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art.018/1

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     ARTICLE 18

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, 2017 2018, the period from October 1, 2015 2016,

through September 30, 2016 2017, and for any fiscal year ending after September 30, 2018 2019,

the period from October 1, 2016, through September 30, 2017.

     (2) "Medicaid 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

and shall mean the actual facilities and buildings in existence in Rhode Island, licensed pursuant to

§ 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on that license, regardless

of changes in licensure status pursuant to chapter 17.14 of title 23 (hospital conversions) and § 23-

17-6(b) (change in effective control), that provides short-term, acute inpatient and/or outpatient

care to persons who require definitive diagnosis and treatment for injury, illness, disabilities, or

pregnancy. Notwithstanding the preceding language, the negotiated Medicaid managed-care

payment rates for a court-approved purchaser that acquires a hospital through receivership, special

mastership, or other similar state insolvency proceedings (which court-approved purchaser is issued

a hospital license after January 1, 2013) shall be based upon the newly negotiated rates between

the court-approved purchaser and the health plan, and such rates shall be effective as of the date

that the court-approved purchaser and the health plan execute the initial agreement containing the

newly negotiated rate. The rate-setting methodology for inpatient hospital payments and outpatient

hospital payments set forth in §§ 40-8-13.4(b)(1)(ii)(C) and 40-8-13.4(b)(2), respectively, shall

thereafter apply to negotiated increases for each annual twelve-month (12) period as of July 1

following the completion of the first full year of the court-approved purchaser's initial Medicaid

managed-care contract;

     (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, September

30, 2014, September 30, 2015, September 30, 2016, September 30, 2017, and September 30, 2018,

September 30, 2019, and September 30, 2020 shall be deemed to be five and thirty hundredths

percent (5.30%).

     40-8.3-3. Implementation.

     (a) For federal fiscal year 2017, commencing on October 1, 2016, and ending September

30, 2017, 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 DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$139.7 million, shall be allocated by the executive office of health and human services to the Pool

D component 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 11, 2017, and are expressly conditioned upon approval

on or before July 5, 2017, 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 2017 for the

disproportionate share payments.

     (b)(a) For federal fiscal year 2018, commencing on October 1, 2017, and ending September

30, 2018, 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 DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$138.6 million, shall be allocated by the executive office of health and human services to the Pool

D component 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 10, 2018, and are expressly conditioned upon approval

on or before July 5, 2018, 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 2018 for the

disproportionate share payments.

     (c)(b) For federal fiscal year 2019, commencing on October 1, 2018, and ending September

30, 2019, 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 DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$139.7 million, shall be allocated by the executive office of health and human services to the Pool

D component 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 10, 2019, and are expressly conditioned upon approval

on or before July 5, 2019, 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 2018 2019 for the

disproportionate share payments.

     (c) For federal fiscal year 2020, commencing on October 1, 2019, and ending September

30, 2020, 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 DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$139.7 million, shall be allocated by the executive office of health and human services to the Pool

D component 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, 2020, and are expressly conditioned upon approval

on or before July 6, 2020, 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 2020 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.

     (e) The executive office of health and human services is directed, on at least a monthly

basis, to collect patient-level uninsured information, including, but not limited to, demographics,

services rendered, and reason for uninsured status from all hospitals licensed in Rhode Island.

     (f) Beginning with federal FY 2016, Pool D DSH payments will be recalculated by the

state based on actual hospital experience. The final Pool D payments will be based on the data from

the final DSH audit for each federal fiscal year. Pool D DSH payments will be redistributed among

the qualifying hospitals in direct proportion to the individual, qualifying hospital's uncompensated-

care to the total uncompensated-care costs for all qualifying hospitals as determined by the DSH

audit. No hospital will receive an allocation that would incur funds received in excess of audited

uncompensated-care costs.

     SECTION 2. This article shall take effect as of July 1, 2019.