ARTICLE 18

RELATING TO LICENSING OF HOSPITAL FACILITIES

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 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.

(b) (a) 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, 2018, 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 13, 2020, 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, 2020, make a return to the tax administrator containing the correct computation of net

patient-services revenue for the hospital fiscal year ending September 30, 2018, 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) (b) There is also imposed a hospital licensing fee for state fiscal year 2021 against each

hospital in the state. The hospital licensing fee is equal to five six percent (5.0%) (6.0%) of the net

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

January 1, 2018, 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 13, 2021, 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,

2020, make a return to the tax administrator containing the correct computation of net patient-

services revenue for the hospital fiscal year ending September 30, 2018, 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.

(d) (c) 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 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.

(e) (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.

(f) (e) The licensing fee imposed by subsection (b) (a) shall apply to hospitals as defined

herein that are duly licensed on July 1, 2019, and shall be in addition to the inspection fee imposed

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

(g) (f) The licensing fee imposed by subsection (c) (b) shall apply to hospitals as defined

herein that are duly licensed on July 1, 2020, and shall be in addition to the inspection fee imposed

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

SECTION 2. This article shall take effect as of July 1, 2020.