House Bill No. 7504

June Special Session, Public Act No. 01-3

AN ACT CONCERNING HOSPITAL RATES AND DISPROPORTIONATE SHARE PAYMENTS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (d) of section 17b-239 of the general statutes is repealed and the following is substituted in lieu thereof:

(d) The state shall also pay to such hospitals for each outpatient clinic and emergency room visit a reasonable rate to be established annually by the commissioner for each hospital, such rate to be determined by the reasonable cost of such services. [, but the established rate for an outpatient clinic visit shall not exceed one hundred sixteen per cent of the combined average fee of the general practitioner and specialist for an office visit according to the fee schedule for practitioners of the healing arts approved under section 4-67c, except that the outpatient clinic rate in effect June 30, 1992, shall increase July 1, 1992, and each July first thereafter by no more than the most recent annual increase in the consumer price index for medical care.] The emergency room visit rates in effect June 30, 1991, shall remain in effect through June 30, 1993, except those which would have been decreased effective July 1, 1991, or July 1, 1992, shall be decreased. [To the extent that the commissioner receives approval for a disproportionate share exemption pursuant to federal regulations, the commissioner may establish a rate cap for qualifying hospital outpatient clinics up to one hundred seventy-five per cent of the combined average fee of the general practitioner and specialist for an office visit according to the fee schedule for practitioners of the healing arts approved under section 4-67c.] Nothing contained herein shall authorize a payment by the state for such services to any hospital in excess of the charges made by such hospital for comparable services to the general public. For those outpatient hospital services paid on the basis of a ratio of cost to charges, the ratios in effect June 30, 1991, shall be reduced effective July 1, 1991, by the most recent annual increase in the consumer price index for medical care. For those outpatient hospital services paid on the basis of a ratio of cost to charges, the ratios computed to be effective July 1, 1994, shall be reduced by the most recent annual increase in the consumer price index for medical care. The emergency room visit rates in effect June 30, 1994, shall remain in effect through December 31, 1994. The Commissioner of Social Services shall establish a fee schedule for outpatient hospital services to be effective on and after January 1, 1995. Except with respect to the rate periods beginning July 1, 1999, and July 1, 2000, such fee schedule shall be adjusted annually beginning July 1, 1996, to reflect necessary increases in the cost of services. Notwithstanding the provisions of this subsection, for the rate period beginning July 1, 2001, the fee schedule shall be increased by ten and one-half per cent.

Sec. 2. Subsection (g) of section 17b-239 of the general statutes is repealed and the following is substituted in lieu thereof:

(g) [Effective October 1, 1998, and annually thereafter, the commissioner shall establish hospital inpatient rates in accordance with the method specified in regulations adopted pursuant to this section and applied for the rate period beginning October 1, 1997, except that for the rate period beginning October 1, 1998, the commissioner shall apply a three per cent annual adjustment factor to the target amount per discharge in lieu of the annual adjustment factor, if any, used to determine rates for prospective payment-system-exempt hospitals under the Medicare program, and for succeeding rate periods the commissioner shall not apply an annual adjustment factor.] Effective July 1, 2001, the commissioner shall establish inpatient hospital rates in accordance with the method specified in regulations adopted pursuant to this section and applied for the rate period beginning October 1, 2000, except that the commissioner shall update each hospital's target amount per discharge to the actual allowable cost per discharge based upon the 1999 cost report filing multiplied by sixty-two and one-half per cent if such amount is higher than the target amount per discharge for the rate period beginning October 1, 2000, as adjusted for the ten per cent incentive identified in Section 4005 of Public Law 101-508. If a hospital's rate is increased pursuant to this subsection, the hospital shall not receive the ten per cent incentive identified in Section 4005 of Public Law 101-508. For rate periods beginning October 1, 2001, and October 1, 2002, the commissioner shall not apply an annual adjustment factor to the target amount per discharge.

Sec. 3. Section 19a-670 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Within available appropriations, the Department of Social Services may make semimonthly payments to short-term general hospitals in an amount calculated pursuant to section 19a-671, provided the total amount of payments made to individual hospitals and to hospitals in the aggregate shall maximize the amount qualifying for federal matching payments under the medical assistance program and the emergency assistance to families program as determined by the Department of Social Services in consultation with the Office of Policy and Management. No payments shall be made to any hospital exempt from taxation under chapter 211a. The payments shall be medical assistance disproportionate share payments, including grants provided pursuant to section 19a-168k, to the extent allowable under federal law. In addition, payments may be made for authorized emergency assistance to needy families with dependent children in accordance with Title IV-A of the Social Security Act to the extent allowable under federal law. The payments shall not be part of the routine medical assistance inpatient hospital rate determined pursuant to section 17b-239, as amended by this act. [except to the extent the Commissioner of Social Services determines that increasing those rates would be appropriate to resolve any civil action pending on April 1, 1994, in the United States District Court for the district of Connecticut or the court orders such increase.] Payments shall be made on an interim basis during each year and a final settlement shall be calculated pursuant to section 19a-671 by the office for each hospital after the year end based on audited data for the hospitals. The Commissioner of Social Services may withhold payment to a hospital which is in arrears in remitting its obligations to the state.

(b) (1) For the hospital fiscal year 1994, and subsequent fiscal years, the commission or its designated representative shall conduct a cash audit of the projected amount of uncompensated care, including emergency assistance to families and underpayments against the actual receipts of the hospital. In addition, the office or its designated intermediary shall conduct an audit of the revenues, deductions from revenue, discharges, days or other measures of patient volume for hospitals for the purposes of termination and final settlement of uncompensated care pool assessments and payments for the period ending March 31, 1994.

(2) For the six-month period ending September 30, 1994, and for each subsequent fiscal year, the office or its designated intermediary shall conduct an audit of the revenues, deductions from revenue, discharges, days or other measures of patient volume for hospitals for the purposes of determining disproportionate share payments. Included in this audit shall be a comparison of projected and actual levels of medical assistance underpayment and uncompensated care.

(3) The total payments from the Department of Social Services medical assistance disproportionate share-emergency assistance account established pursuant to section 38 of public act 94-9* and made in accordance with sections 19a-670 to 19a-672, inclusive, during the fiscal year less any payments for emergency assistance to families, and less any payments resulting from the resolution of or court order entered in any civil action pending on April 1, 1994, in the United States District Court for the district of Connecticut, shall be reallocated to hospitals based on actual audited levels of medical assistance underpayment, grants pursuant to section 19a-168k and uncompensated care to determine the final payment for the fiscal year.

(4) If the final payment for a hospital for the hospital fiscal year, as determined as a result of this audit, is less than the total payments the hospital received during the same fiscal year excluding any prior year audit adjustment, then the current hospital fiscal year remaining semimonthly payments shall each be reduced by an amount equal to the total excess payment divided by the number of remaining semimonthly payments for the current hospital fiscal year.

(5) If the final payment for a hospital for the hospital fiscal year, as determined as a result of this audit, is greater than the total payments the hospital received during the same fiscal year, then the current hospital fiscal year remaining semimonthly payments shall each be increased by an amount equal to the total excess payment divided by the number of remaining semimonthly payments for the current hospital fiscal year.

(6) The office shall, by June 1, 1995, and June first of each subsequent year, report the results of such audit for the previous hospital fiscal year to the joint standing committee of the General Assembly having cognizance of matters relating to public health. The report shall include information concerning the financial stability of hospitals in a competitive market.

(7) Notwithstanding the provisions of subdivisions (3) to (5), inclusive, of this subsection, no adjustment of disproportionate share payments to hospitals for purposes of final settlement shall be implemented for the hospital fiscal years commencing October 1, 1997, and October 1, 1998, provided every hospital subject to final settlement for said fiscal years submits documentation in writing of its agreement to forego such final settlement to the Commissioner of Social Services in a form acceptable to the commissioner.

(8) Notwithstanding the provisions of subdivisions (3) to (5), inclusive, of this subsection, for the hospital fiscal year commencing October 1, 1999, and for each subsequent fiscal year, no adjustment of disproportionate share payments to hospitals for purposes of final settlement shall be determined or implemented.

(9) For the quarter ending September 30, 2001, no negative adjustment to the disproportionate share payments to hospitals for purposes of implementing the final one-quarter of the disproportionate share final settlement for the hospital fiscal year commencing October 1, 1998, shall be made. Any hospitals with a positive adjustment to the disproportionate share payments for purposes of implementing the remaining one-quarter of the hospital fiscal year 1999 disproportionate share final settlement shall receive payment of the adjustment through funds appropriated for said purpose.

(10) The Department of Social Services may, within available appropriations and with the approval of the Office of Health Care Access and the Office of Policy and Management, make payment of any final settlement amount determined to represent any and all claims arising out of any incorrect payments to Yale-New Haven Hospital for the fiscal quarter ending September 30, 1998, or the hospital fiscal year ending September 30, 1999, or both. If such incorrect payment, whether an overpayment or an underpayment, has occurred as a result of the hospital's reporting incorrect information and statistics to the Office of Health Care Access, the Office of Health Care Access shall recompute the amount of any payments for the indicated time periods, offsetting any underpaid amount by the amount of any overpayment of funds for the indicated time period. Yale-New Haven Hospital shall submit all information and documentation determined necessary by the Office of Health Care Access to make a final determination of the amounts due. Prior to the release of any funds under this section, the hospital shall submit a written release in a form satisfactory to the Secretary of the Office of Policy and Management. The written release shall provide for settlement of any and all claims which have been or could have been brought challenging the amount of payment for the indicated periods. Nothing in this section shall be construed to relieve the hospital from any settlement or adjustments for any periods other than those identified in this section.

(c) The Commissioner of Social Services is authorized to determine exceptions, exemptions and adjustments in accordance with 42 CFR 413.40.

(d) Nothing in section 3-114i, subdivisions (2) or (29) of section 12-407, subsection (1) of section 12-408, section 12-408a, subdivision (5) of section 12-412, subsection (1) of section 12-414, sections 12-263a to 12-263e, inclusive, sections 19a-646, 19a-659 to 19a-662 or 19a-666 to 19a-680, inclusive, or sections 1, 2, or 38 of public act 94-9* shall be construed to require the Department of Social Services to pay out more funds than are appropriated pursuant to said sections.

Sec. 4. (NEW) For the fiscal year ending June 30, 2002, and the fiscal year ending June 30, 2003, the Department of Social Services may, within available funds, make payments to all short-term general hospitals located in distressed municipalities, as defined in section 32-9p of the general statutes, with a population greater than seventy thousand. The payment amount for each hospital shall be determined by the Commissioner of Social Services based upon the ratio that the number of inpatient discharges paid by Medicaid on a fee-for-service basis to the hospital for the most recently filed cost report period bears to the total hospital discharges paid by Medicaid on a fee-for-service basis for all qualifying hospitals. Notwithstanding the provisions of this section, no payment shall be made to a facility licensed as a children's hospital.

Sec. 5. Except as otherwise provided in subsection (w) of section 47 of special act 01-1 of the June special session, for the fiscal years ending June 30, 2002, and June 30, 2003, the following sums shall be paid from funds appropriated to the Department of Social Services for Hospital Finance Restructuring Funding in subsection (a) of section 47 of special act 01-1 of the June special session:

 

Hartford Hospital

$3,412,244

 

Saint Francis Hospital

$2,709,583

 

Stamford Hospital

$2,485,860

Sec. 6. This act shall take effect July 1, 2001.

Approved July 2, 2001