H1075B2189A03203 MSP:JB 06/30/13 #90 A03203
AMENDMENTS TO HOUSE BILL NO. 1075
Sponsor: SENATOR VANCE
Printer's No. 2189
1Amend Bill, page 1, line 17, by inserting after "assessment,"
2 reenacting and
9STATEWIDE QUALITY CARE ASSESSMENT
13Section 801-G. Definitions.
20"Bad debt expense." The cost of care for which a hospital
21expected payment from the patient or a third-party payer, but
22which the hospital subsequently determines to be uncollectible,
23as further described in the Medicare Provider Reimbursement
24Manual published by the United States Department of Health and
26"Charity care expense." The cost of care for which a
27hospital ordinarily charges a fee but which is provided free or
28at a reduced rate to patients who cannot afford to pay but who
29are not eligible for public programs, and from whom the hospital
30did not expect payment in accordance with the hospital's charity
31care policy, as further described in the Medicare Provider
32Reimbursement Manual published by the United States Department
33of Health and Human Services.
5"Critical access hospital." Any hospital that has qualified
6under section 1861(mm)(1) of the Social Security Act (49 Stat.
7620, 42 U.S.C. § 1395x(mm)(1)) as a critical access hospital
9"Exempt hospital." Any of the following:
10(1) A Federal veterans' affairs hospital.
13(3) A private psychiatric hospital.
14(4) A State-owned psychiatric hospital.
15(5) A critical access hospital.
16(6) A long-term acute care hospital.
20"Long-term acute care hospital." A hospital or unit of a
21hospital whose patients have a length of stay of greater than 25
22days and that provides specialized acute care of medically
23complex patients who are critically ill.
24"Medical assistance managed care organization." A Medicaid
25managed care organization as defined in section 1903(m)(1)(a) of
26the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396b(m)(1)
27(a)) that is a party to a Medicaid managed care contract with
28the department. The term shall not include a behavioral health
29managed care organization that is a party to a Medicaid managed
30care contract with the department.
31"Net inpatient revenue." Gross charges for facilities for
32inpatient services less any deducted amounts for bad debt
33expense, charity care expense and contractual allowances as
34reported on forms specified by the department and:
44Section 802-G. Authorization.
45In order to generate additional revenues for the purpose of
46assuring that medical assistance recipients have access to
47hospital services, the department shall implement a monetary
48assessment, known as the Quality Care Assessment, on each
49covered hospital subject to the conditions and requirements
50specified in this article, including section 813-G.
51Section 12.3. Section 803-G of the act, added or amended
3Section 803-G. Implementation.
4(a) Health care-related fee.--The assessment authorized
5under this article, once imposed, shall be implemented as a
6health care-related fee as defined under section 1903(w)(3)(B)
7of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396b(w)
8(3)(B)) or any amendments thereto and may be collected only to
9the extent and for the periods that the secretary determines
10that revenues generated by the assessment will qualify as the
11State share of program expenditures eligible for Federal
21(c) Adjustments to assessment percentage.--The secretary may
22adjust the assessment percentage specified in subsection (b),
23provided that, before adjusting, the secretary shall publish a
24notice in the Pennsylvania Bulletin that specifies the proposed
25assessment percentage and identifies the aggregate impact on
26covered hospitals subject to the assessment. Interested parties
27shall have 30 days in which to submit comments to the secretary.
28Upon expiration of the 30-day comment period, the secretary,
29after consideration of the comments, shall publish a second
30notice in the Pennsylvania Bulletin announcing the assessment
32(d) Maximum amount.--In each year in which the assessment is
33implemented, the assessment shall be subject to the maximum
34aggregate amount that may be assessed under 42 CFR 433.68(f)(3)
35(i) (relating to permissible health care-related taxes) or any
36other maximum established under Federal law.
37(e) Limited review.--Except as permitted under section 810-
38G, the secretary's determination of the assessment percentage
39pursuant to subsection (b) shall not be subject to
40administrative or judicial review under 2 Pa.C.S. Chs. 5 Subch.
41A (relating to practice and procedure of Commonwealth agencies)
42and 7 Subch. A (relating to judicial review of Commonwealth
43agency action) or any other provision of law; nor shall any
44assessments implemented under this article or forms or reports
45required to be completed by covered hospitals pursuant to this
46article be subject to the act of July 31, 1968 (P.L.769,
47No.240), referred to as the Commonwealth Documents Law, the act
48of October 15, 1980 (P.L.950, No.164), known as the Commonwealth
49Attorneys Act, and the act of June 25, 1982 (P.L.633, No.181),
50known as the Regulatory Review Act.
51Section 12.4. Section 804-G of the act, amended June 30,
12011 (P.L.89, No.22), is reenacted and amended to read:
2Section 804-G. Administration.
3(a) Calculation and notice of assessment amount.--Using the
4assessment percentage established under section 803-G and
5covered hospitals' net inpatient revenue, the department shall
6calculate and notify each covered hospital of the assessment
7amount owed for the fiscal year. Notification pursuant to this
8subsection may be made in writing or electronically at the
9discretion of the department.
10(a.1) Calculation of assessment with changes of ownership.--
11(1) If a single covered hospital changes ownership or
12control, the department will continue to calculate the
13assessment amount using the hospital's net inpatient revenue
14for State fiscal year [2008-2009] 2010-2011 or for the most
15recent State fiscal year, or part thereof, if the State
16fiscal year [2008-2009] 2010-2011 amounts are not available.
17The covered hospital is liable for any outstanding assessment
18amounts, including outstanding amounts related to periods
19prior to the change of ownership or control.
20(2) If two or more hospitals merge or consolidate into a
21single covered hospital as a result of a change in ownership
22or control, the department will calculate the covered
23hospital assessment amount using the combined net inpatient
24revenue for State fiscal year [2008-2009] 2010-2011 or for
25the most recent State fiscal year, or part thereof, if the
26State fiscal year [2008-2009] 2010-2011 amounts are not
27available, of any covered hospitals that were merged or
28consolidated into the single covered hospital. The single
29covered hospital is liable for any outstanding assessment
30amounts, including outstanding amounts related to periods
31prior to the change of ownership or control, of any covered
32hospital that was merged or consolidated.
33(a.2) Calculation of assessment with closures or other
34changes in operation.--Except as provided in subsection (a.1)
35(2), a covered hospital that closes or that becomes an exempt
36hospital during a fiscal year is liable for both:
51(2) For the State fiscal year following the State fiscal
1year under paragraph (1), the department shall calculate the
2hospital's assessment amount using the net inpatient revenue
3from the State fiscal year in which the covered hospital
4began operation or became a covered hospital.
5(3) For the State fiscal years following the first full
6State fiscal year under paragraph (2), the department shall
7calculate the hospital's assessment amount using the net
8inpatient revenue from the prior State fiscal year.
9(b) Payment.--A covered hospital shall pay the assessment
10amount due for a fiscal year in four quarterly installments.
11Payment of a quarterly installment shall be made on or before
12the first day of the second month of the quarter or 30 days from
13the date of the notice of the quarterly assessment amount,
14whichever day is later.
15(c) Records.--Upon request by the department, a covered
16hospital shall furnish to the department such records as the
17department may specify in order for the department to validate
18the net inpatient revenue reported by the hospital or to
19determine the assessment for a fiscal year or the amount of the
20assessment due from the covered hospital or to verify that the
21covered hospital has paid the correct amount due.
22(d) Underpayments and overpayments.--In the event that the
23department determines that a covered hospital has failed to pay
24an assessment or that it has underpaid an assessment, the
25department shall notify the covered hospital in writing of the
26amount due, including interest, and the date on which the amount
27due must be paid, which shall not be less than 30 days from the
28date of the notice. In the event that the department determines
29that a covered hospital has overpaid an assessment, the
30department shall notify the covered hospital in writing of the
31overpayment and, within 30 days of the date of the notice of the
32overpayment, shall either refund the amount of the overpayment
33or offset the amount of the overpayment against any amount that
34may be owed to the department from the covered hospital.
38Section 805-G. Restricted account.
39(a) Establishment.--There is established a restricted
40account, known as the Quality Care Assessment Account, in the
41General Fund for the receipt and deposit of revenues collected
42under this article. Funds in the account are appropriated to the
43department for the following:
47(2) Making adjusted capitation payments to medical
48assistance managed care organizations for additional payments
49for inpatient hospital services in accordance with section
50443.1(1.2), (1.3) and (1.4).
51(3) Any other purpose approved by the secretary for
4(1) For the first year of the assessment, the amount
5used for the medical assistance payments for hospitals and
6Medicaid managed care organizations may not exceed the
7aggregate amount of assessment funds collected for the year
9(2) For the second year of the assessment, the amount
10used for the medical assistance payments for hospitals and
11medical assistance managed care organizations may not exceed
12the aggregate amount of assessment funds collected for the
13year less $109,000,000.
14(4) For the third year of the assessment, the amount
15used for the medical assistance payment for hospitals and
16medical assistance managed care organizations may not exceed
17the aggregate amount of the assessment funds collected for
18the year less $109,000,000.
19(4.1) For State fiscal years 2013-2014 and 2014-2015,
20the amount used for the medical assistance payment for
21hospitals and medical assistance managed care organizations
22may not exceed the aggregate amount of the assessment funds
23collected for the year less $150,000,000.
24(4.2) For State fiscal year 2015-2016, the amount used
25for the medical assistance payment for hospitals and medical
26assistance managed care organizations may not exceed the
27aggregate amount of the assessment funds collected for the
28year less $140,000,000.
29(5) The amounts retained by the department pursuant to
30paragraphs (1), (2) [and], (4), (4.1) and (4.2) and any
31additional amounts remaining in the restricted accounts after
32the payments described in subsection (a)(1) and (2) are made
33shall be used for purposes approved by the secretary under
35(c) Lapse.--Funds in the Quality Care Assessment Account
36shall not lapse to the General Fund at the end of a fiscal year.
37If this article expires, the department shall use any remaining
38funds for the purposes stated in this section until the funds in
39the Quality Care Assessment Account are exhausted.
43Section 806-G. No hold harmless.
44No covered hospital shall be directly guaranteed a repayment
45of its assessment in derogation of 42 CFR 433.68(f) (relating to
46permissible health care-related taxes), except that, in each
47fiscal year in which an assessment is implemented, the
48department shall use the funds received under this article for
49the purposes outlined under section 805-G to the extent
50permissible under Federal and State law or regulation and
51without creating an indirect guarantee to hold harmless, as
1those terms are used under 42 CFR 433.68(f)(i). The secretary
2shall submit to the United States Department of Health and Human
3Services any State Medicaid plan amendments that are necessary
4to make the payments authorized under section 805-G.
5Section 807-G. Federal waiver.
6To the extent necessary in order to implement this article,
7the department shall seek a waiver under 42 CFR 433.68(e)
8(relating to permissible health care-related taxes) from the
9Centers for Medicare and Medicaid Services of the United States
10Department of Health and Human Services. The department shall
11not implement the assessment until approval of the waiver is
12obtained. Upon approval of the waiver, the assessment shall be
13implemented retroactive to the first day of the fiscal year to
14which the waiver applies.
15Section 808-G. Tax exemption.
16(a) General rule.--Notwithstanding any exemptions granted by
17any other Federal, State or local tax or other law, no covered
18hospital other than an exempt hospital shall be exempt from the
20(b) Interpretation.--The assessment imposed under this
21article shall be recognized by the Commonwealth as uncompensated
22goods and services under the act of November 26, 1997 (P.L.508,
23No.55), known as the Institutions of Purely Public Charity Act,
24and shall be considered a community benefit for purposes of any
25required or voluntary community benefit report filed or prepared
26by a covered hospital.
27Section 809-G. Remedies.
31(1) When a covered hospital fails to pay an assessment
32or penalty in the amount or on the date required by this
33article, the department shall add interest at the rate
34provided in section 806 of the act of April 9, 1929 (P.L.343,
35No.176), known as The Fiscal Code, to the unpaid amount of
36the assessment or penalty from the date prescribed for its
37payment until the date it is paid.
38(2) When a covered hospital fails to file a report or to
39furnish records to the department as required by this
40article, the department shall impose a penalty against the
41covered hospital in the amount of $1,000, plus an additional
42amount of $200 per day for each additional day that the
43failure to file the report or furnish the records continues.
44(3) When a covered hospital that is a medical assistance
45provider, or that is related through common ownership or
46control as defined in 42 CFR 413.17(b) (relating to cost to
47related organizations) to a medical assistance provider,
48fails to pay all or part of an assessment or penalty within
4960 days of the date that payment is due, the department may
50deduct the unpaid assessment or penalty and any interest owed
51thereon from any medical assistance payments due to the
1covered hospital or to any related medical assistance
2provider until the full amount is recovered. Any such
3deduction shall be made only after written notice to the
4covered hospital and medical assistance provider and may be
5taken in installments over a period of time, taking into
6account the financial condition of the medical assistance
8(4) Within 60 days after the end of each calendar
9quarter, the department shall notify the Department of Health
10of any covered hospital that has assessment, penalty or
11interest amounts that have remained unpaid for 90 days or
12more. The Department of Health shall not renew the license of
13any such covered hospital until the department notifies the
14Department of Health that the covered hospital has paid the
15outstanding amount in its entirety or that the department has
16agreed to permit the covered hospital to repay the
17outstanding amount in installments and that, to date, the
18covered hospital has paid the installments in the amount and
19by the date required by the department.
23Section 810-G. Request for review.
24A covered hospital that is aggrieved by a determination of
25the department as to the amount of the assessment due from the
26covered hospital or a remedy imposed pursuant to section 809-G
27may file a request for review of the decision of the department
28by the Bureau of Hearings and Appeals, which shall have
29exclusive jurisdiction in such matters. The procedures and
30requirements of 67 Pa.C.S. Ch. 11 (relating to medical
31assistance hearings and appeals) shall apply to requests for
32review filed pursuant to this section, except that in any such
33request for review, a covered hospital may not challenge an
34assessment percentage determined by the secretary pursuant to
35section 803-G(b) but only whether the department correctly
36determined the assessment amount due from the covered hospital
37using the assessment percentage in effect for the fiscal year. A
38notice of review filed pursuant to this section shall not
39operate as a stay of the covered hospital's obligation to pay
40the assessment amount due for a fiscal year as specified in
42Section 811-G. Liens.
43Any assessments implemented and interest and penalties
44assessed against a covered hospital under this article shall be
45a lien on the real and personal property of the covered hospital
46in the manner provided by section 1401 of the act of April 9,
471929 (P.L.343, No.176), known as The Fiscal Code, may be entered
48by the department in the manner provided by section 1404 of The
49Fiscal Code and shall continue and retain priority in the manner
50provided in section 1404.1 of The Fiscal Code.
51Section 812-G. Regulations.
6Section 813-G. Conditions for payments.
7The department shall not be required to make payments as
8specified in section 443.1(1.1), (1.2), (1.3) and (1.4) and a
9covered hospital shall not be required to pay the Quality Care
10Assessment as specified in section 804-G(b) unless all of the
11following have occurred:
12(1) The department receives Federal approval of a waiver
13under 42 CFR 433.68(e) (relating to permissible health care-
14related taxes) authorizing the department to implement the
15Quality Care Assessment as specified in this article.
19(3) The department receives Federal approval of
20amendments to its medical assistance managed care
21organization contracts authorizing adjustments to its
22capitation payments funded in accordance with section 805-G.
25Section 814-G. Report.
26Not later than 180 days prior to the expiration date
27specified in section 815-G, the department shall prepare and
28submit a report to the chair and minority chair of the Public
29Health and Welfare Committee of the Senate, the chair and
30minority chair of the Appropriations Committee of the Senate,
31the chair and minority chair of the Health and Human Services
32Committee of the House of Representatives and the chair and
33minority chair of the Appropriations Committee of the House of
34Representatives. The report shall include the following:
3Section 815-G. Expiration.
4This article shall expire June 30,  2016.
7Section 816-G. Retroactive applicability.
8This article shall apply retroactively to July 1, 2010.