Assembly Bill No. 482–Committee on Ways and Means

 

CHAPTER..........

 

AN ACT relating to welfare; revising the provisions governing the payment of hospitals for treating a disproportionate share of Medicaid patients, indigent patients or other low-income patients; providing for the allocation and transfer of certain funding for the treatment of those patients; 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.  The Legislature hereby finds and declares that:

    1.  Federal law concerning payments made pursuant to 42

U.S.C. § 1396r-4, otherwise known as “disproportionate share

payments,” are a critical source of income for hospitals, particularly

public hospitals.

    2.  To ensure that certain hospitals can depend upon the revenue

from this source, the Legislature has periodically established base

payments to the hospitals in a fiscal year.

    3.  Because of the unique geographic, financial and

organizational characteristics of these hospitals, a general law

establishing base disproportionate share payments cannot be made

applicable.

    Sec. 2. NRS 422.380 is hereby amended to read as follows:

    422.380  As used in NRS 422.380 to 422.390, inclusive, unless

the context otherwise requires:

    1.  “Disproportionate share payment” means a payment made

pursuant to 42 U.S.C. § 1396r-4.

    2.  “Hospital” has the meaning ascribed to it in NRS 439B.110

and includes public and private hospitals.

    [2.] 3.  “Public hospital” means:

    (a) A hospital owned by a state or local government, including,

without limitation, a hospital district; or

    (b) A hospital that is supported in whole or in part by tax

revenue, other than tax revenue received for medical care which is

provided to Medicaid patients, indigent patients or other low-income

patients.

    Sec. 3. NRS 422.382 is hereby amended to read as follows:

    422.382  1.  In a county whose population is 100,000 or more

within which:

    (a) A public hospital is located, the state or local government or

other entity responsible for the public hospital shall transfer an

amount equal to [75] :

        (1) Seventy percent of the total amount of disproportionate

share payments distributed to [that hospital] all hospitals pursuant

to NRS 422.387 for a fiscal year, less [$75,000,] $1,050,000; or

        (2) Sixty-eight and fifty-four one hundredths percent of the

total amount of disproportionate share payments distributed to all

hospitals pursuant to NRS 422.387 for a fiscal year,

whichever is less, to the Division of Health Care Financing and

Policy.

    (b) A private hospital which receives a disproportionate share

payment pursuant to[:

        (1) Paragraph (b)] paragraph (c) of subsection 2 of NRS

422.387 is located, the county shall transfer[:

            (I) Except as otherwise provided in sub-subparagraph (II),

an amount equal to 75 percent of the total amount distributed to that

hospital pursuant to paragraph (b) of subsection 2 of NRS 422.387

for a fiscal year; or

            (II) An amount established by the Legislature for a fiscal

year,] 1.95 percent of the total amount of disproportionate share

payments distributed to all hospitals pursuant to NRS 422.387 for

a fiscal year, but not more than $1,500,000, to the Division of

Health Care Financing and Policy.

        [(2) Paragraph (c) of subsection 2 of NRS 422.387 is located,

the county shall transfer:

            (I) An amount equal to 75 percent of the total amount

distributed to that hospital pursuant to that paragraph for a fiscal

year, less $75,000; or

            (II) Any maximum amount established by the Legislature

for a fiscal year,

whichever is less, to the Division of Health Care Financing and

Policy.]

    2.  A county that transfers the amount required pursuant to

[subparagraph (1) of] paragraph (b) of subsection 1 to the Division

of Health Care Financing and Policy is discharged of the duty and is

released from liability for providing medical treatment for indigent

inpatients who are treated in the hospital in the county that receives

a payment pursuant to paragraph [(b)] (c) of subsection 2 of

NRS 422.387.

    3.  The money transferred to the Division of Health Care

Financing and Policy pursuant to subsection 1 must not come from

any source of funding that could result in any reduction in revenue

to the State pursuant to 42 U.S.C. § 1396b(w).

    4.  Any money collected pursuant to subsection 1, including

any interest or penalties imposed for a delinquent payment, must be

deposited in the State Treasury for credit to the Intergovernmental

Transfer Account in the State General Fund to be administered by

the Division of Health Care Financing and Policy.

    5.  The interest and income earned on money in the

Intergovernmental Transfer Account, after deducting any applicable

charges, must be credited to the Account.

    Sec. 4.  NRS 422.385 is hereby amended to read as follows:

    422.385  1.  The allocations and payments required pursuant

to subsections 1 [and 2] to 5, inclusive, of NRS 422.387 must be

made, to the extent allowed by the State Plan for Medicaid, from the

Medicaid Budget Account.

    2.  Except as otherwise provided in subsection 3 and subsection

[3] 6 of NRS 422.387, the money in the Intergovernmental Transfer

Account must be transferred from that Account to the Medicaid

Budget Account to the extent that money is available from the

Federal Government for proposed expenditures, including

expenditures for administrative costs. If the amount in the Account

exceeds the amount authorized for expenditure by the Division of

Health Care Financing and Policy for the purposes specified in NRS

422.387, the Division of Health Care Financing and Policy is

authorized to expend the additional revenue in accordance with the

provisions of the State Plan for Medicaid.

    3.  If enough money is available to support Medicaid and to

make the payments required by subsection [3] 6 of NRS 422.387,

money in the Intergovernmental Transfer Account may be

transferred:

    (a) To an account established for the provision of health care

services to uninsured children pursuant to a federal program in

which at least 50 percent of the cost of such services is paid for by

the Federal Government, including, without limitation, the

Children’s Health Insurance Program; or

    (b) To carry out the provisions of NRS 439B.350 and 439B.360.

    Sec. 5.  NRS 422.387 is hereby amended to read as follows:

    422.387  1.  Before making the payments required or

authorized by this section, the Division of Health Care Financing

and Policy shall allocate money for the administrative costs

necessary to carry out the provisions of NRS 422.380 to 422.390,

inclusive. The amount allocated for administrative costs must not

exceed the amount authorized for expenditure by the Legislature for

this purpose in a fiscal year. The Interim Finance Committee may

adjust the amount allowed for administrative costs.

    2.  The State Plan for Medicaid must provide[:

    (a) For] for the payment of the maximum amount of

disproportionate share payments allowable under federal law and

regulations . [after making any payments pursuant to paragraphs (b)

and (c), to public hospitals for treating a disproportionate share of

Medicaid patients, indigent patients or other low-income patients,

unless such payments are subsequently limited by federal law or

regulation.

    (b) For a payment in an amount approved by the Legislature to

the private hospital that provides the largest volume of medical care

to Medicaid patients, indigent patients or other low-income patients

in a county that does not have a public hospital.

    (c) For a payment to each private hospital whose Medicaid

utilization percentage is greater than the average for all the hospitals

in this state and which is located in a county that has a public

hospital, in an amount equal to:

        (1) If the Medicaid utilization percentage of the hospital is

greater than 20 percent, $200 for each uncompensated day incurred

by the hospital; and

        (2) If the Medicaid utilization percentage of the hospital is 20

percent or less, $100 for each uncompensated day incurred by the

hospital.] The State Plan for Medicaid must provide that for:

    (a) All public hospitals in counties whose population is

400,000 or more, the total annual disproportionate share payments

are $66,650,000 plus 90 percent of the total amount of

disproportionate share payments distributed by the State in that

fiscal year that exceeds $76,000,000;

    (b) All private hospitals in counties whose population is

400,000 or more, the total annual disproportionate share payments

are $1,200,000 plus 2.5 percent of the total amount of

disproportionate share payments distributed by the State in that

fiscal year that exceeds $76,000,000;

    (c) All private hospitals in counties whose population is

100,000 or more but less than 400,000, the total annual

disproportionate share payments are $4,800,000 plus 2.5 percent

of the total amount of disproportionate share payments distributed

by the State in that fiscal year that exceeds $76,000,000;

    (d) All public hospitals in counties whose population is less

than 100,000, the total annual disproportionate share payments

are $900,000 plus 2.5 percent of the total amount of

disproportionate share payments distributed by the State in that

fiscal year that exceeds $76,000,000; and

    (e) All private hospitals in counties whose population is less

than 100,000, the total annual disproportionate share payments

are $2,450,000 plus 2.5 percent of the total amount of

disproportionate share payments distributed by the State in that

fiscal year that exceeds $76,000,000.

    3.  The State Plan for Medicaid must provide for a base

payment in an amount determined pursuant to subsections 4 and

5. Any amount set forth in each paragraph of subsection 2 that

remains after all base payments have been distributed must be

distributed to the hospital within that paragraph with the highest

uncompensated care percentage in an amount equal to either the

amount remaining after all base payments have been distributed

or the amount necessary to reduce the uncompensated care

percentage of that hospital to the uncompensated care percentage

of the hospital in that paragraph with the second highest

uncompensated care percentage, whichever is less. Any amount

set forth in subsection 2 that remains after the uncompensated

care percentage of the hospital with the highest uncompensated

care percentage in a paragraph has been reduced to equal the

uncompensated care percentage of the hospital in that paragraph

with the second highest uncompensated care percentage must be

distributed equally to the two hospitals with the highest

uncompensated care percentage in that paragraph until their

uncompensated care percentages are equal to the uncompensated

care percentage of the hospital with the third highest

uncompensated care percentage in that paragraph. This process

must be repeated until all available funds set forth in a paragraph

of subsection 2 have been distributed.

    4.  Except as otherwise provided in subsection 5, the base

payments for the purposes of subsection 3 are:

    (a) For the University Medical Center of Southern Nevada,

$66,531,729;

    (b) For Washoe Medical Center, $4,800,000;

    (c) For Carson-Tahoe Hospital, $1,000,000;

    (d) For Northeastern Nevada Regional Hospital, $500,000;

    (e) For Churchill Community Hospital, $500,000;

    (f) For Humboldt General Hospital, $215,109;

    (g) For William Bee Ririe Hospital, $204,001;

    (h) For Mt. Grant General Hospital, $195,838;

    (i) For South Lyon Medical Center, $174,417; and

    (j) For Nye Regional Medical Center, $115,000,

or the successors in interest to such hospitals.

    5.  The Plan must be consistent with the provisions of NRS

422.380 to 422.390, inclusive, and Title XIX of the Social Security

Act, 42 U.S.C. §§ 1396 et seq., and the regulations adopted pursuant

to those provisions.

    [3.] If the total amount available to the State for making

disproportionate share payments is less than $76,000,000, the

Administrator:

    (a) Shall adjust the amounts for each group of hospitals

described in a paragraph of subsection 2 proportionally in

accordance with the limits of federal law. If the amount available

to hospitals in a group described in a paragraph of subsection 2 is

less than the total amount of base payments specified in subsection

4, the Administrator shall reduce the base payments proportionally

in accordance with the limits of federal law.

    (b) Shall adopt a regulation specifying the amount of the

reductions required by paragraph (a).

    6.  To the extent that money is available in the

Intergovernmental Transfer Account, the Division of Health Care

Financing and Policy shall distribute $50,000 from that Account

each fiscal year to each public hospital which:

    (a) Is located in a county that does not have any other hospitals;

and

    (b) Is not eligible for a payment pursuant to [subsection 2.

    4.] subsections 2, 3 and 4.

    7.  As used in this section:

    (a) [“Medicaid utilization percentage” means the total number of

days of treatment of Medicaid patients, including patients who

receive their Medicaid benefits through a health maintenance

organization, divided by the total number of days of treatment of all

patients during a fiscal year.

    (b) “Uncompensated day” means a day in which medical care is

provided to an inpatient for which a hospital receives:

        (1) Not more than 25 percent of the cost of providing that

care from the patient; and

        (2) No compensation for the cost of providing that care from

any other person or any governmental program.] “Total revenue” is

the amount of revenue a hospital receives for patient care and

other services, net of any contractual allowances or bad debts.

    (b) “Uncompensated care costs” means the total costs of a

hospital incurred in providing care to uninsured patients,

including, without limitation, patients covered by Medicaid or

another governmental program for indigent patients, less any

payments received by the hospital for that care.

    (c) “Uncompensated care percentage” means the

uncompensated care costs of a hospital divided by the total

revenue for the hospital.

    Sec. 6.  NRS 422.390 is hereby amended to read as follows:

    422.390  1.  The Division of Health Care Financing and Policy

shall adopt regulations concerning:

    (a) Procedures for the transfer to the Division of Health Care

Financing and Policy of the amount required pursuant to

NRS 422.382.

    (b) Provisions for the payment of a penalty and interest for a

delinquent transfer.

    (c) Provisions for the payment of interest by the Division of

Health Care Financing and Policy for late reimbursements to

hospitals or other providers of medical care.

    (d) Provisions for the calculation of the uncompensated care

percentage for hospitals, including, without limitation, the

procedures and methodology required to be used in calculating the

percentage, and any required documentation of and reporting by a

hospital relating to the calculation.

    2.  The Division of Health Care Financing and Policy shall

report to the Interim Finance Committee quarterly concerning the

provisions of NRS 422.380 to 422.390, inclusive.

    Sec. 7.  This act becomes effective upon passage and approval

for the purpose of adopting any regulations necessary to carry out

the provisions of this act and on July 1, 2003, for all other purposes.

 

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