Chief Sponsor: Stewart E. Barlow

Senate Sponsor: Allen M. Christensen


9     General Description:
10          This bill amends, reauthorizes, and adds a retrospective effective date to the Hospital
11     Provider Assessment Act.
12     Highlighted Provisions:
13          This bill:
14          ▸     repeals and reenacts the Hospital Provider Assessment Act with a retrospective
15     effective date;
16          ▸     amends provisions relating to the calculation of hospital provider assessment rates;
17     and
18          ▸     extends the sunset date for the Hospital Provider Assessment Act for five years.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides retrospective operation.
23     Utah Code Sections Affected:
24     AMENDS:
25          63I-1-226, as last amended by Laws of Utah 2018, Chapters 180, 281, 384, 430, and
26     468
28          26-36d-101, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1

29          26-36d-102, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
30          26-36d-103, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
31          26-36d-201, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
32          26-36d-202, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
33          26-36d-203, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
34          26-36d-204, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
35          26-36d-205, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
36          26-36d-206, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
37          26-36d-207, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1
38          26-36d-208, as enacted by Laws of Utah 2018, Third Special Session, Chapter 1

40     Be it enacted by the Legislature of the state of Utah:
41          Section 1. Section 26-36d-101 is repealed and reenacted to read:

Part 1. General Provisions

44          26-36d-101. Title.
45          This chapter is known as the "Hospital Provider Assessment Act."
46          Section 2. Section 26-36d-102 is repealed and reenacted to read:
47          26-36d-102. Legislative findings.
48          (1) The Legislature finds that there is an important state purpose to improve the access
49     of Medicaid patients to quality care in Utah hospitals because of continuous decreases in state
50     revenues and increases in enrollment under the Utah Medicaid program.
51          (2) The Legislature finds that in order to improve this access to those persons described
52     in Subsection (1):
53          (a) the rates paid to Utah hospitals shall be adequate to encourage and support
54     improved access; and
55          (b) adequate funding shall be provided to increase the rates paid to Utah hospitals

56     providing services pursuant to the Utah Medicaid program.
57          Section 3. Section 26-36d-103 is repealed and reenacted to read:
58          26-36d-103. Definitions.
59          As used in this chapter:
60          (1) "Accountable care organization" means a managed care organization, as defined in
61     42 C.F.R. Sec. 438, that contracts with the department under the provisions of Section
62     26-18-405.
63          (2) "Assessment" means the Medicaid hospital provider assessment established by this
64     chapter.
65          (3) "Discharges" means the number of total hospital discharges reported on Worksheet
66     S-3 Part I, column 15, lines 12, 14, and 14.01 of the 2552-96 Medicare Cost Report or on
67     Worksheet S-3 Part I, column 15, lines 14, 16, and 17 of the 2552-10 Medicare Cost Report for
68     the applicable assessment year.
69          (4) "Division" means the Division of Health Care Financing of the department.
70          (5) "Hospital":
71          (a) means a privately owned:
72          (i) general acute hospital operating in the state as defined in Section 26-21-2; and
73          (ii) specialty hospital operating in the state, which shall include a privately owned
74     hospital whose inpatient admissions are predominantly:
75          (A) rehabilitation;
76          (B) psychiatric;
77          (C) chemical dependency; or
78          (D) long-term acute care services; and
79          (b) does not include:
80          (i) a human services program, as defined in Section 62A-2-101;
81          (ii) a hospital owned by the federal government, including the Veterans Administration
82     Hospital; or

83          (iii) a hospital that is owned by the state government, a state agency, or a political
84     subdivision of the state, including:
85          (A) a state-owned teaching hospital; and
86          (B) the Utah State Hospital.
87          (6) "Medicare Cost Report" means CMS-2552-96 or CMS-2552-10, the cost report for
88     electronic filing of hospitals.
89          (7) "State plan amendment" means a change or update to the state Medicaid plan.
90          Section 4. Section 26-36d-201 is repealed and reenacted to read:
Part 2. Hospital Provider Assessment

92          26-36d-201. Application of chapter.
93          (1) Other than for the imposition of the assessment described in this chapter, nothing in
94     this chapter shall affect the nonprofit or tax exempt status of any nonprofit charitable, religious,
95     or educational health care provider under:
96          (a) Section 501(c), as amended, of the Internal Revenue Code;
97          (b) other applicable federal law;
98          (c) any state law;
99          (d) any ad valorem property taxes;
100          (e) any sales or use taxes; or
101          (f) any other taxes, fees, or assessments, whether imposed or sought to be imposed by
102     the state or any political subdivision, county, municipality, district, authority, or any agency or
103     department thereof.
104          (2) All assessments paid under this chapter may be included as an allowable cost of a
105     hospital for purposes of any applicable Medicaid reimbursement formula.
106          (3) This chapter does not authorize a political subdivision of the state to:
107          (a) license a hospital for revenue;
108          (b) impose a tax or assessment upon hospitals; or
109          (c) impose a tax or assessment measured by the income or earnings of a hospital.

110          Section 5. Section 26-36d-202 is repealed and reenacted to read:
111          26-36d-202. Assessment, collection, and payment of hospital provider assessment.
112          (1) A uniform, broad based, assessment is imposed on each hospital as defined in
113     Subsection 26-36d-103(5)(a):
114          (a) in the amount designated in Section 26-36d-203; and
115          (b) in accordance with Section 26-36d-204.
116          (2) (a) The assessment imposed by this chapter is due and payable on a quarterly basis
117     in accordance with Section 26-36d-204.
118          (b) The collecting agent for this assessment is the department which is vested with the
119     administration and enforcement of this chapter, including the right to adopt administrative rules
120     in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, necessary to:
121          (i) implement and enforce the provisions of this act; and
122          (ii) audit records of a facility:
123          (A) that is subject to the assessment imposed by this chapter; and
124          (B) does not file a Medicare Cost Report.
125          (c) The department shall forward proceeds from the assessment imposed by this
126     chapter to the state treasurer for deposit in the expendable special revenue fund as specified in
127     Section 26-36d-207.
128          (3) The department may, by rule, extend the time for paying the assessment.
129          Section 6. Section 26-36d-203 is repealed and reenacted to read:
130          26-36d-203. Calculation of assessment.
131          (1) (a) An annual assessment is payable on a quarterly basis for each hospital in an
132     amount calculated at a uniform assessment rate for each hospital discharge, in accordance with
133     this section.
134          (b) The uniform assessment rate shall be determined using the total number of hospital
135     discharges for assessed hospitals divided into the total non-federal portion in an amount
136     consistent with Subsections 26-36d-205(1)(a) and (b) that is needed to support capitated rates

137     for accountable care organizations for purposes of hospital services provided to Medicaid
138     enrollees.
139          (c) Any quarterly changes to the uniform assessment rate shall be applied uniformly to
140     all assessed hospitals.
141          (d) The annual uniform assessment rate may not generate more than:
142          (i) $1,000,000 to offset Medicaid mandatory expenditures; and
143          (ii) the non-federal share to seed amounts needed to support capitated rates for
144     accountable care organizations as provided for in Subsection (1)(b).
145          (2) (a) For each state fiscal year, discharges shall be determined using the data from
146     each hospital's Medicare Cost Report contained in the Centers for Medicare and Medicaid
147     Services' Healthcare Cost Report Information System file. The hospital's discharge data will be
148     derived as follows:
149          (i) for state fiscal year 2013, the hospital's cost report data for the hospital's fiscal year
150     ending between July 1, 2009, and June 30, 2010;
151          (ii) for state fiscal year 2014, the hospital's cost report data for the hospital's fiscal year
152     ending between July 1, 2010, and June 30, 2011;
153          (iii) for state fiscal year 2015, the hospital's cost report data for the hospital's fiscal year
154     ending between July 1, 2011, and June 30, 2012;
155          (iv) for state fiscal year 2016, the hospital's cost report data for the hospital's fiscal year
156     ending between July 1, 2012, and June 30, 2013; and
157          (v) for each subsequent state fiscal year, the hospital's cost report data for the hospital's
158     fiscal year that ended in the state fiscal year two years prior to the assessment fiscal year.
159          (b) If a hospital's fiscal year Medicare Cost Report is not contained in the Centers for
160     Medicare and Medicaid Services' Healthcare Cost Report Information System file:
161          (i) the hospital shall submit to the division a copy of the hospital's Medicare Cost
162     Report applicable to the assessment year; and
163          (ii) the division shall determine the hospital's discharges.

164          (c) If a hospital is not certified by the Medicare program and is not required to file a
165     Medicare Cost Report:
166          (i) the hospital shall submit to the division its applicable fiscal year discharges with
167     supporting documentation;
168          (ii) the division shall determine the hospital's discharges from the information
169     submitted under Subsection (2)(c)(i); and
170          (iii) the failure to submit discharge information shall result in an audit of the hospital's
171     records and a penalty equal to 5% of the calculated assessment.
172          (3) Except as provided in Subsection (4), if a hospital is owned by an organization that
173     owns more than one hospital in the state:
174          (a) the assessment for each hospital shall be separately calculated by the department;
175     and
176          (b) each separate hospital shall pay the assessment imposed by this chapter.
177          (4) Notwithstanding the requirement of Subsection (3), if multiple hospitals use the
178     same Medicaid provider number:
179          (a) the department shall calculate the assessment in the aggregate for the hospitals
180     using the same Medicaid provider number; and
181          (b) the hospitals may pay the assessment in the aggregate.
182          Section 7. Section 26-36d-204 is repealed and reenacted to read:
183          26-36d-204. Quarterly notice -- Collection.
184          Quarterly assessments imposed by this chapter shall be paid to the division within 15
185     business days after the original invoice date that appears on the invoice issued by the division.
186          Section 8. Section 26-36d-205 is repealed and reenacted to read:
187          26-36d-205. Medicaid hospital adjustment under accountable care organization
188     rates.
189          To preserve and improve access to hospital services, the division shall, for accountable
190     care organization rates effective on or after April 1, 2013, incorporate into the accountable care

191     organization rate structure calculation consistent with the certified actuarial rate range:
192          (1) $154,000,000 to be allocated toward the hospital inpatient directed payments for
193     the Medicaid eligibility categories covered in Utah before January 1, 2019; and
194          (2) an amount equal to the difference between payments made to hospitals by
195     accountable care organizations for the Medicaid eligibility categories covered in Utah before
196     January 1, 2019, based on submitted encounter data and the maximum amount that could be
197     paid for those services using Medicare payment principles to be used for directed payments to
198     hospitals for outpatient services.
199          Section 9. Section 26-36d-206 is repealed and reenacted to read:
200          26-36d-206. Penalties and interest.
201          (1) A facility that fails to pay any assessment or file a return as required under this
202     chapter, within the time required by this chapter, shall pay, in addition to the assessment,
203     penalties and interest established by the department.
204          (2) (a) Consistent with Subsection (2)(b), the department shall adopt rules in
205     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, which establish
206     reasonable penalties and interest for the violations described in Subsection (1).
207          (b) If a hospital fails to timely pay the full amount of a quarterly assessment, the
208     department shall add to the assessment:
209          (i) a penalty equal to 5% of the quarterly amount not paid on or before the due date;
210     and
211          (ii) on the last day of each quarter after the due date until the assessed amount and the
212     penalty imposed under Subsection (2)(b)(i) are paid in full, an additional 5% penalty on:
213          (A) any unpaid quarterly assessment; and
214          (B) any unpaid penalty assessment.
215          (c) Upon making a record of its actions, and upon reasonable cause shown, the division
216     may waive, reduce, or compromise any of the penalties imposed under this part.
217          Section 10. Section 26-36d-207 is repealed and reenacted to read:

218          26-36d-207. Hospital Provider Assessment Expendable Revenue Fund.
219          (1) There is created an expendable special revenue fund known as the "Hospital
220     Provider Assessment Expendable Revenue Fund."
221          (2) The fund shall consist of:
222          (a) the assessments collected by the department under this chapter;
223          (b) any interest and penalties levied with the administration of this chapter; and
224          (c) any other funds received as donations for the fund and appropriations from other
225     sources.
226          (3) Money in the fund shall be used:
227          (a) to support capitated rates consistent with Subsection 26-36d-203(1)(d) for
228     accountable care organizations; and
229          (b) to reimburse money collected by the division from a hospital through a mistake
230     made under this chapter.
231          Section 11. Section 26-36d-208 is repealed and reenacted to read:
232          26-36d-208. Repeal of assessment.
233          (1) The repeal of the assessment imposed by this chapter shall occur upon the
234     certification by the executive director of the department that the sooner of the following has
235     occurred:
236          (a) the effective date of any action by Congress that would disqualify the assessment
237     imposed by this chapter from counting toward state Medicaid funds available to be used to
238     determine the federal financial participation;
239          (b) the effective date of any decision, enactment, or other determination by the
240     Legislature or by any court, officer, department, or agency of the state, or of the federal
241     government that has the effect of:
242          (i) disqualifying the assessment from counting towards state Medicaid funds available
243     to be used to determine federal financial participation for Medicaid matching funds; or
244          (ii) creating for any reason a failure of the state to use the assessments for the Medicaid

245     program as described in this chapter;
246          (c) the effective date of:
247          (i) an appropriation for any state fiscal year from the General Fund for hospital
248     payments under the state Medicaid program that is less than the amount appropriated for state
249     fiscal year 2012;
250          (ii) the annual revenues of the state General Fund budget return to the level that was
251     appropriated for fiscal year 2008;
252          (iii) a division change in rules that reduces any of the following below July 1, 2011,
253     payments:
254          (A) aggregate hospital inpatient payments;
255          (B) adjustment payment rates; or
256          (C) any cost settlement protocol; or
257          (iv) a division change in rules that reduces the aggregate outpatient payments below
258     July 1, 2011, payments; and
259          (d) the sunset of this chapter in accordance with Section 63I-1-226.
260          (2) If the assessment is repealed under Subsection (1), money in the fund that was
261     derived from assessments imposed by this chapter, before the determination made under
262     Subsection (1), shall be disbursed under Section 26-36d-205 to the extent federal matching is
263     not reduced due to the impermissibility of the assessments. Any funds remaining in the special
264     revenue fund shall be refunded to the hospitals in proportion to the amount paid by each
265     hospital.
266          Section 12. Section 63I-1-226 is amended to read:
267          63I-1-226. Repeal dates, Title 26.
268          (1) Section 26-1-40 is repealed July 1, 2019.
269          (2) Title 26, Chapter 9f, Utah Digital Health Service Commission Act, is repealed July
270     1, 2025.
271          (3) Section 26-10-11 is repealed July 1, 2020.

272          (4) Subsection 26-18-417(3) is repealed July 1, 2020.
273          (5) Title 26, Chapter 33a, Utah Health Data Authority Act, is repealed July 1, 2024.
274          (6) Title 26, Chapter 36b, Inpatient Hospital Assessment Act, is repealed July 1, 2024.
275          (7) Title 26, Chapter 36c, Medicaid Expansion Hospital Assessment Act, is repealed
276     July 1, 2024.
277          (8) Title 26, Chapter 36d, Hospital Provider Assessment Act, is repealed July 1, [2019]
278     2024.
279          [(9) Title 26, Chapter 56, Hemp Extract Registration Act, is repealed January 1, 2019.]
280          [(10)] (9) Title 26, Chapter 63, Nurse Home Visiting Pay-for-Success Program, is
281     repealed July 1, 2026.
282          Section 13. Retrospective operation -- Effective date.
283          This bill has retrospective operation to December 1, 2018, except that the amendments
284     to Section 63I-1-226 take effect on May 14, 2019.