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     ARTICLE 17

RELATING TO HOSPITAL UNCOMPENSATED CARE

     SECTION 1. Sections 40-8.3-2 and 40-8.3-3 of the General Laws in Chapter 40-8.3

entitled "Uncompensated Care" are hereby amended to read as follows:

     40-8.3-2. Definitions. -- As used in this chapter:

     (1) "Base year" means for the purpose of calculating a disproportionate share payment for

any fiscal year ending after September 30, 2012 2013, the period from October 1, 2010 2011

through September 30, 2011 2012, and for any fiscal year ending after September 30, 2013 2014,

the period from October 1, 2011 2012 through September 30, 2012 2013.

     (2) "Medical assistance inpatient utilization rate for a hospital" means a fraction

(expressed as a percentage) the numerator of which is the hospital's number of inpatient days

during the base year attributable to patients who were eligible for medical assistance during the

base year and the denominator of which is the total number of the hospital's inpatient days in the

base year.

     (3) "Participating hospital" means any nongovernment and nonpsychiatric hospital that:

(i) was licensed as a hospital in accordance with chapter 17 of title 23 during the base year; (ii)

achieved a medical assistance inpatient utilization rate of at least one percent (1%) during the

base year; and (iii) continues to be licensed as a hospital in accordance with chapter 17 of title 23

during the payment year.

     (4) "Uncompensated care costs" means, as to any hospital, the sum of: (i) the cost

incurred by such hospital during the base year for inpatient or outpatient services attributable to

charity care (free care and bad debts) for which the patient has no health insurance or other third-

party coverage less payments, if any, received directly from such patients; and (ii) the cost

incurred by such hospital during the base year for inpatient or out-patient services attributable to

Medicaid beneficiaries less any Medicaid reimbursement received therefor; multiplied by the

uncompensated care index.

     (5) "Uncompensated care index" means the annual percentage increase for hospitals

established pursuant to § 27-19-14 for each year after the base year, up to and including the

payment year, provided, however, that the uncompensated care index for the payment year ending

September 30, 2007 shall be deemed to be five and thirty-eight hundredths percent (5.38%), and

that the uncompensated care index for the payment year ending September 30, 2008 shall be

deemed to be five and forty-seven hundredths percent (5.47%), and that the uncompensated care

index for the payment year ending September 30, 2009 shall be deemed to be five and thirty-eight

hundredths percent (5.38%), and that the uncompensated care index for the payment years ending

September 30, 2010, September 30, 2011, September 30, 2012, September 30, 2013 and,

September 30, 2014 and September 30, 2015 shall be deemed to be five and thirty hundredths

percent (5.30%).

     40-8.3-3. Implementation. -- (a) For the fiscal year commencing on October 1, 2011 and

ending September 30, 2012, the executive office of health and human services shall submit to the

Secretary of the U.S. Department of Health and Human Services a state plan amendment to the

Rhode Island Medicaid state plan for disproportionate share hospital payments (DSH Plan) to

provide:

     (1) That the disproportionate share hospital payments to all participating hospitals, not to

exceed an aggregate limit of $126.2 million, shall be allocated by the executive office of health

and human services to the Pool A, Pool C and Pool D components of the DSH Plan; and,

     (2) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital's uncompensated care costs for the base

year, inflated by the uncompensated care index to the total uncompensated care costs for the base

year inflated by uncompensated care index for all participating hospitals. The disproportionate

share payments shall be made on or before July 16, 2012 and are expressly conditioned upon

approval on or before July 9, 2012 by the Secretary of the U.S. Department of Health and Human

Services, or his or her authorized representative, of all Medicaid state plan amendments necessary

to secure for the state the benefit of federal financial participation in federal fiscal year 2012 for

the disproportionate share payments.

     (b)(a) For federal fiscal year 2013, commencing on October 1, 2012 and ending

September 30, 2013, the executive office of health and human services shall submit to the

Secretary of the U.S. Department of Health and Human Services a state plan amendment to the

Rhode Island Medicaid state plan for disproportionate share hospital payments (DSH Plan) to

provide:

     (1) That the disproportionate share hospital payments to all participating hospitals, not to

exceed an aggregate limit of $128.3 million, shall be allocated by the executive office of health

and human services to the Pool A, Pool C and Pool D components of the DSH Plan; and,

     (2) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital's uncompensated care costs for the base

year, inflated by the uncompensated care index to the total uncompensated care costs for the base

year inflated by uncompensated care index for all participating hospitals. The disproportionate

share payments shall be made on or before July 15, 2013 and are expressly conditioned upon

approval on or before July 8, 2013 by the Secretary of the U.S. Department of Health and Human

Services, or his or her authorized representative, of all Medicaid state plan amendments necessary

to secure for the state the benefit of federal financial participation in federal fiscal year 2013 for

the disproportionate share payments.

     (c) (b) For federal fiscal year 2014, commencing on October 1, 2013 and ending

September 30, 2014, the executive office of health and human services shall submit to the

Secretary of the U.S. Department of Health and Human Services a state plan amendment to the

Rhode Island Medicaid state plan for disproportionate share hospital payments (DSH Plan) to

provide:

     (1) That the disproportionate share hospital payments to all participating hospitals, not to

exceed an aggregate limit of $128.3 $136.8 million, shall be allocated by the executive office of

health and human services to the Pool A, Pool C and Pool D components of the DSH Plan; and,

     (2) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital's uncompensated care costs for the base

year, inflated by the uncompensated care index to the total uncompensated care costs for the base

year inflated by uncompensated care index for all participating hospitals. The disproportionate

share payments shall be made on or before July 14, 2014 and are expressly conditioned upon

approval on or before July 7, 2014 by the Secretary of the U.S. Department of Health and Human

Services, or his or her authorized representative, of all Medicaid state plan amendments necessary

to secure for the state the benefit of federal financial participation in federal fiscal year 2014 for

the disproportionate share payments.

     (c) For federal fiscal year 2015, commencing on October 1, 2014 and ending September

30, 2015, the executive office of health and human services shall submit to the Secretary of the

U.S. Department of Health and Human Services a state plan amendment to the Rhode Island

Medicaid state plan for disproportionate share hospital payments (DSH Plan) to provide:

     (1) That the disproportionate share hospital payments to all participating hospitals, not to

exceed an aggregate limit of $136.8 million, shall be allocated by the executive office of health

and human services to the Pool A, Pool C and Pool D components of the DSH Plan; and,

     (2) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital's uncompensated care costs for the base

year, inflated by the uncompensated care index to the total uncompensated care costs for the base

year inflated by uncompensated care index for all participating hospitals. The disproportionate

share payments shall be made on or before July 13, 2015 and are expressly conditioned upon

approval on or before July 6, 2015 by the Secretary of the U.S. Department of Health and Human

Services, or his or her authorized representative, of all Medicaid state plan amendments necessary

to secure for the state the benefit of federal financial participation in federal fiscal year 2015 for

the disproportionate share payments.

     (d) No provision is made pursuant to this chapter for disproportionate share hospital

payments to participating hospitals for uncompensated care costs related to graduate medical

education programs.

     SECTION 2. Section 40-8.3-10 of the General Laws in Chapter 40-8.3 entitled

"Uncompensated Care" is hereby amended to read as follows:

     40-8.3-10. Outpatient adjustment payments. -- Hospital adjustment payments. --

Effective July 1, 2012 and for each subsequent year, the executive office of health and human

services is hereby authorized and directed to amend its regulations for reimbursement to hospitals

for inpatient and outpatient services as follows:

      (a) Each hospital in the state of Rhode Island, as defined in subdivision 23-17-

38.19(b)(1), shall receive a quarterly outpatient adjustment payment each state fiscal year of an

amount determined as follows:

      (1) Determine the percent of the state's total Medicaid outpatient and emergency

department services (exclusive of physician services) provided by each hospital during each

hospital's prior fiscal year;

      (2) Determine the sum of all Medicaid payments to hospitals made for outpatient and

emergency department services (exclusive of physician services) provided during each hospital's

prior fiscal year;

      (3) Multiply the sum of all Medicaid payments as determined in subdivision (2) by

seventy-four and ninety-seven hundredths percent (74.97%) a percentage defined as the total

identified upper payment limit for all hospitals divided by the sum of all Medicaid payments as

determined in subdivision (2); and then multiply that result by each hospital's percentage of the

state's total Medicaid outpatient and emergency department services as determined in subdivision

(1) to obtain the total outpatient adjustment for each hospital to be paid each year;

      (4) Pay each hospital on or before July 20, October 20, January 20, and April 20 one

quarter (1/4) of its total outpatient adjustment as determined in subdivision (3) above.

     (b) Each hospital in the state of Rhode Island, as defined in subdivision 3-17-38.19(b)(1),

shall receive a quarterly inpatient adjustment payment each state fiscal year of an amount

determined as follows:

     (1) Determine the percent of the state's total Medicaid inpatient services (exclusive of

physician services) provided by each hospital during each hospital's prior fiscal year;

     (2) Determine the sum of all Medicaid payments to hospitals made for inpatient services

(exclusive of physician services) provided during each hospital's prior fiscal year;

     (3) Multiply the sum of all Medicaid payments as determined in subdivision (2) by a

percentage defined as the total identified upper payment limit for all hospitals divided by the sum

of all Medicaid payments as determined in subdivision (2); and then multiply that result by each

hospital's percentage of the state's total Medicaid inpatient services as determined in subdivision

(1) to obtain the total inpatient adjustment for each hospital to be paid each year;

     (4) Pay each hospital on or before July 20, October 20, January 20, and April 20 one

quarter (1/4) of its total inpatient adjustment as determined in subdivision (3) above.

     (b) (c) The amounts determined in subsections (a) and (b) are in addition to Medicaid

inpatient and outpatient payments and emergency services payments (exclusive of physician

services) paid to hospitals in accordance with current state regulation and the Rhode Island Plan

for Medicaid Assistance pursuant to Title XIX of the Social Security Act and are not subject to

recoupment or settlement.

     SECTION 4. This article shall take effect as of July 1, 2014.