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          This bill provides coordination clauses.     
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
62     Utah Code Sections Affected by Coordination Clause:
63          26-36b-103, as enacted by Laws of Utah 2016, Chapter 279
64     

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

86          (b) The health coverage improvement program under Section 26-18-411 is not
87     [Medicaid expansion for purposes of this section] subject to the requirements in Subsection (2).
88          Section 2. Section 26-18-415 is enacted to read:
89          26-18-415. Medicaid waiver expansion.
90          (1) As used in this section:
91          (a) "CMS" means the Centers for Medicare and Medicaid Services within the United
92     States Department of Health and Human Services.
93          (b) "Expansion population" means individuals:
94          (i) whose household income is less than 95% of the federal poverty level; and
95          (ii) who are not eligible for enrollment in the Medicaid program, with the exception of
96     the Primary Care Network program, on May 8, 2018.
97          (c) "Federal poverty level" means the same as that term is defined in Section
98     26-18-411.
99          (d) "Medicaid waiver expansion" means a Medicaid expansion in accordance with this
100     section.
101          (2) (a) Before January 1, 2019, the department shall apply to CMS for approval of a
102     waiver or state plan amendment to implement the Medicaid waiver expansion.
103          (b) The Medicaid waiver expansion shall:
104          (i) expand Medicaid coverage to eligible individuals whose income is below 95% of
105     the federal poverty level;
106          (ii) obtain maximum federal financial participation under 42 U.S.C. Sec. 1396d(y) for
107     enrolling an individual in the Medicaid program;
108          (iii) provide Medicaid benefits through the state's Medicaid accountable care
109     organizations in areas where a Medicaid accountable care organization is implemented;
110          (iv) integrate the delivery of behavioral health services and physical health services
111     with Medicaid accountable care organizations in select geographic areas of the state that
112     choose an integrated model;
113          (v) include a path to self-sufficiency, including work activities as defined in 42 U.S.C.

114     Sec. 607(d), for qualified adults;
115          (vi) require an individual who is offered a private health benefit plan by an employer to
116     enroll in the employer's health plan;
117          (vii) sunset in accordance with Subsection (5)(a); and
118          (viii) permit the state to close enrollment in the Medicaid waiver expansion if the
119     department has insufficient funding to provide services to additional eligible individuals.
120          (3) If the Medicaid waiver described in Subsection (1) is approved, the department may
121     only pay the state portion of costs for the Medicaid waiver expansion with appropriations from:
122          (a) the Medicaid Expansion Fund, created in Section 26-36b-208;
123          (b) county contributions to the non-federal share of Medicaid expenditures; and
124          (c) any other contributions, funds, or transfers from a non-state agency for Medicaid
125     expenditures.
126          (4) Medicaid accountable care organizations and counties that elect to integrate care
127     under Subsection (2)(b)(iv) shall collaborate on enrollment, engagement of patients, and
128     coordination of services.
129          (5) (a) If federal financial participation for the Medicaid waiver expansion is reduced
130     below 90%, the authority of the department to implement the Medicaid waiver expansion shall
131     sunset no later than the next July 1 after the date on which the federal financial participation is
132     reduced.
133          (b) The department shall close the program to new enrollment if the cost of the
134     Medicaid waiver expansion is projected to exceed the appropriations for the fiscal year that are
135     authorized by the Legislature through an appropriations act adopted in accordance with Title
136     63J, Chapter 1, Budgetary Procedures Act.
137          (6) If the Medicaid waiver expansion is approved by CMS, the department shall report
138     to the Social Services Appropriations Subcommittee on or before November 1 of each year that
139     the Medicaid waiver expansion is operational:
140          (a) the number of individuals who enrolled in the Medicaid waiver program;
141          (b) costs to the state for the Medicaid waiver program;

142          (c) estimated costs for the current and following state fiscal year; and
143          (d) recommendations to control costs of the Medicaid waiver expansion.
144          Section 3. Section 26-36b-103 is amended to read:
145          26-36b-103. Definitions.
146          As used in this chapter:
147          (1) "Assessment" means the inpatient hospital assessment established by this chapter.
148          (2) "CMS" means the [same as that term is defined in Section 26-18-411] Centers for
149     Medicare and Medicaid Services within the United States Department of Health and Human
150     Services.
151          (3) "Discharges" means the number of total hospital discharges reported on:
152          (a) Worksheet S-3 Part I, column 15, lines 14, 16, and 17 of the 2552-10 Medicare cost
153     report for the applicable assessment year; or
154          (b) a similar report adopted by the department by administrative rule, if the report
155     under Subsection (3)(a) is no longer available.
156          (4) "Division" means the Division of Health Care Financing within the department.
157          (5) "Health coverage improvement program" means the health coverage improvement
158     program described in Section 26-18-411.
159          (6) "Hospital share" means the hospital share described in Section 26-36b-203.
160          (7) "Medicaid accountable care organization" means a managed care organization, as
161     defined in 42 C.F.R. Sec. 438, that contracts with the department under the provisions of
162     Section 26-18-405.
163          (8) "Medicaid waiver expansion" means a Medicaid expansion in accordance with
164     Section 26-18-415.
165          [(5)] (9) "Medicare cost report" means CMS-2552-10, the cost report for electronic
166     filing of hospitals.
167          [(6)] (10) (a) "Non-state government hospital"[:(a)] means a hospital owned by a
168     non-state government entity[; and].
169          (b) "Non-state government hospital" does not include:

170          (i) the Utah State Hospital; or
171          (ii) a hospital owned by the federal government, including the Veterans Administration
172     Hospital.
173          [(7)] (11) (a) "Private hospital"[:(a)] means:
174          (i) a [privately owned] general acute hospital [operating in the state], as defined in
175     Section 26-21-2, that is privately owned and operating in the state; and
176          (ii) a privately owned specialty hospital operating in the state, [which shall include]
177     including a privately owned hospital whose inpatient admissions are predominantly for:
178          (A) rehabilitation;
179          (B) psychiatric care;
180          (C) chemical dependency services; or
181          (D) long-term acute care services[; and].
182          (b) "Private hospital" does not include a facility for residential [care or] treatment
183     [facility] as defined in Section 62A-2-101.
184          [(8)] (12) "State teaching hospital" means a state owned teaching hospital that is part of
185     an institution of higher education.
186          (13) "Upper payment limit gap" means the difference between the private hospital
187     outpatient upper payment limit and the private hospital Medicaid outpatient payments, as
188     determined in accordance with 42 C.F.R. Sec. 447.321.
189          Section 4. Section 26-36b-201 is amended to read:
190          26-36b-201. Assessment.
191          (1) An assessment is imposed on each private hospital:
192          (a) beginning upon the later of CMS approval of:
193          (i) the health coverage improvement program waiver under Section 26-18-411; and
194          (ii) the assessment under this chapter;
195          (b) in the amount designated in Sections 26-36b-204 and 26-36b-205; and
196          (c) in accordance with Section 26-36b-202.
197          (2) Subject to Section 26-36b-203, the assessment imposed by this chapter is due and

198     payable on a quarterly basis, after payment of the outpatient upper payment limit supplemental
199     payments under Section 26-36b-210 have been paid.
200          (3) The first quarterly payment [shall not be] is not due until at least three months after
201     the earlier of the effective [date] dates of the coverage provided through:
202          (a) the health coverage improvement program [waiver under Section 26-18-411.]; or
203          (b) the Medicaid waiver expansion.
204          Section 5. Section 26-36b-202 is amended to read:
205          26-36b-202. Collection of assessment -- Deposit of revenue -- Rulemaking.
206          (1) The collecting agent for the assessment imposed under Section 26-36b-201 is the
207     department.
208          (2) The department is vested with the administration and enforcement of this chapter,
209     [including the right to adopt administrative] and may make rules in accordance with Title 63G,
210     Chapter 3, Utah Administrative Rulemaking Act, necessary to:
211          [(a) implement and enforce the provisions of this chapter;]
212          (a) collect the assessment, intergovernmental transfers, and penalties imposed under
213     this chapter;
214          (b) audit records of a facility that:
215          (i) is subject to the assessment imposed by this chapter; and
216          (ii) does not file a Medicare cost report; and
217          (c) select a report similar to the Medicare cost report if Medicare no longer uses a
218     Medicare cost report.
219          (2) The department shall:
220          (a) administer the assessment in this [part separate] chapter separately from the
221     assessment in Chapter 36a, Hospital Provider Assessment Act; and
222          (b) deposit assessments collected under this chapter into the Medicaid Expansion Fund
223     created by Section 26-36b-208.
224          Section 6. Section 26-36b-203 is amended to read:
225          26-36b-203. Quarterly notice.

226          (1) Quarterly assessments imposed by this chapter shall be paid to the division within
227     15 business days after the original invoice date that appears on the invoice issued by the
228     division.
229          (2) The department may, by rule, extend the time for paying the assessment.
230          Section 7. Section 26-36b-204 is amended to read:
231          26-36b-204. Hospital financing of health coverage improvement program
232     Medicaid waiver expansion -- Hospital share.
233          [(1) For purposes of this section, "hospital share":]
234          (1) The hospital share is:
235          (a) [means] 45% of the state's net cost of[:(i)] the health coverage improvement
236     program [Medicaid waiver under Section 26-18-411;(ii)], including Medicaid coverage for
237     individuals with dependent children up to the federal poverty level designated under Section
238     26-18-411; [and]
239          [(iii) the UPL gap, as that term is defined in Section 26-36b-210;]
240          [(b) for the hospital share of the additional coverage under Section 26-18-411,]
241          (b) if the waiver for the Medicaid waiver expansion is approved, $11,900,000; and
242          (c) 45% of the state's net cost of the upper payment limit gap.
243          (2) (a) The hospital share is capped at no more than $13,600,000 annually, consisting
244     of:
245          (i) an $11,900,000 cap [on the hospital's share] for the programs specified in
246     Subsections (1)(a)[(i) and (ii)] and (b); and
247          (ii) a $1,700,000 cap for the program specified in Subsection (1)[(a)(iii);](c).
248          [(c) for the cap specified in Subsection (1)(b), shall be prorated]
249          (b) The department shall prorate the cap described in Subsection (2)(a) in any year in
250     which at least one of the programs specified in Subsection (1)[(a)] are not in effect for the full
251     fiscal year[; and].
252          [(d) if the Medicaid program expands in a manner that is greater than the expansion
253     described in Section 26-18-411, is capped at 33% of the state's share of the cost of the

254     expansion that is in addition to the program described in Section 26-18-411.]
255          [(2) The assessment for the private hospital share under Subsection (1) shall be:]
256          (3) Private hospitals shall be assessed under this chapter for:
257          (a) 69% of the portion of the hospital share specified in Subsections (1)(a)[(i) and (ii)]
258     and (b); and
259          (b) 100% of the portion of the hospital share specified in Subsection (1)[(a)(iii)](c).
260          [(3)] (4) (a) The department shall, on or before October 15, 2017, and on or before
261     October 15 of each subsequent year [thereafter], produce a report that calculates the state's net
262     cost of the programs described in Subsections (1)(a)[(i) and (ii)] and (b) that are in effect for
263     that year.
264          (b) If the assessment collected in the previous fiscal year is above or below the [private
265     hospital's share of the state's net cost as specified in Subsection (2),] hospital share for private
266     hospitals for the previous fiscal year, the underpayment or overpayment of the assessment by
267     the private hospitals shall be applied to the fiscal year in which the report [was] is issued.
268          [(4)] (5) A Medicaid accountable care organization shall, on or before October 15 of
269     each year, report to the department the following data from the prior state fiscal year for each
270     private hospital, state teaching hospital, and non-state government hospital provider that the
271     Medicaid accountable care organization contracts with:
272          (a) for the traditional Medicaid population[, for each private hospital, state teaching
273     hospital, and non-state government hospital provider]:
274          (i) hospital inpatient payments;
275          (ii) hospital inpatient discharges;
276          (iii) hospital inpatient days; and
277          (iv) hospital outpatient payments; and
278          [(b) for the Medicaid population newly eligible under Subsection 26-18-411, for each
279     private hospital, state teaching hospital, and non-state government hospital provider:]
280          (b) if the Medicaid accountable care organization enrolls any individuals in the health
281     coverage improvement program or the Medicaid waiver expansion, for the population newly

282     eligible for either program:
283          (i) hospital inpatient payments;
284          (ii) hospital inpatient discharges;
285          (iii) hospital inpatient days; and
286          (iv) hospital outpatient payments.
287          (6) The department shall, by rule made in accordance with Title 63G, Chapter 3, Utah
288     Administrative Rulemaking Act, provide details surrounding specific content and format for
289     the reporting by the Medicaid accountable care organization.
290          Section 8. Section 26-36b-205 is amended to read:
291          26-36b-205. Calculation of assessment.
292          (1) (a) Except as provided in Subsection (1)(b), an annual assessment is payable on a
293     quarterly basis for each private hospital in an amount calculated by the division at a uniform
294     assessment rate for each hospital discharge, in accordance with this section.
295          (b) A private teaching hospital with more than 425 beds and 60 residents shall pay an
296     assessment rate [2.50] 2.5 times the uniform rate established under Subsection (1)(c).
297          (c) The division shall calculate the uniform assessment rate [shall be determined using
298     the total number of hospital discharges for assessed private hospitals, the percentages in
299     Subsection 26-36b-204(2), and rule adopted by the department.] described in Subsection (1)(a)
300     by dividing the hospital share for assessed private hospitals, described in Subsection
301     26-36b-204(1), by the sum of:
302          (i) the total number of discharges for assessed private hospitals that are not a private
303     teaching hospital; and
304          (ii) 2.5 times the number of discharges for a private teaching hospital, described in
305     Subsection (1)(b).
306          (d) The division may, by rule made in accordance with Title 63G, Chapter 3, Utah
307     Administrative Rulemaking Act, adjust the formula described in Subsection (1)(c) to address
308     unforeseen circumstances in the administration of the assessment under this chapter.
309          [(d)] (e) Any quarterly changes to the uniform assessment rate shall be applied

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

338          (a) the assessment for each hospital shall be separately calculated by the department;
339     and
340          (b) each separate hospital shall pay the assessment imposed by this chapter.
341          [(4) Notwithstanding the requirement of Subsection (3), if]
342          (5) If multiple hospitals use the same Medicaid provider number:
343          (a) the department shall calculate the assessment in the aggregate for the hospitals
344     using the same Medicaid provider number; and
345          (b) the hospitals may pay the assessment in the aggregate.
346          Section 9. Section 26-36b-206 is amended to read:
347          26-36b-206. State teaching hospital and non-state government hospital
348     mandatory intergovernmental transfer.
349          (1) [A] The state teaching hospital and a non-state government hospital shall make an
350     intergovernmental transfer to the Medicaid Expansion Fund created in Section 26-36b-208, in
351     accordance with this section.
352          (2) The [intergovernmental transfer shall be paid] hospitals described in Subsection (1)
353     shall pay the intergovernmental transfer beginning on the later of CMS approval of:
354          (a) the health improvement program waiver under Section 26-18-411; or
355          (b) the assessment for private hospitals in this chapter[; and].
356          [(c) the intergovernmental transfer in this section.]
357          (3) The intergovernmental transfer [shall be paid in an amount divided] is apportioned
358     as follows:
359          (a) the state teaching hospital is responsible for:
360          (i) 30% of the portion of the hospital share specified in Subsections
361     26-36b-204(1)(a)[(i) and (ii)] and (b); and
362          (ii) 0% of the hospital share specified in Subsection 26-36b-204(1)[(a)(iii)](c); and
363          (b) non-state government hospitals are responsible for:
364          (i) 1% of the portion of the hospital share specified in Subsections 26-36b-204(1)(a)[(i)
365     and (ii)] and (b); and

366          (ii) 0% of the hospital share specified in Subsection 26-36b-204(1)[(a)(iii)](c).
367          (4) The department shall, by rule made in accordance with Title 63G, Chapter 3, Utah
368     Administrative Rulemaking Act, designate:
369          (a) the method of calculating the [percentages] amounts designated in Subsection (3);
370     and
371          (b) the schedule for the intergovernmental transfers.
372          Section 10. Section 26-36b-207 is amended to read:
373          26-36b-207. Penalties and interest.
374          (1) A hospital that fails to pay [any] a quarterly assessment, make the mandated
375     intergovernmental transfer, or file a return as required under this chapter, within the time
376     required by this chapter, shall pay penalties described in this section, in addition to the
377     assessment or intergovernmental transfer[, and interest established by the department].
378          [(2) (a) Consistent with Subsection (2)(b), the department shall adopt rules in
379     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that establish
380     reasonable penalties and interest for the violations described in Subsection (1).]
381          [(b)] (2) If a hospital fails to timely pay the full amount of a quarterly assessment or the
382     mandated intergovernmental transfer, the department shall add to the assessment or
383     intergovernmental transfer:
384          [(i)] (a) a penalty equal to 5% of the quarterly amount not paid on or before the due
385     date; and
386          [(ii)] (b) on the last day of each quarter after the due date until the assessed amount and
387     the penalty imposed under Subsection (2)[(b)(i)](a) are paid in full, an additional 5% penalty
388     on:
389          [(A)] (i) any unpaid quarterly assessment or intergovernmental transfer; and
390          [(B)] (ii) any unpaid penalty assessment.
391          [(c)] (3) Upon making a record of the division's actions, and upon reasonable cause
392     shown, the division may waive, reduce, or compromise any of the penalties imposed under this
393     chapter.

394          Section 11. Section 26-36b-208 is amended to read:
395          26-36b-208. Medicaid Expansion Fund.
396          (1) There is created an expendable special revenue fund known as the Medicaid
397     Expansion Fund.
398          (2) The fund consists of:
399          (a) assessments collected under this chapter;
400          (b) intergovernmental transfers under Section 26-36b-206;
401          (c) savings attributable to the health coverage improvement program [under Section
402     26-18-411] as determined by the department;
403          (d) savings attributable to the Medicaid waiver expansion as determined by the
404     department;
405          [(d)] (e) savings attributable to the inclusion of psychotropic drugs on the preferred
406     drug list under Subsection 26-18-2.4(3) as determined by the department;
407          [(e)] (f) savings attributable to the services provided by the Public Employees' Health
408     Plan under Subsection 49-20-401(1)(u);
409          [(f)] (g) gifts, grants, donations, or any other conveyance of money that may be made to
410     the fund from private sources; [and]
411          (h) interest earned on money in the fund; and
412          [(g)] (i) additional amounts as appropriated by the Legislature.
413          (3) (a) The fund shall earn interest.
414          (b) All interest earned on fund money shall be deposited into the fund.
415          (4) (a) A state agency administering the provisions of this chapter may use money from
416     the fund to pay the costs [of], not otherwise paid for with federal funds or other revenue
417     sources, of:
418          (i) the health coverage improvement [Medicaid waiver under Section 26-18-411, and]
419     program;
420          (ii) the Medicaid waiver expansion; and
421          (iii) the outpatient [UPL] upper payment limit supplemental payments under Section

422     26-36b-210[, not otherwise paid for with federal funds or other revenue sources, except that
423     no].
424          (b) A state agency administering the provisions of this chapter may not use:
425          (i) funds described in Subsection (2)(b) [may be used] to pay the cost of private
426     outpatient [UPL] upper payment limit supplemental payments[.]; or
427          [(b)] (ii) [Money] money in the fund [may not be used for any other] for any purpose
428     not described in Subsection (4)(a).
429          Section 12. Section 26-36b-209 is amended to read:
430          26-36b-209. Hospital reimbursement.
431          (1) [The] If the health coverage improvement program or the Medicaid waiver
432     expansion is implemented by contracting with a Medicaid accountable care organization, the
433     department shall, to the extent allowed by law, include, in a contract [with a Medicaid
434     accountable care organization] to provide benefits under the health coverage improvement
435     program or the Medicaid waiver expansion, a requirement that the Medicaid accountable care
436     organization reimburse hospitals in the accountable care organization's provider network[,] at
437     no less than the Medicaid fee-for-service rate.
438          (2) If the health coverage improvement program or the Medicaid waiver expansion is
439     implemented by the department as a fee-for-service program, the department shall reimburse
440     hospitals at no less than the Medicaid fee-for-service rate.
441          (3) Nothing in this section prohibits a Medicaid accountable care organization from
442     paying a rate that exceeds the Medicaid fee-for-service [rates] rate.
443          Section 13. Section 26-36b-210 is amended to read:
444          26-36b-210. Outpatient upper payment limit supplemental payments.
445          [(1) For purposes of this section, "UPL gap" means the difference between the private
446     hospital outpatient upper payment limit and the private hospital Medicaid outpatient payments,
447     as determined in accordance with 42 C.F.R. 447.321.]
448          [(2)] (1) Beginning on the effective date of the assessment imposed under this chapter,
449     and for each subsequent fiscal year [thereafter], the department shall implement an outpatient

450     upper payment limit program for private hospitals that shall supplement the reimbursement to
451     private hospitals in accordance with Subsection [(3)] (2).
452          [(3)] (2) The division shall ensure that supplemental payment to Utah private hospitals
453     under Subsection [(2) shall] (1):
454          (a) does not exceed the positive [UPL] upper payment limit gap; and
455          (b) [be] is allocated based on the Medicaid state plan.
456          [(4)] (3) The department shall use the same outpatient data [used to calculate the UPL
457     gap under Subsection (1) shall be the same outpatient data used] to allocate the payments under
458     Subsection [(3)] (2) and to calculate the upper payment limit gap.
459          [(5)] (4) The supplemental payments to private hospitals under Subsection [(2) shall
460     be] (1) are payable for outpatient hospital services provided on or after the later of:
461          (a) July 1, 2016;
462          (b) the effective date of the Medicaid state plan amendment necessary to implement the
463     payments under this section; or
464          (c) the effective date of the coverage provided through the health coverage
465     improvement program waiver [under Section 26-18-411].
466          Section 14. Section 26-36b-211 is amended to read:
467          26-36b-211. Suspension of assessment.
468          (1) The [repeal of the] department shall suspend the assessment imposed by this
469     chapter [shall occur upon the certification by the executive director of the department that the
470     sooner of the following has occurred] when the executive director certifies that:
471          [(a) the effective date of any action by Congress that would disqualify]
472          (a) action by Congress is in effect that disqualifies the assessment imposed by this
473     chapter from counting toward state Medicaid funds available to be used to determine the
474     amount of federal financial participation;
475          (b) [the effective date of any] a decision, enactment, or other determination by the
476     Legislature or by any court, officer, department, or agency of the state, or of the federal
477     government, [that has the effect of] is in effect that:

478          (i) [disqualifying] disqualifies the assessment from counting toward state Medicaid
479     funds available to be used to determine federal financial participation for Medicaid matching
480     funds; or
481          (ii) [creating] creates for any reason a failure of the state to use the assessments for at
482     least one of the Medicaid [program as] programs described in this chapter; or
483          (c) [the effective date of] a change is in effect that reduces the aggregate hospital
484     inpatient and outpatient payment rate below the aggregate hospital inpatient and outpatient
485     payment rate for July 1, 2015[; and].
486          [(d) the sunset of this chapter in accordance with Section 63I-1-226.]
487          [(2) If the assessment is repealed under Subsection (1), money in the fund that was
488     derived from assessments imposed by this chapter, before the determination made under
489     Subsection (1), shall be disbursed under Section 26-36b-207 to the extent federal matching is
490     not reduced due to the impermissibility of the assessments. Any funds remaining in the special
491     revenue fund shall be refunded to the hospitals in proportion to the amount paid by each
492     hospital.]
493          (2) If the assessment is suspended under Subsection (1):
494          (a) the division may not collect any assessment or intergovernmental transfer under this
495     chapter;
496          (b) the division shall disburse money in the Medicaid Expansion Fund in accordance
497     with the requirements in Subsection 26-36b-208(4), to the extent federal matching is not
498     reduced by CMS due to the repeal of the assessment;
499          (c) the division shall refund any money remaining in the Medicaid Expansion Fund
500     after the disbursement described in Subsection (2)(b) that was derived from assessments
501     imposed by this chapter to the hospitals in proportion to the amount paid by each hospital for
502     the last three fiscal years; and
503          (d) the division shall deposit any money remaining in the Medicaid Expansion Fund
504     after the disbursements described in Subsections (2)(b) and (c) into the General Fund by the
505     end of the fiscal year that the assessment is suspended.

506          Section 15. Section 26-36c-101 is enacted to read:
507     
CHAPTER 36c. MEDICAID EXPANSION HOSPITAL ASSESSMENT ACT

508     
Part 1. General Provisions

509          26-36c-101. Title.
510          This chapter is known as the "Medicaid Expansion Hospital Assessment Act."
511          Section 16. Section 26-36c-102 is enacted to read:
512          26-36c-102. Definitions.
513          As used in this chapter:
514          (1) "Assessment" means the Medicaid expansion hospital assessment established by
515     this chapter.
516          (2) "CMS" means the Centers for Medicare and Medicaid Services within the United
517     States Department of Health and Human Services.
518          (3) "Discharges" means the number of total hospital discharges reported on:
519          (a) Worksheet S-3 Part I, column 15, lines 14, 16, and 17 of the 2552-10 Medicare cost
520     report for the applicable assessment year; or
521          (b) a similar report adopted by the department by administrative rule, if the report
522     under Subsection (3)(a) is no longer available.
523          (4) "Division" means the Division of Health Care Financing within the department.
524          (5) "Hospital share" means the hospital share described in Section 26-36c-203.
525          (6) "Medicaid accountable care organization" means a managed care organization, as
526     defined in 42 C.F.R. Sec. 438, that contracts with the department under the provisions of
527     Section 26-18-405.
528          (7) "Medicaid Expansion Fund" means the Medicaid Expansion Fund created in
529     Section 26-36b-208.
530          (8) "Medicaid waiver expansion" means the same as that term is defined in Section
531     26-18-415.
532          (9) "Medicare cost report" means CMS-2552-10, the cost report for electronic filing of
533     hospitals.

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

562     sought to be imposed, by the state or any political subdivision of the state.
563          (2) A hospital paying an assessment under this chapter may include the assessment as
564     an allowable cost of a hospital for purposes of any applicable Medicaid reimbursement
565     formula.
566          (3) This chapter does not authorize a political subdivision of the state to:
567          (a) license a hospital for revenue;
568          (b) impose a tax or assessment upon a hospital; or
569          (c) impose a tax or assessment measured by the income or earnings of a hospital.
570          Section 18. Section 26-36c-201 is enacted to read:
571     
Part 2. Assessment and Collection

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

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

618          (b) The division shall prorate the cap specified in Subsection (2)(a) in any year in
619     which the Medicaid waiver expansion is not in effect for the full fiscal year.
620          Section 21. Section 26-36c-204 is enacted to read:
621          26-36c-204. Hospital financing of Medicaid waiver expansion.
622          (1) Private hospitals shall be assessed under this chapter for the portion of the hospital
623     share described in Section 26-36c-209.
624          (2) The department shall, on or before October 15, 2019, and on or before October 15
625     of each subsequent year, produce a report that calculates the state's net cost of the Medicaid
626     waiver expansion.
627          (3) If the assessment collected in the previous fiscal year is above or below the hospital
628     share for private hospitals for the previous fiscal year, the division shall apply the
629     underpayment or overpayment of the assessment by the private hospitals to the fiscal year in
630     which the report is issued.
631          Section 22. Section 26-36c-205 is enacted to read:
632          26-36c-205. Calculation of assessment.
633          (1) (a) Except as provided in Subsection (1)(b), each private hospital shall pay an
634     annual assessment due on the last day of each quarter in an amount calculated by the division at
635     a uniform assessment rate for each hospital discharge, in accordance with this section.
636          (b) A private teaching hospital with more than 425 beds and more than 60 residents
637     shall pay an assessment rate 2.5 times the uniform rate established under Subsection (1)(c).
638          (c) The division shall calculate the uniform assessment rate described in Subsection
639     (1)(a) by dividing the hospital share for assessed private hospitals, as described in Subsection
640     26-36c-204(1), by the sum of:
641          (i) the total number of discharges for assessed private hospitals that are not a private
642     teaching hospital; and
643          (ii) 2.5 times the number of discharges for a private teaching hospital, described in
644     Subsection (1)(b).
645          (d) The division may make rules in accordance with Title 63G, Chapter 3, Utah

646     Administrative Rulemaking Act, to adjust the formula described in Subsection (1)(c) to address
647     unforeseen circumstances in the administration of the assessment under this chapter.
648          (e) The division shall apply any quarterly changes to the uniform assessment rate
649     uniformly to all assessed private hospitals.
650          (2) Except as provided in Subsection (3), for each state fiscal year, the division shall
651     determine a hospital's discharges as follows:
652          (a) for state fiscal year 2019, the hospital's cost report data for the hospital's fiscal year
653     ending between July 1, 2015, and June 30, 2016; and
654          (b) for each subsequent state fiscal year, the hospital's cost report data for the hospital's
655     fiscal year that ended in the state fiscal year two years before the assessment fiscal year.
656          (3) (a) If a hospital's fiscal year Medicare cost report is not contained in the Centers for
657     Medicare and Medicaid Services' Healthcare Cost Report Information System file:
658          (i) the hospital shall submit to the division a copy of the hospital's Medicare cost report
659     applicable to the assessment year; and
660          (ii) the division shall determine the hospital's discharges.
661          (b) If a hospital is not certified by the Medicare program and is not required to file a
662     Medicare cost report:
663          (i) the hospital shall submit to the division the hospital's applicable fiscal year
664     discharges with supporting documentation;
665          (ii) the division shall determine the hospital's discharges from the information
666     submitted under Subsection (3)(c)(i); and
667          (iii) if the hospital fails to submit discharge information, the division shall audit the
668     hospital's records and may impose a penalty equal to 5% of the calculated assessment.
669          (4) Except as provided in Subsection (5), if a hospital is owned by an organization that
670     owns more than one hospital in the state:
671          (a) the division shall calculate the assessment for each hospital separately; and
672          (b) each separate hospital shall pay the assessment imposed by this chapter.
673          (5) If multiple hospitals use the same Medicaid provider number:

674          (a) the department shall calculate the assessment in the aggregate for the hospitals
675     using the same Medicaid provider number; and
676          (b) the hospitals may pay the assessment in the aggregate.
677          Section 23. Section 26-36c-206 is enacted to read:
678          26-36c-206. State teaching hospital and non-state government hospital mandatory
679     intergovernmental transfer.
680          (1) A state teaching hospital and a non-state government hospital shall make an
681     intergovernmental transfer to the Medicaid Expansion Fund, in accordance with this section.
682          (2) The hospitals described in Subsection (1) shall pay the intergovernmental transfer
683     beginning on the later of CMS approval of:
684          (a) the waiver for the Medicaid waiver expansion; or
685          (b) the assessment for private hospitals in this chapter.
686          (3) The intergovernmental transfer is apportioned between the non-state government
687     hospitals as follows:
688          (a) the state teaching hospital shall pay for the portion of the hospital share described in
689     Section 26-36c-209; and
690          (b) non-state government hospitals shall pay for the portion of the hospital share
691     described in Section 26-36c-209.
692          (4) The department shall, by rule made in accordance with Title 63G, Chapter 3, Utah
693     Administrative Rulemaking Act, designate:
694          (a) the method of calculating the amounts designated in Subsection (3); and
695          (b) the schedule for the intergovernmental transfers.
696          Section 24. Section 26-36c-207 is enacted to read:
697          26-36c-207. Penalties.
698          (1) A hospital that fails to pay a quarterly assessment, make the mandated
699     intergovernmental transfer, or file a return as required under this chapter, within the time
700     required by this chapter, shall pay penalties described in this section, in addition to the
701     assessment or intergovernmental transfer.

702          (2) If a hospital fails to timely pay the full amount of a quarterly assessment or the
703     mandated intergovernmental transfer, the department shall add to the assessment or
704     intergovernmental transfer:
705          (a) a penalty equal to 5% of the quarterly amount not paid on or before the due date;
706     and
707          (b) on the last day of each quarter after the due date until the assessed amount and the
708     penalty imposed under Subsection (2)(a) are paid in full, an additional 5% penalty on:
709          (i) any unpaid quarterly assessment or intergovernmental transfer; and
710          (ii) any unpaid penalty assessment.
711          (3) Upon making a record of the division's actions, and upon reasonable cause shown,
712     the division may waive or reduce any of the penalties imposed under this chapter.
713          Section 25. Section 26-36c-208 is enacted to read:
714          26-36c-208. Hospital reimbursement.
715          (1) If the Medicaid waiver expansion is implemented by contracting with a Medicaid
716     accountable care organization, the department shall, to the extent allowed by law, include in a
717     contract to provide benefits under the Medicaid waiver expansion a requirement that the
718     accountable care organization reimburse hospitals in the accountable care organization's
719     provider network at no less than the Medicaid fee-for-service rate.
720          (2) If the Medicaid waiver expansion is implemented by the department as a
721     fee-for-service program, the department shall reimburse hospitals at no less than the Medicaid
722     fee-for-service rate.
723          (3) Nothing in this section prohibits the department or a Medicaid accountable care
724     organization from paying a rate that exceeds the Medicaid fee-for-service rate.
725          Section 26. Section 26-36c-209 is enacted to read:
726          26-36c-209. Hospital financing of the hospital share.
727          (1) For the first two full fiscal years that the assessment is in effect, the department
728     shall:
729          (a) assess private hospitals under this chapter for 69% of the hospital share for the

730     Medicaid waiver expansion;
731          (b) require the state teaching hospital to make an intergovernmental transfer under this
732     chapter for 30% of the hospital share for the Medicaid waiver expansion; and
733          (c) require non-state government hospitals to make an intergovernmental transfer under
734     this chapter for 1% of the hospital share for the Medicaid waiver expansion.
735          (2) (a) At the beginning of the third full fiscal year that the assessment is in effect, and
736     at the beginning of each subsequent fiscal year, the department may set a different percentage
737     share for private hospitals, the state teaching hospital, and non-state government hospitals by
738     rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, with
739     input from private hospitals and private teaching hospitals.
740          (b) If the department does not set a different percentage share under Subsection (2)(a),
741     the percentage shares in Subsection (1) shall apply.
742          Section 27. Section 26-36c-210 is enacted to read:
743          26-36c-210. Suspension of assessment.
744          (1) The department shall suspend the assessment imposed by this chapter when the
745     executive director certifies that:
746          (a) action by Congress is in effect that disqualifies the assessment imposed by this
747     chapter from counting toward state Medicaid funds available to be used to determine the
748     amount of federal financial participation;
749          (b) a decision, enactment, or other determination by the Legislature or by any court,
750     officer, department, or agency of the state, or of the federal government, is in effect that:
751          (i) disqualifies the assessment from counting toward state Medicaid funds available to
752     be used to determine federal financial participation for Medicaid matching funds; or
753          (ii) creates for any reason a failure of the state to use the assessments for at least one of
754     the Medicaid programs described in this chapter; or
755          (c) a change is in effect that reduces the aggregate hospital inpatient and outpatient
756     payment rate below the aggregate hospital inpatient and outpatient payment rate for July 1,
757     2015.

758          (2) If the assessment is suspended under Subsection (1):
759          (a) the division may not collect any assessment or intergovernmental transfer under this
760     chapter;
761          (b) the division shall disburse money in the Medicaid Expansion Fund that was derived
762     from assessments imposed by this chapter in accordance with the requirements in Subsection
763     26-36b-208(4), to the extent federal matching is not reduced by CMS due to the repeal of the
764     assessment;
765          (c) the division shall refund any money remaining in the Medicaid Expansion Fund
766     after the disbursement described in Subsection (2)(b) that was derived from assessments
767     imposed by this chapter to the hospitals in proportion to the amount paid by each hospital for
768     the last three fiscal years.
769          Section 28. Section 63I-1-226 is amended to read:
770          63I-1-226. Repeal dates, Title 26.
771          (1) Section 26-1-40 is repealed July 1, 2019.
772          (2) Title 26, Chapter 9f, Utah Digital Health Service Commission Act, is repealed July
773     1, 2025.
774          (3) Section 26-10-11 is repealed July 1, 2020.
775          (4) Title 26, Chapter 33a, Utah Health Data Authority Act, is repealed July 1, 2024.
776          (5) Title 26, Chapter 36a, Hospital Provider Assessment Act, is repealed July 1, 2019.
777          (6) Title 26, Chapter 36b, Inpatient Hospital Assessment Act, is repealed July 1, [2021]
778     2024.
779          [(7) Section 26-38-2.5 is repealed July 1, 2017.]
780          [(8) Section 26-38-2.6 is repealed July 1, 2017.]
781          (7) Title 26, Chapter 36c, Medicaid Expansion Hospital Assessment Act, is repealed
782     July 1, 2024.
783          [(9)] (8) Title 26, Chapter 56, Hemp Extract Registration Act, is repealed July 1, 2021.
784          Section 29. Coordinating H.B. 472 with H.B. 14 -- Superseding technical and
785     substantive amendments.

786          If this H.B. 472 and H.B. 14, Substance Abuse Treatment Facility Patient Brokering,
787     both pass and become law, it is the intent of the Legislature that the amendments to Section
788     26-36b-103 in this bill supersede the amendments to Section 26-36b-103 in H.B. 14, when the
789     Office of Legislative Research and General Counsel prepares the Utah Code database for
790     publication.
791          Section 30. Coordinating H.B. 472 with S.B. 125 -- Superseding technical and
792     substantive amendments.
793          If this H.B. 472 and S.B. 125, Child Welfare Amendments, both pass and become law,
794     it is the intent of the Legislature that the amendments to Section 26-36b-103 in this bill
795     supersede the amendments to Section 26-36b-103 in S.B. 125, when the Office of Legislative
796     Research and General Counsel prepares the Utah Code database for publication.