House Bill No. 6522
               House Bill No. 6522

               PUBLIC ACT NO. 97-2


AN ACT CONCERNING HOSPITAL COMPLIANCE PAYMENTS AND
APPLICATION OF THE TAXES ON HOSPITAL CHARGES.

    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section   1.  (NEW)  (a)  Notwithstanding  the
provisions of  section  19a-170c  of  the  general
statutes,  as  amended  by section 2 of public act
96-238, for the hospital  fiscal  year  commencing
October 1, 1994, no amount due on or after January
31, 1997, for  net  revenue  compliance  shall  be
assessed, collected, or deducted from any hospital
which has submitted a written release as specified
in  this  section  and  such hospital shall not be
liable for any such amount. The  release  required
by this section shall be in a form satisfactory to
the  Secretary  of  the  Office  of   Policy   and
Management  and  shall  release any and all claims
which have been brought or could have been brought
challenging  the  assessment  or collection of any
amount of net  revenue  compliance  due  prior  to
January  31, 1997. To be effective for purposes of
this section such release must be received by  the
Secretary on or before January 30, 1997.
    (b)   Notwithstanding  any  provision  of  the
general statutes, the Office of Health Care Access
shall  not  assess,  collect or deduct net revenue
compliance pursuant to said  section  19a-170c  of
the  general  statutes  for  hospital fiscal years
commencing on or after October 1, 1995.
    Sec.   2.   Section  12-263a  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    As   used  in  sections  12-263a  to  12-263e,
inclusive:
    (1)  "Hospital" means any health care facility
or institution, as  defined  in  section  19a-145,
which is licensed as a short-term general hospital
by the Department of Public Health BUT,  DOES  NOT
INCLUDE  ANY HOSPITAL WHICH, ON THE EFFECTIVE DATE
OF THIS ACT, IS  WITHIN  THE  CLASS  OF  HOSPITALS
LICENSED  BY  THE DEPARTMENT AS CHILDREN'S GENERAL
HOSPITALS;
    (2)  "Gross  revenue"  means  the  amount of a
hospital's total  charges  for  all  patient  care
services  minus  any refunds resulting from errors
or overcharges;
    (3)    "Contractual   allowance"   means   the
percentage amount of discounts that  are  provided
to  nongovernmental payers pursuant to subsections
(c), (d) and (e) of section 19a-166;
    (4)  "Uncompensated  care"  means  the cost of
care that is written off as a bad debt or provided
free  under  a  free  care  policy  that  has been
approved by the Office of Health Care Access;
    (5)  "Other  allowances"  means  any financial
requirements,  as  authorized  by  the  Office  of
Health  Care  Access, of a hospital resulting from
circumstances including, but not  limited  to,  an
insurance   settlement  of  a  liability  case  or
satisfaction  of  a  lien  or   encumbrance,   any
difference    between    charges    for   employee
self-insurance and related  expenses.  For  fiscal
years  commencing  on  and  after October 1, 1994,
"other  allowances"  means  the  amount   of   any
difference    between    charges    for   employee
self-insurance  and  related  expenses  determined
using the hospital's overall relationship of costs
to charges as determined by the Office  of  Health
Care Access;
    (6)  "Net  revenue"  means  the  amount  of  a
hospital's gross revenue minus the hospital's  (A)
contractual allowances, (B) the difference between
government charges and  government  payments,  (C)
uncompensated care and (D) other allowances;
    (7)   "Hospital   gross  earnings"  means  the
amount of a hospital's net revenue minus  (A)  the
amount  that  is  projected  to be received by the
hospital from the federal government for  Medicare
patients,   based   on   the   hospital's   budget
authorization,  and  (B)  the   amount   that   is
projected  to be received by the hospital from the
Department  of  Social  Services,  based  on   the
hospital's budget authorization.
    Sec.  3. Subdivision (28) of section 12-407 of
the general statutes, as amended by section  1  of
public  act  96-165, is repealed and the following
is substituted in lieu thereof:
    (28)  "Hospital"  means  a  hospital  included
within the definition of health care facilities or
institutions under section 19a-145 and licensed as
a short-term general hospital by the Department of
Public  Health and including John Dempsey Hospital
of The University  of  Connecticut  Health  Center
BUT,  DOES  NOT INCLUDE ANY HOSPITAL WHICH, ON THE
EFFECTIVE DATE OF THIS ACT, IS WITHIN THE CLASS OF
HOSPITALS LICENSED BY THE DEPARTMENT AS CHILDREN'S
GENERAL HOSPITALS.
    Sec.  4. Subsection (a) of section 19a-169a of
the general statutes, as amended by section 57  of
public  act  95-160, is repealed and the following
is substituted in lieu thereof:
    (a)   Within   available  appropriations,  the
Department of Social Services may make semimonthly
payments  to  hospitals  in  an  amount calculated
pursuant to section 19a-169b, 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
CHILDREN'S  GENERAL  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,   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-169b
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.
    Sec.   5.   (NEW)  The  Department  of  Social
Services  shall  promptly  apply  to  the  federal
Health   Care  Financing  Administration  for  any
necessary   federal   approval   or   a    federal
determination that no such approval is needed with
respect to the provisions of sections 12-263a  and
19a-169a,  as  amended by sections 2 and 4 of this
act.
    Sec.  6.  (NEW)  Nothing  in this act shall be
construed  as  relieving  any  children's  general
hospital  from  any  prior year's disproportionate
share settlements or adjustments.
    Sec.  7.  The  sum  of eighteen thousand seven
hundred eighty-three dollars is appropriated  from
the  General  Fund  to  the  Office of Health Care
Access for the fiscal year ending June  30,  1997.
The  funds shall be used by the office for payment
to  Sharon  Hospital   for   compliance   payments
otherwise due January 31, 1997, and prepaid.
    Sec.  8.  This  act shall take effect from its
passage, except  that:  (1)  Section  3  shall  be
applicable to sales occurring on or after February
1, 1997, and (2)  sections  2  and  4  shall  take
effect  the later of, October 1, 1997, or upon the
date of federal approval or federal  determination
that no approval is required pursuant to section 5
of this act.

Approved January 30, 1997