S.B. 179 Enrolled

1

HOSPITAL TAX ASSESSMENT
2 2012 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Lyle W. Hillyard
5 House Sponsor: R. Curt Webb
6
7 LONG TITLE
8 General Description:
9 This bill amends the Hospital Provider Assessment Act to adjust the calculation of the
10 assessment.
11 Highlighted Provisions:
12 This bill:
13 . deletes outdated language;
14 . amends the calculation of the assessment; and
15 . deletes the requirement for an advisory board.
16 Money Appropriated in this Bill:
17 None
18 Other Special Clauses:
19 None
20 Utah Code Sections Affected:
21 AMENDS:
22 26-36a-203, as last amended by Laws of Utah 2011, Chapter 297
23 26-36a-205, as enacted by Laws of Utah 2010, Chapter 179
24 26-36a-209, as enacted by Laws of Utah 2010, Chapter 179
25
26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 26-36a-203 is amended to read:
28 26-36a-203. Calculation of assessment.
29 (1) The division shall calculate the inpatient upper payment limit gap for hospitals for

30 each state fiscal year.
31 (2) (a) An annual assessment is payable on a quarterly basis for each hospital in an
32 amount calculated at a uniform assessment rate for each hospital discharge, in accordance with
33 this section.
34 (b) The uniform assessment rate shall be determined using the total number of hospital
35 discharges for assessed hospitals divided into the total non-federal portion of the upper
36 payment limit gap.
37 (c) Any quarterly changes to the uniform assessment rate shall be applied uniformly to
38 all assessed hospitals.
39 (d) (i) Except as provided in Subsection (2)(d)(ii), the annual uniform assessment rate
40 may not generate more than the non-federal share of the annual upper payment limit gap for the
41 fiscal year.
42 [(ii) (A) For fiscal year 2010 the assessment may not generate more than the
43 non-federal share of the annual upper payment limit gap for the fiscal year.]
44 [(B) For fiscal year 2010-11 the department may generate an additional amount from
45 the assessment imposed under Subsection (2)(d)(i) in the amount of $2,000,000 which shall be
46 used by the department and the division as follows:]
47 [(I) $1,000,000 to offset Medicaid mandatory expenditures; and]
48 [(II) $1,000,000 to offset the reduction in hospital outpatient fees in the state program.]
49 [(C)] (ii) For fiscal years 2011-12 and 2012-13 the department may generate an
50 additional amount from the assessment imposed under Subsection (2)(d)(i) in the amount of:
51 (A) $1,000,000 to offset Medicaid mandatory expenditures[.]; and
52 (B) the non-federal share to seed amounts needed to support capitated rates for
53 accountable care organizations.
54 (3) (a) For state fiscal years 2010 and 2011, discharges shall be determined using the
55 data from each hospital's Medicare Cost Report contained in the Centers for Medicare and
56 Medicaid Services' Healthcare Cost Report Information System file as of April 1, 2009, for
57 hospital fiscal years ending between October 1, 2007, and September 30, 2008.

58 (b) If a hospital's fiscal year Medicare Cost Report is not contained in the Centers for
59 Medicare and Medicaid Services' Healthcare Cost Report Information System file dated March
60 31, 2009:
61 (i) the hospital shall submit to the division a copy of the hospital's Medicare Cost
62 Report with a fiscal year end between October 1, 2007, and September 30, 2008; and
63 (ii) the division shall determine the hospital's discharges from the information
64 submitted under Subsection (3)(b)(i).
65 (c) If a hospital started operations after the due date for a 2007 Medicare Cost Report:
66 (i) the hospital shall submit to the division a copy of the hospital's most recent
67 complete year Medicare Cost Report; and
68 (ii) the division shall determine the hospital's discharges from the information
69 submitted under Subsection (3)(c)(i).
70 (d) If a hospital is not certified by the Medicare program and is not required to file a
71 Medicare Cost Report:
72 (i) the hospital shall submit to the division its applicable fiscal year discharges with
73 supporting documentation;
74 (ii) the division shall determine the hospital's discharges from the information
75 submitted under Subsection (3)(d)(i); and
76 (iii) the failure to submit discharge information under Subsections (3)(d)(i) and (ii)
77 shall result in an audit of the hospital's records by the department and the imposition of a
78 penalty equal to 5% of the calculated assessment.
79 (4) (a) For state fiscal year 2012 and 2013, discharges shall be determined using the
80 data from each hospital's Medicare Cost Report contained in the Centers for Medicare and
81 Medicaid Services' Healthcare Cost Report Information System file as of:
82 (i) for state fiscal year 2012, September 30, 2010, for hospital fiscal years ending
83 between October 1, 2008, and September 30, 2009; and
84 (ii) for state fiscal year 2013, September 30, 2011, for hospital fiscal years ending
85 between October 1, 2009, and September 30, 2010.

86 (b) If a hospital's fiscal year Medicare Cost Report is not contained in the Centers for
87 Medicare and Medicaid Services' Healthcare Cost Report Information System file:
88 (i) the hospital shall submit to the division a copy of the hospital's Medicare Cost
89 Report applicable to the assessment year; and
90 (ii) the division shall determine the hospital's discharges.
91 (c) If a hospital is not certified by the Medicare program and is not required to file a
92 Medicare Cost Report:
93 (i) the hospital shall submit to the division its applicable fiscal year discharges with
94 supporting documentation;
95 (ii) the division shall determine the hospital's discharges from the information
96 submitted under Subsection (4)(c)(i); and
97 (iii) the failure to submit discharge information shall result in an audit of the hospital's
98 records and a penalty equal to 5% of the calculated assessment.
99 (5) Except as provided in Subsection (6), if a hospital is owned by an organization that
100 owns more than one hospital in the state:
101 (a) the assessment for each hospital shall be separately calculated by the department;
102 and
103 (b) each separate hospital shall pay the assessment imposed by this chapter.
104 (6) Notwithstanding the requirement of Subsection (5), if multiple hospitals use the
105 same Medicaid provider number:
106 (a) the department shall calculate the assessment in the aggregate for the hospitals
107 using the same Medicaid provider number; and
108 (b) the hospitals may pay the assessment in the aggregate.
109 (7) (a) The assessment formula imposed by this section, and the inpatient access
110 payments under Section 26-36a-205 , shall be adjusted in accordance with Subsection (7)(b) if a
111 hospital, for any reason, does not meet the definition of a hospital subject to the assessment
112 under Section 26-36a-103 for the entire fiscal year.
113 (b) The department shall adjust the assessment payable to the department under this

114 chapter for a hospital that is not subject to the assessment for an entire fiscal year by
115 multiplying the annual assessment calculated under Subsection (3) or (4) by a fraction, the
116 numerator of which is the number of days during the year that the hospital operated, and the
117 denominator of which is 365.
118 (c) A hospital described in Subsection (7)(a):
119 (i) that is ceasing to operate in the state, shall pay any assessment owed to the
120 department immediately upon ceasing to operate in the state; and
121 (ii) shall receive Medicaid inpatient hospital access payments under Section
122 26-36a-205 for the state fiscal year, adjusted using the same formula described in Subsection
123 (7)(b).
124 (8) A hospital that is subject to payment of the assessment at the beginning of a state
125 fiscal year, but during the state fiscal year experiences a change in status so that it no longer
126 falls under the definition of a hospital subject to the assessment in Section 26-36a-204 , shall:
127 (a) not be required to pay the hospital assessment beginning on the date established by
128 the department by administrative rule; and
129 (b) not be entitled to Medicaid inpatient hospital access payments under Section
130 26-36a-205 on the date established by the department by administrative rule.
131 Section 2. Section 26-36a-205 is amended to read:
132 26-36a-205. Medicaid hospital inpatient access payments.
133 (1) To preserve and improve access to hospitals, the division shall make Medicaid
134 inpatient hospital access payments to hospitals in accordance with this section, Section
135 26-36a-204 , and Subsection 26-36a-203 (7).
136 (2) (a) The Medicaid inpatient hospital access payment amount to a particular hospital
137 shall be established by the division.
138 (b) The aggregate of all hospital's Medicaid inpatient hospital access payments shall
139 be:
140 (i) equal to the upper payment limit gap for inpatient services for all hospitals; and
141 (ii) designated as the Medicaid inpatient hospital access payment pool.

142 (3) In addition to any other funds paid to hospitals during fiscal years 2010 and 2011
143 for inpatient hospital services to Medicaid patients, a Medicaid hospital inpatient access
144 payment shall be made:
145 (a) for state fiscal years 2010 and 2011:
146 (i) the amount of $825 per Medicaid fee for service day, to a hospital that:
147 (A) was not a specialty hospital; and
148 (B) had less than 300 select access inpatient cases during state fiscal year 2008; and
149 (ii) inpatient hospital access payments as determined by dividing the remaining
150 spending room available in the current year UPL, after offsetting the payments authorized
151 under Subsection (3)(a)(i) by the total 2008 Medicaid inpatient hospital payments, multiplied
152 by the hospital's Medicaid inpatient payments for state fiscal year 2008, exclusive of medical
153 education and Medicaid disproportionate share payments;
154 (b) for state fiscal year 2012[, using state fiscal year 2009 paid Medicaid inpatient
155 claims data; and]:
156 (i) the amount of $825 per Medicaid fee for service day, to a hospital that:
157 (A) is not a specialty hospital; and
158 (B) has less than 300 select access inpatient cases during the state fiscal year 2008; and
159 (ii) inpatient hospital access payments as determined by dividing the remaining
160 spending room available in the current year upper payment limit, after offsetting the payments
161 authorized under Subsection (3)(a)(i), by the total 2009 Medicaid inpatient hospital payments,
162 multiplied by the hospital's Medicaid inpatient payments for state fiscal year 2009; and
163 (c) for state fiscal year 2013[, using state fiscal year 2010 paid Medicaid inpatient
164 claims data.]:
165 (i) the amount of $825 per Medicaid fee for service day, to a hospital that:
166 (A) is not a specialty hospital; and
167 (B) has less than 300 select access inpatient cases during the state fiscal year 2008; and
168 (ii) inpatient hospital access payments as determined by dividing the remaining
169 spending room available in the current year upper payment limit, after offsetting the payments

170 authorized under Subsection (3)(a)(i), by the total 2010 Medicaid inpatient hospital payments,
171 multiplied by the hospital's Medicaid inpatient payments for state fiscal year 2010.
172 [(4) For both state fiscal years 2012 and 2013, the division shall submit adjustments to
173 the payment rates in Subsection (3)(a) to the Hospital Policy Review Board for their review.]
174 [(5)] (4) Medicaid inpatient hospital access payments shall be made:
175 (a) on a quarterly basis for inpatient hospital services furnished to Medicaid individuals
176 during each quarter; and
177 (b) within 15 days after the end of each quarter.
178 [(6)] (5) A hospital's Medicaid inpatient access payment shall not be used to offset any
179 other payment by Medicaid for hospital inpatient or outpatient services to Medicaid
180 beneficiaries, including a:
181 (a) fee-for-service payment;
182 (b) per diem payment;
183 (c) hospital inpatient adjustment; or
184 (d) cost settlement payment.
185 (6) When the division obtains approval from the Centers for Medicare and Medicaid
186 Services for the Medicaid Waiver - Accountable Care Organizations, and has determined the
187 capitated rate for the accountable care organizations, the department shall consult with the Utah
188 Hospitals Association to develop an alternative supplemental payment methodology that can be
189 approved by the Centers for Medicare and Medicaid Services.
190 (7) A hospital shall not be guaranteed that the hospital's Medicaid inpatient hospital
191 access payments will equal or exceed the amount of the hospital's assessment.
192 Section 3. Section 26-36a-209 is amended to read:
193 26-36a-209. State plan amendment.
194 (1) The division shall file with the Center for Medicare and Medicaid Services a state
195 plan amendment to implement the requirements of this chapter, including the payment of
196 hospital access payments under Section 26-36a-205 no later than 45 days after the effective
197 date of this chapter.

198 (2) If the state plan amendment is not approved by the Center for Medicare and
199 Medicaid Services, the division shall:
200 (a) not implement the assessment imposed under this chapter; and
201 (b) return any assessment fees to the hospitals that paid the fees if assessment fees have
202 been collected.
203 [(3) (a) The department shall establish an advisory board that is the Hospital Policy
204 Review Board.]
205 [(b) The board shall have five members selected as follows:]
206 [(i) one member appointed by the governor from a list of names submitted by the Utah
207 Hospitals and Health Systems Association;]
208 [(ii) two members appointed by the president of the Senate from a list of names
209 submitted by the Utah Hospitals and Health Systems Association; and]
210 [(iii) two members appointed by the speaker of the House from a list of names
211 submitted by the Utah Hospitals and Health Systems Association.]
212 [(c) Members of the board may not be compensated for their services on the board or
213 receive reimbursement for costs or per diem expenses.]
214 [(d) If a selection is not made by the governor, the speaker of the House, or the
215 president of the Senate within 60 days after the names are submitted by the Utah Hospitals and
216 Health Systems Association, the member shall be appointed by the Utah Hospitals and Health
217 Systems Association.]
218 [(e) (i) The board shall review state Medicaid plan amendments or waivers affecting
219 hospital reimbursement between the date of enactment of this chapter and the end of state fiscal
220 year 2013.]
221 [(ii) A majority of the board is a quorum.]
222 [(f) The department may not amend the state Medicaid plan or any waiver affecting
223 hospital reimbursement without submitting the amendment or waiver to the board for review.]