This document includes House Committee Amendments incorporated into the bill on Fri, Mar 2, 2018 at 5:00 PM by bbryner.
1     
MEDICAID EXPANSION REVISIONS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Robert M. Spendlove

5     
Senate Sponsor: Brian Zehnder

6     

7     LONG TITLE
8     General Description:
9          This bill amends the state Medicaid program to permit an expansion of Medicaid
10     eligibility under certain conditions.
11     Highlighted Provisions:
12          This bill:
13          ▸     requires the Department of Health to submit a waiver request to the federal
14     government by January 1, 2019, to:
15               •     provide Medicaid benefits to eligible individuals who are below 95% of the
16     federal poverty level;
17               •     offer services to Medicaid enrollees through the Medicaid managed care
18     organizations;
19               •     obtain maximum federal financial participation for the new Medicaid enrollees;
20               •     require certain qualified adults to meet a work activity requirement; and
21               •     obtain options for flexibility on enrollment;
22          ▸     makes changes to the inpatient hospital assessment;
23          ▸     creates a new Medicaid expansion hospital assessment;
24          ▸     amends the sunset date for the inpatient hospital assessment and creates a sunset
25     date for the Medicaid expansion hospital assessment; and
26          ▸     makes technical changes.
27     Money Appropriated in this Bill:

28          None
29     Other Special Clauses:
30          Ĥ→ [
None] This bill provides a coordination clause. ←Ĥ
31     Utah Code Sections Affected:
32     AMENDS:
33          26-18-18, as last amended by Laws of Utah 2017, Chapter 247
34          26-36b-103, as enacted by Laws of Utah 2016, Chapter 279
35          26-36b-201, as enacted by Laws of Utah 2016, Chapter 279
36          26-36b-202, as enacted by Laws of Utah 2016, Chapter 279
37          26-36b-203, as enacted by Laws of Utah 2016, Chapter 279
38          26-36b-204, as enacted by Laws of Utah 2016, Chapter 279
39          26-36b-205, as enacted by Laws of Utah 2016, Chapter 279
40          26-36b-206, as enacted by Laws of Utah 2016, Chapter 279
41          26-36b-207, as enacted by Laws of Utah 2016, Chapter 279
42          26-36b-208, as enacted by Laws of Utah 2016, Chapter 279
43          26-36b-209, as enacted by Laws of Utah 2016, Chapter 279
44          26-36b-210, as enacted by Laws of Utah 2016, Chapter 279
45          26-36b-211, as enacted by Laws of Utah 2016, Chapter 279
46          63I-1-226, as last amended by Laws of Utah 2017, Chapters 177 and 443
47     ENACTS:
48          26-18-415, Utah Code Annotated 1953
49          26-36c-101, Utah Code Annotated 1953
50          26-36c-102, Utah Code Annotated 1953
51          26-36c-103, Utah Code Annotated 1953
52          26-36c-201, Utah Code Annotated 1953
53          26-36c-202, Utah Code Annotated 1953
54          26-36c-203, Utah Code Annotated 1953
55          26-36c-204, Utah Code Annotated 1953
56          26-36c-205, Utah Code Annotated 1953
57          26-36c-206, Utah Code Annotated 1953
58          26-36c-207, Utah Code Annotated 1953

59          26-36c-208, Utah Code Annotated 1953
60          26-36c-209, Utah Code Annotated 1953
61          26-36c-210, Utah Code Annotated 1953
61a          Ĥ→ Utah Code Sections Affected by Coordination Clause:
61b          26-36b-103, as enacted by Laws of Utah 2016, Chapter 279 ←Ĥ
62     

63     Be it enacted by the Legislature of the state of Utah:
64          Section 1. Section 26-18-18 is amended to read:
65          26-18-18. Optional Medicaid expansion.
66          (1) For purposes of this section[,]:
67          (a) "CMS" means the Centers for Medicare and Medicaid Services within the United
68     States Department of Health and Human Services.
69          (b) "PPACA" means the same as that term is defined in Section 31A-1-301.
70          (2) The department and the governor [shall] may not expand the state's Medicaid
71     program [to the optional population] under PPACA unless:
72          (a) the department expands Medicaid in accordance with Section 26-18-415; or
73          [(a)] (b) (i) the governor or the governor's designee has reported the intention to expand
74     the state Medicaid program under PPACA to the Legislature in compliance with the legislative
75     review process in Sections 63N-11-106 and 26-18-3; and
76          [(b)] (ii) the governor submits the request for expansion of the Medicaid program for
77     optional populations to the Legislature under the high impact federal funds request process
78     required by Section 63J-5-204[, Legislative review and approval of certain federal funds
79     request].
80          (3) (a) The department shall request approval from [the Centers for Medicare and
81     Medicaid Services within the United States Department of Health and Human Services] CMS
82     for waivers from federal statutory and regulatory law necessary to implement the health
83     coverage improvement program under Section 26-18-411.
84          (b) The health coverage improvement program under Section 26-18-411 is not
85     [Medicaid expansion for purposes of this section] subject to the requirements in Subsection (2).
86          Section 2. Section 26-18-415 is enacted to read:
87          26-18-415. Medicaid waiver expansion.
88          (1) As used in this section:
89          (a) "CMS" means the Centers for Medicare and Medicaid Services within the United

90     States Department of Health and Human Services.
91          (b) "Expansion population" means individuals:
92          (i) whose household income is less than 95% of the federal poverty level; and
93          (ii) who are not eligible for enrollment in the Medicaid program Ĥ→ , with the exception
93a     of the Primary Care Network program, ←Ĥ on May 8, 2018.
94          (c) "Federal poverty level" means the same as that term is defined in Section
95     26-18-411.
96          (d) "Medicaid waiver expansion" means a Medicaid expansion in accordance with this
97     section.
98          (2) (a) Before January 1, 2019, the department shall apply to CMS for approval of a
99     waiver or state plan amendment to implement the Medicaid waiver expansion.
100          (b) The Medicaid waiver expansion shall:
101          (i) expand Medicaid coverage to eligible individuals whose income is below 95% of
102     the federal poverty level;
103          (ii) obtain maximum federal financial participation under 42 U.S.C. Sec. 1396d(y) for
104     enrolling an individual in the Medicaid program;
105          (iii) provide Medicaid benefits through the state's Medicaid accountable care
106     organizations in areas where a Medicaid accountable care organization is implemented;
107          (iv) integrate the delivery of behavioral health services and physical health services
108     with Medicaid accountable care organizations in select geographic areas of the state that
109     choose an integrated model;
110          (v) include a path to self-sufficiency, including work activities as defined in 42 U.S.C.
111     Sec. 607(d), for qualified adults;
112          (vi) require an individual who is offered a private health benefit plan by an employer to
113     enroll in the employer's health plan;
114          (vii) sunset in accordance with Subsection (5)(a); and
115          (viii) permit the state to close enrollment in the Medicaid waiver expansion if the
116     department has insufficient funding to provide services to additional eligible individuals.
117          (3) If the Medicaid waiver described in Subsection (1) is approved, the department may
118     only pay the state portion of costs for the Medicaid waiver expansion with appropriations from:
119          (a) the Medicaid Expansion Fund, created in Section 26-36b-208;
120          (b) county contributions to the non-federal share of Medicaid expenditures; and

121          (c) any other contributions, funds, or transfers from a non-state agency for Medicaid
122     expenditures.
123          (4) Medicaid accountable care organizations and counties that elect to integrate care
124     under Subsection (2)(b)(iv) shall collaborate on enrollment, engagement of patients, and
125     coordination of services.
126          (5) (a) If federal financial participation for the Medicaid waiver expansion is reduced
127     below 90%, the authority of the department to implement the Medicaid waiver expansion shall
128     sunset no later than the next July 1 after the date on which the federal financial participation is
129     reduced.
130          (b) The department shall close the program to new enrollment if the cost of the
131     Medicaid waiver expansion is projected to exceed the appropriations for the fiscal year that are
132     authorized by the Legislature through an appropriations act adopted in accordance with Title
133     63J, Chapter 1, Budgetary Procedures Act.
134          (6) If the Medicaid waiver expansion is approved by CMS, the department shall report
135     to the Social Services Appropriations Subcommittee on or before November 1 of each year that
136     the Medicaid waiver expansion is operational:
137          (a) the number of individuals who enrolled in the Medicaid waiver program;
138          (b) costs to the state for the Medicaid waiver program;
139          (c) estimated costs for the current and following state fiscal year; and
140          (d) recommendations to control costs of the Medicaid waiver expansion.
141          Section 3. Section 26-36b-103 is amended to read:
142          26-36b-103. Definitions.
143          As used in this chapter:
144          (1) "Assessment" means the inpatient hospital assessment established by this chapter.
145          (2) "CMS" means the [same as that term is defined in Section 26-18-411] Centers for
146     Medicare and Medicaid Services within the United States Department of Health and Human
147     Services.
148          (3) "Discharges" means the number of total hospital discharges reported on:
149          (a) Worksheet S-3 Part I, column 15, lines 14, 16, and 17 of the 2552-10 Medicare cost
150     report for the applicable assessment year; or
151          (b) a similar report adopted by the department by administrative rule, if the report

152     under Subsection (3)(a) is no longer available.
153          (4) "Division" means the Division of Health Care Financing within the department.
154          (5) "Health coverage improvement program" means the health coverage improvement
155     program described in Section 26-18-411.
156          (6) "Hospital share" means the hospital share described in Section 26-36b-203.
157          (7) "Medicaid accountable care organization" means a managed care organization, as
158     defined in 42 C.F.R. Sec. 438, that contracts with the department under the provisions of
159     Section 26-18-405.
160          (8) "Medicaid waiver expansion" means a Medicaid expansion in accordance with
161     Section 26-18-415.
162          [(5)] (9) "Medicare cost report" means CMS-2552-10, the cost report for electronic
163     filing of hospitals.
164          [(6)] (10) (a) "Non-state government hospital"[:(a)] means a hospital owned by a
165     non-state government entity[; and].
166          (b) "Non-state government hospital" does not include:
167          (i) the Utah State Hospital; or
168          (ii) a hospital owned by the federal government, including the Veterans Administration
169     Hospital.
170          [(7)] (11) (a) "Private hospital"[:(a)] means:
171          (i) a [privately owned] general acute hospital [operating in the state], as defined in
172     Section 26-21-2, that is privately owned and operating in the state; and
173          (ii) a privately owned specialty hospital operating in the state, [which shall include]
174     including a privately owned hospital whose inpatient admissions are predominantly Ĥ→ for ←Ĥ :
175          (A) rehabilitation;
176          (B) psychiatric care;
177          (C) chemical dependency services; or
178          (D) long-term acute care services[; and].
179          (b) "Private hospital" does not include a facility for residential [care or] treatment
180     [facility] as defined in Section 62A-2-101.
181          [(8)] (12) "State teaching hospital" means a state owned teaching hospital that is part of
182     an institution of higher education.

183          (13) "Upper payment limit gap" means the difference between the private hospital
184     outpatient upper payment limit and the private hospital Medicaid outpatient payments, as
185     determined in accordance with 42 C.F.R. Sec. 447.321.
186          Section 4. Section 26-36b-201 is amended to read:
187          26-36b-201. Assessment.
188          (1) An assessment is imposed on each private hospital:
189          (a) beginning upon the later of CMS approval of:
190          (i) the health coverage improvement program waiver under Section 26-18-411; and
191          (ii) the assessment under this chapter;
192          (b) in the amount designated in Sections 26-36b-204 and 26-36b-205; and
193          (c) in accordance with Section 26-36b-202.
194          (2) Subject to Section 26-36b-203, the assessment imposed by this chapter is due and
195     payable on a quarterly basis, after payment of the outpatient upper payment limit supplemental
196     payments under Section 26-36b-210 have been paid.
197          (3) The first quarterly payment [shall not be] is not due until at least three months after
198     the Ĥ→ earlier of the ←Ĥ effective Ĥ→ [
date] dates ←Ĥ of the coverage provided through:
199          (a) the health coverage improvement program [waiver under Section 26-18-411.]; or
200          (b) the Medicaid waiver expansion.
201          Section 5. Section 26-36b-202 is amended to read:
202          26-36b-202. Collection of assessment -- Deposit of revenue -- Rulemaking.
203          (1) The collecting agent for the assessment imposed under Section 26-36b-201 is the
204     department.
205          (2) The department is vested with the administration and enforcement of this chapter,
206     [including the right to adopt administrative] and may make rules in accordance with Title 63G,
207     Chapter 3, Utah Administrative Rulemaking Act, necessary to:
208          [(a) implement and enforce the provisions of this chapter;]
209          (a) collect the assessment, intergovernmental transfers, and penalties imposed under
210     this chapter;
211          (b) audit records of a facility that:
212          (i) is subject to the assessment imposed by this chapter; and
213          (ii) does not file a Medicare cost report; and

214          (c) select a report similar to the Medicare cost report if Medicare no longer uses a
215     Medicare cost report.
216          (2) The department shall:
217          (a) administer the assessment in this [part separate] chapter separately from the
218     assessment in Chapter 36a, Hospital Provider Assessment Act; and
219          (b) deposit assessments collected under this chapter into the Medicaid Expansion Fund
220     created by Section 26-36b-208.
221          Section 6. Section 26-36b-203 is amended to read:
222          26-36b-203. Quarterly notice.
223          (1) Quarterly assessments imposed by this chapter shall be paid to the division within
224     15 business days after the original invoice date that appears on the invoice issued by the
225     division.
226          (2) The department may, by rule, extend the time for paying the assessment.
227          Section 7. Section 26-36b-204 is amended to read:
228          26-36b-204. Hospital financing of health coverage improvement program
229     Medicaid waiver expansion-- Hospital share.
230          [(1) For purposes of this section, "hospital share":]
231          (1) The hospital share is:
232          (a) [means] 45% of the state's net cost of[:(i)] the health coverage improvement
233     program [Medicaid waiver under Section 26-18-411;(ii)], including Medicaid coverage for
234     individuals with dependent children up to the federal poverty level designated under Section
235     26-18-411; [and]
236          [(iii) the UPL gap, as that term is defined in Section 26-36b-210;]
237          [(b) for the hospital share of the additional coverage under Section 26-18-411,]
238          (b) if the waiver for the Medicaid waiver expansion is approved, $11,900,000; and
239          (c) 45% of the state's net cost of the upper payment limit gap.
240          (2) (a) The hospital share is capped at no more than $13,600,000 annually, consisting
241     of:
242          (i) an $11,900,000 cap Ĥ→ [
on the hospital's share] ←Ĥ for the programs specified in
242a     Subsections
243     (1)(a)[(i) and (ii)] and (b); and
244          (ii) a $1,700,000 cap for the program specified in Subsection (1)[(a)(iii);](c).

245          [(c) for the cap specified in Subsection (1)(b), shall be prorated]
246          (b) The department shall prorate the cap described in Subsection (2)(a) in any year in
247     which at least one of the programs specified in Subsection (1) Ĥ→ [
(a)] ←Ĥ are not in effect for the
247a     full
248     fiscal year[; and].
249          [(d) if the Medicaid program expands in a manner that is greater than the expansion
250     described in Section 26-18-411, is capped at 33% of the state's share of the cost of the
251     expansion that is in addition to the program described in Section 26-18-411.]
252          [(2) The assessment for the private hospital share under Subsection (1) shall be:]
253          (3) Private hospitals shall be assessed under this chapter for:
254          (a) 69% of the portion of the hospital share specified in Subsections (1)(a)[(i) and (ii)]
255     and (b); and
256          (b) 100% of the portion of the hospital share specified in Subsection (1)[(a)(iii)](c).
257          [(3)] (4) (a) The department shall, on or before October 15, 2017, and on or before
258     October 15 of each subsequent year [thereafter], produce a report that calculates the state's net
259     cost of the programs described in Subsections (1)(a)[(i) and (ii)] and (b) that are in effect for
260     that year.
261          (b) If the assessment collected in the previous fiscal year is above or below the [private
262     hospital's share of the state's net cost as specified in Subsection (2),] hospital share for private
263     hospitals for the previous fiscal year, the underpayment or overpayment of the assessment by
264     the private hospitals shall be applied to the fiscal year in which the report [was] is issued.
265          [(4)] (5) A Medicaid accountable care organization shall, on or before October 15 of
266     each year, report to the department the following data from the prior state fiscal year for each
267     private hospital, state teaching hospital, and non-state government hospital provider that the
268     Medicaid accountable care organization contracts with:
269          (a) for the traditional Medicaid population[, for each private hospital, state teaching
270     hospital, and non-state government hospital provider]:
271          (i) hospital inpatient payments;
272          (ii) hospital inpatient discharges;
273          (iii) hospital inpatient days; and
274          (iv) hospital outpatient payments; and
275          [(b) for the Medicaid population newly eligible under Subsection 26-18-411, for each

276     private hospital, state teaching hospital, and non-state government hospital provider:]
277          (b) if the Medicaid accountable care organization enrolls any individuals in the health
278     coverage improvement program or the Medicaid waiver expansion, for the population newly
279     eligible for either program:
280          (i) hospital inpatient payments;
281          (ii) hospital inpatient discharges;
282          (iii) hospital inpatient days; and
283          (iv) hospital outpatient payments.
284          (6) The department shall, by rule made in accordance with Title 63G, Chapter 3, Utah
285     Administrative Rulemaking Act, provide details surrounding specific content and format for
286     the reporting by the Medicaid accountable care organization.
287          Section 8. Section 26-36b-205 is amended to read:
288          26-36b-205. Calculation of assessment.
289          (1) (a) Except as provided in Subsection (1)(b), an annual assessment is payable on a
290     quarterly basis for each private hospital in an amount calculated by the division at a uniform
291     assessment rate for each hospital discharge, in accordance with this section.
292          (b) A private teaching hospital with more than 425 beds and 60 residents shall pay an
293     assessment rate [2.50] 2.5 times the uniform rate established under Subsection (1)(c).
294          (c) The division shall calculate the uniform assessment rate [shall be determined using
295     the total number of hospital discharges for assessed private hospitals, the percentages in
296     Subsection 26-36b-204(2), and rule adopted by the department.] described in Subsection (1)(a)
297     by dividing the hospital share for assessed private hospitals, described in Subsection
298     26-36b-204(1), by the sum of:
299          (i) the total number of discharges for assessed private hospitals that are not a private
300     teaching hospital; and
301          (ii) 2.5 times the number of discharges for a private teaching hospital, described in
302     Subsection (1)(b).
302a     Ĥ→ (d) The division may, by rule made in accordance with Title 63G, Chapter 3, Utah
302b     Administrative Rulemaking Act, adjust the formula described in Subsection (1)(c) to address
302c     unforeseen circumstances in the administration of the assessment under this chapter.
303           [
(d)] (e) ←Ĥ Any quarterly changes to the uniform assessment rate shall be applied
303a     uniformly to
304     all assessed private hospitals.
305          [(2) (a) For each state fiscal year, discharges shall be determined using the data from
306     each hospital's Medicare cost report contained in the Centers for Medicare and Medicaid

307     Services' Healthcare Cost Report Information System file. The hospital's discharge data will be
308     derived as follows:]
309          (2) Except as provided in Subsection (3), for each state fiscal year, the division shall
310     determine a hospital's discharges as follows:
311          [(i)] (a) for state fiscal year 2017, the hospital's cost report data for the hospital's fiscal
312     year ending between July 1, 2013, and June 30, 2014; and
313          [(ii)] (b) for each subsequent state fiscal year, the hospital's cost report data for the
314     hospital's fiscal year that ended in the state fiscal year two years before the assessment fiscal
315     year.
316          [(b)] (3) (a) If a hospital's fiscal year Medicare cost report is not contained in the
317     [Centers for Medicare and Medicaid Services'] CMS Healthcare Cost Report Information
318     System file:
319          (i) the hospital shall submit to the division a copy of the hospital's Medicare cost report
320     applicable to the assessment year; and
321          (ii) the division shall determine the hospital's discharges.
322          [(c)] (b) If a hospital is not certified by the Medicare program and is not required to file
323     a Medicare cost report:
324          (i) the hospital shall submit to the division the hospital's applicable fiscal year
325     discharges with supporting documentation;
326          (ii) the division shall determine the hospital's discharges from the information
327     submitted under Subsection [(2)(c)(i)] (3)(b)(i); and
328          (iii) [the] failure to submit discharge information shall result in an audit of the
329     hospital's records and a penalty equal to 5% of the calculated assessment.
330          [(3)] (4) Except as provided in Subsection [(4)] (5), if a hospital is owned by an
331     organization that owns more than one hospital in the state:
332          (a) the assessment for each hospital shall be separately calculated by the department;
333     and
334          (b) each separate hospital shall pay the assessment imposed by this chapter.
335          [(4) Notwithstanding the requirement of Subsection (3), if]
336          (5) If multiple hospitals use the same Medicaid provider number:
337          (a) the department shall calculate the assessment in the aggregate for the hospitals

338     using the same Medicaid provider number; and
339          (b) the hospitals may pay the assessment in the aggregate.
340          Section 9. Section 26-36b-206 is amended to read:
341          26-36b-206. State teaching hospital and non-state government hospital
342     mandatory intergovernmental transfer.
343          (1) [A] The state teaching hospital and a non-state government hospital shall make an
344     intergovernmental transfer to the Medicaid Expansion Fund created in Section 26-36b-208, in
345     accordance with this section.
346          (2) The [intergovernmental transfer shall be paid] hospitals described in Subsection (1)
347     shall pay the intergovernmental transfer beginning on the later of CMS approval of:
348          (a) the health improvement program waiver under Section 26-18-411; or
349          (b) the assessment for private hospitals in this chapter[; and].
350          [(c) the intergovernmental transfer in this section.]
351          (3) The intergovernmental transfer [shall be paid in an amount divided] is apportioned
352     as follows:
353          (a) the state teaching hospital is responsible for:
354          (i) 30% of the portion of the hospital share specified in Subsections
355     26-36b-204(1)(a)[(i) and (ii)] and (b); and
356          (ii) 0% of the hospital share specified in Subsection 26-36b-204(1)[(a)(iii)](c); and
357          (b) non-state government hospitals are responsible for:
358          (i) 1% of the portion of the hospital share specified in Subsections 26-36b-204(1)(a)[(i)
359     and (ii)] and (b); and
360          (ii) 0% of the hospital share specified in Subsection 26-36b-204(1)[(a)(iii)](c).
361          (4) The department shall, by rule made in accordance with Title 63G, Chapter 3, Utah
362     Administrative Rulemaking Act, designate:
363          (a) the method of calculating the Ĥ→ [
percentages] amounts ←Ĥ designated in Subsection
363a     (3); and
364          (b) the schedule for the intergovernmental transfers.
365          Section 10. Section 26-36b-207 is amended to read:
366          26-36b-207. Penalties and interest.
367          (1) A hospital that fails to pay [any] a quarterly assessment, make the mandated
368     intergovernmental transfer, or file a return as required under this chapter, within the time

369     required by this chapter, shall pay penalties described in this section, in addition to the
370     assessment or intergovernmental transfer[, and interest established by the department].
371          [(2) (a) Consistent with Subsection (2)(b), the department shall adopt rules in
372     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that establish
373     reasonable penalties and interest for the violations described in Subsection (1).]
374          [(b)] (2) If a hospital fails to timely pay the full amount of a quarterly assessment or the
375     mandated intergovernmental transfer, the department shall add to the assessment or
376     intergovernmental transfer:
377          [(i)] (a) a penalty equal to 5% of the quarterly amount not paid on or before the due
378     date; and
379          [(ii)] (b) on the last day of each quarter after the due date until the assessed amount and
380     the penalty imposed under Subsection (2)[(b)(i)](a) are paid in full, an additional 5% penalty
381     on:
382          [(A)] (i) any unpaid quarterly assessment or intergovernmental transfer; and
383          [(B)] (ii) any unpaid penalty assessment.
384          [(c)] (3) Upon making a record of the division's actions, and upon reasonable cause
385     shown, the division may waive, reduce, or compromise any of the penalties imposed under this
386     chapter.
387          Section 11. Section 26-36b-208 is amended to read:
388          26-36b-208. Medicaid Expansion Fund.
389          (1) There is created an expendable special revenue fund known as the Medicaid
390     Expansion Fund.
391          (2) The fund consists of:
392          (a) assessments collected under this chapter;
393          (b) intergovernmental transfers under Section 26-36b-206;
394          (c) savings attributable to the health coverage improvement program [under Section
395     26-18-411] as determined by the department;
396          (d) savings attributable to the Medicaid waiver expansion as determined by the
397     department;
398          [(d)] (e) savings attributable to the inclusion of psychotropic drugs on the preferred
399     drug list under Subsection 26-18-2.4(3) as determined by the department;

400          [(e)] (f) savings attributable to the services provided by the Public Employees' Health
401     Plan under Subsection 49-20-401(1)(u);
402          [(f)] (g) gifts, grants, donations, or any other conveyance of money that may be made to
403     the fund from private sources; [and]
404          (h) interest earned on money in the fund; and
405          [(g)] (i) additional amounts as appropriated by the Legislature.
406          (3) (a) The fund shall earn interest.
407          (b) All interest earned on fund money shall be deposited into the fund.
408          (4) (a) A state agency administering the provisions of this chapter may use money from
409     the fund to pay the costs [of], not otherwise paid for with federal funds or other revenue
410     sources, of:
411          (i) the health coverage improvement [Medicaid waiver under Section 26-18-411, and]
412     program;
413          (ii) the Medicaid waiver expansion; and
414          (iii) the outpatient [UPL] upper payment limit supplemental payments under Section
415     26-36b-210[, not otherwise paid for with federal funds or other revenue sources, except that
416     no].
417          (b) A state agency administering the provisions of this chapter may not use:
418          (i) funds described in Subsection (2)(b) [may be used] to pay the cost of private
419     outpatient [UPL] upper payment limit supplemental payments[.]; or
420          [(b)] (ii) [Money] money in the fund [may not be used for any other] for any purpose
421     not described in Subsection (4)(a).
422          Section 12. Section 26-36b-209 is amended to read:
423          26-36b-209. Hospital reimbursement.
424          (1) [The] If the health coverage improvement program or the Medicaid waiver
425     expansion is implemented by contracting with a Medicaid accountable care organization, the
426     department shall, to the extent allowed by law, include, in a contract [with a Medicaid
427     accountable care organization] to provide benefits under the health coverage improvement
428     program or the Medicaid waiver expansion, a requirement that the Medicaid accountable care
429     organization reimburse hospitals in the accountable care organization's provider network[,] at
430     no less than the Medicaid fee-for-service rate.

431          (2) If the health coverage improvement program or the Medicaid waiver expansion is
432     implemented by the department as a fee-for-service program, the department shall reimburse
433     hospitals at no less than the Medicaid fee-for-service rate.
434          (3) Nothing in this section prohibits a Medicaid accountable care organization from
435     paying a rate that exceeds the Medicaid fee-for-service [rates] rate.
436          Section 13. Section 26-36b-210 is amended to read:
437          26-36b-210. Outpatient upper payment limit supplemental payments.
438          [(1) For purposes of this section, "UPL gap" means the difference between the private
439     hospital outpatient upper payment limit and the private hospital Medicaid outpatient payments,
440     as determined in accordance with 42 C.F.R. 447.321.]
441          [(2)] (1) Beginning on the effective date of the assessment imposed under this chapter,
442     and for each subsequent fiscal year [thereafter], the department shall implement an outpatient
443     upper payment limit program for private hospitals that shall supplement the reimbursement to
444     private hospitals in accordance with Subsection [(3)] (2).
445          [(3)] (2) The division shall ensure that supplemental payment to Utah private hospitals
446     under Subsection [(2) shall] (1):
447          (a) does not exceed the positive [UPL] upper payment limit gap; and
448          (b) [be] is allocated based on the Medicaid state plan.
449          [(4)] (3) The department shall use the same outpatient data [used to calculate the UPL
450     gap under Subsection (1) shall be the same outpatient data used] to allocate the payments under
451     Subsection [(3)] (2) and to calculate the upper payment limit gap.
452          [(5)] (4) The supplemental payments to private hospitals under Subsection [(2) shall
453     be] (1) are payable for outpatient hospital services provided on or after the later of:
454          (a) July 1, 2016;
455          (b) the effective date of the Medicaid state plan amendment necessary to implement the
456     payments under this section; or
457          (c) the effective date of the coverage provided through the health coverage
458     improvement program waiver [under Section 26-18-411].
459          Section 14. Section 26-36b-211 is amended to read:
460          26-36b-211. Suspension of assessment.
461          (1) The [repeal of the] department shall suspend the assessment imposed by this

462     chapter [shall occur upon the certification by the executive director of the department that the
463     sooner of the following has occurred] when the executive director certifies that:
464          [(a) the effective date of any action by Congress that would disqualify]
465          (a) action by Congress is in effect that disqualifies the assessment imposed by this
466     chapter from counting toward state Medicaid funds available to be used to determine the
467     amount of federal financial participation;
468          (b) [the effective date of any] a decision, enactment, or other determination by the
469     Legislature or by any court, officer, department, or agency of the state, or of the federal
470     government, [that has the effect of] is in effect that:
471          (i) [disqualifying] disqualifies the assessment from counting toward state Medicaid
472     funds available to be used to determine federal financial participation for Medicaid matching
473     funds; or
474          (ii) [creating] creates for any reason a failure of the state to use the assessments for at
475     least one of the Medicaid [program as] programs described in this chapter; or
476          (c) [the effective date of] a change is in effect that reduces the aggregate hospital
477     inpatient and outpatient payment rate below the aggregate hospital inpatient and outpatient
478     payment rate for July 1, 2015[; and].
479          [(d) the sunset of this chapter in accordance with Section 63I-1-226.]
480          [(2) If the assessment is repealed under Subsection (1), money in the fund that was
481     derived from assessments imposed by this chapter, before the determination made under
482     Subsection (1), shall be disbursed under Section 26-36b-207 to the extent federal matching is
483     not reduced due to the impermissibility of the assessments. Any funds remaining in the special
484     revenue fund shall be refunded to the hospitals in proportion to the amount paid by each
485     hospital.]
486          (2) If the assessment is suspended under Subsection (1):
487          (a) the division may not collect any assessment or intergovernmental transfer under this
488     chapter;
489          (b) the division shall disburse money in the Ĥ→ [
special revenue fund] Medicaid
489a     Expansion Fund ←Ĥ in accordance with
490     the requirements in Subsection 26-36b-208(4), to the extent federal matching is not reduced by
491     CMS due to the repeal of the assessment;
492          (c) the division shall refund any money remaining in the Ĥ→ [
special revenue fund]
492a      Medicaid Expansion Fund ←Ĥ after the

493     disbursement described in Subsection (2)(b) that was derived from assessments imposed by
494     this chapter to the hospitals in proportion to the amount paid by each hospital for the last three
495     fiscal years; and
496          (d) the division shall deposit any money remaining in the Ĥ→ [
special revenue fund]
496a      Medicaid Expansion Fund ←Ĥ after the
497     disbursements described in Subsections (2)(b) and (c) into the General Fund Ĥ→ by the end of the
497a     fiscal year that the assessment is suspended ←Ĥ .
498          Section 15. Section 26-36c-101 is enacted to read:
499     
CHAPTER 36c. MEDICAID EXPANSION HOSPITAL ASSESSMENT ACT

500     
Part 1. General Provisions

501          26-36c-101. Title.
502          This chapter is known as the "Medicaid Expansion Hospital Assessment Act."
503          Section 16. Section 26-36c-102 is enacted to read:
504          26-36c-102. Definitions.
505          As used in this chapter:
506          (1) "Assessment" means the Medicaid expansion hospital assessment established by
507     this chapter.
508          (2) "CMS" means the Centers for Medicare and Medicaid Services within the United
509     States Department of Health and Human Services.
510          (3) "Discharges" means the number of total hospital discharges reported on:
511          (a) Worksheet S-3 Part I, column 15, lines 14, 16, and 17 of the 2552-10 Medicare cost
512     report for the applicable assessment year; or
513          (b) a similar report adopted by the department by administrative rule, if the report
514     under Subsection (3)(a) is no longer available.
515          (4) "Division" means the Division of Health Care Financing within the department.
516          (5) "Hospital share" means the hospital share described in Section 26-36c-203.
517          (6) "Medicaid accountable care organization" means a managed care organization, as
518     defined in 42 C.F.R. Sec. 438, that contracts with the department under the provisions of
519     Section 26-18-405.
520          (7) "Medicaid Expansion Fund" means the Medicaid Expansion Fund created in
521     Section 26-36b-208.
522          (8) "Medicaid waiver expansion" means the same as that term is defined in Section
523     26-18-415.

524          (9) "Medicare cost report" means CMS-2552-10, the cost report for electronic filing of
525     hospitals.
526          (10) (a) "Non-state government hospital" means a hospital owned by a non-state
527     government entity.
528          (b) "Non-state government hospital" does not include:
529          (i) the Utah State Hospital; or
530          (ii) a hospital owned by the federal government, including the Veterans Administration
531     Hospital.
532          (11) (a) "Private hospital" means:
533          (i) a privately owned general acute hospital operating in the state as defined in Section
534     26-21-2; or
535          (ii) a privately owned specialty hospital operating in the state, including a privately
536     owned hospital for which inpatient admissions are predominantly:
537          (A) rehabilitation;
538          (B) psychiatric;
539          (C) chemical dependency; or
540          (D) long-term acute care services.
541          (b) "Private hospital" does not include a facility for residential treatment as defined in
542     Section 62A-2-101.
543          (12) "State teaching hospital" means a state owned teaching hospital that is part of an
544     institution of higher education.
545          Section 17. Section 26-36c-103 is enacted to read:
546          26-36c-103. Application.
547          (1) Other than for the imposition of the assessment described in this chapter, nothing in
548     this chapter shall affect the nonprofit or tax exempt status of any nonprofit charitable, religious,
549     or educational health care provider under any:
550          (a) state law;
551          (b) ad valorem property tax requirement;
552          (c) sales or use tax requirement; or
553          (d) other requirements imposed by taxes, fees, or assessments, whether imposed or
554     sought to be imposed, by the state or any political subdivision of the state.

555          (2) A hospital paying an assessment under this chapter may include the assessment as
556     an allowable cost of a hospital for purposes of any applicable Medicaid reimbursement
557     formula.
558          (3) This chapter does not authorize a political subdivision of the state to:
559          (a) license a hospital for revenue;
560          (b) impose a tax or assessment upon a hospital; or
561          (c) impose a tax or assessment measured by the income or earnings of a hospital.
562          Section 18. Section 26-36c-201 is enacted to read:
563     
Part 2. Assessment and Collection

564          26-36c-201. Assessment.
565          (1) An assessment is imposed on each private hospital:
566          (a) beginning upon the later of CMS approval of:
567          (i) the waiver for the Medicaid waiver expansion; and
568          (ii) the assessment under this chapter;
569          (b) in the amount designated in Sections 26-36c-204 and 26-36c-205; and
570          (c) in accordance with Section 26-36c-202.
571          (2) Subject to Subsection 26-36c-202(4), the assessment imposed by this chapter is due
572     and payable on the last day of each quarter.
573          (3) The first quarterly payment is not due until at least three months after the effective
574     date of the coverage provided through the Medicaid waiver expansion.
575          Section 19. Section 26-36c-202 is enacted to read:
576          26-36c-202. Collection of assessment -- Deposit of revenue -- Rulemaking.
577          (1) The department shall act as the collecting agent for the assessment imposed under
578     Section 26-36c-201.
579          (2) The department shall administer and enforce the provisions of this chapter, and may
580     make rules, in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
581     necessary to:
582          (a) collect the assessment, intergovernmental transfers, and penalties imposed under
583     this chapter;
584          (b) audit records of a facility that:
585          (i) is subject to the assessment imposed under this chapter; and

586          (ii) does not file a Medicare cost report; and
587          (c) select a report similar to the Medicare cost report if Medicare no longer uses a
588     Medicare cost report.
589          (3) The department shall:
590          (a) administer the assessment in this part separately from the assessments in Chapter
591     36a, Hospital Provider Assessment Act, and Chapter 36b, Inpatient Hospital Assessment Act;
592     and
593          (b) deposit assessments collected under this chapter into the Medicaid Expansion Fund.
594          (4) (a) Hospitals shall pay the quarterly assessments imposed by this chapter to the
595     division within 15 business days after the original invoice date that appears on the invoice
596     issued by the division.
597          (b) The department may make rules creating requirements to allow the time for paying
598     the assessment to be extended.
599          Section 20. Section 26-36c-203 is enacted to read:
600          26-36c-203. Hospital share.
601          (1) The hospital share is 100% of the state's net cost of the Medicaid waiver expansion,
602     after deducting appropriate offsets and savings expected as a result of implementing the
603     Medicaid waiver expansion, including savings from:
604          (a) the Primary Care Network program;
605          (b) the health coverage improvement program, as defined in Section 26-18-411;
606          (c) the state portion of inpatient prison medical coverage;
607          (d) behavioral health coverage; and
608          (e) county contributions to the non-federal share of Medicaid expenditures.
609          (2) (a) The hospital share is capped at no more than $25,000,000 annually.
610          (b) The division shall prorate the cap specified in Subsection (2)(a) in any year in
611     which the Medicaid waiver expansion is not in effect for the full fiscal year.
612          Section 21. Section 26-36c-204 is enacted to read:
613          26-36c-204. Hospital financing of Medicaid waiver expansion.
614          (1) Private hospitals shall be assessed under this chapter for the portion of the hospital
615     share described in Section 26-36c-209.
616          (2) The department shall, on or before October 15, 2019, and on or before October 15

617     of each subsequent year, produce a report that calculates the state's net cost of the Medicaid
618     waiver expansion.
619          (3) If the assessment collected in the previous fiscal year is above or below the hospital
620     share for private hospitals for the previous fiscal year, the division shall apply the
621     underpayment or overpayment of the assessment by the private hospitals to the fiscal year in
622     which the report is issued.
623          Section 22. Section 26-36c-205 is enacted to read:
624          26-36c-205. Calculation of assessment.
625          (1) (a) Except as provided in Subsection (1)(b), each private hospital shall pay an
626     annual assessment due on the last day of each quarter in an amount calculated by the division at
627     a uniform assessment rate for each hospital discharge, in accordance with this section.
628          (b) A private teaching hospital with more than 425 beds and more than 60 residents
629     shall pay an assessment rate 2.5 times the uniform rate established under Subsection (1)(c).
630          (c) The division shall calculate the uniform assessment rate described in Subsection
631     (1)(a) by dividing the hospital share for assessed private hospitals, as described in Subsection
632     26-36c-204(1), by the sum of:
633          (i) the total number of discharges for assessed private hospitals that are not a private
634     teaching hospital; and
635          (ii) 2.5 times the number of discharges for a private teaching hospital, described in
636     Subsection (1)(b).
637          (d) The division may make rules in accordance with Title 63G, Chapter 3, Utah
638     Administrative Rulemaking Act, to adjust the formula described in Subsection (1)(c) to address
639     unforeseen circumstances in the administration of the assessment under this chapter.
640          (e) The division shall apply any quarterly changes to the uniform assessment rate
641     uniformly to all assessed private hospitals.
642          (2) Except as provided in Subsection (3), for each state fiscal year, the division shall
643     determine a hospital's discharges as follows:
644          (a) for state fiscal year 2019, the hospital's cost report data for the hospital's fiscal year
645     ending between July 1, 2015, and June 30, 2016; and
646          (b) for each subsequent state fiscal year, the hospital's cost report data for the hospital's
647     fiscal year that ended in the state fiscal year two years before the assessment fiscal year.

648          (3) (a) If a hospital's fiscal year Medicare cost report is not contained in the Centers for
649     Medicare and Medicaid Services' Healthcare Cost Report Information System file:
650          (i) the hospital shall submit to the division a copy of the hospital's Medicare cost report
651     applicable to the assessment year; and
652          (ii) the division shall determine the hospital's discharges.
653          (b) If a hospital is not certified by the Medicare program and is not required to file a
654     Medicare cost report:
655          (i) the hospital shall submit to the division the hospital's applicable fiscal year
656     discharges with supporting documentation;
657          (ii) the division shall determine the hospital's discharges from the information
658     submitted under Subsection (3)(c)(i); and
659          (iii) if the hospital fails to submit discharge information, the division shall audit the
660     hospital's records and may impose a penalty equal to 5% of the calculated assessment.
661          (4) Except as provided in Subsection (5), if a hospital is owned by an organization that
662     owns more than one hospital in the state:
663          (a) the division shall calculate the assessment for each hospital separately; and
664          (b) each separate hospital shall pay the assessment imposed by this chapter.
665          (5) If multiple hospitals use the same Medicaid provider number:
666          (a) the department shall calculate the assessment in the aggregate for the hospitals
667     using the same Medicaid provider number; and
668          (b) the hospitals may pay the assessment in the aggregate.
669          Section 23. Section 26-36c-206 is enacted to read:
670          26-36c-206. State teaching hospital and non-state government hospital mandatory
671     intergovernmental transfer.
672          (1) A state teaching hospital and a non-state government hospital shall make an
673     intergovernmental transfer to the Medicaid Expansion Fund, in accordance with this section.
674          (2) The hospitals described in Subsection (1) shall pay the intergovernmental transfer
675     beginning on the later of CMS approval of:
676          (a) the waiver for the Medicaid waiver expansion; or
677          (b) the assessment for private hospitals in this chapter.
678          (3) The intergovernmental transfer is apportioned between the non-state government

679     hospitals as follows:
680          (a) the state teaching hospital shall pay for the portion of the hospital share described in
681     Section 26-36c-209; and
682          (b) non-state government hospitals shall pay for the portion of the hospital share
683     described in Section 26-36c-209.
684          (4) The department shall, by rule made in accordance with Title 63G, Chapter 3, Utah
685     Administrative Rulemaking Act, designate:
686          (a) the method of calculating the amounts designated in Subsection (3); and
687          (b) the schedule for the intergovernmental transfers.
688          Section 24. Section 26-36c-207 is enacted to read:
689          26-36c-207. Penalties.
690          (1) A hospital that fails to pay a quarterly assessment, make the mandated
691     intergovernmental transfer, or file a return as required under this chapter, within the time
692     required by this chapter, shall pay penalties described in this section, in addition to the
693     assessment or intergovernmental transfer.
694          (2) If a hospital fails to timely pay the full amount of a quarterly assessment or the
695     mandated intergovernmental transfer, the department shall add to the assessment or
696     intergovernmental transfer:
697          (a) a penalty equal to 5% of the quarterly amount not paid on or before the due date;
698     and
699          (b) on the last day of each quarter after the due date until the assessed amount and the
700     penalty imposed under Subsection (2)(a) are paid in full, an additional 5% penalty on:
701          (i) any unpaid quarterly assessment or intergovernmental transfer; and
702          (ii) any unpaid penalty assessment.
703          (3) Upon making a record of the division's actions, and upon reasonable cause shown,
704     the division may waive or reduce any of the penalties imposed under this chapter.
705          Section 25. Section 26-36c-208 is enacted to read:
706          26-36c-208. Hospital reimbursement.
707          (1) If the Medicaid waiver expansion is implemented by contracting with a Medicaid
708     accountable care organization, the department shall, to the extent allowed by law, include in a
709     contract to provide benefits under the Medicaid waiver expansion a requirement that the

710     accountable care organization reimburse hospitals in the accountable care organization's
711     provider network at no less than the Medicaid fee-for-service rate.
712          (2) If the Medicaid waiver expansion is implemented by the department as a
713     fee-for-service program, the department shall reimburse hospitals at no less than the Medicaid
714     fee-for-service rate.
715          (3) Nothing in this section prohibits the department or a Medicaid accountable care
716     organization from paying a rate that exceeds the Medicaid fee-for-service rate.
717          Section 26. Section 26-36c-209 is enacted to read:
718          26-36c-209. Hospital financing of the hospital share.
719          (1) For the first two full fiscal years that the assessment is in effect, the department
720     shall:
721          (a) assess private hospitals under this chapter for 69% of the hospital share for the
722     Medicaid waiver expansion;
723          (b) require the state teaching hospital to make an intergovernmental transfer under this
724     chapter for 30% of the hospital share for the Medicaid waiver expansion; and
725          (c) require non-state government hospitals to make an intergovernmental transfer under
726     this chapter for 1% of the hospital share for the Medicaid waiver expansion.
727          (2) (a) At the beginning of the third full fiscal year that the assessment is in effect, and
728     at the beginning of each subsequent fiscal year, the department may set a different percentage
729     share for private hospitals, the state teaching hospital, and non-state government hospitals by
730     rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, with
731     input from private hospitals and private teaching hospitals.
732          (b) If the department does not set a different percentage share under Subsection (2)(a),
733     the percentage shares in Subsection (1) shall apply.
734          Section 27. Section 26-36c-210 is enacted to read:
735          26-36c-210. Suspension of assessment.
736          (1) The department shall suspend the assessment imposed by this chapter when the
737     executive director certifies that:
738          (a) action by Congress is in effect that disqualifies the assessment imposed by this
739     chapter from counting toward state Medicaid funds available to be used to determine the
740     amount of federal financial participation;

741          (b) a decision, enactment, or other determination by the Legislature or by any court,
742     officer, department, or agency of the state, or of the federal government, is in effect that:
743          (i) disqualifies the assessment from counting toward state Medicaid funds available to
744     be used to determine federal financial participation for Medicaid matching funds; or
745          (ii) creates for any reason a failure of the state to use the assessments for at least one of
746     the Medicaid programs described in this chapter; or
747          (c) a change is in effect that reduces the aggregate hospital inpatient and outpatient
748     payment rate below the aggregate hospital inpatient and outpatient payment rate for July 1,
749     2015.
750          (2) If the assessment is suspended under Subsection (1):
751          (a) the division may not collect any assessment or intergovernmental transfer under this
752     chapter;
753          (b) the division shall disburse money in the Ĥ→ [
special revenue fund] Medicaid
753a     Expansion Fund ←Ĥ that was derived from
754     assessments imposed by this chapter in accordance with the requirements in Subsection
755     26-36b-208(4), to the extent federal matching is not reduced by CMS due to the repeal of the
756     assessment;
757          (c) the division shall refund any money remaining in the Ĥ→ [
special revenue fund]
757a      Medicaid Expansion Fund ←Ĥ after the
758     disbursement described in Subsection (2)(b) that was derived from assessments imposed by
759     this chapter to the hospitals in proportion to the amount paid by each hospital for the last three
760     fiscal years Ĥ→ [
; and] .
761           [
(d) the division shall deposit any money remaining in the special revenue fund after the
762     disbursements described in Subsections (2)(b) and (c) into the General Fund.
] ←Ĥ

763          Section 28. Section 63I-1-226 is amended to read:
764          63I-1-226. Repeal dates, Title 26.
765          (1) Section 26-1-40 is repealed July 1, 2019.
766          (2) Title 26, Chapter 9f, Utah Digital Health Service Commission Act, is repealed July
767     1, 2025.
768          (3) Section 26-10-11 is repealed July 1, 2020.
769          (4) Title 26, Chapter 33a, Utah Health Data Authority Act, is repealed July 1, 2024.
770          (5) Title 26, Chapter 36a, Hospital Provider Assessment Act, is repealed July 1, 2019.
771          (6) Title 26, Chapter 36b, Inpatient Hospital Assessment Act, is repealed July 1, [2021]

772     2024.
773          [(7) Section 26-38-2.5 is repealed July 1, 2017.]
774          [(8) Section 26-38-2.6 is repealed July 1, 2017.]
775          (7) Title 26, Chapter 36c, Medicaid Expansion Hospital Assessment Act, is repealed
776     July 1, 2024.
777          [(9)] (8) Title 26, Chapter 56, Hemp Extract Registration Act, is repealed July 1, 2021.
777a     Ĥ→ Section 29. Coordinating H.B. 472 with H.B. 14 -- Superseding technical and substantive
777b     amendments.
777c     If this H.B. 472 and H.B. 14, Substance Abuse Treatment Facility Patient Brokering, both pass
777d     and become law, it is the intent of the Legislature that the amendments to Section 26-36b-103
777e     in this bill supersede the amendments to Section 26-36b-103 in H.B. 14, when the Office of
777f     Legislative Research and General Counsel prepares the Utah Code database for
777g     publication.
777h      Section 30. Coordinating H.B. 472 with S.B. 125 -- Superseding technical and substantive
777i     amendments.
777j      If this H.B. 472 and S.B. 125, Child Welfare Amendments, both pass and become law, it is the
777k     intent of the Legislature that the amendments to Section 26-36b-103 in this bill supersede the
777l     amendments to Section 26-36b-103 in S.B. 125, when the Office of Legislative Research and
777m     General Counsel prepares the Utah Code database for publication. ←Ĥ











Legislative Review Note
Office of Legislative Research and General Counsel