Senate Bill No. 235–Committee on Human
Resources and Facilities

 

(On Behalf of the Legislative Committee on
Health Care (NRS 439B.200))

 

March 4, 2003

____________

 

Referred to Committee on Human Resources and Facilities

 

SUMMARY—Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38‑746)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

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:

 

1-1  Section 1. NRS 422.380 is hereby amended to read as follows:

1-2  422.380  As used in NRS 422.380 to 422.390, inclusive, unless

1-3  the context otherwise requires:

1-4  1.  “Disproportionate share payment” means a payment made

1-5  pursuant to 42 U.S.C. § 1396r-4.

1-6  2.  “Hospital” has the meaning ascribed to it in NRS 439B.110

1-7  and includes public and private hospitals.

1-8  [2.] 3.  “Public hospital” means:

1-9  (a) A hospital owned by a state or local government, including,

1-10  without limitation, a hospital district; or

2-1  (b) A hospital that is supported in whole or in part by tax

2-2  revenue, other than tax revenue received for medical care which is

2-3  provided to Medicaid patients, indigent patients or other low-income

2-4  patients.

2-5  Sec. 2.  NRS 422.382 is hereby amended to read as follows:

2-6  422.382  1.  In a county whose population is 100,000 or more

2-7  within which:

2-8  (a) A public hospital is located, the state or local government or

2-9  other entity responsible for the public hospital shall transfer an

2-10  amount equal to [75] :

2-11          (1) Seventy percent of the total amount of disproportionate

2-12  share payments distributed to [that hospital] all hospitals pursuant

2-13  to NRS 422.387 for a fiscal year, less [$75,000,] $1,050,000; or

2-14          (2) The total amount of disproportionate share payments

2-15  distributed to all hospitals pursuant to NRS 422.387 for a fiscal

2-16  year, less $24,000,000,

2-17  whichever is less, to the Division of Health Care Financing and

2-18  Policy.

2-19      (b) A private hospital which receives a disproportionate share

2-20  payment pursuant to[:

2-21          (1) Paragraph] paragraph (b) of subsection 2 of NRS

2-22  422.387 is located, the county shall transfer[:

2-23             (I) Except as otherwise provided in sub-subparagraph (II),

2-24  an amount equal to 75 percent of the total amount distributed to that

2-25  hospital pursuant to paragraph (b) of subsection 2 of NRS 422.387

2-26  for a fiscal year; or

2-27             (II) An amount established by the Legislature for a fiscal

2-28  year,] $1,500,000 to the Division of Health Care Financing and

2-29  Policy.

2-30          [(2) Paragraph (c) of subsection 2 of NRS 422.387 is located,

2-31  the county shall transfer:

2-32             (I) An amount equal to 75 percent of the total amount

2-33  distributed to that hospital pursuant to that paragraph for a fiscal

2-34  year, less $75,000; or

2-35             (II) Any maximum amount established by the Legislature

2-36  for a fiscal year,

2-37  whichever is less, to the Division of Health Care Financing and

2-38  Policy.]

2-39      2.  A county that transfers the amount required pursuant to

2-40  [subparagraph (1) of] paragraph (b) of subsection 1 to the Division

2-41  of Health Care Financing and Policy is discharged of the duty and is

2-42  released from liability for providing medical treatment for indigent

2-43  inpatients who are treated in the hospital in the county that

2-44  receives a payment pursuant to paragraph (b) of subsection 2 of

2-45  NRS 422.387.

3-1  3.  The money transferred to the Division of Health Care

3-2  Financing and Policy pursuant to subsection 1 must not come from

3-3  any source of funding that could result in any reduction in revenue

3-4  to the State pursuant to 42 U.S.C. § 1396b(w).

3-5  4.  Any money collected pursuant to subsection 1, including

3-6  any interest or penalties imposed for a delinquent payment, must be

3-7  deposited in the State Treasury for credit to the Intergovernmental

3-8  Transfer Account in the State General Fund to be administered by

3-9  the Division of Health Care Financing and Policy.

3-10      5.  The interest and income earned on money in the

3-11  Intergovernmental Transfer Account, after deducting any applicable

3-12  charges, must be credited to the Account.

3-13      Sec. 3.  NRS 422.385 is hereby amended to read as follows:

3-14      422.385  1.  The allocations and payments required pursuant

3-15  to subsections 1 [and 2] to 4, inclusive, of NRS 422.387 must be

3-16  made, to the extent allowed by the State Plan for Medicaid, from the

3-17  Medicaid Budget Account.

3-18      2.  Except as otherwise provided in subsection 3 and subsection

3-19  [3] 5 of NRS 422.387, the money in the Intergovernmental Transfer

3-20  Account must be transferred from that Account to the Medicaid

3-21  Budget Account to the extent that money is available from the

3-22  Federal Government for proposed expenditures, including

3-23  expenditures for administrative costs. If the amount in the Account

3-24  exceeds the amount authorized for expenditure by the Division of

3-25  Health Care Financing and Policy for the purposes specified in NRS

3-26  422.387, the Division of Health Care Financing and Policy is

3-27  authorized to expend the additional revenue in accordance with the

3-28  provisions of the State Plan for Medicaid.

3-29      3.  If enough money is available to support Medicaid and to

3-30  make the payments required by subsection [3] 5 of NRS 422.387,

3-31  money in the Intergovernmental Transfer Account may be

3-32  transferred:

3-33      (a) To an account established for the provision of health care

3-34  services to uninsured children pursuant to a federal program in

3-35  which at least 50 percent of the cost of such services is paid for by

3-36  the Federal Government, including, without limitation, the

3-37  Children’s Health Insurance Program; or

3-38      (b) To carry out the provisions of NRS 439B.350 and 439B.360.

3-39      Sec. 4.  NRS 422.387 is hereby amended to read as follows:

3-40      422.387  1.  Before making the payments required or

3-41  authorized by this section, the Division of Health Care Financing

3-42  and Policy shall allocate money for the administrative costs

3-43  necessary to carry out the provisions of NRS 422.380 to 422.390,

3-44  inclusive. The amount allocated for administrative costs must not

3-45  exceed the amount authorized for expenditure by the Legislature for

4-1  this purpose in a fiscal year. The Interim Finance Committee may

4-2  adjust the amount allowed for administrative costs.

4-3  2.  The State Plan for Medicaid must provide[:

4-4  (a) For] for the payment of the maximum amount of

4-5  disproportionate share payments allowable under federal law and

4-6  regulations . [after making any payments pursuant to paragraphs (b)

4-7  and (c), to public hospitals for treating a disproportionate share of

4-8  Medicaid patients, indigent patients or other low-income patients,

4-9  unless such payments are subsequently limited by federal law or

4-10  regulation.

4-11      (b) For a payment in an amount approved by the Legislature to

4-12  the private hospital that provides the largest volume of medical care

4-13  to Medicaid patients, indigent patients or other low-income patients

4-14  in a county that does not have a public hospital.

4-15      (c) For a payment to each private hospital whose Medicaid

4-16  utilization percentage is greater than the average for all the hospitals

4-17  in this state and which is located in a county that has a public

4-18  hospital, in an amount equal to:

4-19          (1) If the Medicaid utilization percentage of the hospital is

4-20  greater than 20 percent, $200 for each uncompensated day incurred

4-21  by the hospital; and

4-22          (2) If the Medicaid utilization percentage of the hospital is 20

4-23  percent or less, $100 for each uncompensated day incurred by the

4-24  hospital.] The State Plan for Medicaid must provide that for:

4-25      (a) All public hospitals in counties whose population is

4-26  400,000 or more, the total annual disproportionate share payments

4-27  are $66,650,000 plus 90 percent of the total amount of

4-28  disproportionate share payments distributed by the State in that

4-29  fiscal year that exceeds $76,000,000;

4-30      (b) All private hospitals in counties whose population is

4-31  400,000 or more, the total annual disproportionate share payments

4-32  are $1,200,000 plus 2.5 percent of the total amount of

4-33  disproportionate share payments distributed by the State in that

4-34  fiscal year that exceeds $76,000,000;

4-35      (c) All private hospitals in counties whose population is

4-36  100,000 or more but less than 400,000, the total annual

4-37  disproportionate share payments are $4,800,000 plus 2.5 percent

4-38  of the total amount of disproportionate share payments distributed

4-39  by the State in that fiscal year that exceeds $76,000,000;

4-40      (d) All public hospitals in counties whose population is less

4-41  than 100,000, the total annual disproportionate share payments

4-42  are $900,000 plus 2.5 percent of the total amount of

4-43  disproportionate share payments distributed by the State in that

4-44  fiscal year that exceeds $76,000,000; and

5-1  (e) All private hospitals in counties whose population is less

5-2  than 100,000, the total annual disproportionate share payments

5-3  are $2,450,000 plus 2.5 percent of the total amount of

5-4  disproportionate share payments distributed by the State in that

5-5  fiscal year that exceeds $76,000,000.

5-6  3.  The State Plan for Medicaid must provide for a base

5-7  payment in an amount approved by the Legislature for each

5-8  hospital described in subsection 2. Any amount set forth in each

5-9  paragraph of subsection 2 that remains after all base payments

5-10  have been distributed must be distributed to the hospital within

5-11  that paragraph with the highest uncompensated care percentage

5-12  in an amount equal to either the amount remaining after all base

5-13  payments have been distributed or the amount necessary to reduce

5-14  the uncompensated care percentage of that hospital to the

5-15  uncompensated care percentage of the hospital in that paragraph

5-16  with the second highest uncompensated care percentage,

5-17  whichever is less. Any amount set forth in subsection 2 that

5-18  remains after the uncompensated care percentage of the hospital

5-19  with the highest uncompensated care percentage in a paragraph

5-20  has been reduced to equal the uncompensated care percentage of

5-21  the hospital in that paragraph with the second highest

5-22  uncompensated care percentage must be distributed equally to the

5-23  two hospitals with the highest uncompensated care percentage in

5-24  that paragraph until their uncompensated care percentages are

5-25  equal to the uncompensated care percentage of the hospital with

5-26  the third highest uncompensated care percentage in that

5-27  paragraph. This process must be repeated until all available funds

5-28  set forth in a paragraph of subsection 2 have been distributed.

5-29      4.  The Plan must be consistent with the provisions of NRS

5-30  422.380 to 422.390, inclusive, and Title XIX of the Social Security

5-31  Act, 42 U.S.C. §§ 1396 et seq., and the regulations adopted pursuant

5-32  to those provisions. If the total amount available to the State for

5-33  making disproportionate share payments is less than $76,000,000,

5-34  the Administrator:

5-35      (a) May adjust the amounts set forth in subsection 2

5-36  proportionally in accordance with the limits of federal law; and

5-37      (b) Shall adopt a regulation specifying the amount of the

5-38  reductions required by paragraph (a).

5-39      [3.] 5.  To the extent that money is available in the

5-40  Intergovernmental Transfer Account, the Division of Health Care

5-41  Financing and Policy shall distribute $50,000 from that Account

5-42  each fiscal year to each public hospital which:

5-43      (a) Is located in a county that does not have any other hospitals;

5-44  and

5-45      (b) Is not eligible for a payment pursuant to [subsection 2.

6-1  4.] subsections 2 and 3.

6-2  6.  As used in this section:

6-3  (a) [“Medicaid utilization percentage” means the total number of

6-4  days of treatment of Medicaid patients, including patients who

6-5  receive their Medicaid benefits through a health maintenance

6-6  organization, divided by the total number of days of treatment of all

6-7  patients during a fiscal year.

6-8  (b) “Uncompensated day” means a day in which medical care is

6-9  provided to an inpatient for which a hospital receives:

6-10          (1) Not more than 25 percent of the cost of providing that

6-11  care from the patient; and

6-12          (2) No compensation for the cost of providing that care from

6-13  any other person or any governmental program.] “Total revenue” is

6-14  the amount of revenue a hospital receives for patient care and

6-15  other services, net of any contractual allowances or bad debts.

6-16      (b) “Uncompensated care costs” means the total costs of a

6-17  hospital incurred in providing care to uninsured patients,

6-18  including, without limitation, patients covered by Medicaid or

6-19  another governmental program for indigent patients, less any

6-20  payments received by the hospital for that care.

6-21      (c) “Uncompensated care percentage” means the

6-22  uncompensated care costs of a hospital divided by the total

6-23  revenue for the hospital.

6-24      Sec. 5.  NRS 422.390 is hereby amended to read as follows:

6-25      422.390  1.  The Division of Health Care Financing and Policy

6-26  shall adopt regulations concerning:

6-27      (a) Procedures for the transfer to the Division of Health Care

6-28  Financing and Policy of the amount required pursuant to

6-29  NRS 422.382.

6-30      (b) Provisions for the payment of a penalty and interest for a

6-31  delinquent transfer.

6-32      (c) Provisions for the payment of interest by the Division of

6-33  Health Care Financing and Policy for late reimbursements to

6-34  hospitals or other providers of medical care.

6-35      (d) Provisions for the calculation of the uncompensated care

6-36  percentage for hospitals, including, without limitation, the

6-37  procedures and methodology required to be used in calculating the

6-38  percentage, and any required documentation of and reporting by a

6-39  hospital relating to the calculation.

6-40      2.  The Division of Health Care Financing and Policy shall

6-41  report to the Interim Finance Committee quarterly concerning the

6-42  provisions of NRS 422.380 to 422.390, inclusive.

6-43      Sec. 6.  1.  Except as otherwise provided in subsection 2, for

6-44  the fiscal year 2003-2004 and the fiscal year 2004-2005, the base

6-45  payments for the purposes of subsection 3 of NRS 422.387 are:

7-1  (a) For the University Medical Center of Southern Nevada,

7-2  $66,531,729;

7-3  (b) For Washoe Medical Center, $4,800,000;

7-4  (c) For Carson-Tahoe Hospital, $1,000,000;

7-5  (d) For Northeastern Nevada Regional Hospital, $500,000;

7-6  (e) For Churchill Community Hospital, $500,000;

7-7  (f) For Humboldt General Hospital, $215,109;

7-8  (g) For William Bee Ririe Hospital, $204,001;

7-9  (h) For Mt. Grant General Hospital, $195,838;

7-10      (i) For South Lyon Medical Center, $174,417; and

7-11      (j) For Nye Regional Medical Center, $115,000.

7-12      2.  If federal law changes the amounts payable pursuant to

7-13  subsection 2 of NRS 422.387:

7-14      (a) The respective amounts required to be allocated and

7-15  transferred pursuant to subsection 1 must be reduced proportionally

7-16  in accordance with the limits of federal law.

7-17      (b) The Administrator of the Division of Health Care Financing

7-18  and Policy of the Department of Human Resources shall adopt a

7-19  regulation specifying the amount of the reductions required by

7-20  paragraph (a).

7-21      Sec. 7.  This act becomes effective upon passage and approval

7-22  for the purpose of adopting any regulations necessary to carry out

7-23  the provisions of this act and on July 1, 2003, for all other purposes.

 

7-24  H