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Regular Session, 2013
HOUSE BILL NO. 652
BY REPRESENTATIVE ABRAMSON
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
HEALTH CARE: Provides relative to health care financing
AN ACT1
To enact Chapter 67 of Title 46 of the Louisiana Revised Statutes of 1950, to be comprised2
of R.S. 46:2921 through 2929, relative to health services; to provide relative to the3
medical assistance program; to provide relative to reimbursement rates for certain4
health services; to enact the Supplemental Hospital Credit Program Act; to provide5
for collection and administration of an assessment for hospitals; to provide for6
disposition of the assessment; to provide for penalties and sanctions; to provide for7
an effective date; to provide for duties of the secretary of the Department of Health8
and Hospitals; to provide for rulemaking authority; to provide for a sunset date; and9
to provide for related matters.10
Be it enacted by the Legislature of Louisiana:11
Section 1. Chapter 67 of Title 46 of the Louisiana Revised Statutes of 1950,12
comprised of R.S. 46:2921 through 2929, is hereby enacted to read as follows:13
CHAPTER 67. SUPPLEMENTAL HOSPITAL CREDIT PROGRAM14
§2921. Short title; purpose15
A. This Chapter may be known and referred to as the "Supplemental16
Hospital Credit Program Act".17
B. The purposes of this Chapter include the following:18
(1) Preserve and enhance the availability of inpatient and outpatient hospital19
care for all patients.20 HLS 13RS-650 ORIGINAL
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(2) Enhance the stability of Medicaid funding by capturing a reliable source1
of funding for a portion of the state's obligation.2
(3) Ease "cost-shifting" to employers and private insurers by providing3
reimbursement for a portion of hospitals' uncompensated care and Medicaid4
underpayment.5
§2922. Definitions6
As used in this Chapter, the following terms shall have the following7
meanings:8
(1) "Assessment effective date" means the date specified in R.S. 46:2926(E).9
(2) "Base year Medicaid hospital funding" means the amount paid to all10
nonstate hospitals by the Medicaid program in state Fiscal Year 2012-2013,11
excluding Medicare upper payment limit payments.12
(3) "Base year Medicaid hospital rates" means the rates, excluding upper13
payment limit payments, for inpatient and outpatient services paid to all nonstate14
hospitals by the Medicaid program in state Fiscal Year 2012-2013.15
(4) "Base year Medicare cost report" means the hospital's Medicare cost16
report filed for the full cost report year beginning in the Federal Fiscal Year 201217
(October 2011 through September 2012). In the event that the hospital did not file18
a full year Medicare cost report for this period, the base year Medicare cost report19
shall be the hospital's first full year Medicare cost report filed subsequent to this20
period.21
(5) "CMS" means the Centers for Medicare and Medicaid Services of the22
United States Department of Health and Human Services or its successor.23
(6) "Department" means the Department of Health and Hospitals.24
(7) "Exempt hospitals" means all hospitals owned by the state, all hospitals25
owned by the United States or any agency or department thereof, rural hospitals as26
defined in R.S. 40:1300.143, and hospitals certified by Medicare as separately27
licensed long-term acute care, rehabilitation, or psychiatric hospitals.28
(8) "Fund" means the Supplemental Hospital Credit Program Trust Fund.29 HLS 13RS-650 ORIGINAL
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(9) "Hospital" means any hospital licensed by the state under R.S. 40:21001
et seq., but shall not include any hospital owned by the state, any hospital owned by2
the United States or any agency or department thereof, rural hospitals as defined in3
R.S. 40:1300.143, and hospitals certified by Medicare as separately licensed long-4
term acute care, rehabilitation, or psychiatric hospitals.5
(10) "Nonstate hospitals" means all hospitals licensed by the state or6
participating in the Medicaid program, excluding only those that are owned by the7
state.8
(11) "Intentional failure to pay" means the failure by a hospital to pay the fee9
imposed under this Chapter within thirty days of a written notice of delinquency10
from the department.11
(12) "Medicaid program" means the medical assistance program as12
established in Title XIX of the Social Security Act and as administered in the state13
of Louisiana by the Department of Health and Hospitals.14
(13) "Net patient revenue" means the amount reported as net patient revenue15
in the hospital's Medicare cost report.16
(14) "Net uncompensated cost" means, with respect to hospitals subject to17
this Chapter, the cost of furnishing uncompensated care to uninsured patients less18
any payments received for such care.19
(15) "Secretary" means the secretary of the Department of Health and20
Hospitals.21
(16) "State" means the state of Louisiana.22
(17) "Uncompensated care" means, with respect to hospitals subject to this23
Chapter, furnishing inpatient and outpatient hospital services to uninsured persons24
as defined by the Louisiana Department of Health and Hospitals.25
§2923. Supplemental Hospital Credit Program Trust Fund26
A. There is hereby established as a special fund in the state treasury to be27
known as the Supplemental Hospital Credit Program Act Trust Fund, which shall28
consist of monies generated by the assessments on hospitals as provided in this29 HLS 13RS-650 ORIGINAL
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Chapter. The monies in the fund shall be available for appropriation by the1
legislature only to the Medicaid program and only as provided in this Chapter and2
solely in order to accomplish the purposes of this Chapter. The monies in the fund3
shall be invested by the state treasurer in the same manner as monies in the state4
general fund. All interest earned from the investment of monies in the fund, all5
interest paid as a result of late payments, and any other income relating to the fund6
or the fee imposed by this Chapter shall be deposited in and remain to the credit of7
the fund.8
B. When available for appropriation as provided in this Chapter, the monies9
from the fund appropriated by the legislature shall be used and expended for the10
stated purposes and subject to the limitations of this Chapter.11
C. Use of the monies in the fund shall be limited to those programs for which12
federal financial participation under Title XIX of the Social Security Act is available.13
§2924. Assessment; deposit into fund14
A.(1) The Department of Health and Hospitals, or its successor, shall15
annually develop and adopt a formula which shall be used to determine the16
assessment provided for in this Chapter, subject to approval of the legislature. Prior17
to approval of the formula by the legislature, the legislature may return the formula18
adopted by the department to the department and may recommend to the department19
an amended formula for consideration by the department and submission to the20
legislature for approval.21
(2) The legislature shall annually appropriate funds sufficient to fully fund22
the current cost to the state of the Supplemental Hospital Credit Program as23
determined by applying the approved formula. Neither the governor nor the24
legislature shall reduce the appropriation, except that the governor may reduce such25
appropriation using means provided in the act containing the appropriation provided26
that any such reduction is consented to in writing by two-thirds of the elected27
members of each house of the legislature.28 HLS 13RS-650 ORIGINAL
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(3) Whenever the legislature fails to approve the formula most recently1
adopted by the department, or its successor, the last formula adopted by the2
department, or its successor, and approved by the legislature shall be used for the3
determination of the cost of the Supplemental Hospital Credit Program and for the4
allocation of funds appropriated.5
B. In the event that the net patient revenue stated in the hospitals' base year6
Medicare cost report is amended or adjusted at any time after assessment payments7
under this Chapter have been made, the hospital shall, within ninety days of such8
amendment or adjustment, pay any difference between previous assessment9
payments and the amount that would have been due in light of the cost report10
amendment or adjustment. If the amendment to the cost report reflects that the11
assessment was overpaid, the balance shall be refunded to the hospital within the12
same period.13
C. Except in the implementation period, the assessment shall be paid in equal14
quarterly installments due on the twentieth day of the third month of each calendar15
quarter. Subject to the exceptions contained in Article VII, Section 9(A) of the16
Constitution of Louisiana, all assessments collected pursuant to this Chapter shall be17
paid into the state treasury and shall be credited to the Bond Security and18
Redemption Fund. Out of the funds remaining in the Bond Security and Redemption19
Fund after a sufficient amount is allocated from that fund to pay all obligations20
secured by the full faith and credit of the state which become due and payable within21
any fiscal year, the treasurer shall, prior to placing such remaining funds in the state22
general fund, pay into the Supplemental Hospital Credit Program Trust Fund an23
amount equal to the total amount of the assessments collected.24
D. Any assessment not timely paid by a hospital shall bear interest at the rate25
provided by law for failure to pay other assessments due to the state, provided that26
the secretary may, in individual cases, waive the interest based on the financial27
condition of the hospital involved. The department shall cause a notice of28 HLS 13RS-650 ORIGINAL
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delinquency to be sent to any hospital which has not paid in full any amount within1
thirty days of the date due.2
E. When a hospital disputes that the assessment is payable, or disputes the3
amount that is payable, it shall give the department written notice thereof at any time4
before the assessment becomes delinquent. Under no circumstances shall the5
department offset any amounts due to a hospital to collect the assessment to the6
extent that the assessment has been properly disputed as provided herein.7
F. Any assessment collected pursuant to this Chapter shall be considered an8
allowable cost for purposes of Medicare and Medicaid cost reporting and9
reimbursement.10
G.(1)(a) No hospital shall pass on the cost of this assessment or include the11
assessment as an itemized and separately listed amount on any statement sent to any12
patient, responsible party, insurer, or self-insured employer programs. If such a13
violation occurs, it shall be considered a violation of hospital minimum standards.14
If any party has reason to believe that the assessment has been passed on to the party,15
or an attempt was made to do so, the party may submit in writing to the Department16
of Revenue a request for an investigation along with evidence that the assessment17
has been passed on or that an attempt was made to pass on the assessment. The18
department shall have an affirmative duty to protect the parties above against any19
violation of this Subsection.20
(b) Any bill or statement sent to a patient, responsible party, insurer, or self-21
insured employer program after the initial effective date of this Subsection shall22
contain the following statement: "This bill does not contain any cost of the23
assessment imposed by the Supplemental Hospital Credit Program Act provided in24
Act of the 2013 Regular Session." The act number shall be the number of the25
act which originated as House Bill No. ____ of the 2013 Regular Session.26
(2) Upon receipt of a written request for an investigation by an affected27
party, the department shall conduct a full investigation in a timely manner. Upon28
completion of the investigation, the department shall conduct a hearing, pursuant to29 HLS 13RS-650 ORIGINAL
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the provisions of the Administrative Procedure Act, if it believes sufficient cause has1
been shown to warrant a hearing. If the department declines to conduct a hearing,2
it shall explain in writing to the requesting party its reasons for not acting further3
upon the complaint.4
(3) Upon any finding by the Department of Revenue of a violation of this5
Subsection, it shall order full restitution to the affected party, including judicial6
interest computed from the time that the violation occurred until payment of the7
restitution. Furthermore, the Department of Revenue shall forward its findings to the8
Department of Health and Hospitals, which shall conduct a hearing in the matter to9
determine the sanctions applicable thereto, including suspension or revocation of the10
violating hospital's license.11
§2925. Disbursement of credit fund proceeds12
A. The proceeds of the credit fund may be disbursed only to the department13
for use in the Medicaid program consistent with the stated purposes of this Chapter,14
and only when the following conditions have been met:15
(1) Total Medicaid funding and reimbursement rates paid in the current fiscal16
year for payments to all nonstate hospitals is not less than the base year Medicaid17
hospital funding.18
(2) The payments required to be made to hospitals under the Rural Hospital19
Preservation Act is not less than the base year Medicaid funding.20
(3) An approved and final system is in place and fully funded to compensate21
hospitals as defined in this Chapter for at least seventy-five percent of their22
uncompensated care as reported on the latest uncompensated care filing prior to May23
thirty-first of the previous fiscal year. Any hospital which has not filed previously24
or is not yet required by regulation to make an uncompensated care filing, or which25
is without a full year cost report, may file an estimate of its uncompensated costs26
within forty-five days of the end of the quarter of such care provided in that quarter,27
and any such hospital otherwise eligible under this Chapter for such uncompensated28
care compensation shall be included in the payment to be made in the quarter in29 HLS 13RS-650 ORIGINAL
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which the estimate is filed, subject to final adjustment as otherwise provided. Except1
as hereinafter provided, the uncompensated care payment shall be paid in equal2
quarterly installments due on the fifteenth day of the third month in each calendar3
quarter.4
(4) In the current fiscal year, Medicaid rates for all inpatient and outpatient5
services rendered by hospitals, including psychiatric care, are equal to the maximum6
allowable Medicare hospital rates for those services, respectively.7
B. During the implementation period, the rates required by Subsection A of8
this Section may be contingent on final implementation of the assessment imposed9
by this Chapter, as long as the rates apply, whether prospectively or retroactively, to10
all services rendered and payments due in the implementation period.11
C. If the criteria in Subsection A of this Section have not been met, no12
assessments or other assets of the fund shall be disbursed to the department. Any13
amount not disbursed within one hundred twenty days of the end of the quarter in14
which it was received shall be refunded to the hospital that paid it. Thereafter, no15
assessment may be imposed, and no assessment shall be due until the criteria in16
Subsection A of this Section have been met.17
§2926. Department responsibilities; effective date18
A. The department shall promptly promulgate, pursuant to the19
Administrative Procedure Act, such regulations as are necessary to comply with R.S.20
46:2925(A). The department is specifically authorized to promulgate the regulations21
as emergency rules. The department shall submit to the secretary of the United22
States Department of Health and Human Services for his approval those amendments23
to the Medicaid state plan necessary to conform the Medicaid state plan with the24
provisions of this Chapter. The department shall simultaneously seek any waivers25
of applicable federal regulations required to implement this Chapter. The provisions26
of this Chapter, including any base level funding and rate requirements in R.S.27
46:2925, shall be contingent upon this approval and the granting of any required28
waiver.29 HLS 13RS-650 ORIGINAL
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B. The department is authorized and directed to adopt and promulgate,1
pursuant to the Administrative Procedure Act, the rules and regulations as are2
necessary to administer the assessments imposed herein, including but not limited3
to rules and regulations regarding the collection and payment of the assessments and4
the records necessary to be maintained and made available by the hospitals on which5
the assessments are imposed.6
C. Except to the extent that they directly or indirectly contradict the7
provisions of R.S. 46:2925, the department is authorized to promulgate the8
regulations required by CMS to obtain approval hereof.9
D. The governor, by executive order, may designate any agency, department,10
or division of state government to assist the Department of Health and Hospitals to11
collect the assessment authorized herein.12
E.(1) The effective date of the assessment imposed by this Chapter shall be13
the later of either of the following:14
(a) The date upon which the rates provided for in R.S. 46:2925(A)(3) and (4)15
become payable to hospitals to which the assessment applies as defined in this16
Chapter.17
(b) The first day of the calendar quarter in which the department seeks18
approval from CMS of the amendments to the state's Medicaid state plan as provided19
in Subsection A of this Section.20
(2) The implementation period will begin on the effective date of the21
assessment and continue until the end of the calendar quarter in which CMS22
approves the amendments to the state's Medicaid state plan and any required waiver23
as provided in Subsection A of this Section; however, if that approval date falls24
within the last thirty days of the calendar quarter, the implementation period shall25
extend to the end of the next calendar quarter. All rates provided for in R.S.26
47:2925(A)(3) and (4) payable during the implementation period may be accrued by27
the department until the last month of the implementation period, but shall be paid28
no later than the fifteenth day of that month. All assessments due for the29 HLS 13RS-650 ORIGINAL
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implementation period shall not be payable until the twentieth day of the last month1
of the implementation period, but in no event shall any assessment be payable by2
any hospital before five days after all rates provided for in R.S. 46:2925(A)(3) and3
(4) which were accrued during the implementation period have been paid to that4
hospital. Thereafter, payments shall be made and the assessment shall be payable5
as provided in R.S. 46:2924.6
§2927. Assessments by other entities prohibited7
No political subdivision of the state or other local governmental entity may8
require a license or impose an assessment which applies to hospital providers9
disproportionately to other businesses or which is measured by the income or10
earnings of a hospital provider.11
§2928. Certification of Title XIX claims and incurred uncompensated costs12
Nonstate public hospitals, except small rural hospitals as defined in R.S.13
40:1300.143, shall certify to the Department of Health and Hospitals the state,14
nonfederal share of expenditures for all their Medicaid claims and shall provide a15
certification of incurred uncompensated care costs that constitute public expenditures16
that are eligible for federal financial participation under Title XIX of the Social17
Security Act. Both certifications shall be submitted in a form satisfactory to the18
department at the earliest possible date after July first, but no later than October first19
of each fiscal year beginning July 1, 2013. The department shall by regulation20
specify how any certification is to be made during the implementation period21
provided by this Chapter.22
§2929. Actions relating to collection of the assessment23
When the department fails to comply with any of the terms of this Chapter,24
Article 3601 of the Louisiana Code of Civil Procedure shall not prohibit any action25
to enjoin collection of any assessment provided by this Chapter or the transfer of any26
amounts from the fund to the department or any other agency of state government.27
Section 2. This Act shall become null and void as of January 1, 2015, if no proposed28
amendment of the Constitution of Louisiana to establish the Supplemental Hospital Credit29 HLS 13RS-650 ORIGINAL
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Program Act Trust Fund and to provide for the dedicated appropriation of the monies1
contained therein consistent with the purposes of this Act is adopted at a statewide election2
and becomes effective on or before January 1, 2015.3
Section 3. This Act shall become effective upon signature by the governor or, if not4
signed by the governor, upon expiration of the time for bills to become law without signature5
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If6
vetoed by the governor and subsequently approved by the legislature, this Act shall become7
effective on the day following such approval.8
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)]
Abramson HB No. 652
Abstract: Establishes the Supplemental Hospital Credit Program.
Proposed law provides that the purposes of the Act are to:
(1)Preserve and enhance the availability of inpatient and outpatient hospital care for all
patients.
(2)Enhance the stability of Medicaid funding by capturing a reliable source of funding
for a portion of the state's obligation.
(3)Ease "cost-shifting" to employers and private insurers by providing reimbursement
for a portion of hospitals' uncompensated care and Medicaid underpayment.
Proposed law creates the Supplemental Hospital Credit Program Trust Fund in the state
treasury and requires that monies in the credit fund to be invested in the same manner as
monies in the state general fund. Interest earned shall be deposited and remain in the credit
fund.
Proposed law further provides for appropriation of monies from the fund.
Proposed law provides a method for the deposit of the revenue produced by the assessment
provided by proposed law and limits the utilization of the monies to those programs for
which federal financial participation is available.
Proposed law provides for definitions.
Proposed law requires the Dept. of Health and Hospitals, or its successor, to annually
develop and adopt a formula which shall be used to determine the assessment provided for
in proposed law, subject to approval of the legislature. Prior to approval of the formula by
the legislature, the legislature may return the formula adopted by the department to the
department and may recommend to the department an amended formula for consideration
by the department and submission to the legislature for approval. HLS 13RS-650 ORIGINAL
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Proposed law requires the legislature to annually appropriate funds sufficient to fully fund
the current cost to the state of the Supplemental Hospital Credit Program as determined by
applying the approved formula. Neither the governor nor the legislature may reduce the
appropriation, except that the governor may reduce the appropriation using means provided
in the act containing the appropriation provided that any such reduction is consented to in
writing by two-thirds of the elected members of each house of the legislature.
Proposed law provides that, whenever the legislature fails to approve the formula most
recently adopted by the department, or its successor, the last formula adopted by the
department, or its successor, and approved by the legislature shall be used for the
determination of the cost of the Supplemental Hospital Credit Program and for the allocation
of funds appropriated.
Exempted from the term "hospitals" are:
(1)All hospitals owned by the state, the United States or any agency or department
thereof.
(2)Rural hospitals as defined in present law.
(3)Hospitals certified by Medicare as separately licensed long term acute care,
rehabilitation, or psychiatric hospitals.
Proposed law defines "base year Medicare cost report" as the hospital's Medicare cost report
filed for the full cost report year beginning in the Federal Fiscal Year 2012 (Oct. 2011
through Sept. 2012) or, if the hospital did not file a full year Medicare cost report for this
period, the hospital's first full year Medicare cost report filed subsequent to that period.
Proposed law provides that the effective date of the assessment is the later of: (1) the date
the required rates for uncompensated care, Medicaid psychiatric care, and outpatient rates
become payable or (2) the first day of the quarter in which DHH seeks approval from CMS
of the amendments to the state's Medicaid state plan.
Proposed law provides that the assessment shall be considered an allowable cost for
purposes of Medicare and Medicaid cost reporting and reimbursement.
Proposed law prohibits hospitals from passing on the cost of this assessment or including the
assessment as an itemized and separately listed amount on any statement, and requires any
bill to contain a statement that the costs have not been passed on. Any hospital that violates
proposed law after notice and hearing shall be considered to have violated "hospital
minimum standards" and shall be subject to the sanctions applicable thereto, including
suspension or revocation of its license by DHH. Additionally, DHH must order restitution
of the amounts obtained.
Proposed law requires the assessment to be paid into the Supplemental Hospital Credit
Program Trust Fund. Money in the fund may be appropriated only for purposes of the
proposed law.
Proposed law provides that proceeds of the fund may be disbursed to DHH for use in the
Medicaid program only when the following conditions have been met:
(1)Total Medicaid funding and reimbursement rates paid in the "current fiscal year" for
payments to all "nonstate hospitals" is not less than the "base year Medicaid hospital
funding", defined as the amount paid to all "nonstate hospitals" by the Medicaid
program in FY 12-13, excluding Medicare upper payment limit payments.
(2)The payments required to be made to hospitals under the Rural Hospital Preservation
Act is not less than the base year. HLS 13RS-650 ORIGINAL
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(3)An approved and final system is in place and fully funded to compensate "hospitals"
for at least 75% of their "uncompensated care" (furnishing services to "uninsured
people" as defined by DHH) as reported on the latest uncompensated care filing prior
to May 31st of the previous fiscal year.
Hospitals which are not yet required by regulation to file, or without a full year
report, or have not previously filed, may file an estimate within 45 days of the end
of the quarter, subject to final adjustment as otherwise provided.
The uncompensated care payment is made in equal quarterly installments due on the
15
th
day of the 3
rd
month in each calendar quarter.
(4)In the current fiscal year, Medicaid rates for all inpatient and outpatient services
rendered by hospitals, including psychiatric care, are equal to the maximum
allowable Medicare hospital rates for those services, respectively.
Proposed law provides that, if the above criteria have not been met, no assessments can be
disbursed to DHH and must be refunded if not disbursed within 120 days of the end. No
assessment may be thereafter imposed until the criteria has been met.
Proposed law requires DHH to adopt and promulgate rules and regulations necessary to
implement the proposed law after submission to the secretary of the U.S. Dept. of Health and
Human Services.
Proposed law prohibits other political subdivisions from collecting assessments from
hospitals in a manner that treats them differently than other providers.
Proposed law requires "nonstate public hospitals" except "small rural hospitals"to certify to
DHH the state, nonfederal share of expenditures for all their Medicaid claims and incurred
uncompensated care costs that constitute "public expenditures" that are eligible for federal
participation.
Proposed law provides for jurisdiction, should the provisions of law not be met, to enjoin the
collection of the assessment and to prohibit the amounts from the fund from being
transferred to DHH or any other agency of state government.
Proposed law will become null and void as of Jan. 1, 2015, if no proposed amendment of
the Constitution of La. to establish the Supplemental Hospital Credit Program Act Trust
Fund and to provide for the dedicated appropriation of the monies contained therein
consistent with the purposes of proposed law is adopted at a statewide election and becomes
effective on or before Jan. 1, 2015.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 46:2921-2929)