Rhode Island 2025 Regular Session

Rhode Island House Bill H6095 Compare Versions

Only one version of the bill is available at this time.

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5	5	2025 -- H 6095
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7	7	LC002404
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO HEALTH AND SAFETY -- LICENSING OF HEALTHCARE FACILITIES
16	16	Introduced By: Representatives Bennett, Edwards, Hull, Chippendale, Corvese,
17	17	Azzinaro, Diaz, Casimiro, Kazarian, and Fellela
18	18	Date Introduced: March 14, 2025
19	19	Referred To: House Finance
20	20
21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled "Licensing 1
24	24	of Healthcare Facilities" is hereby amended to read as follows: 2
25	25	23-17-38.1. Hospitals — Licensing fee. 3
26	26	(a) There is imposed a hospital licensing fee for state fiscal year 2023 against each hospital 4
27	27	in the state. The hospital licensing fee is equal to five and forty-two hundredths percent (5.42%) of 5
28	28	the net patient-services revenue of every hospital for the hospital’s first fiscal year ending on or 6
29	29	after January 1, 2021, except that the license fee for all hospitals located in Washington County, 7
30	30	Rhode Island shall be discounted by thirty-seven percent (37%). The discount for Washington 8
31	31	County hospitals is subject to approval by the Secretary of the U.S. Department of Health and 9
32	32	Human Services of a state plan amendment submitted by the executive office of health and human 10
33	33	services for the purpose of pursuing a waiver of the uniformity requirement for the hospital license 11
34	34	fee. This licensing fee shall be administered and collected by the tax administrator, division of 12
35	35	taxation within the department of revenue, and all the administration, collection, and other 13
36	36	provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to the tax 14
37	37	administrator on or before June 30, 2023, and payments shall be made by electronic transfer of 15
38	38	monies to the general treasurer and deposited to the general fund. Every hospital shall, on or before 16
39	39	May 25, 2023, make a return to the tax administrator containing the correct computation of net 17
40	40	patient-services revenue for the hospital fiscal year ending September 30, 2021, and the licensing 18
41	41	fee due upon that amount. All returns shall be signed by the hospital’s authorized representative, 19
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44	44	LC002404 - Page 2 of 6
45	45	subject to the pains and penalties of perjury. 1
46	46	(b)(a) There is also imposed a hospital licensing fee described in subsections (c) through 2
47	47	(f) for state fiscal years 2024 and 2025 against net patient-services revenue of every non-3
48	48	government owned hospital as defined herein for the hospital’s first fiscal year ending on or after 4
49	49	January 1, 2022. The hospital licensing fee shall have three (3) tiers with differing fees based on 5
50	50	inpatient and outpatient net patient-services revenue. The executive office of health and human 6
51	51	services, in consultation with the tax administrator, shall identify the hospitals in each tier, subject 7
52	52	to the definitions in this section, by July 15, 2023, and shall notify each hospital of its tier by August 8
53	53	1, 2023. 9
54	54	(b) There is also imposed a hospital licensing fee described in subsections (c) through (f) 10
55	55	of this section for state fiscal year 2026 against net patient-services revenue of every non-11
56	56	government owned hospital as defined herein for the hospital's first fiscal year ending on or after 12
57	57	January 1, 2024. The hospital licensing fee shall have three (3) tiers with differing fees based on 13
58	58	inpatient and outpatient net patient-services revenue. The executive office of health and human 14
59	59	services, in consultation with the tax administrator, shall identify the hospitals in each tier, subject 15
60	60	to the definitions in this section, by July 15, 2025, and shall notify each hospital of its assigned tier 16
61	61	by August 1, 2025. 17
62	62	(c) Tier 1 is composed of hospitals that do not meet the description of either Tier 2 or Tier 18
63	63	3. 19
64	64	(1) The inpatient hospital licensing fee for Tier 1 is equal to thirteen and twelve hundredths 20
65	65	percent (13.12%) of the inpatient net patient-services revenue derived from inpatient net patient-21
66	66	services revenue of every Tier 1 hospital. 22
67	67	(2) The outpatient hospital licensing fee for Tier 1 is equal to thirteen and thirty hundredths 23
68	68	percent (13.30%) of the net patient-services revenue derived from outpatient net patient-services 24
69	69	revenue of every Tier 1 hospital. 25
70	70	(d) Tier 2 is composed of high Medicaid/uninsured cost hospitals and independent 26
71	71	hospitals. 27
72	72	(1) The inpatient hospital licensing fee for Tier 2 is equal to two and sixty-three hundredths 28
73	73	percent (2.63%) of the inpatient net patient-services revenue derived from inpatient net patient-29
74	74	services revenue of every Tier 2 hospital. 30
75	75	(2) The outpatient hospital licensing fee for Tier 2 is equal to two and sixty-six hundredths 31
76	76	percent (2.66%) of the outpatient net patient-services revenue derived from outpatient net patient-32
77	77	services revenue of every Tier 2 hospital. 33
78	78	(e) Tier 3 is composed of hospitals that are Medicare-designated low-volume hospitals and 34
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81	81	LC002404 - Page 3 of 6
82	82	rehabilitative hospitals. 1
83	83	(1) The inpatient hospital licensing fee for Tier 3 is equal to one and thirty-one hundredths 2
84	84	percent (1.31%) of the inpatient net patient-services revenue derived from inpatient net patient-3
85	85	services revenue of every Tier 3 hospital. 4
86	86	(2) The outpatient hospital licensing fee for Tier 3 is equal to one and thirty-three 5
87	87	hundredths percent (1.33%) of the outpatient net patient-services revenue derived from outpatient 6
88	88	net patient-services revenue of every Tier 3 hospital. 7
89	89	(f) There is also imposed a hospital licensing fee for state fiscal year 2024 against state-8
90	90	government owned and operated hospitals in the state as defined herein. The hospital licensing fee 9
91	91	is equal to five and twenty-five hundredths percent (5.25%) of the net patient-services revenue of 10
92	92	every hospital for the hospital’s first fiscal year ending on or after January 1, 2022. There is also 11
93	93	imposed a hospital licensing fee for state fiscal year 2025 against state-government owned and 12
94	94	operated hospitals in the state as defined herein equal to five and twenty-five hundredths percent 13
95	95	(5.25%) of the net patient-services revenue of every hospital for the hospital’s first fiscal year 14
96	96	ending on or after January 1, 2023. 15
97	97	(g) The hospital licensing fee described in subsections (b) through (f) is subject to U.S. 16
98	98	Department of Health and Human Services approval of a request to waive the requirement that 17
99	99	healthcare-related taxes be imposed uniformly as contained in 42 C.F.R. § 433.68(d). 18
100	100	(h) This hospital licensing fee shall be administered and collected by the tax administrator, 19
101	101	division of taxation within the department of revenue, and all the administration, collection, and 20
102	102	other provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to 21
103	103	the tax administrator before June 30 of each fiscal year, and payments shall be made by electronic 22
104	104	transfer of monies to the tax administrator and deposited to the general fund. Every hospital shall, 23
105	105	on or before August 1, 2023 2025, make a return to the tax administrator containing the correct 24
106	106	computation of inpatient and outpatient net patient-services revenue for the hospital fiscal year 25
107	107	ending in 2022 2024, and the licensing fee due upon that amount. All returns shall be signed by the 26
108	108	hospital’s authorized representative, subject to the pains and penalties of perjury. 27
109	109	(i) Any funds collected pursuant to this provision in excess of ninety million dollars 28
110	110	($90,000,000) shall be used to increase Medicaid reimbursement for hospitals under managed care 29
111	111	and fee-for-service for all of the following subject to approval by the federal Centers for Medicare 30
112	112	and Medicaid Services: 31
113	113	(1) Fee-for-service upper payment limit payments for inpatient hospital services and 32
114	114	outpatient hospital services as authorized in § 40-8.3-10; 33
115	115	(2) Disproportionate share hospital payments for hospitals that are eligible to participate 34
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119	119	and receive payments in the disproportionate share hospital program as authorized in § 40-8.3-3; 1
120	120	(3) Medicaid rate increases for inpatient hospital services and outpatient hospital services 2
121	121	as directed in § 40-8-13.4; and 3
122	122	(4) State directed managed care payments as authorized by § 42-12.4-10. 4
123	123	(i)(j) For purposes of this section the following words and phrases have the following 5
124	124	meanings: 6
125	125	(1) “Gross patient-services revenue” means the gross revenue related to patient care 7
126	126	services. 8
127	127	(2) “High Medicaid/uninsured cost hospital” means a hospital for which the hospital’s total 9
128	128	uncompensated care, as calculated pursuant to § 40-8.3-2(4), divided by the hospital’s total net 10
129	129	patient-services revenues, is equal to six percent (6.0%) or greater. 11
130	130	(3) “Hospital” means the actual facilities and buildings in existence in Rhode Island, 12
131	131	licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on 13
132	132	that license, regardless of changes in licensure status pursuant to chapter 17.14 of this title (hospital 14
133	133	conversions) and § 23-17-6(b) (change in effective control), that provides short-term acute inpatient 15
134	134	and/or outpatient care to persons who require definitive diagnosis and treatment for injury, illness, 16
135	135	disabilities, or pregnancy. Notwithstanding the preceding language, the negotiated Medicaid 17
136	136	managed care payment rates for a court-approved purchaser that acquires a hospital through 18
137	137	receivership, special mastership, or other similar state insolvency proceedings (which court-19
138	138	approved purchaser is issued a hospital license after January 1, 2013) shall be based upon the newly 20
139	139	negotiated rates between the court-approved purchaser and the health plan, and such rates shall be 21
140	140	effective as of the date that the court-approved purchaser and the health plan execute the initial 22
141	141	agreement containing the newly negotiated rate. The rate-setting methodology for inpatient hospital 23
142	142	payments and outpatient hospital payments set forth in §§ 40-8-13.4(b) and 40-8-13.4(b)(2), 24
143	143	respectively, shall thereafter apply to negotiated increases for each annual twelve-month (12) 25
144	144	period as of July 1 following the completion of the first full year of the court-approved purchaser’s 26
145	145	initial Medicaid managed care contract. 27
146	146	(4) “Independent hospitals” means a hospital not part of a multi-hospital system. 28
147	147	(5) “Inpatient net patient-services revenue” means the charges related to inpatient care 29
148	148	services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual 30
149	149	allowances. 31
150	150	(6) “Medicare-designated low-volume hospital” means a hospital that qualifies under 42 32
151	151	C.F.R. 412.101(b)(2) for additional Medicare payments to qualifying hospitals for the higher 33
152	152	incremental costs associated with a low volume of discharges. 34
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156	156	(7) “Net patient-services revenue” means the charges related to patient care services less 1
157	157	(i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual allowances. 2
158	158	(8) “Non-government owned hospitals” means a hospital not owned and operated by the 3
159	159	state of Rhode Island. 4
160	160	(9) “Outpatient net patient-services revenue” means the charges related to outpatient care 5
161	161	services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual 6
162	162	allowances. 7
163	163	(10) “Rehabilitative hospital” means Rehabilitation Hospital Center licensed by the Rhode 8
164	164	Island department of health. 9
165	165	(11) “State-government owned and operated hospitals” means a hospital facility licensed 10
166	166	by the Rhode Island department of health, owned and operated by the state of Rhode Island. 11
167	167	(j)(k) The tax administrator in consultation with the executive office of health and human 12
168	168	services shall make and promulgate any rules, regulations, and procedures not inconsistent with 13
169	169	state law and fiscal procedures that he or she deems necessary for the proper administration of this 14
170	170	section and to carry out the provisions, policy, and purposes of this section. 15
171	171	(k)(l) The licensing fee imposed by subsection (a) shall apply to hospitals as defined herein 16
172	172	that are duly licensed on July 1, 2022, and shall be in addition to the inspection fee imposed by § 17
173	173	23-17-38 and to any licensing fees previously imposed in accordance with this section. 18
174	174	(l)(m) The licensing fees imposed by subsections (b) through (f) shall apply to hospitals as 19
175	175	defined herein that are duly licensed on July 1, 2023 2024, and shall be in addition to the inspection 20
176	176	fee imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with this 21
177	177	section. 22
178	178	SECTION 2. Chapter 42-12.4 of the General Laws entitled "The Rhode Island Medicaid 23
179	179	Reform Act of 2008" is hereby amended by adding thereto the following section: 24
180	180	42-12.4-10. Hospital state directed managed care payments. 25
181	181	The executive office of health and human services is hereby authorized and directed to 26
182	182	maintain and enforce the practice, in effect since July 1, 2023, of amending its regulations for 27
183	183	reimbursement to Medicaid Managed Care Organizations (MMCO) and directing MMCOs to make 28
184	184	quarterly state-directed payments each year to hospitals for inpatient and outpatient services. Such 29
185	185	payments shall be made in accordance with the payment methodology contained in the approved 30
186	186	CMS preprint for hospital state-directed payments. 31
187	187	SECTION 3. This act shall take effect upon passage. 32
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194	194	EXPLANATION
195	195	BY THE LEGISLATIVE COUNCIL
196	196	OF
197	197	A N A C T
198	198	RELATING TO HEALTH AND SAFETY -- LICENSING OF HEALTHCARE FACILITIES
199	199	***
200	200	This act would impose a hospital licensing fee for state fiscal year 2026 against net patient-1
201	201	services revenue of every non-government owned hospital for the hospital’s first fiscal year ending 2
202	202	on or after January 1, 2024. The hospital licensing fee would have three (3) tiers with differing fees 3
203	203	based on inpatient and outpatient net patient-services revenue. The executive office of health and 4
204	204	human services, in consultation with the tax administrator, would identify the hospitals in each tier, 5
205	205	by July 15, 2025, and would notify each hospital of its assigned tier by August 1, 2025. 6
206	206	This act would take effect upon passage. 7
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