SENATE AMENDED

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY FAIRCHILD, ADOLPH, BAKER, BARRAR, BEAR, BEYER, BOYD, BRENNAN, CIVERA, CLYMER, COHEN, CONKLIN, DENLINGER, EACHUS, EVERETT, FLECK, FRANKEL, GEIST, GEORGE, GINGRICH, GOODMAN, GRELL, GROVE, GRUCELA, HARKINS, HARRIS, HELM, HESS, KIRKLAND, KORTZ, McGEEHAN, McILVAINE SMITH, MICCARELLI, MILLER, MOUL, O'NEILL, PAYNE, PHILLIPS, PICKETT, RAPP, REICHLEY, SAYLOR, SCAVELLO, SIPTROTH, K. SMITH, SOLOBAY, STERN, VULAKOVICH, WANSACZ, YUDICHAK, ROCK, CAUSER, MICOZZIE, MURT AND BOBACK, FEBRUARY 4, 2009

SENATOR VANCE, PUBLIC HEALTH AND WELFARE, IN SENATE, RE-REPORTED AS AMENDED, JULY 1, 2010

AN ACT

Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An

act to consolidate, editorially revise, and codify the public

welfare laws of the Commonwealth," in general powers of the

Department of Public Welfare, further providing for

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determining whether applicants are veterans; in public

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assistance, further providing for establishment of county

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boards and expenses and for lifetime limit; and, in hospital

assessment, further providing for definitions, for

authorization, for administration, for no hold harmless, for

tax exemption and for cessation medical assistance payments

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for institutional care; and providing for Statewide Quality

Care Assessment.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of June 13, 1967 (P.L.31, No.21), known

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as the Public Welfare Code, is amended by adding a section to

read:

Section 215.  Veterans.--(a)  The department shall make a

good faith effort to determine whether an applicant for cash, 

medical or energy assistance is a veteran. While in the process

of making its determination, the department shall dispense

benefits to the applicant, if otherwise eligible.

(b)  As a condition of eligibility to receive cash, medical

or energy assistance, unless there is good cause not to do so, 

an applicant who is a veteran shall be required to contact a

veteran service officer accredited and recognized by the United

States Department of Veterans Affairs, the Department of

Military and Veterans Affairs or the county director of veterans

affairs in which the applicant resides in order to determine the

applicant's eligibility for veteran's benefits or to file a

veteran claims packet. The department shall develop a standard

form to be used by a veteran service officer to verify the

applicant's eligibility for veteran benefits.

(c)  An applicant who is a veteran shall provide proof of

compliance with this section and the department shall, to the

greatest extent possible, require the applicant to provide

information on the final determination of eligibility for

veteran benefits and the type of benefits the veteran is

entitled to receive.

(d)  As used in this section, the following words and phrases

shall have the following meanings:

"Assistance" means money, services and payment for medical

coverage or energy assistance for needy persons who are

residents of this Commonwealth, are in need of assistance and

meet all conditions of eligibility.

"Veteran claims packet" means an application requesting a

determination or entitlement or evidencing a belief in

entitlement to a benefit as provided for in 38 CFR (relating to

pensions, bonuses, and veterans' relief) or 51 Pa.C.S. (relating

to military affairs).

Section 2.  Section 415 of the act is amended to read:

Section 415.  Establishment of County Boards; Expenses.--For

each county of the Commonwealth, there is hereby established a

county board of assistance, to be known as the County Board of

Assistance and referred to in this Article IV as the "county

board," which shall be composed of men and women, to be

appointed by the Governor [with the advice and consent of two-

thirds of all members of the Senate]. Each appointment by the

Governor shall bear the endorsement of the senator of the

district in which the nominee resides. In the case of a vacancy

in that senatorial district, the nominee shall be endorsed by

the senator of an adjacent district. The county boards shall be

composed as far as possible of persons engaged or interested in

business, social welfare, labor, industry, education or public

administration. The members of the county boards shall serve

without compensation, but shall be reimbursed for necessary

expenses. No member of a county board shall hold office in any

political party. Not all of the members of a county board shall

belong to the same political party.

Section 3.  Section 441.4 of the act, added July 7, 2005

(P.L.177, No.42), is amended to read:

Section 441.4.  [Lifetime Limit] Reasonable Limits on

Allowable Income Deductions for Medical Expenses When

Determining Payment Toward the Cost of Long-Term Care

Services.--(a)  [Necessary medical or remedial care expenses

recognized under Federal or State law but not paid for by the

medical assistance program are allowable income deductions when

determining a recipient's payment toward the cost of long-term

care services. An allowable income deduction for unpaid medical

expenses incurred prior to the authorization of medical

assistance eligibility and those medical expenses incurred for

long-term care services after medical assistance is authorized

shall be subject to a lifetime maximum of ten thousand dollars

($10,000) unless application of the limit would result in undue

hardship.] When determining a recipient's payment toward the

cost of long-term care services, long-term care medical expenses

incurred six months or more prior to application for medical

assistance shall be disallowed as a deduction, and medical and

remedial expenses that were incurred as a result of a transfer

of assets penalty shall be limited to zero unless application of

these limits would result in undue hardship.

(b)  As used in this section, the term "undue hardship" shall

mean that either:

(1)  denial of medical assistance would deprive the

individual of medical care and endanger the individual's health

or life; or

(2)  the individual or a financially dependent family member

would be deprived of food, shelter or the necessities of life.

Section 4.  The definitions of "exempt hospital" and "general

acute care hospital" in section 801-E of the act, added July 4,

2008 (P.L.557, No.44), are amended and the section is amended by

adding a definition to read:

Section 801-E.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

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["Exempt hospital."  A hospital that the Secretary of Public

Welfare has determined meets one of the following:

(1)  Is excluded under 42 CFR 412.23(a), (b), (d) and (f)

(relating to excluded hospitals: classifications) as of March

20, 2008, from reimbursement of certain Federal funds under the

prospective payment system described by 42 CFR Pt. 412 (relating

to prospective payment systems for inpatient hospital services).

(2)  Is a Federal veterans' affairs hospital.

(3)  Is part of an institution with State-related status as

that term is defined in 22 Pa. Code § 31.2 (relating to

definitions) and provides over 100,000 days of care to medical

assistance patients annually.

(4)  Provides care, including inpatient hospital services, to

all patients free of charge.]

"General acute care hospital."  A hospital other than [an

exempt hospital.] a hospital that the Secretary of Public

Welfare has determined meets one of the following:

(1)  Is excluded under 42 CFR 412.23(a), (b), (d), (e) and

(f) (relating to excluded hospitals: Classifications) as of

March 20, 2008, from reimbursement of certain Federal funds

under the prospective payment system described by 42 CFR 412

(relating to prospective payment systems for inpatient hospital

services).

(2)  Is a Federal veterans' affairs hospital.

(3)  Is a high volume Medicaid hospital.

(4)  Provides care, including inpatient hospital services, to

all patients free of charge.

"High volume Medicaid hospital."  A hospital that the

Secretary of Public Welfare has determined meets all of the

following:

(1)  Is a nonprofit hospital subsidiary of a State-related

institution as that term is defined in 62 Pa.C.S. § 103

(relating to definitions); and

(2)  Provides more than 90,000 days of care to medical

assistance patients annually.

* * *

Section 5.  Sections 802-E, 804-E, 805-E, 807-E and 808-E of

the act, added July 4, 2008 (P.L.557, No.44), are amended to

read:

Section 802-E.  Authorization.

(a)  General rule.--In order to generate additional revenues

for the purpose of assuring that medical assistance recipients

have access to hospital services and that all citizens have

access to emergency department services, and subject to the

conditions and requirements specified under this article, a

municipality may, by ordinance, [impose] do the following:

(1)  Impose a monetary assessment on the net operating

revenue reduced by all revenues received from Medicare of each

general acute care hospital located in the municipality [subject

to the conditions and requirements specified under this

article].

(2)  Beginning on or after July 1, 2009, and subject to the

advance written approval by the secretary, impose a monetary

assessment on the net operating revenues reduced by all revenues

received from Medicare of each high volume Medicaid hospital

located in the municipality.

(b)  Administrative provisions.--The [ordinance] ordinances

adopted pursuant to subsection (a) may include appropriate

administrative provisions including, without limitation,

provisions for the collection of interest and penalties.

(c)  Maximum assessment.--In each year in which the

assessment is implemented, the assessment shall be subject to

the maximum aggregate amount that may be assessed under 42 CFR

433.68(f)(3)(i) (relating to permissible health care-related

taxes) or any other maximum established under Federal law.

Section 804-E.  Administration.

(a)  Remittance.--Upon collection of the funds generated by

the assessment authorized under this article, the municipality

shall remit a portion of the funds to the Commonwealth for the

purposes set forth under section 802-E, except that the

municipality may retain funds in an amount necessary to

reimburse it for its reasonable costs in the administration and

collection of the assessment and to fund a portion of its costs

of operating public health clinics as set forth in an agreement

to be entered into between the municipality and the Commonwealth

acting through the secretary.

(b)  Establishment.--There is established a restricted

account in the General Fund for the receipt and deposit of funds

under subsection (a). Funds in the account are hereby

appropriated to the department for purposes of making

supplemental or increased medical assistance payments for

emergency department services to general acute care hospitals

within the municipality and to maintain or increase other

medical assistance payments to hospitals within the

municipality, as specified in the Commonwealth's approved Title

XIX State Plan.

Section 805-E.  No hold harmless.

No general acute care hospital or high volume Medicaid

hospital shall be directly guaranteed a repayment of its

assessment in derogation of 42 CFR 433.68(f) (relating to

permissible health care-related taxes), except that, in each

fiscal year in which an assessment is implemented, the

department shall use a portion of the funds received under

section 804-E(a) for the purposes outlined under section 804-

E(b) to the extent permissible under Federal and State law or

regulation and without creating an indirect guarantee to hold

harmless, as those terms are used under 42 CFR 433.68(f)(i). The

secretary shall submit any State Medicaid plan amendments to the

United States Department of Health and Human Services that are

necessary to make the payments authorized under section 804-

E(b).

Section 807-E.  Tax exemption.

Notwithstanding any exemptions granted by any other Federal,

State or local tax or other law, including section 204(a)(3) of

the act of May 22, 1933 (P.L.853, No.155), known as The General

County Assessment Law, no general acute care hospital or high

volume Medicaid hospital in the municipality shall be exempt

from the assessment.

Section 808-E.  [Cessation] Time period.

(a)  Cessation.--The assessment authorized under this article

shall cease June 30, 2013.

(b)  Assessment.--A municipality shall have the power to

enact the assessment authorized in section 802-E(a)(2) either

prior to or during its fiscal year ending June 30, 2010.

Section 6.  This act shall take effect immediately.

Section 1.  Section 215 of the act of June 13, 1967 (P.L.31,

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No.21), known as the Public Welfare Code, added December 17,

2009 (P.L.598, No.54), is amended to read:

Section 215.  Determining Whether Applicants are Veterans.--

(a)  The department shall make a good faith effort to determine

whether an applicant for cash, medical or energy assistance is a

veteran. While in the process of making its determination, the

department shall dispense benefits to the applicant, if

otherwise eligible.

(b)  As a condition of eligibility to receive cash, medical

or energy assistance, unless there is good cause not to do so,

an applicant who is a veteran shall be required to contact a

veteran service officer accredited and recognized by the United

States Department of Veterans Affairs, the Department of

Military and Veterans Affairs or the county director of veterans

affairs in which the applicant resides in order to determine the

applicant's eligibility for veteran's benefits or to file a

veteran claims packet. The department shall develop a standard

form to be used by a veteran service officer to verify the

applicant's eligibility for veteran's benefits and make this

form available on its official website.

(c)  An applicant who is a veteran shall provide proof of

compliance with this section and the department shall, to the

greatest extent possible, require the applicant to provide

information on the final determination of eligibility for

veteran's benefits and the type of benefits the veteran is

entitled to receive.

(d)  As used in this section, the following words and phrases

shall have the following meanings:

"Assistance" means money, services and payment for medical

coverage or energy assistance for needy persons who are

residents of this Commonwealth, are in need of assistance and

meet all conditions of eligibility.

"Veteran claims packet" means an application requesting a

determination or entitlement or evidencing a belief in

entitlement to a benefit as provided for in 38 CFR (relating to

pensions, bonuses, and veterans' relief) or 51 Pa.C.S. (relating

to military affairs).

Section 2.  Section 443.1 introductory paragraph and (1) of

the act, amended June 30, 2007 (P.L.49, No.16), are amended and

the section is amended by adding paragraphs to read:

Section 443.1.  Medical Assistance Payments for Institutional

Care.--The following medical assistance payments shall be made

[in] on behalf of eligible persons whose institutional care is

prescribed by physicians:

(1)  Payments as determined by the department for inpatient

hospital care consistent with Title XIX of the Social Security

Act (49 Stat. 620, 42 U.S.C. § 1396 et seq.). To be eligible for

such payments, a hospital must be qualified to participate under

Title XIX of the Social Security Act and have entered into a

written agreement with the department regarding matters

designated by the secretary as necessary to efficient

administration, such as hospital utilization, maintenance of

proper cost accounting records and access to patients' records.

Such efficient administration shall require the department to

permit participating hospitals to utilize the same fiscal

intermediary for this Title XIX program as such hospitals use

for the Title XVIII program[;].

(1.1)  Subject to section 813-G, for inpatient acute care

hospital services provided during a fiscal year in which an

assessment is imposed under Article VIII-G, payments under the

medical assistance fee-for-service program shall be determined

in accordance with the department's regulations, except as

follows:

(i)  If the Commonwealth's approved Title XIX State Plan for

inpatient hospital services in effect for the period of July 1,

2010, through June 30, 2013, specifies a methodology for

calculating payments that is different from the department's

regulations or authorizes additional payments not specified in

the department's regulations, such as inpatient disproportionate

share payments and direct medical education payments, the

department shall follow the methodology or make the additional

payments as specified in the approved Title XIX State Plan.

(ii)  Subject to Federal approval of an amendment to the

Commonwealth's approved Title XIX State Plan, in making medical

assistance fee-for-service payments to acute care hospitals for

inpatient services provided on or after July 1, 2010, the

department shall use payment methods and standards that provide

for all of the following:

(A)  Use of the All Patient Refined-Diagnosis Related Group

(APR/DRG) system for the classification of inpatient stays into

DRGs.

(B)  Calculation of base DRG rates based upon a Statewide

average cost which are adjusted to account for a hospital's

regional labor costs, teaching status, capital and medical

assistance patient levels and such other factors as the

department determines may significantly impact the costs that a

hospital incurs in delivering inpatient services and which may

be adjusted based on the assessment revenue collected under

Article VIII-G.

(C)  Adjustments to payments for outlier cases where the

costs of the inpatient stays exceed cost thresholds established

by the department.

(iii)  Notwithstanding subparagraph (i), the department may

make additional changes to its payment methods and standards for

inpatient hospital services consistent with Title XIX of the

Social Security Act, including changes to supplemental payments

currently authorized in the State Plan based on the availability

of Federal and State funds.

(1.2)  Subject to section 813-G, for inpatient acute care

hospital services provided under the physical health medical

assistance managed care program during a fiscal year in which an

assessment is imposed under Article XIII-G, the following shall

apply:

(i)  For inpatient hospital services provided under a

participation agreement between an inpatient acute care hospital

and a medical assistance managed care organization in effect as

of June 30, 2010, the medical assistance managed care

organization shall pay, and the hospital shall accept as payment

in full, amounts determined in accordance with the payment terms

and rate methodology specified in the agreement and in effect as

of June 30, 2010, during the term of that participation

agreement. If a participation agreement in effect as of June 30,

2010, uses the department fee for service DRG rate methodology

in determining payment amounts, the medical assistance managed

care organization shall pay, and the hospital shall accept as

payment in full, amounts determined in accordance with the fee

for service payment methodology in effect as of June 30, 2010,

including, without limitation, continuation of the same grouper,

outlier methodology, base rates and relative weights, during the

term of that participation agreement.

(ii)  Nothing in subparagraph (i) shall prohibit payment

rates for inpatient acute care hospital services provided under

a participation agreement to change from the rates in effect as

of June 30, 2010, if the change in payment rates is authorized

by the terms of the participation agreement between the

inpatient acute care hospital and the medical assistance managed

care organization. For purposes of this act, any contract

provision that provides that payment rates and changes to

payment rates shall be calculated based upon the department's

fee for service DRG payment methodology shall be interpreted to

mean the department's fee for service medical assistance DRG

methodology in place on June 30, 2010.

(iii)  If a participation agreement between a hospital and a

medical assistance managed care organization terminates during a

fiscal year in which an assessment is imposed under Article

VIII-G prior to the expiration of the term of the participation

agreement, payment for services, other than emergency services,

covered by the medical assistance managed care organization and

rendered by the hospital shall be made at the rate in effect as

of the termination date, as adjusted in accordance with

subparagraphs (i) and (ii), during the period in which the

participation agreement would have been in effect had the

agreement not terminated. The hospital shall receive the

supplemental payment in accordance with subparagraph (v).

(iv)  If a hospital and a medical assistance managed care

organization do not have a participation agreement in effect as

June 30, 2010, the medical assistance managed care organization

shall pay, and the hospital shall accept as payment in full for

services, other than emergency services, covered by the medical

assistance managed care organization and rendered during a

fiscal year in which an assessment is imposed under Article

XIII-G an amount equal to the rates payable for the services by

the medical assistance fee for service program as of June 30,

2010. The hospital shall receive the supplemental payment in

accordance with subparagraph (v).

(v)  The department shall make enhanced capitation payments

to medical assistance managed care organizations exclusively for

the purpose of making supplemental payments to hospitals in

order to promote continued access to quality care for medical

assistance recipients. Medical assistance managed care

organizations shall use the enhanced capitation payments

received pursuant to this section solely for the purpose of

making supplemental payments to hospitals and shall provide

documentation to the department certifying that all funds

received in this manner are used in accordance with this

section. The supplemental payments to hospitals made pursuant to

this subsection are in lieu of increased or additional payments

for inpatient acute care services from medical assistance

managed care organizations resulting from the department's

implementation of payments under paragraph (1.1)(ii). Medical

assistance managed care organizations shall in no event be

obligated under this section to make supplemental or other

additional payments to hospitals that exceed the enhanced

capitation payments made to the medical assistance managed care

organization under this section. Medical assistance managed care

organizations shall not be required to advance the supplemental

payments to hospitals authorized by this subsection and shall

only make the supplemental payments to hospitals once medical

assistance managed care organizations have received the enhanced

capitation payments from the department.

(vi)  Nothing in this subsection shall prohibit an inpatient

acute care hospital and a medical assistance managed care

organization from executing a new participation agreement or

amending an existing participation agreement on or after July 1,

2010, in which they agree to payment terms that would result in

payments that are different than the payments determined in

accordance with subparagraphs (i), (ii), (iii) and (iv).

(vii)  As used in this paragraph, the term "medical

assistance managed care organization" means a Medicaid managed

care organization as defined in section 1903(m)(1)(a) of the

Social Security Act (49 Stat. 620, 42 U.S.C. § 1396b(m)(1)(a))

that is a party to a Medicaid managed care contract with the

department, other than a behavioral health managed care

organization that is a party to a medical assistance managed

care contract with the department.

* * *

Section 3.  The act is amended by adding an article to read:

ARTICLE VIII-G

STATEWIDE QUALITY CARE ASSESSMENT

Section 801-G.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Assessment."  The fee, known as the Quality Care Assessment,

authorized to be implemented under this article on every covered

hospital.

"Bad debt expense."  The cost of care for which a hospital

expected payment from the patient or a third-party payer, but

which the hospital subsequently determines to be uncollectible,

as further described in the Medicare Provider Reimbursement

Manual published by the United States Department of Health and

Human Services.

"Charity care expense."  The cost of care for which a

hospital ordinarily charges a fee but which is provided free or

at a reduced rate to patients who cannot afford to pay but who

are not eligible for public programs, and from whom the hospital

did not expect payment in accordance with the hospital's charity

care policy, as further described in the Medicare Provider

Reimbursement Manual published by the United States Department

of Health and Human Services.

"Contractual allowance."  The difference between what a

hospital charges for services and the amounts that certain

payers have agreed to pay for the services as further described

in the Medicare Provider Reimbursement Manual published by the

United States Department of Health and Human Services.

"Covered hospital." A hospital other than an exempt hospital.

"Critical access hospital."  Any hospital that has qualified

under section 1861(mm)(1) of the Social Security Act (49 Stat.

620, 42 U.S.C. § 1395x(mm)(1)) as a critical access hospital

under Medicare.

"Exempt hospital." Any of the following:

(1)  A Federal veterans' affairs hospital.

(2)  A hospital that provides care, including inpatient

hospital services, to all patients free of charge.

(3)  A private psychiatric hospital.

(4)  A State-owned psychiatric hospital.

(5)  A critical access hospital.

(6)  A long-term acute care hospital.

"Hospital."  A facility licensed as a hospital under 28

Pa.Code Pt. IV Subpt. B (relating to general and special

hospitals).

"Long-term acute care hospital."  A hospital or unit of a

hospital whose patients have a length of stay of greater than 25

days, and that provide specialized acute care of medically

complex patients who are critically ill.

"Medical assistance managed care organization."  A Medicaid

managed care organization as defined in section 1903(m)(1)(a) of

the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396b(m)(1)

(a)) that is a party to a Medicaid managed care contract with

the department. The term shall not include a behavioral health

managed care organization that is a party to a Medicaid managed

care contract with the department.

"Net inpatient revenue."  Gross charges for facilities for

inpatient services less any deducted amounts for bad debt

expense, charity care expense and contractual allowances as

reported on the Medicare Cost Report for Federal Fiscal Year

2008 or to the Pennsylvania Health Care Cost Containment Council

for Federal fiscal year 2008, if the Medicare Cost Report is not

available, and validated by the department.

"Program."  The Commonwealth's medical assistance program as

authorized under Article IV.

Section 802-G.  Authorization.

In order to generate additional revenues for the purpose of

assuring that medical assistance recipients have access to

hospital services, the department shall implement a monetary

assessment, known as the Quality Care Assessment, on each

covered hospital subject to the conditions and requirements

specified in this article, including section 813-G.

Section 803-G.  Implementation.

(a)  Health care-related fee.--The assessment authorized

under this article, once imposed, shall be implemented as a

health care-related fee as defined under section 1903(w)(3)(B)

of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396b(w)

(3)(B)) or any amendments thereto and may be collected only to

the extent and for the periods that the secretary determines

that revenues generated by the assessment will qualify as the

State share of program expenditures eligible for Federal

financial participation.

(b)  Assessment percentage.--Subject to subsection (c), each

covered hospital shall be assessed as follows:

(1)  for fiscal year 2010-2011, each covered hospital

shall be assessed an amount equal to 2.69% of the net

inpatient revenue of the covered hospital; and 

(2)  for fiscal years 2011–2012 and 2012-2013, an amount

equal to 2.84% of the net inpatient revenue of the covered

hospital.

(c)  Adjustments to assessment percentage.--The secretary may

adjust the assessment percentage specified in subsection (b)

(2), subject to the following:

(1)  Before adjusting, the secretary shall publish a

notice in the Pennsylvania Bulletin that specifies the

proposed assessment percentage and identifies the aggregate

impact on covered hospitals subject to the assessment.

Interested parties shall have 30 days in which to submit

comments to the secretary. Upon expiration of the 30-day

comment period, the secretary, after consideration of the

comments, shall publish a second notice in the Pennsylvania

Bulletin announcing the assessment percentage.

(2)  The secretary may not adjust the assessment

percentages to exceed 2.95% of the net inpatient revenue of

covered hospitals.

(3)  An adjustment in the assessment percentage shall be

approved by the Governor.

(d)  Maximum amount.--In each year in which the assessment is

implemented, the assessment shall be subject to the maximum

aggregate amount that may be assessed under 42 CFR 433.68(f)(3)

(i) (relating to permissible health care-related taxes) or any

other maximum established under Federal law.

(e)  Limited review.--Except as permitted under section 810-

G, the secretary's determination of the assessment percentage

pursuant to subsection (b) shall not be subject to

administrative or judicial review under 2 Pa.C.S. Chs. 5 Subch.

A (relating to practice and procedure of Commonwealth agencies)

and 7 Subch. A (relating to judicial review of Commonwealth

agency action), or any other provision of law; nor shall any

assessments implemented under this article or forms or reports

required to be completed by covered hospitals pursuant to this

article be subject to the act of July 31, 1968 (P.L.769,

No.240), referred to as the Commonwealth Documents Law; the act

of October 15, 1980 (P.L.950, No.164), known as the Commonwealth

Attorneys Act; and the act of June 25, 1982 (P.L.633, No.181),

known as the Regulatory Review Act.

Section 804-G.  Administration.

(a)  Calculation and notice of assessment amount.--Using the

assessment percentage established under section 803-G(b) and

covered hospitals' net inpatient revenue, the department shall

calculate and notify each covered hospital of the assessment

amount owed for the fiscal year. Notification pursuant to this

subsection may be made in writing or electronically at the

discretion of the department.

(b)  Payment.--A covered hospital shall pay the assessment

amount due for a fiscal year in four quarterly installments.

Payment of a quarterly installment shall be made on or before

the first day of the second month of the quarter or 30 days from

the date of the notice of the quarterly assessment amount,

whichever day is later.

(c)  Records.--Upon request by the department, a covered

hospital shall furnish to the department such records as the

department may specify in order to determine the assessment for

a fiscal year or the amount of the assessment due from the

covered hospital or to verify that the covered hospital has paid

the correct amount due.

(d)  Underpayments and overpayments.--In the event that the

department determines that a covered hospital has failed to pay

an assessment or that it has underpaid an assessment, the

department shall notify the covered hospital in writing of the

amount due, including interest, and the date on which the amount

due must be paid, which shall not be less than 30 days from the

date of the notice. In the event that the department determines

that a covered hospital has overpaid an assessment, the

department shall notify the covered hospital in writing of the

overpayment and, within 30 days of the date of the notice of the

overpayment, shall either refund the amount of the overpayment

or offset the amount of the overpayment against any amount that

may be owed to the department from the covered hospital.

Section 805-G.  Restricted account.

(a)  Establishment.--There is established a restricted

account, known as the Quality Care Assessment Account, in the

General Fund for the receipt and deposit of revenues collected

under this article. Funds in the account are appropriated to the

department for the following:

(1)  Making medical assistance payments to hospitals in

accordance with section 443.1(1.1) and as otherwise specified

in the Commonwealth's approved Title XIX State Plan.

(2)  Making enhanced capitation payments to medical

assistance managed care organizations for supplemental

payments for inpatient hospital services in accordance with

section 443.1(1.2).

(3)  Any other purpose approved by the secretary.

(b)  Limitations.--

(1)  For the first year of the assessment, the amount

used for the medical assistance payments for hospitals and

Medicaid managed care organizations may not exceed the

aggregate amount of assessment funds collected for the year

less $121,000,000.

(2)  For the second year of the assessment, the amount

used for the medical assistance payments for hospitals and

medical assistance managed care organizations may not exceed

the aggregate amount of assessment funds collected for the

year less $59,000,000.

(3)  For the first two years of the assessments, the

aggregate amount used for the medical assistance payments for

hospitals and Medicaid managed care organizations may not

exceed the aggregate amount of assessment funds collected for

the two years less $180,000,000.

(4)  For the third year of the assessment, the amount

used for the medical assistance payment for hospitals and

medical assistance managed care organizations may not exceed

the aggregate amount of the assessment funds collected for

the year less $51,500,000.

(5)  The amounts retained by the department shall be used

for purposes approved by the secretary under subsection (a)

(3).

(c)  Lapse.--Funds in the Quality Care Assessment Account

shall not lapse to the General Fund at the end of a fiscal year.

If this article expires, the department shall use any remaining

funds for the purposes stated in this section until the funds in

the Quality Care Assessment Account are exhausted.

Section 806-G.  No hold harmless.

No covered hospital shall be directly guaranteed a repayment

of its assessment in derogation of 42 CFR 433.68(f) (relating to

permissible health care-related taxes), except that, in each

fiscal year in which an assessment is implemented, the

department shall use the funds received under this article for

the purposes outlined under section 805-G to the extent

permissible under Federal and State law or regulation and

without creating an indirect guarantee to hold harmless, as

those terms are used under 42 CFR 433.68(f)(i). The secretary

shall submit to the United States Department of Health and Human

Services any State Medicaid plan amendments that are necessary

to make the payments authorized under section 805-G.

Section 807-G.  Federal waiver.

To the extent necessary in order to implement this article,

the department shall seek a waiver under 42 CFR 433.68(e)

(relating to permissible health care-related taxes) from the

Centers for Medicare and Medicaid Services of the United States

Department of Health and Human Services. The department shall

not implement the assessment until approval of the waiver is

obtained. Upon approval of the waiver, the assessment shall be

implemented retroactive to the first day of the fiscal year to

which the waiver applies.

Section 808-G.  Tax exemption.

(a)  General rule.--Notwithstanding any exemptions granted by

any other Federal, State or local tax or other law, no covered

hospital other than an exempt hospital shall be exempt from the

assessment.

(b)  Interpretation.--The assessment imposed under this

article shall be recognized by the Commonwealth as uncompensated

goods and services under the act of November 26, 1997 (P.L.508,

No.55), known as the Institutions of Purely Public Charity Act, 

and shall be considered a community benefit for purposes of any

required or voluntary community benefit report filed or prepared

by a covered hospital.

Section 809-G.  Remedies.

In addition to any other remedy provided by law, the

department may enforce this article by imposing one or more of

the following remedies:

(1)  When a covered hospital fails to pay an assessment

or penalty in the amount or on the date required by this

article, the department shall add interest at the rate

provided in section 806 of the act of April 9, 1929 (P.L.343,

No.176), known as The Fiscal Code, to the unpaid amount of

the assessment or penalty from the date prescribed for its

payment until the date it is paid.

(2)  When a covered hospital fails to file a report or to

furnish records to the department as required by this

article, the department shall impose a penalty against the

covered hospital in the amount of $1,000, plus an additional

amount of $200 per day for each additional day that the

failure to file the report or furnish the records continues.

(3)  When a covered hospital that is a medical assistance

provider, or that is related through common ownership or

control as defined in 42 CFR 413.17(b) (relating to cost to

related organizations) to a medical assistance provider,

fails to pay all or part of an assessment or penalty within

60 days of the date that payment is due, the department may

deduct the unpaid assessment or penalty and any interest owed

thereon from any medical assistance payments due to the

covered hospital or to any related medical assistance

provider until the full amount is recovered. Any such

deduction shall be made only after written notice to the

covered hospital and medical assistance provider and may be

taken in installments over a period of time, taking into

account the financial condition of the medical assistance

provider.

(4)  Within 60 days after the end of each calendar

quarter, the department shall notify the Department of Health

of any covered hospital that has assessment, penalty or

interest amounts that have remained unpaid for 90 days or

more. The Department of Health shall not renew the license of

any such covered hospital until the department notifies the

Department of Health that the covered hospital has paid the

outstanding amount in its entirety or that the department has

agreed to permit the covered hospital to repay the

outstanding amount in installments and that, to date, the

covered hospital has paid the installments in the amount and

by the date required by the department.

(5)  The secretary may waive all or part of the interest

or penalties assessed against a covered hospital pursuant to

this article for good cause as shown by the covered hospital.

Section 810-G.  Request for review.

A covered hospital that is aggrieved by a determination of

the department as to the amount of the assessment due from the

covered hospital or a remedy imposed pursuant to section 809-G

may file a request for review of the decision of the department

by the Bureau of Hearings and Appeals, which shall have

exclusive jurisdiction in such matters. The procedures and

requirements of 67 Pa.C.S. Ch. 11 (relating to medical

assistance hearings and appeals) shall apply to requests for

review filed pursuant to this section, except that in any such

request for review, a covered hospital may not challenge an

assessment percentage determined by the secretary pursuant to

section 803-G(b) but only whether the department correctly

determined the assessment amount due from the covered hospital

using the assessment percentage in effect for the fiscal year. A

notice of review filed pursuant to this section shall not

operate as a stay of the covered hospital's obligation to pay

the assessment amount due for a fiscal year as specified in

section 804-G(b).

Section 811-G.  Liens.

Any assessments implemented and interest and penalties

assessed against a covered hospital under this article shall be

a lien on the real and personal property of the covered hospital

in the manner provided by section 1401 of the act of April 9,

1929 (P.L.343, No.176), known as The Fiscal Code, may be entered

by the department in the manner provided by section 1404 of The

Fiscal Code and shall continue and retain priority in the manner

provided in section 1404.1 of The Fiscal Code.

Section 812-G.  Regulations.

The department may issue such regulations and orders as may

be necessary to implement the Quality Care Assessment program in

accordance with the requirements of this article.

Section 813-G.  Conditions for payments.

The department and the medical assistance managed care

organizations shall not be required to make payments as

specified in section 443.1(1.1) and (1.2) and a covered hospital

shall not be required to pay the Quality Care Assessment as

specified in section 804-G(b) unless all of the following have

occurred:

(1)  The department receives Federal approval of a waiver

under 42 CFR 433.68(e) (relating to permissible health care-

related taxes), authorizing the department to implement the

Quality Care Assessment as specified in this article.

(2)  The department receives Federal approval of a State

plan amendment authorizing the changes to its payment methods

and standards specified in § 443.1(1.1)(ii).

(3)  The department receives Federal approval of a waiver

under section 1915(b) of the Social Security Act (49 Stat.

620, 42 U.S.C. § 1396n(b)) for the HealthChoices Program and

amendments to its medical assistance managed care

organization contracts authorizing supplemental payments for

inpatient hospital services funded in accordance with section

805-G.

Section 814-G.  Report.

Not later than 180 days prior to the expiration date

specified in section 815-G, the department shall prepare and

submit a report to the chair and minority chair of the Public

Health and Welfare Committee of the Senate, the chair and

minority chair of the Appropriations Committee of the Senate,

the chair and minority chair of the Health and Human Services

Committee of the House of Representatives and the chair and

minority chair of the Appropriations Committee of the House of

Representatives. The report shall include the following:

(1)  The name, address and amount of assessment for each

covered hospital subject to the Quality Care Assessment.

(2)  The total amount of assessment revenue collected for

each year.

(3)  The amount of assessment paid by each covered

hospital, including any interest and penalties paid.

(4)  The name and address of each hospital receiving

supplemental payments instituted as a result of the Quality

Care Assessment.

(5)  The payment amount and type of supplemental payment

received by each hospital.

(6)  The total amount of fee-for-service inpatient acute

care payment made to each hospital.

(7)  The number of medical assistance patient days and

discharges by hospital.

(8)  Any proposed changes to the payment methodologies

and standards.

Section 815-G.  Expiration.

This article shall expire June 30, 2013.

Section 816-G.  Retroactive applicability.

This article shall apply retroactively to July 1, 2010.

Section 4.  This act shall take effect immediately.