(On Behalf of the Budget Division of the
Department of Administration)
May 12, 1997
____________
Referred to Committee on Finance
SUMMARY--Extends date for prospective expiration of provisions that limit increase in charges that major hospitals may impose. (BDR S-1451)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: Executive Budget.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to health care; extending the date for the prospective expiration of certain provisions that limit the increase in charges that a major hospital may impose; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 Section 21 of chapter 706, Statutes of Nevada 1991, as last amended by chapter 540, Statutes of Nevada 1995, at page 1856, is hereby amended to read as follows:
Sec. 21. 1. As used in this section:
(a) "Charge master" means the uniform list of billed charges described in NRS 439B.400, except that the term includes the uniform list of billed charges for units of service or goods provided on an outpatient basis.
(b) "Department" means the department of human resources.
(c) "Director" means the director of the department.
(d) "Hospital" has the meaning ascribed to it in NRS 439B.110.
(e) "Major hospital" means a hospital which has 200 or more licensed or approved beds, or any hospital in a group of affiliated hospitals in a county which have a combined total of 200 or more licensed or approved beds, that is not operated by a federal, state or local governmental agency.
(f) "New major hospital" means a hospital that becomes a major hospital, as defined in paragraph (e), on or after July 1, 1991.
(g) "Revenue neutral" means a change in price made by a hospital that neither increases nor decreases the gross revenue of the hospital.
2. On or before July 1, 1991, each major hospital shall submit to the department a complete charge master for the hospital that will be effective on July 1, 1991. The charge master must be submitted on a computer medium in a form acceptable to the director.
3. Except as otherwise provided in subsections 4 to 9, inclusive, during the period from July 1, 1991, through June 30, [1997,] 1999, no major hospital may:
(a) Raise the unit price of any item in its charge master.
(b) Modify the unit to which a price applies unless the change is revenue neutral.
(c) Replace an existing item in the charge master with a different item or add a new item to its charge master unless the price for the different or new item is approved by the director.
4. The director shall by regulation establish a procedure and standards for approving charges for items that:
(a) Are not stated in the charge master;
(b) Represent special equipment, supplies or medication ordered by a physician; and
(c) Are not standard items that the hospital regularly provides,
and for such other unique or unusual items as the director prescribes by regulation. The director shall allow a hospital to use the rate formula that the hospital has in effect on July 1, 1991, for determining charges for such items.
5. A major hospital shall notify the department in writing of any modification pursuant to paragraph (b) of subsection 3 or the replacement or addition of an item pursuant to paragraph (c) of subsection 3 not less than 10 days, excluding Saturdays, Sundays and legal holidays, after the modification, replacement or addition. The hospital shall submit with the notice documentation that:
(a) The modification is revenue neutral; or
(b) The different or additional item is priced at a level that reflects the same rate of return on the item as the hospital receives on comparable items or received on an item being replaced.
6. If the director determines that a modification pursuant to paragraph (b) of subsection 3 is not revenue neutral or that a replacement or addition pursuant to paragraph (c) of subsection 3 exceeds the level allowed pursuant to paragraph (b) of subsection 5, he shall disapprove the proposed charge and notify the hospital of the charge he will allow for the items disapproved. The hospital shall charge the amount approved by the director and shall credit the bill of any patient charged the amount disapproved the difference between the approved charge and the actual charge within 20 days, excluding Saturdays, Sundays and legal holidays, after receiving notice of the disapproval. If the director does not give notice of disapproval pursuant to this subsection within 20 days, excluding Saturdays, Sundays and legal holidays, after receiving notice of the modification, replacement or addition, the modification, replacement or addition shall be deemed approved.
7. If any new state or federal taxes are imposed on hospitals between July 1, 1991, and June 30, 1992, except the tax imposed on hospitals pursuant to section 13 of this act and the tax imposed pursuant to section 16 of this act, a major hospital may increase the prices in its charge master by an amount that will generate net revenue sufficient to recover the amount of the added expense. Prices may be increased pursuant to this subsection only to compensate for new taxes. Prices must not be increased to correspond with increases in existing taxes, or a modification, reconfiguration or replacement of existing taxes which results in an increased tax burden on a hospital. The director shall by regulation establish the mechanism for carrying out the increase allowed by this subsection.
8. At any time during the fiscal years 1992-93, 1993-94, 1994-95, 1995-96 , [and] 1996-97, 1997-98 and 1998-99, a major hospital may increase the price of any item on its charge master by a percentage up to the percentage increase, if any, in the Consumer Price Index (Medical Care Component for All Urban Consumers) as published by the Bureau of Labor Statistics of the United States Department of Labor for the most recent 12-month period for which information is available at the time the notice of the allowable increase is given pursuant to subsection 10. A hospital shall notify the director in writing within 10 days, excluding Saturdays, Sundays and legal holidays, after making an increase allowed by this subsection. In addition to the increases authorized by this subsection, a hospital may modify the unit to which a price applies, replace an existing item in the charge master with a different item or add a new item to its charge master during the fiscal years 1992-93, 1993-94, 1994-95, 1995-96 , [and] 1996-97 , 1997-98 and 1998-99 in the manner provided in subsections 5 and 6.
9. In addition to the increase allowed pursuant to subsection 8, if the net revenue per admission in a major hospital has decreased by at least 4 percent between the base period of July 1, 1989, to June 30, 1990, and the period from July 1, 1992, to March 31, 1993, the major hospital may increase the price of any item on its charge master by not more than an additional 4 percent at any time during fiscal year 1993-94 and 1994-95. A hospital shall notify the director in writing within 10 working days after making an increase allowed by this subsection.
10. On or before May 1 of each fiscal year the director shall notify each major hospital of the permissible percentage increase in each item in its charge master for the succeeding fiscal year.
11. A major hospital shall submit to the department upon request by the director a detailed listing of charges by the identification code used in the hospital's charge master for any inpatient admission or outpatient visit on a computer medium in a form acceptable to the director.
12. A new major hospital shall submit to the director a complete charge master for the hospital at least 60 days before becoming a major hospital. The charge master must be submitted on a computer medium in a form acceptable to the director. The director shall review, revise as appropriate [,] and approve the prices in the charge master based upon the prevailing charges in the area in which the new major hospital is located. After approval of the charge master, the hospital is subject to the provisions of this section to the same extent as other major hospitals. The director shall adopt regulations governing the approval of a charge master pursuant to this subsection.
13. A major hospital which considers its financial condition so weakened that the quality of care provided by the hospital is seriously jeopardized by any provision of this act, or considers that its financial condition is adversely affected by any other governmental action, may request approval to increase the prices in its charge master by submitting a written request for the increase and supporting documentation to the director. The director shall consider the potential impact on the quality of care provided by the hospital and the probability that failure to grant relief would cause financial instability. The director may approve the request, or revise and approve the request, if he determines that such approval is necessary to ensure the ability of the hospital to provide adequate care to its patients.
14. A hospital that submits its charge master for approval pursuant to subsection 12 or requests an increase in its prices pursuant to subsection 13 shall pay the department a fee for its review of the charge master or the request. The director shall by regulation establish rates or fees for the department's review of the charge master or the request.
15. A hospital shall not:
(a) Raise a unit price in its charge master unless authorized pursuant to this section;
(b) Charge a patient a higher price for any item than the price stated in the charge master or otherwise authorized pursuant to this section; or
(c) Except as authorized pursuant to subsection 4, charge a patient for any item not included in its charge master without seeking the approval of the director as required by subsections 5 and 6.
16. The director may compare a major hospital's actual charges with the charges authorized pursuant to this section to determine whether the hospital's charges are in compliance with the provisions of this section. If the director determines that a hospital has engaged in a pattern of violations or committed an egregious violation of any provision of this section, he may impose an administrative penalty on the hospital of not more than:
(a) Two times the difference between the price charged in violation of this section and the allowable price, for each instance in which that item is billed; or
(b) One thousand dollars,
whichever is greater.
17. The director may adopt such regulations as he considers necessary to carry out the provisions of this section.
Sec. 2 This act becomes effective on July 1, 1997.