Chapter 08-100-19

ARTICLE 19 SUBSTITUTE A AS AMENDED

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, 2005, the period from October 1, 2003 through September 30, 2004 and for any fiscal year ending after~~ September 30, 2007, the period from October 1, 2005 through September 30, 2006., and for any fiscal year ending after September 30, 2008, the period from October 1, 2006 through September 30, 2007.

(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, 2005 shall be deemed to be five and eighty-five hundredths percent (5.85%), and that the uncompensated care index for the payment year ending September 30, 2006 shall be deemed to be five and fifty hundredths percent (5.50%), and that the uncompensated care index for the payment year ending September 30, 2007 shall be deemed to be five and ~~forty-seven~~ thirty-eight hundredths percent (~~5.47~~ 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%).

40-8.3-3. Implementation. – (a) For the fiscal year commencing on October 1, 2006 and ending September 30, 2007, the department of 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) Disproportionate share hospital payments to all participating hospitals not to exceed an aggregate limit of $97.8 million, to be allocated by the department to the Pool A, Pool C and Pool D components of the DSH Plan;

(2) That the Pool D allotment shall be distributed among the participating hospitals in direct proportion to the individual participating hospitals 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, 2007 and are expressly conditioned upon approval on or before July 9, 2007 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 2007 for the disproportionate share payments.

~~(b)~~(a) For the fiscal year commencing on October 1, 2007 and ending September 30, 2008, the department of 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) Disproportionate share hospital payments to all participating hospitals not to exceed an aggregate limit of $~~99.5~~ 105.6 million, to be allocated by the department to the Pool A, Pool C and Pool D components of the DSH Plan;

(2) That the Pool D allotment shall be distributed among the participating hospitals in direct proportion to the individual participating hospitals 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, 2008 and are expressly conditioned upon approval on or before July 7, 2008 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 2008 for the disproportionate share payments.

(b) For the fiscal year commencing on October 1, 2008 and ending September 30, 2009, the department of 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 $105.5 million, to be allocated by the department to the Pool A, Pool C and Pool D components of the DSH Plan;

(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, 2009 and are expressly conditioned upon approval on or before July 6, 2009 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 2009 for the disproportionate share payments.

(c) 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. Chapter 40-8.3 of the General Laws entitled "Uncompensated Care" is hereby amended by adding thereto the following sections:

40-8.3-5. Hospital payments. – Due to the high ratio of unqualified uncompensated care expenses to qualified uncompensated care expenses, the department of human services is hereby authorized and directed to pay during state fiscal year 2009: (1) any acute care hospital in Washington County the amount of five hundred thousand dollars ($500,000); (2) any acute care hospital in Kent County the amount of eight hundred thousand dollars ($800,000); and (3) Miriam Hospital the amount of one million six hundred thousand dollars ($1,600,000).

40-8.3-6. Outpatient adjustment payments. – Effective July 1, 2008, the department of human services is hereby authorized and directed to amend its regulations and the Rhode Island State Plan for Medical Assistance pursuant to Title XIX of the Social Security Act for reimbursement to hospitals for outpatient service as follows:

Hospitals – Outpatient adjustment payments.

(a) Each hospital in the state of Rhode Island, as defined in subdivision 23-17-38.1(b)(1), shall receive a quarterly adjustment payment during state fiscal year 2009 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 the hospital's fiscal year ending during 2007;

(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 fiscal year ending during 2007 not including any recoupments or settlements;

(3) Multiply the sum of all Medicaid payments as determined in subdivision (2) by fifty-seven percent (57.0%) 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 in SFY 2009;

(4) Pay each hospital on or about July 20, 2008, October 20, 2008, January 20, 2009, and April 20, 2009 one-quarter (.25) of its total outpatient adjustment as determined in subdivision (3) above.

(b) The amounts determined in subsection (a) are in addition to Medicaid 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.

(c) The payments are expressly conditioned upon approval by the secretary of the United States Department of Health and Human Services, or his or her authorized representative, of any Medicaid state plan amendment necessary to secure for the state the benefit of federal financial participation in federal fiscal year 2009 for such payments, such amendment to be filed not later than July 9, 2008.

40-8.3-7. Inpatient adjustment payments. – Effective July 1, 2008, the department of human services is hereby authorized and directed to amend its regulations and the Rhode Island State Plan for Medical Assistance pursuant to Title XIX of the Social Security Act for reimbursement to hospitals for outpatient services as follows:

Hospitals – Inpatient adjustment payments.

(a) Each hospital in the state of Rhode Island as defined in subdivision 23-17-38.1(b)(1), shall receive a quarterly adjustment payment during state fiscal year 2009 of an amount determined as follows:

(1) Determine the percent of the state's total Medicaid inpatient services provided by each hospital during the hospital's fiscal year ending during 2007;

(2) Determine the sum of all Medicaid payments to hospitals made for inpatient services provided during each hospital's fiscal year ending during 2007 not including any recoupments or sentiments;

(3) Multiply the sum of all Medicaid payments as determined in subdivision (2) by two and ninety-eight hundredths percent (2.98%) 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 outpatient adjustment for each hospital to be paid in SFY 2009;

(4) Pay each hospital on or about July 20, 2008, October 20, 2008, January 20, 2009, and April 20, 2009 one-quarter (.25) of its total outpatient adjustment as determined in subdivision (3) above.

(b) The amounts determined in subsection (a) are in addition to Medicaid inpatient payments 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 3. This article shall take effect upon passage.