You asked for information on recently enacted Utah legislation imposing an assessment on nursing care facilities.

SUMMARY

The Utah “Nursing Care Facility Assessment Act” (S. B. 128), establishes a new assessment on nursing care facilities to improve the Medicaid reimbursement rate for care given to the elderly and physically disabled in such facilities. Utah Governor Olene Walker signed the bill into law on March 23, 2004.

UTAH LEGISLATION

Legislative Findings

The Utah bill makes the following legislative findings: (1) improving the quality of care given to the elderly and the physically disabled in long-term care nursing facilities is an important state purpose; (2) in order to improve the quality of care, the rates paid to the nursing care facilities by the Medicaid program must be adequate to encourage and support quality care; and (3) in order to meet these objectives, adequate funding must be provided to increase the Medicaid rates (§ 26-35a-102).

Collection and Payment of Assessment

The bill requires the Utah Department of Health to establish, by rule, a uniform rate per non-Medicare patient day that cannot exceed 6% of the total gross revenue for services provided to patients of all nursing care facilities licensed in the state. Total revenue does not include charitable contributions received by a facility. The department must calculate the assessment imposed on a nursing facility by multiplying the total number of patient days of care it provided to non-Medicare patients by the uniform rate established above. The assessment, which the department will begin collecting July 2004, is due and payable on a monthly basis (§ 26-35a-104).

The assessment should amount to about $ 5 per patient day according to an official of the Utah Health Department and will raise about $ 10 million annually (see BNA’s Health Law Reporter, April 8, 2004, pp. 523-524). Proceeds from the assessment must be forwarded to the state treasurer for deposit in a restricted account (see below).

The bill requires each nursing facility to file monthly with the department a report that includes:

A facility’s paid assessment is an allowable cost for Medicaid reimbursement purposes.

Penalties and Interest

The bill establishes a penalty for failure to file a return or pay the assessment within the time period required: the greater of $ 50 or 1% of the assessment due. Failure to pay within 30 days of a notice of deficiency is the greater of $ 50 or 5% of the assessment due.

The bill also establishes penalties for underpayment as follows:

The interest rate applied to an underpayment or for an unpaid penalty is 12% annually. The department can waive penalties for good cause (§ 26-35a-105).

Restricted Account

The bill creates a restricted account in the General Fund known as the “Nursing Care Facilities Account. ” This account consists of (1) proceeds from the assessment, (2) money appropriated or otherwise made available by the Legislature, and (3) any interest earned on the account (§ 26-35a-106).

Money in the account must be used, to the extent allowed by federal law, to obtain federal financial participation (matching funds) in the Medicaid program.

Money appropriated from the restricted fund to the Health Department must be used to increase the rates paid to nursing care facilities for Medicaid services and for certain administrative expenses to implement this law. Money from the account cannot be used to replace existing state expenditures paid to nursing facilities for providing Medicaid services (§ 26-35a-106).

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