Session of 2024
SENATE BILL No. 355
By Committee on Ways and Means
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AN ACT concerning health and healthcare; relating to health insurance
coverage; expanding medical assistance eligibility; enacting the cutting
healthcare costs for all Kansans act; directing the department of health
and environment to study certain medicaid expansion topics; adding
meeting days to the Robert G. (Bob) Bethell joint committee on home
and community based services and KanCare oversight to monitor
implementation of expanded medical assistance eligibility; amending
K.S.A. 39-7,160, 40-3213, 65-6207, 65-6210, 65-6211, 65-6212 and
65-6217 and K.S.A. 2023 Supp. 65-6208, 65-6209 and 65-6218 and
repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) Sections 1 through 13, and amendments thereto,
shall be known and may be cited as the cutting healthcare costs for all
Kansans act.
(b) The legislature expressly consents to expand eligibility for receipt
of benefits under the Kansas program of medical assistance, as required by
K.S.A. 39-709(e)(2), and amendments thereto, by the passage and
enactment of the act, subject to all requirements and limitations established
in the act.
(c) The secretary of health and environment shall adopt rules and
regulations as necessary to implement and administer the act.
(d) As used in sections 1 through 13, and amendments thereto, unless
otherwise specified:
(1) "138% of the federal poverty level," or words of like effect,
includes a 5% income disregard permitted under the federal patient
protection and affordable care act.
(2) "Act" means the cutting healthcare costs for all Kansans act.
New Sec. 2. (a) The secretary of health and environment shall submit
to the United States centers for medicare and medicaid services any state
plan amendment, waiver request or other approval request necessary to
implement the act. At least 10 calendar days prior to submission of any
such approval request to the United States centers for medicare and
medicaid services, the secretary of health and environment shall submit
such approval request application to the state finance council.
(b) For purposes of eligibility determinations under the Kansas
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program of medical assistance on and after January 1, 2025, medical
assistance shall be granted to any adult under 65 years of age who is not
pregnant and whose income meets the limitation established in subsection
(c), as permitted under the provisions of 42 U.S.C. § 1396a, as it exists on
the effective date of the act, and subject to a 90% federal medical
assistance percentage and all requirements and limitations established in
the act.
(c) The secretary of health and environment shall submit to the
United States centers for medicare and medicaid services any approval
request necessary to provide medical assistance eligibility to individuals
described in subsection (b) whose modified adjusted gross income does
not exceed 138% of the federal poverty level.
New Sec. 3. (a) The secretary of health and environment shall require
each applicant for coverage under the act to provide employment
verification at the time of initial application or renewal application. Such
verification shall be a prerequisite for coverage under the act.
(b) "Employment verification" means documentation demonstrating
employment during the preceding 12 months that meets the eligibility
requirements of the act. "Employment verification" includes, but is not
limited to:
(1) Federal form W-2 wage and tax statement;
(2) a pay stub demonstrating gross income;
(3) employment records;
(4) federal form 1099 demonstrating payments for contract labor;
(5) compliance with the requirements of K.S.A. 39-709(b), and
amendments thereto; and
(6) any other documentation as determined by the secretary of health
and environment.
(c) The following individuals shall be exempt from the requirements
of this subsection:
(1) A full-time student enrolled in a postsecondary educational
institution or technical college, as defined by K.S.A. 74-3201b, and
amendments thereto, for each year the student is enrolled in such
educational setting;
(2) a parent or guardian of a dependent child under 18 years of age or
a parent or guardian of an incapacitated adult;
(3) an individual who is mentally or physically unfit for employment,
as defined by the secretary of health and environment, or has a pending
application for supplemental security income or social security disability
insurance;
(4) an individual who has a permanent partial disability, as such term
is used in K.S.A. 44-510e, and amendments thereto;
(5) an individual who is engaged in volunteer work for at least 20
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hours per week at a nonprofit organization, as such term is defined in
K.S.A. 17-1779, and amendments thereto;
(6) an individual experiencing homelessness, as such term is defined
in 42 U.S.C. 11302, as in effect on the effective date of this act;
(7) an individual who served in the active military, naval, air or space
service and was discharged or released from such military service under
conditions other than dishonorable;
(8) an individual who is not more than 22 years of age and in the
custody of the secretary of children and families on the date that the
individual reached 18 years of age; and
(9) any individual who the secretary determines is experiencing
hardship.
New Sec. 4. (a) The secretary of health and environment may
establish a health insurance coverage premium assistance program for
individuals who meet the following requirements:
(1) The individual has an annual income that is 100% or greater than,
but does not exceed 138% of, the federal poverty level, based on the
modified adjusted gross income provisions set forth in section 2001(a)(1)
of the federal patient protection and affordable care act; and
(2) the individual is eligible for health insurance coverage through an
employer but cannot afford the health insurance coverage premiums, as
determined by the secretary of health and environment.
(b) A program established under this section shall:
(1) Contain eligibility requirements that are the same as in sections 2
and 3, and amendments thereto; and
(2) provide that an individual's payment for a health insurance
coverage premium may not exceed 2% of the individual's modified
adjusted gross income, not to exceed 2% of the household's modified
adjusted gross income in the aggregate with any premium charged to any
other household member participating in the premium assistance program.
New Sec. 5. (a) Except to the extent prohibited by 42 U.S.C. §
1396u-2(a)(2), as it exists on the effective date of this act, the secretary of
health and environment shall administer medical assistance benefits using
a managed care delivery system using organizations subject to assessment
of the privilege fee under K.S.A. 40-3213, and amendments thereto. If the
United States centers for medicare and medicaid services determines that
the assessment of a privilege fee provided in K.S.A. 40-3213, and
amendments thereto, is unlawful or otherwise invalid, then the secretary of
health and environment shall administer state medicaid services using a
managed care delivery system.
(b) In awarding a contract for an entity to administer state medicaid
services using a managed care delivery system, the secretary of health and
environment shall:
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(1) Not provide favorable or unfavorable treatment in awarding a
contract based on an entity's for-profit or not-for-profit tax status;
(2) give preference in awarding a contract to an entity that provides
health insurance coverage plans on the health benefit exchange in Kansas
established under the federal patient protection and affordable care act; and
(3) require that any entity administering state medicaid services
provide tiered benefit plans with enhanced benefits for covered individuals
who demonstrate healthy behaviors, as determined by the secretary of
health and environment, to be implemented on or before July 1, 2026.
New Sec. 6. If the federal medical assistance percentage for coverage
of medical assistance participants described in section 1902(a)(10)(A)(i)
(VIII) of the federal social security act, 42 U.S.C. § 1396a, as it exists on
the effective date of this act, becomes lower than 90%, then the secretary
of health and environment shall terminate coverage under the act over a
12-month period, beginning on the first day that the federal medical
assistance percentage becomes lower than 90%. No individual shall be
newly enrolled for coverage under the act after such date.
New Sec. 7. (a) Section 6, and amendments thereto, shall be
nonseverable from the remainder of the act. If the provisions of section 6,
and amendments thereto, are not approved by the United States centers for
medicare and medicaid services, then the act shall be null and void and
shall have no force and effect.
(b) A denial of federal approval or federal financial participation that
applies to any provision of the act not enumerated in subsection (a) shall
not prohibit the secretary of health and environment from implementing
any other provision of the act.
New Sec. 8. (a) On or before January 10, 2026, and on or before the
first day of the regular session of the legislature each year thereafter, the
secretary of health and environment shall prepare and deliver a report to
the legislature that summarizes the cost savings achieved by the state from
the movement of covered individuals from the KanCare program to
coverage under the act, including, but not limited to, the MediKan
program, the medically needy spend-down program and the breast and
cervical cancer program.
(b) State cost savings shall be determined by calculating the cost of
providing services to covered individuals in the KanCare program less the
cost of services provided to covered individuals under the act.
(c) If the secretary of health and environment implements other
initiatives using cost savings achieved through the implementation of the
act, the secretary shall include such initiatives as part of the report required
in subsection (a).
New Sec. 9. (a) The secretary of corrections and the secretary of
health and environment shall coordinate with a county sheriff or such
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sheriff's deputy who requests assistance in facilitating medicaid coverage
for any individual committed to a county jail or correctional facility
during any time period that such individual is eligible for coverage under
state or federal law.
(b) If an individual is enrolled in medicaid when such individual is
committed to a county jail or correctional facility, such medicaid status
shall not be suspended or terminated based on such individual's
incarceration for a minimum of 30 days. After 30 days, medicaid coverage
may be suspended, but not terminated, up to the maximum amount of time
permitted by state and federal law.
(c) The secretary of health and environment shall coordinate with a
county sheriff or such sheriff's deputy and the department of corrections to
assist any individual who is committed to a county jail or correctional
facility in applying for medicaid coverage prior to such individual's release
from custody if such individual is likely to meet the requirements for
medicaid coverage to allow adequate time for medicaid coverage to begin
promptly upon release.
(d) The secretary of health and environment shall adopt any rules and
regulations and supporting policies and procedures as necessary to
implement and administer this section prior to January 1, 2025.
New Sec. 10. On or before February 15, 2026, and on or before
February 15 of each year thereafter, the secretary of health and
environment shall present a report to the house of representatives standing
committee on appropriations and the senate standing committee on ways
and means that summarizes the costs of the act and the cost savings and
additional revenues generated during the preceding fiscal year.
New Sec. 11. (a) The department of health and environment shall
remit all moneys received by the department of health and environment
from drug rebates associated with medical assistance enrollees to the state
treasurer in accordance with the provisions of K.S.A. 75-4215, and
amendments thereto. Upon receipt of each such remittance, the state
treasurer shall deposit the entire amount into the state treasury to the credit
of the state general fund.
(b) The department of health and environment shall certify the
amount of moneys received by such agency from drug rebates associated
with medical assistance enrollees on a monthly basis and shall transmit
each such certification to the director of legislative research and the
director of the budget.
(c) Upon receipt of each such certification, the director of legislative
research and the director of the budget shall include such certified amount
on any monthly report prepared by the legislative research department or
the division of the budget that details state general fund receipts as a
separate item entitled "drug rebates" under a category of other revenue
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sources.
(d) This section shall take effect and be in force on and after July 1,
2025.
New Sec. 12. (a) There is hereby established the rural health advisory
committee.
(b) The rural health advisory committee shall consist of 15 members
appointed by the governor. The membership shall be comprised of
individuals with a variety of backgrounds including medicine, education,
farming, finance, business and individuals representing community
interests in rural Kansas.
(c) The governor shall designate one of the appointed members to be
chairperson of the committee. The members of the advisory committee
shall select a vice chairperson from the membership of the advisory
committee.
(d) Upon first appointment, five of the members shall serve for a term
of one year, five of the members shall be appointed for a term of two years
and five of the members shall be appointed for term of three years, as
designated by the governor. The member designated as chairperson shall
serve for a term of three years. Subsequent appointees shall serve terms of
three years.
(e) (1) The advisory committee may meet at any time and at any
place within the state on the call of the chairperson. The advisory
committee shall meet regularly, but shall meet at least once every calendar
quarter.
(2) A quorum of the advisory committee shall be eight voting
members. All actions of the advisory committee shall be adopted by a
majority of those voting members present when there is a quorum.
(f) The advisory committee shall:
(1) Advise the governor and other state agencies on rural health
issues;
(2) recommend and evaluate mechanisms to encourage greater
cooperation between rural communities and rural health providers;
(3) recommend and evaluate approaches to rural health issues that are
sensitive to the needs of local communities;
(4) develop methods to identify individuals who are underserved by
the Kansas rural healthcare system; and
(5) beginning in 2025, provide an annual report to the governor
containing the advice, recommendations and conclusions of the advisory
committee.
(g) The secretary of health and environment shall facilitate the work
of the committee by providing access to meeting space and other necessary
staff and office support. The secretary of health and environment may
adopt any rules and regulations and supporting policies and procedures
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that are necessary to support the work of the advisory committee.
New Sec. 13. The cutting healthcare costs for all Kansans act shall
not provide coverage for abortion services, except in cases where coverage
is mandated by federal law and federal financial participation is available.
Sec. 14. K.S.A. 39-7,160 is hereby amended to read as follows: 39-
7,160. (a) There is hereby established the Robert G. (Bob) Bethell joint
committee on home and community based services and KanCare
oversight. The joint committee shall review the number of individuals who
are transferred from state or private institutions and long-term care
facilities to the home and community based services and the associated
cost savings and other outcomes of the money-follows-the-person
program. The joint committee shall review the funding targets
recommended by the interim report submitted for the 2007 legislature by
the joint committee on legislative budget and use them as guidelines for
future funding planning and policy making. The joint committee shall have
oversight of savings resulting from the transfer of individuals from state or
private institutions to home and community based services. As used in
K.S.A. 39-7,159 through 39-7,162, and amendments thereto, "savings"
means the difference between the average cost of providing services for
individuals in an institutional setting and the cost of providing services in a
home and community based setting. The joint committee shall study and
determine the effectiveness of the program and cost-analysis of the state
institutions or long-term care facilities based on the success of the transfer
of individuals to home and community based services. The joint
committee shall consider the issues of whether sufficient funding is
provided for enhancement of wages and benefits of direct individual care
workers and their staff training and whether adequate progress is being
made to transfer individuals from the institutions and to move them from
the waiver waiting lists to receive home and community based services.
The joint committee shall review and ensure that any proceeds resulting
from the successful transfer be applied to the system of provision of
services for long-term care and home and community based services. The
joint committee shall monitor and study the implementation and operations
of the home and community based service programs, the children's health
insurance program, the program for the all-inclusive care of the elderly
and the state medicaid programs including, but not limited to, access to
and quality of services provided and any financial information and
budgetary issues. Any state agency shall provide data and information on
KanCare programs, including, but not limited to, pay for performance
measures, quality measures and enrollment and disenrollment in specific
plans, KanCare provider network data and appeals and grievances made to
the KanCare ombudsman, to the joint committee, as requested.
(b) The joint committee shall consist of 11 members of the legislature
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appointed as follows: (1) Two members of the house committee on health
and human services appointed by the speaker of the house of
representatives; (2) one member of the house committee on health and
human services appointed by the minority leader of the house of
representatives; (3) two members of the senate committee on public health
and welfare appointed by the president of the senate; (4) one member of
the senate committee on public health and welfare appointed by the
minority leader of the senate; (5) two members of the house of
representatives appointed by the speaker of the house of representatives,
one of whom shall be a member of the house committee on appropriations;
(6) one member of the house of representatives appointed by the minority
leader of the house of representatives; and (7) two members of the senate
appointed by the president of the senate, one of whom shall be a member
of the senate committee on ways and means.
(c) Members shall be appointed for terms coinciding with the
legislative terms for which such members are elected or appointed. All
members appointed to fill vacancies in the membership of the joint
committee and all members appointed to succeed members appointed to
membership on the joint committee shall be appointed in the manner
provided for the original appointment of the member succeeded.
(d) (1) The members originally appointed as members of the joint
committee shall meet upon the call of the member appointed by the
speaker of the house of representatives, who shall be the first chairperson,
within 30 days of the effective date of this act. The vice-chairperson of the
joint committee shall be appointed by the president of the senate.
Chairperson and vice-chairperson shall alternate annually between the
members appointed by the speaker of the house of representatives and the
president of the senate. The ranking minority member shall be from the
same chamber as the chairperson. On and after the effective date of this act
Except as provided in paragraph (2), the joint committee shall meet at
least once in January and once in April when the legislature is in regular
session and at least once for two consecutive days during each of the third
and fourth calendar quarters, on the call of the chairperson, but not to
exceed six meetings in a calendar year, except additional meetings may be
held on call of the chairperson when urgent circumstances exist which
require such meetings. Six members of the joint committee shall constitute
a quorum.
(2) During calendar year 2025 and calendar year 2026, the joint
committee shall meet for one additional day per meeting pursuant to
paragraph (1) in order to monitor the implementation of the cutting
healthcare costs for all Kansans act and to review the following topics
relating to such implementation: Payment integrity and eligibility audits;
outcomes related to section 3, and amendments thereto; health outcomes
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for individuals covered under the act; budget projections and actual
expenditures related to implementation of the act; and expenses incurred
by hospitals arising from charity care and services provided to patients
who are unwilling or unable to pay for such services.
(e) (1) At the beginning of each regular session of the legislature, the
committee shall submit to the president of the senate, the speaker of the
house of representatives, the house committee on health and human
services and the senate committee on public health and welfare a written
report on numbers of individuals transferred from the state or private
institutions to the home and community based services including the
average daily census in the state institutions and long-term care facilities,
savings resulting from the transfer certified by the secretary for aging and
disability services in a quarterly report filed in accordance with K.S.A. 39-
7,162, and amendments thereto, and the current balance in the home and
community based services savings fund of the Kansas department for
aging and disability services.
(2) Such report submitted under this subsection shall also include, but
not be limited to, the following information on the KanCare program:
(A) Quality of care and health outcomes of individuals receiving state
medicaid services under the KanCare program, as compared to the
provision of state medicaid services prior to January 1, 2013;
(B) integration and coordination of health care procedures for
individuals receiving state medicaid services under the KanCare program;
(C) availability of information to the public about the provision of
state medicaid services under the KanCare program, including, but not
limited to, accessibility to health services, expenditures for health services,
extent of consumer satisfaction with health services provided and
grievance procedures, including quantitative case data and summaries of
case resolution by the KanCare ombudsman;
(D) provisions for community outreach and efforts to promote the
public understanding of the KanCare program;
(E) comparison of the actual medicaid costs expended in providing
state medicaid services under the KanCare program after January 1, 2013,
to the actual costs expended under the provision of state medicaid services
prior to January 1, 2013, including the manner in which such cost
expenditures are calculated;
(F) comparison of the estimated costs expended in a managed care
system of providing state medicaid services under the KanCare program
after January 1, 2013, to the actual costs expended under the KanCare
program of providing state medicaid services after January 1, 2013;
(G) comparison of caseload information for individuals receiving
state medicaid services prior to January 1, 2013, to the caseload
information for individuals receiving state medicaid services under the
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KanCare program after January 1, 2013; and
(H) all written testimony provided to the joint committee regarding
the impact of the provision of state medicaid services under the KanCare
program upon residents of adult care homes.
(3) The joint committee shall consider the external quality review
reports and quality assessment and performance improvement program
plans of each managed care organization providing state medicaid services
under the KanCare program in the development of the report submitted
under this subsection.
(4) The report submitted under this subsection shall be published on
the official website of the legislative research department.
(f) Members of the committee shall have access to any medical
assistance report and caseload data generated by the Kansas department of
health and environment division of health care finance. Members of the
committee shall have access to any report submitted by the Kansas
department of health and environment division of health care finance to
the centers for medicare and medicaid services of the United States
department of health and human services.
(g) Members of the committee shall be paid compensation, travel
expenses and subsistence expenses or allowance as provided in K.S.A. 75-
3212, and amendments thereto, for attendance at any meeting of the joint
committee or any subcommittee meeting authorized by the committee.
(h) In accordance with K.S.A. 46-1204, and amendments thereto, the
legislative coordinating council may provide for such professional services
as may be requested by the joint committee.
(i) The joint committee may make recommendations and introduce
legislation as it deems necessary in performing its functions.
Sec. 15. K.S.A. 40-3213 is hereby amended to read as follows: 40-
3213. (a) Every health maintenance organization and medicare provider
organization subject to this act shall pay to the commissioner the following
fees:
(1) For filing an application for a certificate of authority, $150;
(2) for filing each annual report, $50; and
(3) for filing an amendment to the certificate of authority, $10.
(b) Every health maintenance organization subject to this act shall
pay annually to the commissioner at the time such organization files its
annual report, a privilege fee in an amount equal to the following
percentages 5.77% of the total of all premiums, subscription charges or
any other term that may be used to describe the charges made by such
organization to enrollees: 3.31% during the reporting period beginning
January 1, 2015, and ending December 31, 2017; and 5.77% on and after
January 1, 2018. In such computations all such organizations shall be
entitled to deduct therefrom any premiums or subscription charges
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returned on account of cancellations and dividends returned to enrollees. If
the commissioner shall determine at any time that the application of the
privilege fee, or a change in the rate of the privilege fee, would cause a
denial of, reduction in or elimination of federal financial assistance to the
state or to any health maintenance organization subject to this act, the
commissioner is hereby authorized to terminate the operation of such
privilege fee or the change in such privilege fee.
(c) For the purpose of insuring the collection of the privilege fee
provided for by subsection (b), every health maintenance organization
subject to this act and required by subsection (b) to pay such privilege fee
shall at the time it files its annual report, as required by K.S.A. 40-3220,
and amendments thereto, make a return, generated by or at the direction of
its chief officer or principal managing director, under penalty of K.S.A.
21-5824, and amendments thereto, to the commissioner, stating the amount
of all premiums, assessments and charges received by the health
maintenance organization, whether in cash or notes, during the year ending
on the last day of the preceding calendar year. Upon the receipt of such
returns the commissioner of insurance shall verify such returns and
reconcile the fees pursuant to subsection (f) upon such organization on the
basis and at the rate provided in this section.
(d) Premiums or other charges received by an insurance company
from the operation of a health maintenance organization subject to this act
shall not be subject to any fee or tax imposed under the provisions of
K.S.A. 40-252, and amendments thereto.
(e) Fees charged under this section shall be remitted to the state
treasurer in accordance with the provisions of K.S.A. 75-4215, and
amendments thereto. Upon receipt of each such remittance, the state
treasurer shall deposit the entire amount in the state treasury to the credit
of the medical assistance fee fund created by K.S.A. 40-3236, and
amendments thereto.
(f) (1) On and after January 1, 2018, In addition to any other filing or
return required by this section, each health maintenance organization shall
submit a report to the commissioner on or before March 31 and September
30 of each year containing an estimate of the total amount of all premiums,
subscription charges or any other term that may be used to describe the
charges made by such organization to enrollees that the organization
expects to collect during the current calendar year. Upon filing each March
31 report, the organization shall submit payment equal to ½ of the
privilege fee that would be assessed by the commissioner for the current
calendar year based upon the organization's reported estimate. Upon filing
each September 30 report, the organization shall submit payment equal to
the balance of the privilege fee that would be assessed by the
commissioner for the current calendar year based upon the organization's
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reported estimates.
(2) Any amount of privilege fees actually owed by a health
maintenance organization during any calendar year in excess of estimated
privilege fees paid shall be assessed by the commissioner and shall be due
and payable upon issuance of such assessment.
(3) Any amount of estimated privilege fees paid by a health
maintenance organization during any calendar year in excess of privilege
fees actually owed shall be reconciled when the commissioner assesses
privilege fees in the ensuing calendar year. The commissioner shall credit
such excess amount against future privilege fee assessments. Any such
excess amount paid by a health maintenance organization that is no longer
doing business in Kansas and that no longer has a duty to pay the privilege
fee shall be refunded by the commissioner from funds appropriated by the
legislature for such purpose.
Sec. 16. K.S.A. 65-6207 is hereby amended to read as follows: 65-
6207. As used in K.S.A. 65-6207 to through 65-6220, inclusive, and
amendments thereto, the following have the meaning respectively ascribed
thereto, unless the context requires otherwise:
(a) "Annual hospital medicaid expansion surcharge" means the
product of the number of unduplicated medicaid expansion enrollees
multiplied by $233.
(b) "Assessment revenues" means the revenues generated directly by
the assessment and surcharge imposed by K.S.A. 65-6208 and 65-6213,
and amendments thereto, any penalty assessments and all interest credited
to the fund under this act and any federal matching funds obtained
through the use of such assessments, surcharges, penalties and interest
amounts.
(c) "Department" means the Kansas department for aging and
disability services or the Kansas department of health and environment, or
both.
(b)(d) "Fund" means the health care access improvement fund.
(c)(e) "Health maintenance organization" has the meaning means the
same as provided in K.S.A. 40-3202, and amendments thereto.
(d)(f) "Hospital" has the meaning means the same as provided in
K.S.A. 65-425, and amendments thereto.
(e)(g) "Hospital provider" means a person licensed by the department
of health and environment to operate, conduct or maintain a hospital,
regardless of whether the person is a federal medicaid provider.
(f)(h) "Pharmacy provider" means an area, premises or other site
where drugs are offered for sale, where there are pharmacists, as defined in
K.S.A. 65-1626, and amendments thereto, and where prescriptions, as
defined in K.S.A. 65-1626, and amendments thereto, are compounded and
dispensed.
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(g) "Assessment revenues" means the revenues generated directly by
the assessments imposed by K.S.A. 65-6208 and 65-6213, and
amendments thereto, any penalty assessments and all interest credited to
the fund under this act, and any federal matching funds obtained through
the use of such assessments, penalties and interest amounts
(i) "Unduplicated medicaid expansion enrollee" means each
individual who becomes eligible for and enrolls in the Kansas program of
medical assistance under K.S.A. 39-709, and amendments thereto, and is
eligible for a 90% federal medical assistance percentage pursuant to 42
U.S.C. § 1396d(y)(1).
Sec. 17. K.S.A. 2023 Supp. 65-6208 is hereby amended to read as
follows: 65-6208. (a) Subject to the provisions of K.S.A. 65-6209, and
amendments thereto, an annual assessment on services is imposed on each
hospital provider in an amount not less than 1.83% of each hospital's net
inpatient operating revenue and not greater than 3% of each hospital's net
inpatient and outpatient operating revenue, as determined by the healthcare
access improvement panel in consultation with the department of health
and environment, for the hospital's fiscal year three years prior to the
assessment year. In the event that a hospital does not have a complete 12-
month fiscal year in such third prior fiscal year, the assessment under this
section shall be $200,000 until such date that such hospital has completed
the hospital's first 12-month fiscal year. Upon completing such first 12-
month fiscal year, such hospital's assessment under this section shall be the
amount not less than 1.83% of each hospital's net inpatient operating
revenue and not greater than 3% of such hospital's net inpatient and
outpatient operating revenue, as determined by the healthcare access
improvement panel in consultation with the department of health and
environment, for such first completed 12-month fiscal year.
(b) (1) On and after January 1, 2027, an annual hospital medicaid
expansion support surcharge shall be imposed on each hospital provider
in an amount equal to its proportionate share as determined by the
healthcare access improvement panel in accordance with K.S.A. 65-
6218(d), and amendments thereto, except that such surcharge shall not
exceed $35,000,000 for any calendar year and no surcharge shall be
imposed for any period after the federal medical assistance percentage
described in 42 U.S.C. § 1396d(y)(1) is lower than 90%. Upon final
approval by the United States centers for medicare and medicaid services,
notice of the amount of such surcharge shall be transmitted by the
healthcare access improvement panel to the department. Upon receipt of
such notice, the department shall promptly provide notice to each hospital
provider in accordance with K.S.A. 65-6211(b), and amendments thereto.
(2) The department of health and environment shall submit to the
United States centers for medicare and medicaid services any approval
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request necessary to implement the surcharge authorized by this
subsection and shall not impose such surcharge prior to receiving
approval by the United States centers for medicare and medicaid services
and publishing such approval.
(c) Nothing in this act shall be construed to authorize any home rule
unit or other unit of local government to license for revenue or impose a
tax or assessment upon hospital providers or a tax or assessment measured
by the income or earnings of a hospital provider.
(c)(d) (1) The department of health and environment shall submit to
the United States centers for medicare and medicaid services any approval
request necessary to implement the amendments made to subsection (a) by
section 1 of chapter 7 of the 2020 Session Laws of Kansas and this act. If
the department has submitted such a request pursuant to section 80(l) of
chapter 68 of the 2019 Session Laws of Kansas or section 1 of chapter 7 of
the 2020 Session Laws of Kansas, then the department may continue such
request, or modify such request to conform to the amendments made to
subsection (a) by section 1 of chapter 7 of the 2020 Session Laws of
Kansas and this act, to fulfill the requirements of this paragraph.
(2) The secretary of health and environment shall certify to the
secretary of state the receipt of such approval and cause notice of such
approval to be published in the Kansas register.
(3) The amendments made to subsection (a) by section 1 of chapter 7
of the 2020 Session Laws of Kansas and this act shall take effect on and
after January 1 or July 1 immediately following such publication of such
approval.
Sec. 18. K.S.A. 2023 Supp. 65-6209 is hereby amended to read as
follows: 65-6209. (a) A hospital provider that is a state agency, the
authority, as defined in K.S.A. 76-3304, and amendments thereto, a state
educational institution, as defined in K.S.A. 76-711, and amendments
thereto, a critical access hospital, as defined in K.S.A. 65-468, and
amendments thereto, or a rural emergency hospital licensed under the rural
emergency hospital act, K.S.A. 2023 Supp. 65-481 et seq., and
amendments thereto, is exempt from the assessment imposed by K.S.A.
65-6208(a), and amendments thereto, but not the surcharge imposed by
K.S.A. 65-6208(b), and amendments thereto.
(b) A hospital operated by the department in the course of performing
its mental health or developmental disabilities functions is exempt from
the assessment imposed by K.S.A. 65-6208(a), and amendments thereto,
but not the surcharge imposed by K.S.A. 65-6208(b), and amendments
thereto.
Sec. 19. K.S.A. 65-6210 is hereby amended to read as follows: 65-
6210. (a) The assessment imposed by K.S.A. 65-6208(a), and amendments
thereto, for any state fiscal year to which this statute applies shall be due
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and payable in equal installments on or before June 30 and December 31,
commencing with whichever date first occurs after the hospital has
received payments for 150 days after the effective date of the payment
methodology approved by the centers for medicare and medicaid services.
The surcharge imposed by K.S.A. 65-6208(b), and amendments thereto, for
any state fiscal year to which this statute applies shall be due and payable
in installments on or before June 30 and December 31, commencing with
June 30, 2027. The payment made by each hospital provider on or before
June 30 shall be in an amount not less than
1
/3 of such hospital provider's
proportionate share determined in accordance with K.S.A. 65-6218(d),
and amendments thereto. The payment made by each hospital provider on
or before December 31 shall be the remainder of the amount owed for
such hospital provider's proportionate share. No installment payment of
an assessment under this act shall be due and payable, however, until after:
(1) The hospital provider receives written notice from the department
that the payment methodologies to hospitals required under this act have
been approved by the centers for medicare and medicaid services of the
United States department of health and human services under 42 C.F.R. §
433.68 for the assessment imposed by K.S.A. 65-6208, and amendments
thereto, has been granted by the centers for medicare and medicaid
services of the United States department of health and human services; and
(2) in the case of a hospital provider, the hospital has received
payments for 150 days after the effective date of the payment methodology
approved by the centers for medicare and medicaid services.
(b) The department is authorized to establish delayed payment
schedules for hospital providers that are unable to make installment
payments when due under this section due to financial difficulties, as
determined by the department.
(c) If a hospital provider fails to pay the full amount of an installment
when due, including any extensions granted under this section, there shall
be added to the assessment or surcharge imposed by K.S.A. 65-6208(a) or
(b), and amendments thereto, unless waived by the department for
reasonable cause, a penalty assessment equal to the lesser of:
(1) An amount equal to 5% of the installment amount not paid on or
before the due date plus 5% of the portion thereof remaining unpaid on the
last day of each month thereafter; or
(2) an amount equal to 100% of the installment amount not paid on or
before the due date.
For purposes of subsection (c), payments will be credited first to unpaid
installment amounts, rather than to penalty or interest amounts, beginning
with the most delinquent installment.
(d) The effective date for the payment methodology applicable to
hospital providers approved by the centers for medicare and medicaid
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services shall be the date of July 1 or January 1, whichever date is
designated in the state plan submitted by the department of health and
environment for approval by the centers for medicare and medicaid
services.
Sec. 20. K.S.A. 65-6211 is hereby amended to read as follows: 65-
6211. (a) After December 31 of each year, except as otherwise provided in
this subsection, and on or before March 31 of the succeeding year, the
department shall send a notice of assessment imposed under K.S.A. 65-
6208(a), and amendments thereto, to every hospital provider subject to
assessment under this act. (b) The hospital provider notice of assessment
shall notify the hospital provider of its assessment for the state fiscal year
commencing on the next July 1.
(b) On or before April 30 and October 31 of each year, the
department shall send a notice of surcharge imposed under K.S.A. 65-
6208(b), and amendments thereto, to each hospital provider subject to the
surcharge. The department shall send the first such notice on or before
April 30, 2027.
(c) If a hospital provider operates, conducts or maintains more than
one licensed hospital in the state, the hospital provider shall pay the any
assessment or surcharge imposed under K.S.A. 65-6208(a) or (b), and
amendments thereto, for each hospital separately.
(d) Notwithstanding any other provision in this act, in the case of a
person who ceases to operate, conduct or maintain a hospital in respect of
for which the person is subject to assessment in K.S.A. 65-6208(a), and
amendments thereto, as a hospital provider, the assessment for the state
fiscal year in which the cessation occurs shall be adjusted by multiplying
the assessment computed under K.S.A. 65-6208(a), and amendments
thereto, by a fraction, the numerator of which is the number of the days
during the year during which the provider operates, conducts or maintains
a hospital and the denominator of which is 365. Immediately upon ceasing
to operate, conduct or maintain a hospital, the person shall pay the
adjusted assessment for that state fiscal year, to the extent not previously
paid.
(e) Notwithstanding any other provision in this act, in the case of a
person who ceases to operate, conduct or maintain a hospital for which
the person is subject to surcharge in K.S.A. 65-6208(b), and amendments
thereto, as a hospital provider, the surcharge for the six-month period in
which the cessation occurs shall be adjusted by multiplying the surcharge
computed under K.S.A. 65-6208(b), and amendments thereto, by a
fraction, the numerator of which is the number of the days during the six
months during which the provider operates, conducts or maintains a
hospital and the denominator of which is the days in the same six-month
period. Immediately upon ceasing to operate, conduct or maintain a
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hospital, the person shall pay the adjusted assessment for that six-month
period, to the extent not previously paid.
(f) Notwithstanding any other provision in this act, a person who
commences operating, conducting or maintaining a hospital shall pay the
assessment computed under subsection (a) of K.S.A. 65-6208(a), and
amendments thereto, in installments on the due dates stated in the notice
and on the regular installment due dates for the state fiscal year occurring
after the due dates of the initial notice.
Sec. 21. K.S.A. 65-6212 is hereby amended to read as follows: 65-
6212. (a) The assessment imposed by K.S.A. 65-6208(a), and amendments
thereto, shall not take effect or shall cease to be imposed and any moneys
remaining in the fund attributable to assessments imposed under K.S.A.
65-6208(a), and amendments thereto, shall be refunded to hospital
providers in proportion to the amounts paid by them if the payments to
hospitals required under subsection (a) of K.S.A. 65-6218(a), and
amendments thereto, are changed or are not eligible for federal matching
funds under title XIX or XXI of the federal social security act.
(b) The assessment and surcharge imposed by K.S.A. 65-6208(a)
and (b), and amendments thereto, shall not take effect or shall cease to be
imposed if the assessment is determined to be an impermissible tax under
title XIX of the federal social security act. Moneys in the health care
access improvement fund or the hospital medicaid expansion support
surcharge fund derived from assessments or surcharges imposed prior
thereto shall be disbursed in accordance with subsection (a) of K.S.A. 65-
6218(a) or (b), and amendments thereto, to the extent that federal
matching is not reduced due to the impermissibility of the assessments or
surcharges, and any remaining moneys shall be refunded to hospital
providers in proportion to the amounts paid by them.
Sec. 22. K.S.A. 65-6217 is hereby amended to read as follows: 65-
6217. (a) There is hereby created in the state treasury the health care
access improvement fund, which . Such fund shall be administered by the
secretary of health and environment. All moneys received for the
assessments imposed by K.S.A. 65-6208(a) and 65-6213, and amendments
thereto, including any penalty assessments imposed thereon, shall be
remitted to the state treasurer in accordance with K.S.A. 75-4215, and
amendments thereto. Upon receipt of each such remittance, the state
treasurer shall deposit the entire amount in the state treasury to the credit
of the health care access improvement fund. All expenditures from the
health care access improvement fund shall be made in accordance with
appropriation acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the secretary of health and
environment or the secretary's designee.
(b) There is hereby created in the state treasury the hospital medicaid
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expansion support surcharge fund to be administered by the secretary of
health and environment. All moneys received for the surcharge imposed by
K.S.A. 65-6208(b), and amendments thereto, including any penalty
assessments imposed thereon, shall be remitted to the state treasurer in
accordance with K.S.A. 75-4215, and amendments thereto. Upon receipt of
each such remittance, the state treasurer shall deposit the entire amount
into the state treasury to the credit of the hospital medicaid expansion
support surcharge fund. All expenditures from the hospital medicaid
expansion support surcharge fund shall be made in accordance with
appropriation acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the secretary of health and
environment or the secretary's designee.
(c) The fund funds shall not be used to replace any moneys
appropriated by the legislature for the department's medicaid program.
(c)(d) The fund is funds are created for the purpose of receiving
moneys in accordance with this act and disbursing moneys only for the
purpose of improving health care delivery and related health activities,
notwithstanding any other provision of law.
(d)(e) On or before the 10
th
day of each month, the director of
accounts and reports shall transfer from the state general fund to the health
care access improvement fund and the hospital medicaid expansion
support surcharge fund interest earnings based on:
(1) The average daily balance of moneys in the health care access
improvement each such fund for the preceding month; and
(2) the net earnings rate of the pooled money investment portfolio for
the preceding month.
(e)(f) The fund funds shall consist of the following:
(1) All moneys collected or received by the department from the
hospital provider assessment and surcharge and the health maintenance
organization assessment imposed by this act;
(2) any interest or penalty levied in conjunction with the
administration of this act; and
(3) all other moneys received for the fund funds from any other
source.
(f)(g) (1) On July 1 of each fiscal year, the director of accounts and
reports shall record a debit to the state treasurer's receivables for the health
care access improvement fund and shall record a corresponding credit to
the health care access improvement fund in an amount certified by the
director of the budget which that shall be equal to the sum of 80% of the
moneys estimated by the director of the budget to be received from the
assessment imposed on hospital providers pursuant to K.S.A. 65-6208(a),
and amendments thereto, and credited to the health care access
improvement fund during such fiscal year, plus 53% of the moneys
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estimated by the director of the budget to be received from the assessment
imposed on health maintenance organizations pursuant to K.S.A. 65-6213,
and amendments thereto, and credited to the health care access
improvement fund during such fiscal year, except that such amount shall
be proportionally adjusted during such fiscal year with respect to any
change in the moneys estimated by the director of the budget to be
received for such assessments under K.S.A. 65-6208(a) and 65-6213, and
amendments thereto, deposited in the state treasury and credited to the
health care access improvement fund during such fiscal year. Among other
appropriate factors, the director of the budget shall take into consideration
the estimated and actual receipts from such assessments for the current
fiscal year and the preceding fiscal year in determining the amount to be
certified under this subsection (f) paragraph. All moneys received for the
assessments imposed pursuant to K.S.A. 65-6208(a) and 65-6213, and
amendments thereto, deposited in the state treasury and credited to the
health care access improvement fund during a fiscal year shall reduce the
amount debited and credited to the health care access improvement fund
under this subsection (f) paragraph for such fiscal year.
(2) On July 1 of each fiscal year, the director of accounts and reports
shall record a debit to the state treasurer's receivables for the hospital
medicaid expansion support surcharge fund and shall record a
corresponding credit to the hospital medicaid expansion support
surcharge fund in an amount certified by the director of the budget that
shall be equal to 100% of the moneys estimated by the director of the
budget to be received from any surcharge imposed on hospital providers in
accordance with K.S.A. 65-6208(b), and amendments thereto, and credited
to the hospital medicaid expansion support surcharge fund during such
fiscal year, except that such amount shall be proportionally adjusted
during such fiscal year with respect to any change in the moneys estimated
by the director of the budget to be received for such surcharge in
accordance with K.S.A. 65-6208(b), and amendments thereto, deposited in
the state treasury and credited to the hospital medicaid expansion support
surcharge fund during such fiscal year. Among other appropriate factors,
the director of the budget shall take into consideration the estimated and
actual receipts from such surcharge for the current fiscal year and the
preceding fiscal year in determining the amount to be certified under this
paragraph. All moneys received for the surcharge imposed under K.S.A.
65-6208(b), and amendments thereto, deposited in the state treasury and
credited to the hospital medicaid expansion support surcharge fund during
a fiscal year shall reduce the amount debited and credited to the hospital
medicaid expansion support surcharge fund under this paragraph for such
fiscal year.
(3) On June 30 of each fiscal year, the director of accounts and
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reports shall adjust the amounts debited and credited to the state treasurer's
receivables and to the health care access improvement fund and the
hospital medicaid expansion support surcharge fund pursuant to this
subsection (f), to reflect all moneys actually received for the assessments
and surcharge imposed pursuant to K.S.A. 65-6208 and 65-6213, and
amendments thereto, deposited in the state treasury and credited to the
health care access improvement fund and the hospital medicaid expansion
support surcharge fund during the current fiscal year.
(3)(4) The director of accounts and reports shall notify the state
treasurer of all amounts debited and credited to the health care access
improvement fund and the hospital medicaid expansion support surcharge
fund pursuant to this subsection (f) and all reductions and adjustments
thereto made pursuant to this subsection (f). The state treasurer shall enter
all such amounts debited and credited and shall make reductions and
adjustments thereto on the books and records kept and maintained for the
health care access improvement fund by the state treasurer in accordance
with the notice thereof.
Sec. 23. K.S.A. 2023 Supp. 65-6218 is hereby amended to read as
follows: 65-6218. (a) (1) Assessment revenues generated from the hospital
provider assessments under K.S.A. 65-6208(a), and amendments thereto,
shall be disbursed as follows:
(A) Not less than 80% of assessment revenues shall be disbursed to
hospital providers through a combination of medicaid access improvement
payments and increased medicaid rates on designated diagnostic related
groupings, procedures or codes;
(B) not more than 20% of assessment revenues shall be disbursed to
providers who are persons licensed to practice medicine and surgery or
dentistry through increased medicaid rates on designated procedures and
codes; and
(C) not more than 3.2% of hospital provider assessment revenues
shall be used to fund healthcare access improvement programs in
undergraduate, graduate or continuing medical education, including the
medical student loan act.
(2) On July 1 of each year, the department of health and environment,
with approval of the healthcare access improvement panel, shall make
adjustments to the disbursement of moneys in accordance with this
subsection to cause such disbursements to be paid solely from moneys
appropriated from the healthcare access improvement fund. The healthcare
access improvement fund shall not be supplemented by appropriations
from the state general fund for the purpose of making disbursements under
this subsection.
(b) Surcharge revenues generated from the hospital medicaid
expansion support surcharge under K.S.A. 65-6208(b), and amendments
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thereto, shall be disbursed to offset the costs to the state related to
medicaid expansion beneficiaries as calculated in K.S.A. 65-6207(a), and
amendments thereto.
(c) For the purposes of administering and selecting the disbursements
described in subsections subsection (a) and (b), oversight of the
calculation of the annual hospital medicaid expansion support payment
and any surcharge under K.S.A. 65-6208(b), and amendments thereto, the
healthcare access improvement panel is hereby established. The panel shall
consist of the following: Three members appointed by the Kansas hospital
association, two members appointed by the Kansas medical society, one
member appointed by each health maintenance organization that has a
medicaid managed care contract with the department of health and
environment, one member appointed by the community care network of
Kansas, one member appointed by the president of the senate, one member
appointed by the speaker of the house of representatives, one member
from the office of the medicaid inspector general appointed by the attorney
general and one representative of the department of health and
environment appointed by the governor. The panel shall elect a
chairperson from among the members appointed by the Kansas hospital
association. A representative of the panel shall be required to make an
annual report to the legislature regarding the collection and distribution of
all funds received and distributed under this act, and such report shall
include analysis demonstrating that disbursements made in accordance
with subsection (a) are budget neutral to the state general fund.
(c)(d) The panel shall use the following procedure to approve
collection of surcharge revenues under K.S.A. 65-6208(b), and
amendments thereto, for each calendar year beginning with calendar year
2027 based upon the total number of unduplicated medicaid expansion
enrollees for such year:
(1) By March 31 and September 30, the department shall certify to
the panel the total number of unduplicated medicaid expansion enrollees
using data from the most recent end-of- month report.
(2) The panel shall review the number certified by the department,
consult with the department regarding any proposed deletions and certify
the final number of unduplicated medicaid expansion enrollees by April 15
and October 15.
(3) Each hospital's share of the annual hospital medicaid expansion
support surcharge shall be determined by the panel based upon such
hospital's proportion of total hospital revenues. The panel shall certify to
the department the amount of each hospital's surcharge by April 30 and
October 31. The surcharge for any hospital that has not yet filed a
medicare cost report shall pay the lowest surcharge payable by its hospital
licensure category as defined by K.S.A. 65-425, and amendments thereto.
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(4) For purposes of this subsection, the total surcharge revenues to
be certified for any calendar year shall not exceed $35,000,000, and any
annual hospital medicaid expansion support surcharge in excess of
$35,000,000 shall be disregarded.
(5) As used in this subsection:
(A) "Total hospital revenues" means the sum of inpatient and
outpatient revenues for all hospital providers as reflected in the applicable
medicare cost report.
(B) "Applicable medicare cost report" means, for calendar year
2025, such report filed by each hospital for calendar year 2023 or, if the
hospital did not file a medicare cost report for calendar year 2023, the
first year that the hospital filed a medicare cost report. For each calendar
year after 2025, the applicable medicare cost report shall advance by one
year.
(1)(e) The department of health and environment shall submit to the
United States centers for medicare and medicaid services any approval
request necessary to implement the amendments made to this section by
this act section 2 of chapter 7 of the 2020 Session Laws of Kansas. If the
department has submitted such a request pursuant to section 80(l) of
chapter 68 of the 2019 Session Laws of Kansas, then the department may
continue such request, or modify such request to conform to the
amendments made to subsections (a) and (b) by this act, to fulfill the
requirements of this paragraph.
(2)(f) The secretary of health and environment shall certify to the
secretary of state the receipt of such approval and cause notice of such
approval to be published in the Kansas register.
(3) The amendments made to subsections (a) and (b) by this act shall
take effect on and after January 1 or July 1 immediately following such
publication of such approval.
Sec. 24. K.S.A. 39-7,160, 40-3213, 65-6207, 65-6210, 65-6211, 65-
6212 and 65-6217 and K.S.A. 2023 Supp. 65-6208, 65-6209 and 65-6218
are hereby repealed.
Sec. 25. This act shall take effect and be in force from and after its
publication in the Kansas register.
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