SF 1616

as introduced - 90th Legislature (2017 - 2018) Posted on 03/15/2017 11:52am

A bill for an act
relating to human services; establishing a contingent, alternate medical assistance
payment method for children's hospitals; amending Minnesota Statutes 2016,
section 256.969, subdivisions 4b, 9.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 256.969, subdivision 4b, is amended to read:

Subd. 4b.

Medical assistance cost reports for services.

(a) A hospital that meets one
of the following criteria must annually submit to the commissioner medical assistance cost
reports within six months of the end of the hospital's fiscal year:

(1) a hospital designated as a critical access hospital that receives medical assistance
payments; deleted text begin or
deleted text end

(2) a Minnesota hospital or out-of-state hospital located within a Minnesota local trade
area that receives a disproportionate population adjustment under subdivision 9 new text begin ; or
new text end

new text begin (3) a Minnesota hospital that is designated as a children's hospital and enumerated as
such by Medicare new text end .

For purposes of this subdivision, local trade area has the meaning given in subdivision
17.

(b) The commissioner shall suspend payments to any hospital that fails to submit a report
required under this subdivision. Payments must remain suspended until the report has been
filed with and accepted by the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2015.
new text end

Sec. 2.

Minnesota Statutes 2016, section 256.969, subdivision 9, is amended to read:

Subd. 9.

Disproportionate numbers of low-income patients served.

(a) For admissions
occurring on or after July 1, 1993, the medical assistance disproportionate population
adjustment shall comply with federal law and shall be paid to a hospital, excluding regional
treatment centers and facilities of the federal Indian Health Service, with a medical assistance
inpatient utilization rate in excess of the arithmetic mean. The adjustment must be determined
as follows:

(1) for a hospital with a medical assistance inpatient utilization rate above the arithmetic
mean for all hospitals excluding regional treatment centers and facilities of the federal Indian
Health Service but less than or equal to one standard deviation above the mean, the
adjustment must be determined by multiplying the total of the operating and property
payment rates by the difference between the hospital's actual medical assistance inpatient
utilization rate and the arithmetic mean for all hospitals excluding regional treatment centers
and facilities of the federal Indian Health Service; and

(2) for a hospital with a medical assistance inpatient utilization rate above one standard
deviation above the mean, the adjustment must be determined by multiplying the adjustment
that would be determined under clause (1) for that hospital by 1.1. The commissioner shall
report annually on the number of hospitals likely to receive the adjustment authorized by
this paragraph. The commissioner shall specifically report on the adjustments received by
public hospitals and public hospital corporations located in cities of the first class.

(b) Certified public expenditures made by Hennepin County Medical Center shall be
considered Medicaid disproportionate share hospital payments. Hennepin County and
Hennepin County Medical Center shall report by June 15, 2007, on payments made beginning
July 1, 2005, or another date specified by the commissioner, that may qualify for
reimbursement under federal law. Based on these reports, the commissioner shall apply for
federal matching funds.

(c) Upon federal approval of the related state plan amendment, paragraph (b) is effective
retroactively from July 1, 2005, or the earliest effective date approved by the Centers for
Medicare and Medicaid Services.

(d) Effective July 1, 2015, disproportionate share hospital (DSH) payments shall be paid
in accordance with a new methodology using 2012 as the base year. Annual payments made
under this paragraph shall equal the total amount of payments made for 2012. A licensed
children's hospital shall receive only a single DSH factor for children's hospitals. Other
DSH factors may be combined to arrive at a single factor for each hospital that is eligible
for DSH payments. The new methodology shall make payments only to hospitals located
in Minnesota and include the following factors:

(1) a licensed children's hospital with at least 1,000 fee-for-service discharges in the
base year shall receive a factor of 0.868. A licensed children's hospital with less than 1,000
fee-for-service discharges in the base year shall receive a factor of 0.7880;

(2) a hospital that has in effect for the initial rate year a contract with the commissioner
to provide extended psychiatric inpatient services under section 256.9693 shall receive a
factor of 0.0160;

(3) a hospital that has received payment from the fee-for-service program for at least 20
transplant services in the base year shall receive a factor of 0.0435;

(4) a hospital that has a medical assistance utilization rate in the base year between 20
percent up to one standard deviation above the statewide mean utilization rate shall receive
a factor of 0.0468;

(5) a hospital that has a medical assistance utilization rate in the base year that is at least
one standard deviation above the statewide mean utilization rate but is less than three standard
deviations above the mean shall receive a factor of 0.2300; and

(6) a hospital that has a medical assistance utilization rate in the base year that is at least
three standard deviations above the statewide mean utilization rate shall receive a factor of
0.3711.

(e) Any payments or portion of payments made to a hospital under this subdivision that
are subsequently returned to the commissioner because the payments are found to exceed
the hospital-specific DSH limit for that hospital shall be redistributed, proportionate to the
number of fee-for-service discharges, to other DSH-eligible nonchildren's hospitals that
have a medical assistance utilization rate that is at least one standard deviation above the
mean.

new text begin (f) If the days, costs, and revenues associated with patients who are eligible for medical
assistance and also have private health insurance are required to be included in the calculation
of the hospital-specific disproportionate share hospital payment limit for a rate year, then
the commissioner, effective retroactively to rate years beginning on or after January 1, 2015,
shall compute an alternate inpatient payment rate for a Minnesota hospital that is designated
as a children's hospital and enumerated as such by Medicare, and shall reimburse the hospital
based on this alternate payment rate. The alternate payment rate must meet the criteria in
clauses (1) to (4):
new text end

new text begin (1) the alternate payment rate shall be structured to target a total aggregate reimbursement
amount equal to two percent less than each children's hospital's cost coverage percentage
in the applicable base year for providing fee-for-service inpatient services under this section
to patients enrolled in medical assistance;
new text end

new text begin (2) costs shall be determined using the most recently available medical assistance cost
report provided under subdivision 4b, paragraph (a), clause (3), for the applicable base year.
Costs shall be determined using standard Medicare cost finding and cost allocation methods
and applied in the same manner as the costs were in the rebasing for the applicable base
year. If the medical assistance cost report is not available, costs shall be determined in the
interim using the Medicare Cost Report;
new text end

new text begin (3) in any rate year in which payment to a hospital is made using the alternate payment
rate, no payments shall be made to the hospital under this subdivision; and
new text end

new text begin (4) if the alternate payment amount increases payments at a rate that is higher than the
inflation factor applied over the rebasing period, the commissioner shall take this into
consideration when setting payment rates at the next rebasing.
new text end