Bill Text: HI HB1062 | 2024 | Regular Session | Introduced
Bill Title: Relating To The Hospital Sustainability Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2023-12-11 - Carried over to 2024 Regular Session. [HB1062 Detail]
Download: Hawaii-2024-HB1062-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1062 |
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THIRTY-SECOND LEGISLATURE, 2023 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE HOSPITAL SUSTAINABILITY PROGRAM.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the hospital sustainability program was established in 2012 and has served a critical role in strengthening the health care system in Hawaii. In the eleven years since its inception, the hospital sustainability program has helped acute care facilities treat the most vulnerable patients in the State, especially low-income individuals who require hospital services. The program has been carried out in a public-private partnership to ensure that patients in Hawaii can access quality, affordable care.
The legislature further finds that, even with this program, hospitals in the State face major financial challenges. These challenges are due in part to the continuing health and financial pressures related to the COVID-19 pandemic and the healthcare workforce shortage. The federal and state governments jointly finance Medicaid by statutory formula; the federal government pays between fifty per cent and seventy-four per cent, with assistance levels determined by each state's per capita income. States with the lowest per capita income receive higher federal matching rates. Under federal rules, the state share must be paid from public funds that are not federal funds. The legislature finds that public funding to help financially sustain Hawaii's hospitals may be accessed through a provider fee.
The legislature further finds that provider fees exist in forty-nine states and the District of Columbia as a means of drawing down federal funds to sustain medicaid programs due to rising state budget deficits, increasing health care costs, and expanding medicaid enrollment. Provider fees, collected from specific categories of health care providers that agree to the fee, may be imposed on nineteen different classes of health care services, including inpatient and outpatient hospital and nursing facility services.
The legislature, therefore, finds that, in Hawaii, a provider fee on hospitals can result in substantial increases in medicaid payments without putting additional constraints on the State's budget. The additional federal funds obtained via the fee program authorized by the hospital sustainability program can maintain access to care for medicaid recipients. The hospital sustainability program will allow hospitals in the State to continue to serve uninsured or underinsured patients in a timely, effective manner. This helps to ensure the overall sustainability of the health care system in Hawaii.
The purpose of this Act is to continue to preserve access to health care for medicaid recipients by continuing indefinitely and strengthening the hospital sustainability program, and making other nonsubstantive changes for consistency and clarity, and to maximize the use of the hospital sustainability program special fund by continuing the exemptions from the central services expenses assessment and the administrative expenses assessment under sections 36-27(a) and 36-30(a), Hawaii Revised Statutes, respectively, and to appropriate $100,000,000 from the hospital sustainability program special fund.
SECTION 2. Section 346G-2, Hawaii Revised Statutes, is amended to read as follows:
"§346G-2 Findings and declaration of necessity. It is the intent of the legislature to
establish a special fund within the state treasury to receive revenue from the
imposition of a hospital sustainability fee to be administered by the
department of human services, which shall use the revenue from the fee and
associated federal medicaid matching funds exclusively to make [direct]
payments to hospitals and for other purposes as set forth in this chapter."
SECTION 3.
Section 346G-3, Hawaii Revised Statutes, is amended by amending the
definition of "private hospital" to read as follows:
""Private hospital" means
all currently operating hospitals, except for hospitals that are:
(1) Operated by or affiliated with the Hawaii health systems corporation; or
(2) Charitable hospitals funded primarily
through donations or other non-insurance sources of funding, and whose net
patient revenue is less than [forty] fifty per cent of operating
expenses, per the medicaid cost report."
SECTION 4.
Section 346G-4, Hawaii Revised Statutes, is amended to read as follows:
"§346G-4 Hospital sustainability program special
fund. (a) There is created in the state treasury the
hospital sustainability program special fund to be administered by the
department into which shall be deposited all moneys collected under this chapter.
(b)
Moneys in the hospital sustainability program special fund shall consist
of:
(1) All [revenue] revenues
collected or received by the department from the hospital sustainability
fee[;] as required by this chapter;
[(2) All federal medicaid funds received by
the department as a result of matching expenditures made with the hospital
sustainability fee;
(3)] (2) Any interest or penalties levied in
conjunction with the administration of this chapter; and
[(4)] (3) Any designated appropriations, federal funds,
donations, gifts, or moneys from any other sources.
(c)
Moneys in the hospital sustainability program special fund shall be used
exclusively as follows:
(1) No less than ninety per cent of the [revenue]
moneys from the hospital sustainability fee shall be used for one or
more of the following purposes:
(A) To match federal medicaid funds, with
the combined total to be used to enhance [capitated rates] payments to medicaid managed care health plans
for the sole purpose of increasing medicaid payments to private hospitals;
(B) To match federal medicaid funds for Hawaii's medicaid disproportionate share hospital allotment, as authorized by current federal law for private hospitals;
(C) To match federal medicaid funds for a private hospital upper payment limit pool; or
(D) To match federal medicaid funds with
the combined total to be used to enhance [capitated rates] payments
to medicaid managed care health plans for the purpose of increasing medicaid
payments to private hospitals through quality or access incentive programs[.];
and
(2) Ten per cent or less of the
moneys in the hospital sustainability program special fund may be used by the
department for other departmental purposes[; and
(3) Any money remaining in the hospital
sustainability program special fund six months after the repeal of this
chapter, shall be distributed to hospitals within thirty days in the same
proportions as received from the hospitals].
(d)
The department shall use federal funds derived from state hospital
certified expenditures to make [supplemental] payments to state
hospitals and may receive intergovernmental transfers from the state hospitals
to support [direct supplemental] payments and increased capitation rates
to health plans for the benefit of the state hospitals. During any period in which the hospital
sustainability fee is in effect, certified expenditures of state hospitals
shall not be used to make or support [direct] payments to private
hospitals."
SECTION 5. Section 346G-5, Hawaii Revised Statutes, is
amended by amending subsections (c) and (d) to read as follows:
"(c)
The hospital sustainability fee for inpatient care services may differ
from the fee for outpatient care services but the fees charged to the hospital
shall not in the aggregate exceed [five and one-half] six per
cent of the hospital's net patient service revenue. The inpatient hospital sustainability fee
shall not exceed [five and one-half] six per cent of net
inpatient hospital service revenue. The
outpatient hospital sustainability fee shall not exceed [five and one-half]
six per cent of net outpatient hospital service revenue. Each fee shall be the same percentage for all
affected hospitals, subject to subsection (d).
(d)
The department shall exempt federal hospitals and public hospitals from
the hospital sustainability fees on inpatient services and outpatient care
services. Children's hospitals,
psychiatric hospitals, and rehabilitation hospitals may be assessed hospital
sustainability fees on inpatient and outpatient services at a different rate
than other private hospitals. The
department may [also exclude any facility from the hospital sustainability
fee if it is determined that its exclusion is required to meet federal standards
of approval.], upon good faith consultation and negotiations with the
hospital trade association located in Hawaii, modify, add to, or exclude facilities in the assessment if necessary to
obtain and maintain approval of the waiver by the Centers for Medicare and
Medicaid Services, if the modification, addition or exclusion is consistent
with the purposes of this chapter."
SECTION 6. Section 346G-6, Hawaii Revised Statutes, is
amended to read as follows:
"§346G-6 Hospital sustainability fee assessments. (a) Hospitals shall pay the hospital
sustainability fee to the department in accordance with this chapter. [The fee shall be divided and paid in
twelve equal installments on a monthly basis.]
(b)
The department shall determine, with good faith consultation with the
hospital trade association located in Hawaii, the fee rate prospectively for
the applicable fiscal year.
[(b)] (c) The department shall [collect,] impose
the hospital sustainability fee [and each hospital shall pay, if so
required,] on a monthly basis.
The hospital shall pay the hospital sustainability fee [no later
than the sixtieth day] within sixty calendar days after the end of [each]
the calendar month[;] that the department imposed the fee;
provided that, if required federal approvals have not been secured by
the end of a calendar month, the fees for that month shall be paid within ten
days after notification to the hospitals that the required approvals have been
received."
SECTION 7. Section 346G-7, Hawaii Revised Statutes, is
amended to read as follows:
"§346G-7 Federal approval. The department shall seek waivers and any
additional approvals from the Centers for Medicare and Medicaid Services that
may be necessary to implement the hospital sustainability program[.],
including approval of the contracts between the State and medicaid managed care
health plans."
SECTION 8. Section 346G-9, Hawaii Revised Statutes, is
amended by amending subsection (a) to read as follows:
"(a)
If a hospital fails to pay the full amount of any hospital
sustainability fee when due, there shall be added to the fee, unless waived by
the department for reasonable cause, a penalty equal to [prime plus] two
per cent of the fee that was not paid when due. Any subsequent payments shall be credited
first to unpaid fee amounts beginning with the most delinquent installment
rather than to penalty or interest amounts."
SECTION 9. Section 346G-10, Hawaii Revised Statutes, is
amended to read as follows:
"§346G-10 Private hospital payments through enhanced
[rates] payments to medicaid managed care health plans. (a) The
department shall use moneys [solely] from the hospital sustainability
program special fund solely to fulfill the requirements of section
346G-4(c).
(b) In accordance with 42 Code of Federal
Regulations part 438, the department shall use revenues from the hospital
sustainability fee and federal matching funds to enhance [the capitated
rates paid] payments to medicaid managed care health plans [for
the period of
July 1 through December 31, 2021, and calendar years 2022 and 2023,] consistent with the
following objectives:
(1) The [rate enhancement] enhanced
payments shall be used exclusively [for increasing] to increase
reimbursements to private hospitals, to support the availability of services
and to ensure access to care [to the] for medicaid managed care
health plan enrollees;
(2) The [rate enhancement] enhanced
payments shall be [made part of the monthly capitated rates] paid
by the department to medicaid managed care health plans, which shall provide
documentation to the department and the hospital trade association located in
Hawaii certifying that the revenues received under paragraph (1) are used in
accordance with this section;
(3) The [rate enhancement] enhanced
payment rates shall be actuarially sound and approved by the federal
government for federal fund participation;
(4) The rate enhancements shall be
retroactive to July 1, 2012, or the effective date approved by the federal
government, whichever is later. Retroactive rate enhancements shall be paid
within thirty days of notification by the Centers for Medicare and Medicaid
Services to the department of all necessary approvals; [and]
(5) Payments made by the medicaid managed
care health plans shall be made within thirty business days upon receipt of [monthly
capitation rates] payment from the department[.]; and
(6) Each medicaid managed health care plan
shall expend 100 per cent of any increased payments it receives under this
section to carry out the goals of this program.
(c) If federal approval pursuant to section
346G-7 is not received until after the end of any month for which the hospital
sustainability fee is applicable, the department shall make the initial monthly
payments within five days after receipt of the hospital
sustainability fee for the respective month.
(d) To the extent the hospital sustainability
program is not effective for the entire year, the
hospital sustainability fee, the state medicaid expenses and administrative
fee, and the corresponding payments to fulfill the requirements of section
346G-4(c) shall be based on the proportion of the fiscal year the program is in
effect."
SECTION 10. Section 346G-12, Hawaii Revised Statutes, is
amended by amending subsections (a) and (b) to read as follows:
"(a) Collection of the hospital sustainability fee
established by section 346G-5 shall be discontinued if:
(1) The required federal approvals specified in section 346G-7 are not granted or are revoked by the Centers for Medicare and Medicaid Services;
(2) The department reduces [funding for
hospital services below the state appropriation in effect as of July 1, 2021;]
reimbursement rates for private hospital services to medicaid patients with
the intention of using the sustainability funds to supplant the planned or
permanent reduction in reimbursement rates;
(3) The department or any other state agency uses the money in the hospital sustainability program special fund for any use other than the uses permitted by this chapter; or
(4) Federal financial participation to match the revenue from the hospital sustainability fee becomes unavailable under federal law; provided that the department shall terminate the imposition of the hospital sustainability fee beginning on the date the federal statutory, regulatory, or interpretive change takes effect.
(b) If
collection of the hospital sustainability fee is discontinued [as provided
in this section], any remaining moneys in the hospital sustainability
program special fund shall be distributed [pursuant to section 346G-4(c).]
to hospitals within six months of the date of discontinuation in the same
proportions as received from the hospitals."
SECTION 11.
Act 217, Session Laws of Hawaii 2012, as amended by section 2 of Act
141, Session Laws of Hawaii 2013, as amended by section 2 of Act 123, Session
Laws of Hawaii 2014, as amended by Section 2 of Act 70, Session Laws of Hawaii
2015, as amended by section 3 of Act 60, Session Laws of Hawaii 2016, as
amended by section 5 of Act 59, Session Laws of Hawaii 2017, as amended by
section 6 of Act 173, Session Laws of Hawaii 2019, as amended by section 7 of
Act 38, Session Laws of Hawaii 2021 is amended by amending section 5 to read as
follows:
"SECTION 5. This Act shall take effect on July 1, 2012[,
and shall be repealed on December 31, 2023; provided that section -4,
Hawaii Revised Statutes, established by section 2 of this Act, and the amendment
made to section 36-30(a), Hawaii Revised Statutes, in section 3 of this Act,
shall be repealed on June 30, 2024]."
SECTION 12.
Act 123, Session Laws of Hawaii 2014, as amended by section 3 of Act 70,
Session Laws of Hawaii 2015, as amended by section 4 of Act 60, Session Laws of
Hawaii 2016, as amended by section 6 of Act 59, Session Laws of Hawaii 2017, as
amended by section 7 of Act 173, Session Laws of Hawaii 2019, as amended by
section 8 of Act 38, Session Laws of Hawaii 2021 is amended by amending section
7 to read as follows:
"SECTION 7. This Act shall take effect on June 29, 2014;
provided that[:
(1) Section] section 5 shall
take effect on July 1, 2014[; and
(2) The amendments made to sections
36-27(a) and 36-30(a), Hawaii Revised Statutes, in sections 3 and 4 of this Act
shall be repealed on June 30, 2024]."
SECTION 13.
There is appropriated out of the hospital sustainability program special
fund $100,000,000 or so much thereof as may be necessary for fiscal year
2023-2024 and the same sum or so much thereof as may be necessary for fiscal
year 2024-2025 for the purposes of the hospital sustainability program special
fund.
The sums appropriated shall be expended by
the department of human services for the purposes of this Act.
SECTION 14.
Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 15. This Act shall take effect upon its approval.
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INTRODUCED BY: |
_____________________________ |
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BY REQUEST |
Report Title:
Hospital Sustainability Program; Appropriation
Description:
Strengthens and continues the Hospital Sustainability Program indefinitely. Appropriates funds out of the Hospital Sustainability Program Special Fund for fiscal years 2023-2024 and 2024-2025. Makes other non-substantive changes for consistency and clarify.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
