2019 -- S 0666

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LC002092

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO HEALTH AND SAFETY - LICENSING OF HEALTH CARE FACILITIES

     Introduced By: Senator Roger Picard

     Date Introduced: March 21, 2019

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     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 also imposed a hospital licensing fee at the rate of five and eight hundred

fifty-six thousandths percent (5.856%) upon the net patient-services revenue of every hospital for

the hospital's first fiscal year ending on or after January 1, 2016, 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 U.S. 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 chapter 51 of title 44 shall apply. Every

hospital shall pay the licensing fee to the tax administrator on or before July 10, 2018, 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 14, 2018, make a return to the tax

administrator containing the correct computation of net patient-services revenue for the hospital

fiscal year ending September 30, 2016, 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 six percent (6%) upon the

net patient-services revenue of every hospital for the hospital's first fiscal year ending on or after

January 1, 2017, 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 U.S. 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 chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to

the tax administrator on or before July 10, 2019, 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 14, 2019, make a return to the tax administrator containing the correct

computation of net patient-services revenue for the hospital fiscal year ending September 30,

2017, 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) The tax administrator shall remit to the host municipality thirteen percent (13%) of

any hospital licensing fee collected from any hospital located within that municipality.

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

meanings:

     (1) "Hospital" means 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) and

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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.

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

that are duly licensed on July 1, 2018, 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. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HEALTH AND SAFETY - LICENSING OF HEALTH CARE FACILITIES

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     This act would require the tax administrator to remit thirteen percent (13%) of all hospital

licensing fees to the municipality wherein the hospital is located.

     This act would take effect upon passage.

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