Senator Allen M. Christensen proposes the following substitute bill:


1     
REAUTHORIZATION OF HOSPITAL PROVIDER

2     
ASSESSMENT ACT

3     
2019 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Stewart E. Barlow

6     
Senate Sponsor: Allen M. Christensen

7     

8     LONG TITLE
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
27     REPEALS AND REENACTS:
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
39     

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 Section 26-36d-101 is repealed and reenacted to read:
42     
CHAPTER 36d. HOSPITAL PROVIDER ASSESSMENT ACT

43          26-36d-101. Title.
44          This chapter is known as the "Hospital Provider Assessment Act."
45          Section 2. Section 26-36d-102 is repealed and reenacted to read:
46          26-36d-102. Legislative findings.
47          (1) The Legislature finds that there is an important state purpose to improve the access
48     of Medicaid patients to quality care in Utah hospitals because of continuous decreases in state
49     revenues and increases in enrollment under the Utah Medicaid program.
50          (2) The Legislature finds that in order to improve this access to those persons described
51     in Subsection (1):
52          (a) the rates paid to Utah hospitals shall be adequate to encourage and support
53     improved access; and
54          (b) adequate funding shall be provided to increase the rates paid to Utah hospitals
55     providing services pursuant to the Utah Medicaid program.
56          Section 3. Section 26-36d-103 is repealed and reenacted to read:

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

88          (7) "State plan amendment" means a change or update to the state Medicaid plan.
89          Section 4. Section 26-36d-201 is repealed and reenacted to read:
90          26-36d-201. Application of chapter.
91          (1) Other than for the imposition of the assessment described in this chapter, nothing in
92     this chapter shall affect the nonprofit or tax exempt status of any nonprofit charitable, religious,
93     or educational health care provider under:
94          (a) Section 501(c), as amended, of the Internal Revenue Code;
95          (b) other applicable federal law;
96          (c) any state law;
97          (d) any ad valorem property taxes;
98          (e) any sales or use taxes; or
99          (f) any other taxes, fees, or assessments, whether imposed or sought to be imposed by
100     the state or any political subdivision, county, municipality, district, authority, or any agency or
101     department thereof.
102          (2) All assessments paid under this chapter may be included as an allowable cost of a
103     hospital for purposes of any applicable Medicaid reimbursement formula.
104          (3) This chapter does not authorize a political subdivision of the state to:
105          (a) license a hospital for revenue;
106          (b) impose a tax or assessment upon hospitals; or
107          (c) impose a tax or assessment measured by the income or earnings of a hospital.
108          Section 5. Section 26-36d-202 is repealed and reenacted to read:
109          26-36d-202. Assessment, collection, and payment of hospital provider assessment.
110          (1) A uniform, broad based, assessment is imposed on each hospital as defined in
111     Subsection 26-36d-103(5)(a):
112          (a) in the amount designated in Section 26-36d-203; and
113          (b) in accordance with Section 26-36d-204.
114          (2) (a) The assessment imposed by this chapter is due and payable on a quarterly basis
115     in accordance with Section 26-36d-204.
116          (b) The collecting agent for this assessment is the department which is vested with the
117     administration and enforcement of this chapter, including the right to adopt administrative rules
118     in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, necessary to:

119          (i) implement and enforce the provisions of this act; and
120          (ii) audit records of a facility:
121          (A) that is subject to the assessment imposed by this chapter; and
122          (B) does not file a Medicare Cost Report.
123          (c) The department shall forward proceeds from the assessment imposed by this
124     chapter to the state treasurer for deposit in the expendable special revenue fund as specified in
125     Section 26-36d-207.
126          (3) The department may, by rule, extend the time for paying the assessment.
127          Section 6. Section 26-36d-203 is repealed and reenacted to read:
128          26-36d-203. Calculation of assessment.
129          (1) (a) An annual assessment is payable on a quarterly basis for each hospital in an
130     amount calculated at a uniform assessment rate for each hospital discharge, in accordance with
131     this section.
132          (b) The uniform assessment rate shall be determined using the total number of hospital
133     discharges for assessed hospitals divided into the total non-federal portion in an amount
134     consistent with Subsections 26-36d-205(1)(a) and (b) that is needed to support capitated rates
135     for accountable care organizations for purposes of hospital services provided to Medicaid
136     enrollees.
137          (c) Any quarterly changes to the uniform assessment rate shall be applied uniformly to
138     all assessed hospitals.
139          (d) The annual uniform assessment rate may not generate more than:
140          (i) $1,000,000 to offset Medicaid mandatory expenditures; and
141          (ii) the non-federal share to seed amounts needed to support capitated rates for
142     accountable care organizations as provided for in Subsection (1)(b).
143          (2) (a) For each state fiscal year, discharges shall be determined using the data from
144     each hospital's Medicare Cost Report contained in the Centers for Medicare and Medicaid
145     Services' Healthcare Cost Report Information System file. The hospital's discharge data will be
146     derived as follows:
147          (i) for state fiscal year 2013, the hospital's cost report data for the hospital's fiscal year
148     ending between July 1, 2009, and June 30, 2010;
149          (ii) for state fiscal year 2014, the hospital's cost report data for the hospital's fiscal year

150     ending between July 1, 2010, and June 30, 2011;
151          (iii) for state fiscal year 2015, the hospital's cost report data for the hospital's fiscal year
152     ending between July 1, 2011, and June 30, 2012;
153          (iv) for state fiscal year 2016, the hospital's cost report data for the hospital's fiscal year
154     ending between July 1, 2012, and June 30, 2013; and
155          (v) for each subsequent state fiscal year, the hospital's cost report data for the hospital's
156     fiscal year that ended in the state fiscal year two years prior to the assessment fiscal year.
157          (b) If a hospital's fiscal year Medicare Cost Report is not contained in the Centers for
158     Medicare and Medicaid Services' Healthcare Cost Report Information System file:
159          (i) the hospital shall submit to the division a copy of the hospital's Medicare Cost
160     Report applicable to the assessment year; and
161          (ii) the division shall determine the hospital's discharges.
162          (c) If a hospital is not certified by the Medicare program and is not required to file a
163     Medicare Cost Report:
164          (i) the hospital shall submit to the division its applicable fiscal year discharges with
165     supporting documentation;
166          (ii) the division shall determine the hospital's discharges from the information
167     submitted under Subsection (2)(c)(i); and
168          (iii) the failure to submit discharge information shall result in an audit of the hospital's
169     records and a penalty equal to 5% of the calculated assessment.
170          (3) Except as provided in Subsection (4), if a hospital is owned by an organization that
171     owns more than one hospital in the state:
172          (a) the assessment for each hospital shall be separately calculated by the department;
173     and
174          (b) each separate hospital shall pay the assessment imposed by this chapter.
175          (4) Notwithstanding the requirement of Subsection (3), if multiple hospitals use the
176     same Medicaid provider number:
177          (a) the department shall calculate the assessment in the aggregate for the hospitals
178     using the same Medicaid provider number; and
179          (5) the hospitals may pay the assessment in the aggregate.
180          Section 7. Section 26-36d-204 is repealed and reenacted to read:

181          26-36d-204. Quarterly notice -- Collection.
182          Quarterly assessments imposed by this chapter shall be paid to the division within 15
183     business days after the original invoice date that appears on the invoice issued by the division.
184          Section 8. Section 26-36d-205 is repealed and reenacted to read:
185          26-36d-205. Medicaid hospital adjustment under accountable care organization
186     rates.
187          To preserve and improve access to hospital services, the division shall, for accountable
188     care organization rates effective on or after April 1, 2013, incorporate into the accountable care
189     organization rate structure calculation consistent with the certified actuarial rate range:
190          (1) $154,000,000 to be allocated toward the hospital inpatient directed payments for
191     the Medicaid eligibility categories covered in Utah before January 1, 2019; and
192          (2) an amount equal to the difference between payments made to hospitals by
193     accountable care organizations for the Medicaid eligibility categories covered in Utah before
194     January 1, 2019, based on submitted encounter data and the maximum amount that could be
195     paid for those services using Medicare payment principles to be used for directed payments to
196     hospitals for outpatient services.
197          Section 9. Section 26-36d-206 is repealed and reenacted to read:
198          26-36d-206. Penalties and interest.
199          (1) A facility that fails to pay any assessment or file a return as required under this
200     chapter, within the time required by this chapter, shall pay, in addition to the assessment,
201     penalties and interest established by the department.
202          (2) (a) Consistent with Subsection (2)(b), the department shall adopt rules in
203     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, which establish
204     reasonable penalties and interest for the violations described in Subsection (1).
205          (b) If a hospital fails to timely pay the full amount of a quarterly assessment, the
206     department shall add to the assessment:
207          (i) a penalty equal to 5% of the quarterly amount not paid on or before the due date;
208     and
209          (ii) on the last day of each quarter after the due date until the assessed amount and the
210     penalty imposed under Subsection (2)(b)(i) are paid in full, an additional 5% penalty on:
211          (A) any unpaid quarterly assessment; and

212          (B) any unpaid penalty assessment.
213          (3) Upon making a record of its actions, and upon reasonable cause shown, the division
214     may waive, reduce, or compromise any of the penalties imposed under this part.
215          Section 10. Section 26-36d-207 is repealed and reenacted to read:
216          26-36d-207. Hospital Provider Assessment Expendable Revenue Fund.
217          (1) There is created an expendable special revenue fund known as the "Hospital
218     Provider Assessment Expendable Revenue Fund."
219          (2) The fund shall consist of:
220          (a) the assessments collected by the department under this chapter;
221          (b) any interest and penalties levied with the administration of this chapter; and
222          (c) any other funds received as donations for the fund and appropriations from other
223     sources.
224          (3) Money in the fund shall be used:
225          (a) to support capitated rates consistent with Subsection 26-36d-203(1)(d) for
226     accountable care organizations; and
227          (b) to reimburse money collected by the division from a hospital through a mistake
228     made under this chapter.
229          Section 11. Section 26-36d-208 is repealed and reenacted to read:
230          26-36d-208. Repeal of assessment.
231          (1) The repeal of the assessment imposed by this chapter shall occur upon the
232     certification by the executive director of the department that the sooner of the following has
233     occurred:
234          (a) the effective date of any action by Congress that would disqualify the assessment
235     imposed by this chapter from counting toward state Medicaid funds available to be used to
236     determine the federal financial participation;
237          (b) the effective date of any decision, enactment, or other determination by the
238     Legislature or by any court, officer, department, or agency of the state, or of the federal
239     government that has the effect of:
240          (c) disqualifying the assessment from counting towards state Medicaid funds available
241     to be used to determine federal financial participation for Medicaid matching funds; or
242          (d) creating for any reason a failure of the state to use the assessments for the Medicaid

243     program as described in this chapter;
244          (e) the effective date of:
245          (i) an appropriation for any state fiscal year from the General Fund for hospital
246     payments under the state Medicaid program that is less than the amount appropriated for state
247     fiscal year 2012;
248          (ii) the annual revenues of the state General Fund budget return to the level that was
249     appropriated for fiscal year 2008;
250          (iii) a division change in rules that reduces any of the following below July 1, 2011
251     payments:
252          (A) aggregate hospital inpatient payments;
253          (B) adjustment payment rates; or
254          (C) any cost settlement protocol; or
255          (iv) a division change in rules that reduces the aggregate outpatient payments below
256     July 1, 2011 payments; and
257          (f) the sunset of this chapter in accordance with Section 63I-1-226.
258          (2) If the assessment is repealed under Subsection (1), money in the fund that was
259     derived from assessments imposed by this chapter, before the determination made under
260     Subsection (1), shall be disbursed under Section 26-36d-205 to the extent federal matching is
261     not reduced due to the impermissibility of the assessments. Any funds remaining in the special
262     revenue fund shall be refunded to the hospitals in proportion to the amount paid by each
263     hospital.
264          Section 12. Section 63I-1-226 is amended to read:
265          63I-1-226. Repeal dates, Title 26.
266          (1) Section 26-1-40 is repealed July 1, 2019.
267          (2) Title 26, Chapter 9f, Utah Digital Health Service Commission Act, is repealed July
268     1, 2025.
269          (3) Section 26-10-11 is repealed July 1, 2020.
270          (4) Subsection 26-18-417(3) is repealed July 1, 2020.
271          (5) Title 26, Chapter 33a, Utah Health Data Authority Act, is repealed July 1, 2024.
272          (6) Title 26, Chapter 36b, Inpatient Hospital Assessment Act, is repealed July 1, 2024.
273          (7) Title 26, Chapter 36c, Medicaid Expansion Hospital Assessment Act, is repealed

274     July 1, 2024.
275          (8) Title 26, Chapter 36d, Hospital Provider Assessment Act, is repealed July 1, [2019]
276     2024.
277          (9) Title 26, Chapter 56, Hemp Extract Registration Act, is repealed January 1, 2019.
278          (10) Title 26, Chapter 63, Nurse Home Visiting Pay-for-Success Program, is repealed
279     July 1, 2026.
280          Section 13. Retrospective operation -- Effective date.
281          This bill has retrospective operation to December 1, 2018, except that the amendments
282     to Section 63I-1-226 take effect on May 14, 2019.