will increase by $81,112,868 in FY 91, by $94,946,815 in FY 92 and by $94,946,815 in FY 93. There will be no impact on county or local revenue or expenditures.
This bill appropriates $2,000 in FY 92 and $2,000 in FY 93 from the general fund to the Department of Revenue Administration for the purpose of administering the medicaid enhancement tax imposed by the bill.
METHODOLOGY:
Revenue will increase because of an 8% tax imposed on the gross patient service revenue of general and rehabilitation hospitals which will be matched dollar for dollar by federal medicaid funds. State expenditures will increase because of increased payments to hospitals which provide services to medicaid eligible patients and because 1% of the funds collected are reserved for administrative expenditures of the Department. Net general fund revenue is estimated to be $35,206,910 in FY 91 ($116,904,300 - $81,112,868 - 1% x $58,452,150) and $41,243,119 in FY 92 and FY 93.
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