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Regular Session, 2013
HOUSE BILL NO. 532
BY REPRESENTATIVES KLECKLEY AND LEGER
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
FUNDS/FUNDING: (Constitutional Amendment) Provides for a hospital stabilization
formula and assessment and creates the Hospital Stabilization Fund and provides for
uses of the fund
A JOINT RESOLUTION1
Proposing to add Article VII, Section 10.13 of the Constitution of Louisiana, to provide2
relative to health care funding; to provide for a hospital stabilization formula; to3
provide for a hospital assessment; to create the Hospital Stabilization Fund as a4
treasury fund; to provide for deposit, use, and investment of the fund; to provide for5
submission of the proposed amendment to the electors; and to provide for related6
matters.7
Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members8
elected to each house concurring, that there shall be submitted to the electors of the state of9
Louisiana, for their approval or rejection in the manner provided by law, a proposal to add10
Article VII, Section 10.13 of the Constitution of Louisiana, to read as follows:11
§10.13. Hospital stabilization formula and assessment; Hospital Stabilization Fund12
(A) Hospital Stabilization Formula. (1) The legislature may annually adopt13
a Hospital Stabilization Formula, hereafter referred to in this Section as "the14
formula", by concurrent resolution by a favorable vote of a majority of the elected15
members of each house. Such resolution shall be referred to the standing committees16
of the Legislature that receive the general appropriation bill. The formula shall, to17
the maximum extent possible enhance the economic viability of Louisiana hospitals18 HLS 13RS-881 REENGROSSED
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and reduce shifting the cost of caring for Louisiana's needy residents to the state's1
insured residents.2
(2)(a) The first formula established pursuant to Subparagraph (1) of this3
Paragraph, which shall require a favorable vote of two-thirds of the elected members4
of each house for adoption, shall define and establish as the base rate the payment5
levels under the Louisiana medical assistance program provided for in Title XIX of6
the Social Security Act, hereafter referred to as the "Medicaid Program", to hospitals7
for inpatient and outpatient services in Fiscal Year 2012-2013. The formula shall8
also provide for the preservation and protection of rural hospitals as provided for by9
law. Each formula established thereafter shall apply a rate of inflation, which shall10
not be a negative rate, to the base rate from the previous formula adopted by the11
legislature.12
(b) Each formula shall also include and establish assessments to be paid by13
hospitals, and the basis on which such assessments shall be calculated, provided the14
amount of the assessments does not exceed the nonfederal share of the rate15
enhancements.16
(c) Each formula shall also establish reimbursement rate enhancements17
under the Medicaid Program, or its successor achieving the maximum rates allowed18
for such payment by federal law, and which results in distributing such rate19
enhancements exclusively among hospitals for hospital services. Rate enhancements20
may also be distributed for uninsured services delivered.21
(d) Each formula shall also include any additional provisions necessary to22
the implementation of the formula.23
(3) The base rate resulting from the formula shall not be paid from the24
Hospital Stabilization Fund.25
(4) The treasurer shall return any assessment to the hospital from which it26
was collected, and no further assessment shall be collected from any hospital, in a27
fiscal year in which any of the following occur:28
(a) The legislature fails to adopt a formula.29 HLS 13RS-881 REENGROSSED
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(b) The Department of Health and Hospitals, or its successor or contractors,1
reduces or does not pay rate enhancements established in the current formula as2
adopted by the legislature.3
(c) The appropriations provided for in Subparagraph (B)(2) of this Section4
are reduced.5
(B) Appropriation. (1) The legislature shall annually appropriate an amount6
necessary to fund the base rate for hospitals established in the most recent formula7
adopted by the legislature.8
(2) The legislature shall annually appropriate the balance of the Hospital9
Stabilization Fund solely to fund the rate enhancements as provided in the most10
recent formula adopted by the legislature.11
(3) Notwithstanding Article VII, Section 10(F) of this constitution, neither12
the governor nor the legislature may reduce the appropriation funding the base rate13
or the rate enhancements to satisfy a budget deficit, except the governor may reduce14
the appropriation to the base rate if the following occur:15
(a) Such reduction is consented to in writing by two-thirds of the elected16
members of each house in a manner provided by law; and17
(b) Such reduction does not exceed the average reduction of those made to18
the appropriations for other providers under the Medicaid Program, or its successor.19
(C) Hospital Stabilization Fund. There is hereby established as a special20
fund in the state treasury the Hospital Stabilization Fund, hereafter referred to as "the21
fund". After compliance with the requirements of Article VII, Section 9(B) of this22
constitution relative to the Bond Security and Redemption Fund, the treasurer shall23
deposit all proceeds from the assessment collected pursuant to the Hospital24
Stabilization Formula provided for in this Section. The monies in the fund shall be25
invested in the same manner as monies in the state general fund and all interest26
earned on the investment of the fund shall be deposited in and credited to the fund.27
Appropriations from the fund shall be restricted to funding the rate enhancements28
established in the Hospital Stabilization Formula adopted by the legislature for the29 HLS 13RS-881 REENGROSSED
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fiscal year in which the assessment is collected. Any amounts remaining in the fund1
at the end of a fiscal year shall be refunded to the participating hospitals in2
proportion to the assessments paid.3
Section 2. Be it further resolved that this proposed amendment shall be submitted4
to the electors of the state of Louisiana at the statewide election to be held on November 4,5
2014.6
Section 3. Be it further resolved that on the official ballot to be used at the election,7
there shall be printed a proposition, upon which the electors of the state shall be permitted8
to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as9
follows:10
Do you support an amendment to create the Hospital Stabilization Fund to11
stabilize and protect Medicaid reimbursements for health care services by12
depositing assessments paid by hospitals, as authorized by the legislature,13
into a fund to support Louisiana hospital reimbursement? (Adds Article VII,14
Section 10.13)15
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Kleckley HB No. 532
Abstract: Provides for the legislature to establish a formula for funding hospitals by
establishing rate increases for hospitals; by establishing an assessment on hospitals;
by creating the Hospital Stabilization Fund to deposit assessments, and using the
monies in the fund for rate enhancements.
Proposed constitutional amendment provides for an annual Hospital Stabilization Formula
by concurrent resolution by a favorable vote of 2/3 of the elected members of each house in
the first resolution. The resolution requires a favorable vote of a majority of the elected
members of each house in subsequent years. Further, the resolution shall be referred to the
standing committees of the legislature that receive the general appropriation bill. The
formula provided for in the resolution includes:
(1)A base rate that is the payment levels under the Medicaid Program to hospitals for
inpatient and outpatient services in FY 2012-2013 in the first year and each
subsequent formula applies a rate of inflation to the base rate from the previous fiscal
year.
(2)Assessments to be paid by La. hospitals, provided the amount of the assessment
does not exceed the nonfederal share of the rate enhancement. HLS 13RS-881 REENGROSSED
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(3)Reimbursement rate enhancements for those hospitals subject to an assessment
provided for in the formula.
(4)Any additional provisions necessary to the implementation of the formula.
Proposed constitutional amendment provides that the base rate shall not be paid from the
Hospital Stabilization Fund.
Proposed constitutional amendment provides that no assessments shall be collected from any
hospital in a fiscal year in which any of the following occur:
(1)The legislature fails to adopt a formula.
(2)The Department of Health and Hospitals reduces or does not pay rate enhancements
established in the current formula.
(3)The appropriations provided for in proposed constitutional amendment are reduced.
Proposed constitutional amendment provides for annual appropriation of an amount
necessary to fund the base rate for hospitals and appropriate the balance of the Hospital
Stabilization Fund created in the proposed constitutional amendment for rate enhancements.
Proposed constitutional amendment provides for reductions to the appropriations if the
reduction is consented to in writing by 2/3 of the elected members of each house in a manner
provided by law and does not exceed the average reduction of those made to the
appropriations for other providers under the Medicaid Program.
Proposed constitutional amendment creates the Hospital Stabilization Fund and provides
appropriations only for funding the rate enhancement established in the Hospital
Stabilization Formula for the fiscal year in which the assessment is collected. Any amounts
remaining in the fund at the end of a fiscal year shall be refunded to the participating
hospitals in proportion to the assessments paid.
Provides for submission of the proposed amendment to the voters at the statewide election
to be held Nov. 4, 2014.
(Adds Const. Art. VII, §10.13)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Appropriations to the
original bill.
1. Changed the vote necessary for approval of the resolution establishing the
formula from two-thirds of elected members to a majority, except the resolution
for the first formula which shall require a favorable vote of 2/3 of the elected
members of each house.
2. Required the resolution providing for the formula be referred to the standing
committees of the legislature that receive the general appropriation bill.
3. Added that the formula provide for the preservation and protection of rural
hospitals as provided for by law.
4. Clarified that rate enhancements established in the formula will be distributed
among hospitals for hospital services and deletes the provision that the rate
enhancements will be distributed in proportion to the Medicaid services
delivered.