Bill Text: HI HB1368 | 2024 | Regular Session | Amended
Bill Title: Relating To The Hospital Sustainability Program.
Spectrum: Strong Partisan Bill (Democrat 19-1)
Status: (Engrossed - Dead) 2023-12-11 - Carried over to 2024 Regular Session. [HB1368 Detail]
Download: Hawaii-2024-HB1368-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1368 |
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THIRTY-SECOND LEGISLATURE, 2023 |
H.D. 1 |
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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 established
in 2012 has served a critical role in strengthening
Hawaii's health care system. In the
eleven years since the program's inception, the hospital sustainability program
has helped acute care facilities treat the State's most vulnerable patients,
especially low-income individuals requiring hospital services. The program has been carried out in a
public-private partnership to ensure patients in Hawaii have access to quality, affordable care.
The legislature further finds that, even
with the 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
health care 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 a state's per capita
income determining the percentage. States with lower per capita incomes relative
to the national average receive higher federal matching rates. Federal rules mandate that a state must pay
the state's share from public funds that are not federal funds.
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 amid rising state
budget deficits, increasing health care costs, and expanding medicaid
enrollment. Provider fees, which are
collected from and agreed to by specific categories of providers, may be
imposed on nineteen different classes of health care services, including
inpatient and outpatient hospital and nursing facility services. Public funding to
help financially sustain Hawaii's hospitals should continue by assessing a
provider fee, which is currently scheduled to repeal in 2024.
The legislature therefore finds that, in Hawaii, a provider fee for
hospitals can substantially increase medicaid payments without placing
additional
constraints on the State's budget. The
additional federal funds obtained via the hospital sustainability program allow
hospitals in the State to continue to serve uninsured or underinsured patients
in a timely and effective manner, thereby maintaining access to care for
medicaid recipients and helping ensure the overall sustainability of the health
care system in Hawaii.
Therefore, the purpose of this Act is to preserve access to health care for medicaid recipients and strengthen the hospital sustainability program by:
(1) Amending the definition of "private hospital";
(2) Clarifying the uses of the hospital sustainability program special fund;
(3) Increasing the hospital sustainability fee cap for various facilities;
(4) Requiring the department of human services to consult and negotiate with the hospital trade association in hawaii regarding hospital sustainability fee participation and rates;
(5) Clarifying the circumstances under which the hospital sustainability fee shall be discontinued and the distribution of remaining funds;
(6) Repealing the sunset dates of Act 217, Session Laws of Hawaii 2012, and Act 123, Session Laws of Hawaii 2014, thereby making the hospital sustainability program permanent and permanently exempting the hospital sustainability program from the central service and administrative expenses assessments; and
(7) Appropriating funds out of 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] described 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 by amending subsections (b) through (d) to read as follows:
"(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 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 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 the
State, 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; provided that 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, upon good faith consultation and negotiations with the hospital trade association located in the State, the prospective fee rate for the applicable fiscal year.
[(b)]
(c) The department shall [collect,
and each hospital shall pay, if so required,] impose the hospital
sustainability fee [no later than the sixtieth day] on a monthly
basis. The hospital shall pay the
hospital sustainability fee 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 by amending its title and subsections (a) and (b) 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 title 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]
the State 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
managed care health plan shall expend one hundred per cent of any increased
payments received under this section to carry out the goals of the hospital
sustainability program."
SECTION 10. Section 346G-12, Hawaii Revised Statutes, is amended to read as follows:
"§346G-12 Termination. (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, in section 2 of this Act, and
the amendment 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 the sum of $ 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.
Report Title:
Hospital Sustainability Program; Hospital Sustainability Fee; Department of Human Services; Hospital Sustainability Program Special Fund; Repeal; Appropriation
Description:
Makes various updates to the hospital sustainability program, including amending the definition of "private hospital"; clarifying the uses of the hospital sustainability program special fund; increasing various hospital sustainability fee caps; requiring DHS to consult and negotiate with the hospital trade association regarding fee participation and rates; clarifying when the hospital sustainability fee shall be discontinued and the distribution of remaining funds; repealing the sunset dates of Act 217, SLH 2012, and Act 123, SLH 2014, to make the program permanent and permanently exempting the program from the central service and administrative expenses assessments; and appropriating funds out of the special fund. Effective 06/30/3000. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
