SB 165-FN – AS AMENDED BY THE SENATE
03/30/11 1179s
2011 SESSION
01/03
SENATE BILL 165-FN
AN ACT relative to the Medicaid uncompensated care fund and the Medicaid enhancement tax.
SPONSORS: Sen. Odell, Dist 8; Sen. Morse, Dist 22; Sen. Larsen, Dist 15; Sen. Lambert, Dist 13; Sen. Bradley, Dist 3
This bill allows exclusion of rehabilitation hospitals by federal waiver from the uncompensated care fund and clarifies the application of the Medicaid enhancement tax.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/30/11 1179s
11-1045
01/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to the Medicaid uncompensated care fund and the Medicaid enhancement tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Statement of Purpose. The general court hereby finds that the health and well-being of the people of this state is dependent on the availability and accessibility of health care services and the viability of health institutions while maintaining and improving health care quality. The general court notes that federal Medicaid law recognizes that additional resources are necessary to support the financial stability of safety net providers for uninsured and Medicaid recipients. Therefore, the general court hereby creates a Medicaid disproportionate share plan and revenue methodology that are in compliance with federal regulations, that provides more resources for those hospitals that serve more uninsured and Medicaid patients, and that minimizes, to the greatest extent possible, the impact on individual hospitals.
2 Uncompensated Care Fund; Definitions. Amend RSA 167:63, IV to read as follows:
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 and hospitals excluded from taxation under RSA 84-A pursuant to federal approval of a waiver of the broad-based requirement as described in 42 C.F.R. section 433.68.
3 Uncompensated Care Fund; Rehabilitation Hospitals Deleted. Amend RSA 167:64, I(d) to read as follows:
(d) The commissioner may provide reimbursement for uncompensated care costs in accordance with the approved schedule of payments through either Medicaid fee for service rate adjustments or disproportionate share hospital payment adjustments, or a combination thereof. Funds available under this section shall be [first] allocated to ensure that critical access hospitals [and rehabilitation hospitals] receive reimbursement for reported uncompensated care costs at the rate of 100 percent of the individual hospital limit for disproportionate share payments as determined by the commissioner consistent with the provisions of 42 U.S.C. section 1396r-4(g). Non-critical access hospitals shall receive reimbursement at the highest uniform percentage of each hospital limit as the funds made available under this section permit. The commissioner may create additional categories of need and make further reasonable distinctions among hospitals when determining the methodology for payments under this section, as necessary, to ensure that no hospital is unduly burdened by the fiscal effect of uncompensated care costs.
4 Uncompensated Care Fund; Duties of Commissioner. Amend RSA 167:65, II to read as follows:
II. Seek input from [the chairman of] the senate health and human services committee, [the chairman of] the house health, human services and elderly affairs committee, [the chairmen of] the house and senate finance committees, [the insurance department,] and [representatives of] the hospitals currently participating in the uncompensated care program [in developing] during the development of the uncompensated care payment system required under paragraph I, and present a report [detailing all the options and making recommendations] describing the planned payment methodology to the oversight committee on health and human services, established under RSA 126-A:13[, not later than January 1, 2010] prior to payments being made.
II-a. Submit a waiver calculation pursuant to the process outlined in 42 C.F.R. section 433.68 for the purpose of waiving RSA 84-A, Medicaid enhancement tax liability for Hampstead hospital, Healthsouth Rehabilitation hospital, Northeast Rehabilitation hospital, and New Hampshire hospital, no later than September 30, 2011.
5 Medicaid Enhancement Tax. Amend RSA 84-A:1, III to read as follows:
III. “Hospital” means general hospitals and special hospitals for rehabilitation that provide inpatient and outpatient hospital classes of health care services consistent with the requirements of 42 C.F.R. section 433.56 and the Medicaid state plan definitions of inpatient hospital and outpatient hospital services, required to be licensed under RSA 151 [and receiving medicaid diagnosis related group (DRG) payments], but not including government facilities and hospitals excluded from taxation under this chapter pursuant to federal approval of a waiver of the broad-based requirement as described in 42 C.F.R. section 433.68.
6 Repeal. RSA 84-A:3, I and II, relative to the Medicaid enhancement tax as it was applied in 1991-1992, is repealed.
7 Effective Date. This act shall take effect July 1, 2011.
LBAO
11-1045
Amended 04/20/11
SB 165-FN - FISCAL NOTE
AN ACT relative to the Medicaid uncompensated care fund and the Medicaid enhancement tax.
FISCAL IMPACT:
The Department of Health and Human Services estimates this bill, as amended by the Senate (Amendment #2011-1179s), will reduce state restricted revenue by $5,948,640 in FY 2012, $6,424,531 in FY 2013, $6,938,493 in FY 2014, and $7,493,573 in FY 2015. State unrestricted revenue would decrease by $1,982,880, in FY 2012, $2,141,510 in FY 2013, $2,312,831 in FY 2014, and $2,497,858 in FY 2015. State expenditures will decrease by $3,965,760 in FY 2012, $4,283,021 in FY 2013, $4,625,662 in FY 2014, and $4,995,715 in FY 2015. There will be no fiscal impact on county and local revenue and expenditures.
METHODOLOGY:
The Department of Health and Human Services states this bill removes rehabilitation hospitals from the definition of hospitals subject to the Medicaid Enhancement Tax (MET) and entitled to Disproportionate Share Hospital (DSH) payments for uncompensated care. The Department indicated New Hampshire has two rehabilitation hospitals that had a combined Medicaid Enhancement tax liability of $3.4 million in FY 2010. Based on the current law, $1.7 million of the MET tax revenue is deposited into the state general fund and $1.7 million is matched with an additional $1.7 million of federal Medicaid revenue providing $3.4 million for uncompensated care payments to hospitals. The rehabilitation hospitals were entitled receive DSH payments totaling $1.8 million for uncompensated care in FY 2010. In past years, these facilities have not paid the total MET, but instead were able to negotiate their tax payments down to equal the DSH payments they receive for uncompensated care. This analysis assumes the hospitals would pay the full tax and receive payments equal to their uncompensated care. The Department states removal of the rehabilitation hospitals from the tax will impact the state general fund and the remaining hospitals entitled to receive a DSH payment for uncompensated care. Removal of Hampstead Hospital and the New Hampshire Hospital will have no impact since neither has contributed to the MET or collected payments under this program. The Department states the removal of the bad debts deduction from the calculation of Net Patient Services Revenue is consistent with federal law and assumes it will not result in a significant fiscal impact. The Department assumes an 8% growth in net patient revenue in each year, but does not assume any growth in uncompensated care provided by the rehabilitation hospitals. Based on these assumptions the Department estimates the following fiscal impact:
FY 2012 |
FY 2013 |
FY 2014 |
FY 2015 | |
Reduction in MET revenue from rehabilitation hospitals |
($3,965,760) |
($4,283,021) |
($4,625,662) |
($4,995,715) |
Reduction in federal revenue that was matched by one-half of the MET |
($1,982,880) |
($2,141,510) |
($2,312,831) |
($2,497,858) |
Reduction in unrestricted revenue to the general fund (one-half of the MET) |
($1,982,880) |
($2,141,510) |
($2,312,831) |
($2,497,858) |
Reduction in Uncompensated Care Payments to Hospitals |
($3,965,760) |
($4,283,021) |
($4,625,662) |
($4,995,715) |
The Department of Revenue Administration states this bill will decrease state revenue by an indeterminable amount. The Department is not able to disclose the decrease in revenue that would result from exempting the special hospitals for rehabilitation from the Medicaid Enhancement Tax. The Department assumes it can administer the provisions of this bill without additional resources.