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art.016/3/016/2/023/3/023/2/023/1

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     ARTICLE 16 AS AMENDED

RELATING TO HEALTH CARE

     SECTION 1. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled

"Licensing of Health Care Facilities" is hereby amended to read as follows:

     23-17-38.1. Hospitals – Licensing fee. -- (a) There is imposed a hospital licensing fee at

the rate of five and thirty-five hundredths percent (5.35%) upon the net patient services revenue

of every hospital for the hospital's first fiscal year ending on or after January 1, 2011, except that

the license fee for all hospitals located in Washington County, Rhode Island shall be discounted

by thirty-seven percent (37%). The discount for Washington County hospitals is subject to

approval by the Secretary of the US Department of Health and Human Services of a state plan

amendment submitted by the Executive Office of Health and Human Services for the purpose of

pursuing a waiver of the uniformity requirement for the hospital license fee. This licensing fee

shall be administered and collected by the tax administrator, division of taxation within the

department of revenue, and all the administration, collection and other provisions of 51 of title 44

shall apply. Every hospital shall pay the licensing fee to the tax administrator on or before July

15, 2013 and payments shall be made by electronic transfer of monies to the general treasurer and

deposited to the general fund. Every hospital shall, on or before June 17, 2013, make a return to

the tax administrator containing the correct computation of net patient services revenue for the

hospital fiscal year ending September 30, 2011, and the licensing fee due upon that amount. All

returns shall be signed by the hospital's authorized representative, subject to the pains and

penalties of perjury.

     (b)(a) There is also imposed a hospital licensing fee at the rate of five and two hundred

forty-six thousandths percent (5.246%) five and four hundred eighteen thousandths percent

(5.418%) upon the net patient services revenue of every hospital for the hospital's first fiscal year

ending on or after January 1, 2012, except that the license fee for all hospitals located in

Washington County, Rhode Island shall be discounted by thirty-seven percent (37%). The

discount for Washington County hospitals is subject to approval by the Secretary of the US

Department of Health and Human Services of a state plan amendment submitted by the Executive

Office of Health and Human Services for the purpose of pursuing a waiver of the uniformity

requirement for the hospital license fee. This licensing fee shall be administered and collected by

the tax administrator, division of taxation within the department of revenue, and all the

administration, collection and other provisions of 51 of title 44 shall apply. Every hospital shall

pay the licensing fee to the tax administrator on or before July 14, 2014 and payments shall be

made by electronic transfer of monies to the general treasurer and deposited to the general fund.

Every hospital shall, on or before June 16, 2014, make a return to the tax administrator containing

the correct computation of net patient services revenue for the hospital fiscal year ending

September 30, 2012, and the licensing fee due upon that amount. All returns shall be signed by

the hospital's authorized representative, subject to the pains and penalties of perjury.

     (b) There is also imposed a hospital licensing fee at the rate of five and seven hundred

three thousandths percent (5.703%) upon the net patient services revenue of every hospital for the

hospital's first fiscal year ending on or after January 1, 2013, except that the license fee for all

hospitals located in Washington County, Rhode Island shall be discounted by thirty-seven percent

(37%). The discount for Washington County hospitals is subject to approval by the Secretary of

the US Department of Health and Human Services of a state plan amendment submitted by the

Executive Office of Health and Human Services for the purpose of pursuing a waiver of the

uniformity requirement for the hospital license fee. This licensing fee shall be administered and

collected by the tax administrator, division of taxation within the department of revenue, and all

the administration, collection and other provisions of 51 of title 44 shall apply. Every hospital

shall pay the licensing fee to the tax administrator on or before July 13, 2015 and payments shall

be made by electronic transfer of monies to the general treasurer and deposited to the general

fund. Every hospital shall, on or before June 15, 2015, make a return to the tax administrator

containing the correct computation of net patient services revenue for the hospital fiscal year

ending September 30, 2013, and the licensing fee due upon that amount. All returns shall be

signed by the hospital's authorized representative, subject to the pains and penalties of perjury.

     (c) For purposes of this section the following words and phrases have the following

meanings:

     (1) "Hospital" means a person or governmental unit duly licensed in accordance with this

chapter to establish, maintain, and operate a hospital, except a hospital whose primary service and

primary bed inventory are psychiatric.

     (2) "Gross patient services revenue" means the gross revenue related to patient care

services.

     (3) "Net patient services revenue" means the charges related to patient care services less

(i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

     (d) The tax administrator shall make and promulgate any rules, regulations, and

procedures not inconsistent with state law and fiscal procedures that he or she deems necessary

for the proper administration of this section and to carry out the provisions, policy and purposes

of this section.

     (e) The licensing fee imposed by this section shall apply to hospitals as defined herein

which are duly licensed on July 1, 2013 2014, and shall be in addition to the inspection fee

imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with § 23-17-

38.1.

     SECTION 2. Section 23-1-46 of the General Laws in Chapter 23-1 entitled "Department

of Health" is hereby amended to read as follows:

     23-1-46. Insurers. -- (a) Beginning in the fiscal year 2007, each insurer licensed or

regulated pursuant to the provisions of chapters 18, 19, 20, and 41 of title 27 shall be assessed a

child immunization assessment and an adult immunization assessment for the purposes set forth

in this section. The department of health shall make available to each insurer, upon its request,

information regarding the department of health's immunization programs and the costs related to

the program. Further, the department of health shall submit to the general assembly an annual

report on the immunization programs and cost related to the programs, on or before February 1 of

each year. Annual assessments shall be based on direct premiums written in the year prior to the

assessment and for the child immunization program shall not include any Medicare Supplement

Policy (as defined in section 27-18.2-1(g)), Medicaid or Medicare premiums. Adult influenza

immunization program annual assessments shall include contributions related to the program

costs from Medicare, Medicaid and Medicare Managed Care. As to accident and sickness

insurance, the direct premium written shall include, but is not limited to, group, blanket, and

individual policies. Those insurers assessed greater than ten thousand dollars ($10,000) for the

year shall be assessed four (4) quarterly payments of twenty-five percent (25%) of their total

assessment. Beginning July 1, 2001, the annual rate of assessment shall be determined by the

director of health in concurrence with the primary payors, those being insurers assessed at greater

than ten thousand dollars ($10,000) for the previous year. This rate shall be calculated by the

projected costs for the Advisory Committee on Immunization Practices (ACIP) recommended

and state mandated vaccines after the federal share has been determined by the Centers for

Disease Control and Prevention. The primary payors shall be informed of any recommended

change in rates at least six (6) months in advance, and rates shall be adjusted no more frequently

than one time annually. For the childhood vaccine program the director of the department of

health shall deposit these amounts in Beginning January 1, 2016, a portion of the amount

collected pursuant to § 42-7.4-3, up to the actual amount expended or projected to be expended

by the state for vaccines for children that are recommended by the Advisory Committee on

Immunization Practices (ACIP), the American Academy of Pediatrics (AAP), and/or mandated

by state law, less the federal share determined by the Centers for Disease Control and Prevention,

less any amount collected in excess of the prior year’s funding requirement as indicated in

subsection (b) (the "child immunization funding requirement") shall be deposited into the

"childhood immunization account". described in § 23-1-45(a). These assessments funds shall be

used solely for the purposes of the "childhood immunization programs" described in §23-1-44,

and no other. For the adult immunization program the director of the department of health shall

deposit these amounts in the "adult immunization account". Beginning January 1 2016, a portion

of the amount collected from the healthcare services funding method described in § 42-7.4-3, up

to the actual amount expended or projected to be expended by the state for adult immunizations

recommended by ACIP and/or mandated by state law, less the federal share determined by the

Centers for Disease Control and Prevention, less any amount collected in excess of the prior

year’s funding requirement as indicated in subsection (b) (the "adult immunization funding

requirement") shall be deposited into the "adult immunization account" described in § 23-1-45(c).

These funds shall be used solely for the purposes of the "adult immunization programs" described

in § 23-1-44 and no other.

     (b) The department of health shall submit to the general assembly an annual report on the

immunization programs and costs related to the programs, on or before February 1 of each year.

     Any funds collected in excess of funds needed to carry-out ACIP recommendations,

taking into account a reasonable annual carry forward surplus, shall be deducted from the

subsequent year's assessments. funding requirements.

     SECTION 3. Section 42-12-29 of the General Laws in Chapter 42-12 entitled

"Department of Human Services" is hereby amended to read as follows:

     42-12-29. Children's health account. -- (a) There is created within the general fund a

restricted receipt account to be known as the "children's health account". All money in the

account shall be utilized by the department of human services to effectuate coverage for the

following service categories: (1) home health services, which include pediatric private duty

nursing and certified nursing assistant services; (2) comprehensive, evaluation, diagnosis,

assessment, referral and evaluation (CEDARR) services, which include CEDARR family center

services, home based therapeutic services, personal assistance services and supports (PASS) and

kids connect services and (3) child and adolescent treatment services (CAITS). All money

received pursuant to this section shall be deposited in the children's health account. The general

treasurer is authorized and directed to draw his or her orders on the account upon receipt of

properly authenticated vouchers from the department of human services.

     (b) Beginning in the fiscal year 2007, each insurer licensed or regulated pursuant to the

provisions of chapters 18, 19, 20, and 41 of title 27 shall be assessed for the purposes set forth in

this section. The department of human services shall make available to each insurer, upon its

request, information regarding the department of human services child health program and the

costs related to the program. Further, the department of human services shall submit to the

general assembly an annual report on the program and cost related to the program, on or before

February 1 of each year. Annual assessments shall be based on direct premiums written in the

year prior to the assessment and shall not include any Medicare Supplement Policy (as defined in

section 27-18-2.1(g)), Medicare managed care, Medicare, Federal Employees Health Plan,

     Medicaid/RIte Care or dental premiums. As to accident and sickness insurance, the direct

premium written shall include, but is not limited to, group, blanket, and individual policies. Those

insurers assessed greater than five hundred thousand dollars ($500,000) for the year shall be

assessed four (4) quarterly payments of twenty-five percent (25%) of their total assessment.

Beginning July 1, 2006, the annual rate of assessment shall be determined by the director of

human services in concurrence with the primary payors, those being insurers likely to be assessed

at greater than five hundred thousand dollars ($500,000). The director of the department of

human services shall deposit that amount Beginning January 1, 2016, a portion of the amount

collected pursuant to § 42-7.4-3, up to the actual amount expended or projected to be expended

by the state for the services described in § 42-12-29(a), less any amount collected in excess of the

prior year’s funding requirement as indicated in § 42-12-29(c), but in no event more than the limit

set forth in § 42-12-29(d) (the "child health services funding requirement"), shall be deposited in

the "children's health account". The assessment funds shall be used solely for the purposes of the

"children's health account", and no other.

     (c) The office of health and human services shall submit to the general assembly an

annual report on the program and costs related to the program, on or before February 1 of each

year. The department shall make available to each insurer required to make a contribution

pursuant to § 42-7.4-3, upon its request, detailed information regarding the children's health

programs described in subsection (a) and the costs related to those programs. Any funds collected

in excess of funds needed to carry out the programs shall be deducted from the subsequent year's

assessment. funding requirements.

     (d) The total annual assessment on all insurers amount required to be deposited into the

children's health account shall be equivalent to the amount paid by the department of human

services for all services, as listed in subsection (a), but not to exceed seven thousand five hundred

dollars ($7,500) per child per service per year.

     (e) The children's health account shall be exempt from the indirect cost recovery

provisions of section 35-4-27 of the general laws.

     SECTION 4. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 7.4

THE HEALTHCARE SERVICES FUNDING PLAN ACT

     42-7.4-1. Short title. -- This chapter shall be known and may be cited as "The Healthcare

Services Funding Plan Act."

     42-7.4-2. Definitions. -- The following words and phrases as used in this chapter shall

have the following meaning:

     (1) "Secretary" means the secretary of health and human services.

     (2)(i) "Insurer" means all persons offering, administering, and/or insuring healthcare

services, including, but not limited to:

     (A) Policies of accident and sickness insurance, as defined by chapter 18 of title 27:

     (B) Nonprofit hospital or medical service plans, as defined by chapters 19 and 20 of title

27;

     (C) Any person whose primary function is to provide diagnostic, therapeutic, or

preventive services to a defined population on the basis of a periodic premium;

     (D) All domestic, foreign, or alien insurance companies, mutual associations and

organizations;

     (E) Health maintenance organizations, as defined by chapter 41 of title 27;

     (F) All persons providing health benefits coverage on a self-insurance basis;

     (G) All third-party administrators described in chapter 20.7 of title 27; and

     (H) All persons providing health benefit coverage under Title XIX of the Social Security

     Act (Medicaid) as a Medicaid managed care organization offering managed Medicaid.

      (ii) "Insurer" shall not include any nonprofit dental service corporation as defined in §

27-20.1-2, nor any insurer offering only those coverages described in § 42-7.4-14.

     (3)(i) "Contribution enrollee" means an individual residing in this state, with respect to

whom an insurer administers, provides, pays for, insures, or covers health care services, unless

excepted by this section.

     (ii) "Contribution enrollee" shall not include an individual whose healthcare services are

paid or reimbursed by Part A or Part B of the Medicare program, a Medicare supplemental policy

as defined in section 1882(g)(1) of the Social Security Act, 42 U.S.C. 1395ss(g)(1), or Medicare

managed care policy, the federal employees' health benefit program, Tricare, CHAMPUS, the

Veterans' healthcare program, the Indian health service program, or any local governmental

corporation, district, or agency providing health benefits coverage on a self-insured basis;

     (iii) Delayed applicability for state employees, retirees, and dependents and not-for-profit

healthcare corporations. An individual whose healthcare services are paid or reimbursed by the

state of Rhode Island pursuant to chapter 12 of title 36 or a not-for-profit healthcare corporation

subject to the provisions of § 23-17-38.1 of the Rhode Island General Laws shall not be treated as

a "contribution enrollee" until July 1, 2016.

      (4) "Person" means any individual, corporation, company, association, partnership,

limited liability company, firm, state governmental corporations, districts, and agencies, joint

stock associations, trusts, and the legal successor thereof.

     (5) "Healthcare services funding contribution" means per capita amount each contributing

insurer must contribute to support the programs funded by the method established under this

section, with respect to each contribution enrollee; provided, however, that, with respect to an

insurer that is a Medicaid managed care organization offering managed Medicaid, the healthcare

funding services contribution for any contribution enrollee whose healthcare services are paid or

reimbursed under Title XIX of the Social Security Act (Medicaid) shall not include the children's

health services funding requirement described in § 42-12-29.

     42-7.4-3. Imposition of healthcare services funding contribution. -- (a) Each insurer is

required to pay the healthcare services funding contribution for each contribution enrollee of the

insurer at the time the contribution is calculated and paid, at the rate set forth in this section.

     (1) Beginning January 1, 2016, the secretary shall set the healthcare services funding

contribution each fiscal year in an amount equal to: (i) The child immunization funding

requirement described in § 23-1-46; plus (ii) The adult immunization funding requirement

described in § 23-1-46; plus (iii) The children's health services funding requirement described in

§ 42-12-29; and all as divided by (iv) The number of contribution enrollees of all insurers.

     (2) The contribution set forth herein shall be in addition to any other fees or assessments

upon the insurer allowable by law.

     (b) The contribution shall be paid by the insurer; provided, however, a person providing

health benefits coverage on a self-insurance basis that uses the services of a third-party

administrator shall not be required to make a contribution for a contribution enrollee where the

contribution on that enrollee has been or will be made by the third-party administrator.

     (c) The secretary shall create a process to facilitate the transition to the healthcare

services funding contribution method that: (i) assures adequate funding beginning July 1, 2016,

(ii) reflects that funding via the healthcare services funding contribution method initially will be

for only a portion of the state’s fiscal year, and (iii) avoids duplicate liability for any insurer that

made a payment under the premium assessment method in effect prior to January 1, 2016, for a

period for which it would also be liable for a contribution under the healthcare services funding

contribution method as described in this chapter.

     42-7.4-4. Returns and payment. -- (a) Subject to subsection (b), every insurer required

to make a contribution shall, on or before the last day of July, October, January and April of each

year, make a return to the secretary together with payment of the quarterly healthcare services

funding contribution for the preceding three (3) month period.

     (b)(1) Upon request of the director of the department of health, the secretary shall

develop a process whereby an insurer required to make the contribution may be directed to make

estimated payments for the portion of the liability arising under § 42-7.4-3 and the secretary shall

make that pre-paid amount available to the department of health, as requested.

     (2) Unless requested to make an estimated payment as described in subsection (b)(1)

above, any insurer required to make the contribution that can substantiate that the insurer's

contribution liability would average less than twenty-five thousand dollars ($25,000) per month

may file returns and remit payment annually on or before the last day of June each year; provided,

however, that the insurer shall be required to make quarterly payments if the secretary determines

that:

     (i) The insurer has become delinquent in either the filing of the return or the payment of

the healthcare services funding contribution due thereon; or

     (ii) The liability of the insurer exceeds seventy-five thousand dollars ($75,000) in

healthcare services funding contribution per quarter for any two (2) subsequent quarters.

     (c) All returns shall be signed by the insurer required to make the contribution, or by its

authorized representative, subject to the pains and penalties of perjury.

     (d) If a return shows an overpayment of the contribution due, the secretary shall refund or

credit the overpayment to the insurer required to make the contribution, or the insurer may deduct

the overpayment from the next quarterly or annual return.

     (e) The secretary, for good cause shown, may extend the time within which an insurer is

required to file a return, and if the 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 section, but

the insurer shall be liable for interest as prescribed in this section. Failure to file the return during

the period for the extension shall void the extension.

     42-7.4-5. Set-off for delinquent payment. -- If an insurer required to make the

contribution pursuant to this chapter shall fail to pay a contribution within thirty (30) days of its

due date, the secretary may request any agency of state government making payments to the

insurer to set-off the amount of the delinquency against any payment or amount due the insurer

from the agency of state government and remit the sum to the secretary. Upon receipt of the setoff

request from the secretary, any agency of state government is authorized and empowered to set-

off the amount of the delinquency against any payment or amounts due the insurer. The amount

of set-off shall be credited against the contribution due from the insurer.

     42-7.4-6. Assessment on available information -- Interest on delinquencies --

Penalties -- Collection powers. -- If any insurer shall fail to file a return within the time required

by this chapter, or shall file an insufficient or incorrect return, or shall not pay the contribution

imposed by this section when it is due, the secretary shall assess the contribution upon the

information as may be available, which shall be payable upon demand and shall bear interest at

the annual rate provided by § 44-1-7, from the date when the contribution should have been paid.

If the failure is due, in whole or part, to negligence or intentional disregard of the provisions of

this section, a penalty of ten percent (10%) of the amount of the determination shall be added to

the contribution. The secretary shall collect the contribution with interest. The secretary may

request any agency to assist in collection, including the tax administrator, who may collect the

contribution with interest in the same manner and with the same powers as are prescribed for

collection of taxes in title 44.

     42-7.4-7. Claims for refund -- Hearing upon denial. -- (a) Any insurer required to pay

the contribution may file a claim for refund with the secretary at any time within two (2) years

after the contribution has been paid. If the secretary shall determine that the contribution has been

overpaid, he or she shall make a refund with ten percent (10%) interest from the date of

overpayment.

     (b) Any insurer whose claim for refund has been denied may, within thirty (30) days from

the date of the mailing by the secretary of the notice of the decision, request a hearing and the

secretary shall, as soon as practicable, set a time and place for the hearing and shall notify the

person.

     42-7.4-8. Hearing by secretary on application. -- Any insurer aggrieved by the action

of the secretary in determining the amount of any contribution or penalty imposed under the

provisions of this chapter may apply to the secretary, within thirty (30) days after the notice of the

action is mailed to it, for a hearing relative to the contribution or penalty. The secretary shall fix a

time and place for the hearing and shall so notify the person. Upon the hearing the secretary shall

correct manifest errors, if any, disclosed at the hearing and thereupon assess and collect the

amount lawfully due together with any penalty or interest thereon.

     42-7.4-9. Appeals. -- Appeals from administrative orders or decisions made pursuant to

any provisions of this chapter shall be pursued pursuant to chapter 35 of title 42. The right to

appeal under this section shall be expressly made conditional upon prepayment of all

contribution, interest, and penalties unless the insurer demonstrates to the satisfaction of the court

that the insurer has a reasonable probability of success on the merits and is unable to prepay all

contribution, interest, and penalties, considering not only the insurer’s own financial resources

but also the ability of the insurer to borrow the required funds. If the court, after appeal, holds that

the insurer is entitled to a refund, the insurer shall also be paid interest on the amount at the rate

provided in § 44-1-7.1 of the Rhode Island general laws, as amended.

     42-7.4-10. Records. -- Every insurer required to make the contribution shall:

     (1) Keep records as may be necessary to determine the amount of its liability under this

section;

     (2) Preserve those records for a period of three (3) years following the date of filing of

any return required by this section, or until any litigation or prosecution under this section is

finally determined; and

     (3) Make those records available for inspection by the secretary or his/her authorized

agents, upon demand, at reasonable times during regular business hours.

     42-7.4-11. Method of payment and deposit of contribution. -- (a) The payments

required by this chapter may be made by electronic transfer of monies to the general treasurer.

     (b) The general treasurer shall take all steps necessary to facilitate the transfer of monies

to:

     (1) The "childhood immunization account" described in § 23-1-45(a) in the amount

described in § 23-1-46(a);

     (2) To the "adult immunization account" described in § 23-1-45(c) in the amount

described in § 23-1-46(a);

     (3) To the "children's health account" described in § 42-12-29(a) in the amount described

in § 42-12-29(b); and

     (4) Any remainder of the payments shall be proportionally distributed to those accounts

and credited against the next year’s healthcare services funding contribution.

     (c) The general treasurer shall provide the secretary with a record of any monies

transferred and deposited.

     42-7.4-12. Rules and regulations. -- The secretary is authorized to make and promulgate

rules, regulations, and procedures not inconsistent with state law and fiscal procedures as he or

she deems necessary for the proper administration of this healthcare services funding plan act and

to carry out the provisions, policies, and purposes of this chapter including, but not limited to,

data it must collect from insurers for the correct computation of the healthcare services funding

contribution, collaboration with other state agencies for collecting necessary information, and the

form of the return and the data that it must contain for the correct computation of the healthcare

services funding contribution.

     42-7.4-13. Excluded coverage from the healthcare services funding plan act. --

(a) In addition to any exclusion and exemption contained elsewhere in this chapter, this

chapter shall not apply to insurance coverage providing benefits for, nor shall an individual be

deemed a contribution enrollee solely by virtue of receiving benefits for the following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified disease indemnity;

     (8) Sickness or bodily injury or death by accident or both; and

     (9) Other limited benefit policies.

     42-7.4-14. Impact on Health Insurance Rates. (a) Allocation -- An insurer required to

make a healthcare services funding contribution may pass on the cost of that contribution in the

cost of its services, such as its premium rates (for insurers), without being required to specifically

allocate those costs to individuals or populations that actually incurred the contribution. The costs

are to be fairly allocated among the market segments incurring such costs.

      (b) Oversight - The health insurance commissioner shall ensure, through the rate review

and approval process, that the rates filed for fully insured groups and individuals, pursuant to

chapter 18.5, 18.6 or 50 of title 27, reflect the transition to the funding method described in this

section.

     42-7.4-15. Study on Expansion of Health Care Services Funding Program.--

Recognizing the value of the immunization programs to municipal employees, police, fire, and

other public safety officers, and to teachers and other school district employees, the director of

the department of health or his or her designee shall meet with representatives and agencies of

local governments, including but not limited to the league of cities and towns, the division of

municipal finance, the association of police chiefs, the association of fire chiefs, and the

association of school committees, to obtain and share information regarding the effectiveness of

the program and the manner and timing under which municipalities shall become included in the

funding method described in this section. The department shall also seek clarification from the

Centers for Medicare and Medicaid Services regarding the extent to which Medicare, Medicare

managed care organizations, and Medicare supplement plans could become included in the

funding method described in this section. The department shall report its findings to the

chairpersons of the house finance committee and senate finance committee not later than April 1,

2015.

     SECTION 5. Section 1 of this article shall take effect upon passage. The remainder of

this article shall take effect as of January 1, 2016.