HOSPITAL TAX AND LIMITATIONS ON CHARGES OF CERTAIN HOSPITALS ACT

[Rev. 6/29/2024 7:33:38 PM--2023]

Chapter 706, Statutes of Nevada 1991

AN ACT relating to health care; limiting increases in charges for certain care; establishing and financing various programs to assist in containing the costs of health care; imposing a tax on hospitals at a rate determined by the Department of Human Resources; requiring the Department to propose a certain amendment to the State Plan for Medicaid; imposing a tax on other providers of medical care at a rate determined by the Department; requiring that the office of Chair of the Legislative Committee on Health Care alternate biennially between the houses of the Legislature; making appropriations; authorizing expenditures; and providing other matters properly relating thereto.

[Approved: July 5, 1991]

(Leadlines for sections have been supplied by the Legislative Counsel of the State of Nevada)

The People of the State of Nevada, represented in Senate and Assembly, do enact as follows:

Sec. 21. Submission of information regarding charges of certain hospitals to Department of Human Resources; limitations on and approval of charges; regulations; fees; administrative penalties; implementation of provisions.

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.

(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, 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

Ê 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, the Director shall disapprove the proposed charge and notify the hospital of the charge he or she 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, 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 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 the Director 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, the Director 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,

Ê whichever is greater.

17. The Director may adopt such regulations as he or she considers necessary to carry out the provisions of this section.

(Ch. 706, Stats. 1991 p. 2338; A—Ch. 583, Stats. 1993 p. 2427; Ch. 540, Stats. 1995 p. 1856; Ch. 550, Stats. 1997 p. 2633)

Sec. 22. Annual assessment of certain hospitals to pay costs of monitoring compliance with limitations on charges: Imposition; notification; payment; amount; combination with other assessments.

1. The costs of monitoring compliance with the provisions of section 21 of this act must be met by an annual assessment of the hospitals with 200 or more licensed or approved beds that are not operated by a local government.

2. On or before July 15 of each year, the Director of the Department of Human Resources shall notify each hospital of its assessment for the fiscal year. Payment of the assessment is due on or before September 15. Late payments bear interest at the rate of 1 percent per month or fraction thereof.

3. The Director shall estimate the total cost to the Department of Human Resources, within the limits of legislative authorization, for carrying out the provisions of section 21 of this act in the current fiscal year. The total cost must be divided by the total number of patient days of care provided in the previous calendar year by the hospitals subject to the assessment. For each hospital, the assessment must be the result of this calculation multiplied by its number of patient days of care for the preceding calendar year.

4. The assessment made pursuant to this section may be combined with the assessments made pursuant to sections 20, 23 and 24 of this act.

(Ch. 706, Stats. 1991 p. 2341; A—Ch. 550, Stats. 1997 p. 2637)

Sec. 23. Establishment of foundation for hospital nursing practice; imposition of annual assessment for support of foundation; notification, payment and amount of assessment.

1. The Director of the Department of Human Resources shall establish a foundation for hospital nursing practice pursuant to NRS 439B.270 if a foundation is not formed in accordance with subsections 1 and 2 of that section on or before October 31, 1991.

2. The Director of the Department of Human Resources shall impose upon each hospital subject to the provisions of NRS 439B.270 an annual assessment for the support of the foundation in the Fiscal Years 1991-92 and 1992-93. On or before July 15, 1991, and July 15, 1992, the Director of the Department of Human Resources shall notify each hospital of its assessment for the fiscal year. Payment of the assessment is due on or before September 15. Late payments bear interest at the rate of 1 percent per month or fraction thereof.

3. The amount of $250,000 must be divided by the total number of patient days of care provided in the previous calendar year by the hospitals subject to the assessment. For each hospital, the assessment must be the result of this calculation multiplied by its number of patient days of care for the preceding calendar year.

4. The assessment must be made regardless of whether the foundation is formed by the hospitals or the Director. If the foundation is formed by the hospitals, the Director shall pay the proceeds of the assessment to the foundation.

(Ch. 706, Stats. 1991 p. 2341)

Sec. 24. Annual assessment of certain hospitals to pay cost of educational program to promote wellness, physical fitness and prevention of disease: Imposition; notification; payment; amount; credit against assessment.

1. The cost of the educational program to promote wellness, physical fitness and the prevention of disease established pursuant to NRS 439B.280 must be met by an annual assessment of the hospitals with 200 or more licensed or approved beds that are not operated by a local government.

2. Each hospital which is subject to the provisions of this section shall pay an annual assessment for the support of the program in the Fiscal Years 1991-92 and 1992-93. On or before July 15, 1991, and July 15, 1992, the Director of the Department of Human Resources shall notify each hospital of its assessment for the fiscal year. Payment of the assessment is due on or before September 15. Late payments bear interest at the rate of 1 percent per month or fraction thereof.

3. The amount of $100,000 must be divided by the total number of patient days of care provided in the previous calendar year by the hospitals subject to the assessment. Except as otherwise provided in subsection 4, for each hospital, the assessment must be the result of this calculation multiplied by its number of patient days of care for the preceding calendar year.

4. The Director may grant a credit against the assessment made pursuant to subsection 3 for a hospital that establishes its own program to promote wellness, physical fitness and the prevention of disease and accidents, if the program:

(a) Has received the prior approval of the Director; and

(b) Meets the criteria set forth in NRS 439B.280 and any regulations adopted to carry out that section.

(Ch. 706, Stats. 1991 p. 2342)

Sec. 25. Amendment of state plan for Medicaid; retroactive application of certain provisions; repayments by certain hospitals; appropriation; authorization of expenditure; request for additional funding.

1. The Department of Human Resources, through the Welfare Division, shall develop and propose an amendment to the State Plan for Medicaid in accordance with section 12 of this act and submit the proposed amendment to the Health Care Financing Administration on or before September 30, 1991. The amendment must propose to:

(a) Establish a methodology allowing for maximum compensation or for an increased rate of payment to a hospital for treating a disproportionate share of Medicaid patients, indigent patients and other low-income patients;

(b) Increase the rate of reimbursement to hospitals for treating Medicaid patients; or

Ê The Department of Human Resources shall implement the proposed amendment on September 30, 1991.

2. The provisions of section 13 of this act and NRS 422.385 and 422.387 must be applied retroactively to July 1, 1991, except that:

(a) The tax authorized pursuant to section 13 of this act must be collected over the first 3 months that the tax is in effect. The tax for the month of July must be collected with the tax for the month of October. The tax for the month of August must be collected with the tax for the month of November. The tax for the month of September must be collected with the tax for the month of December.

(b) The payments made pursuant to NRS 422.387 with respect to the collection of the retroactively imposed tax must be correspondingly allocated over the first 3 months that the tax is in effect.

3. Except as otherwise provided in subsections 4 and 5, if the proposed amendment is not approved, the hospitals to which payments are made pursuant to NRS 422.387 shall repay to the Department:

(a) The amount paid to the hospital pursuant to the change in the State Plan proposed pursuant to subsection 1 for treating a disproportionate share of Medicaid patients, indigent patients and other low-income patients;

(b) The amount paid to the hospital as a result of the increased rate of reimbursement paid to hospitals pursuant to the change in the State Plan proposed pursuant to subsection 1 for treating Medicaid patients; and

(c) The amount by which the amount guaranteed to be paid to the hospital pursuant to [former] subsection 2 of NRS 422.387 exceeds the amount of tax paid by the hospital,

Ê between September 30, 1991, and the date that the proposed amendment is rejected. Payment is due within 30 calendar days after notice of the amount of the required repayment is received by the hospital. Delinquent payments must be accompanied by a penalty of 10 percent of the amount of the payment and interest at the rate of 1.5 percent per month, or fraction thereof, from the date the payment is due until the date the payment is made.

4. The repayment, if any, required pursuant to subsection 3 does not include:

(a) The amount expended by the Department for administrative costs.

(b) Any reimbursement paid to hospitals for treating inpatients pursuant to the State Plan for Medicaid in effect on June 30, 1991, including increases after that date that would have been made pursuant to the plan in effect on that date.

(c) Any payment for treating a disproportionate share of Medicaid patients, indigent patients and other low-income patients pursuant to the State Plan for Medicaid in effect on June 30, 1991.

5. If a portion of the proposed amendment is approved and a portion is not approved, the repayment required by subsection 3 is limited to the amount paid to the hospital pursuant to the portion of the proposal that was disapproved.

6. There is hereby appropriated from the State General Fund to the Department of Human Resources the sum of $150,000 for the administrative costs of proposing the amendment to the State Plan for Medicaid pursuant to subsection 1 and carrying out the amendment in the Fiscal Year 1991-92. The Department is authorized to expend in the Fiscal Year 1991-92 not more than $150,000 contributed by the Federal Government to match the amount of the appropriation made by this subsection. If the proposed amendment to the State Plan is disapproved, the balance of the appropriation made by this subsection must not be committed for expenditure and reverts to the State General Fund as soon as all payments of money committed have been made. The amount appropriated pursuant to this subsection must be repaid to the State General Fund from the hospital tax account in the manner provided in subsection 1 of NRS 422.387.

7. Notwithstanding any other provision of law to the contrary, the Department of Human Resources may request additional funding from the Legislature to replace money included in the budget approved by the Legislature in reliance upon the revenue to be generated pursuant to this act that is lost as a result of any change in federal law, regulation or policy that affects the amount of money generated for the State pursuant to the provisions of this act, including the loss of any money included in the budget that was intended to be contributed by the Federal Government to match that amount.

(Ch. 706, Stats. 1991 p. 2342)