By: Rodriguez S.B. No. 1768

A BILL TO BE ENTITLED

AN ACT

relating to the authorization for and imposition of hospital assessments by counties. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter ___ of the ____ Code is amended by adding new subchapter A to read as follows:

SUBCHAPTER A. HOSPITAL ASSESSMENTS

Sec. 000.01. DEFINITIONS. In this subchapter:

(a) "Assessment" means the fee authorized to be implemented under this subchapter on every general acute care hospital within a county.

(b) "Assessment advisory committee" means the committee comprised of representatives of general acute care hospitals that are subject to the assessment.

(c) "Commission" means the Health and Human Services Commission or an agency operating the Medicaid program.

(d) "County" means a county of this state.

(e) "Critical access hospital" means any hospital that has qualified under 20 U.S.C. Section 1395x as a critical access hospital under Medicare.

(f) "General acute care hospital" means a hospital other than a hospital that the Department of State Health Services or other appropriate federal or state agency has determined is:

(1) a federal veterans' affairs hospital;

(2) a hospital that provides care, including inpatient hospital services, to all patients free of charge;

(3) a private psychiatric hospital;

(4) a critical access hospital; or

(5) a long-term acute care hospital.

(g) "Hospital" means a facility licensed by the Department of State Health Services under Chapter 241, Health and Safety Code.

(h) "Long-term acute care hospital" means a hospital or unit of a hospital whose patients have a length of stay of greater than 25 days and that provides specialized acute care of medically complex patients who are critically ill.

(i) "Medicaid" means the medical assistance program established under Chapter 32, Human Resources Code.

(j) "Medicaid DSH program" means the Medicaid disproportionate share hospital program as provided for by 42 U.S.C. Section 1394r-(4).

(k) "Medicaid Transformation Waiver" means the Texas Healthcare Transformation and Quality Improvement Program, a demonstration project under 42 U.S.C. Section 1315(a) that was approved by the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services in December 2011.

(l) "Medicare" means the federal health insurance program that is operated under the Health Insurance for the Aged Act (42 U.S.C. Section 1395 et seq.).

(m) "Net patient revenue" means the estimated net realizable amounts from patients, third-party payors, and others for services rendered, including estimated retroactive adjustments under reimbursement agreements with third-party payors. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods, as final settlements are determined.

Sec. 000.03. AUTHORIZATION. (a) General Rule. In order to generate additional revenues for the purpose of assuring that Medicaid recipients have access to hospital services, subject to the conditions and requirements specified under this subchapter, a county may, by order, impose a monetary assessment on the net patient revenue of each general acute care hospital located in the county. Any assessment under this subchapter will be imposed annually and collected quarterly.

(b) Administrative Provisions. The orders adopted pursuant to Subsection (a) of this section shall include appropriate administrative provisions, including, without limitation, provisions for the collection of interest and penalties. The amount of interest and penalties shall not exceed the amounts provided in Title 1, Subtitle E, Chapter 33, Tax Code.

(c) Maximum Assessment. In each year in which the assessment is implemented, the assessment shall be subject to the maximum aggregate amount that may be assessed under 42 C.F.R. Section 433.68 or any other maximum established under federal law.

(d) Assessment Amount. In determining the amount of the assessment, interest and penalties, the county shall consider:

(1) the recommendation of the assessment advisory committee;

(2) the maximum assessment as set out in Subsection (c) of this section; and

(3) the assessment necessary to generate sufficient revenue to accomplish the purposes of the assessment and to pay the expenses of collection.

Sec. 000.05. IMPLEMENTATION. The assessment authorized under this subchapter, once imposed, shall be implemented as a health-care related fee as defined under 42 U.S.C. Section 1396b and may be collected only to the extent and for the periods for which the Commission determines that the revenues generated by the assessment will qualify as the state share of Medicaid expenditures eligible for federal financial participation.

Sec. 000.07. ASSESSMENT AND COLLECTION. (a) If a county imposes an assessment as provided for in this subchapter,

(1) the county shall make the assessment; and

(2) general acute care hospitals shall submit to the county the information required by Sections 311.032 and 311.033, Health and Safety Code, at the same time that the information is submitted to the Department of State Health Services from which the assessment shall be calculated.

(b) If an assessment is imposed, the county tax assessor-collector shall collect the assessment quarterly.

(c) Revenue that the county collects under this subchapter shall be deposited in a dedicated fund or special account established for the purpose of the hospital assessment in the county depository and secured as provided by Title 4, Local Government Code.

Sec. 000.09. USE OF FUNDS. The assessments collected under this subchapter shall be used only to:

(a) provide the state share of the Medicaid DSH program or the Medicaid Transformation Waiver; and

(b) pay collection expenses.

Sec. 000.11. NO HOLD HARMLESS. No general acute care hospital shall be directly guaranteed a repayment of its assessment in derogation of 42 C.F.R. Section 433.68, except that, in each fiscal year in which an assessment is implemented, the county shall use all of the funds received under section 000.03(a) only for the purposes outlined under section 000.09 to the extent permissible under federal and state law or regulation and without creating an indirect guarantee to hold harmless, as those terms are used under 42 C.F.R. Section 433.68, and for the costs of collection as provided for in section 000.09 of this subchapter.

Sec. 000.13. PLAN AMENDMENT; FEDERAL WAIVER. To the extent necessary in order to implement this subchapter, the Commission shall submit any state Medicaid plan amendment to the United States Department of Health and Human Services and/or seek a waiver under 42 C.F.R. Section 433.68 from the Center for Medicare and Medicaid Services of the United States Department of Health and Human Services.

Sec. 000.15. TAX EXEMPTION. Notwithstanding any exemptions granted by any other federal, state, or local tax or other law, no general acute care hospital in the county shall be exempt from the assessment.

Sec. 000.17. ASSESSMENT ADVISORY COMMITTEE. (a) The commissioners court shall appoint an assessment advisory committee. The committee must include one representative of each hospital that will be subject to the hospital assessment to be implemented under this subchapter.

(b) An advisory committee member serves a two-year term, except that the commissioners court may make some initial appointments for one year in order to stagger terms, with as near as possible to one-half of the members' terms expiring each year.

(c) An advisory committee shall select from among its members a presiding officer. The presiding officer shall preside over the advisory committee and report to the commissioners court.

(d) Prior to the adoption of any hospital assessment, or any change to a previously adopted assessment, the committee shall advise the county on the amount of the assessment. The committee shall also advise the county on the interest rate and amount or schedule of penalties to be imposed, or any proposed change to an adopted interest rate or penalty, for late or non-payment of the assessment subject to the requirements of Section 000.03(b).

(e) The advisory committee members shall serve without compensation or remuneration of any kind, including reimbursement of expenses for serving on the advisory committee.

Sec. 000.19. EXPIRATION. This subchapter expires on August 31, 2017.

SECTION 2. If the Commission or the United States Department of Health and Human Services determines that the assessment does not qualify as the state share of Medicaid expenditures eligible for federal financial participation, after consultation with the Commission, the United States Department of Health and Human Services, and the assessment advisory committee, the county shall either retain the revenue collected under this subchapter if the determination is made that the funds will qualify as the state share of Medicaid expenditures eligible for federal financial participation at a date prior to the expiration of this subchapter or, if that determination is not made, return the remainder to the general acute care hospitals paying the assessment on a pro rata basis.

SECTION 3. If this subchapter is not continued in existence by the legislature, any assessments held by the county at the time this subchapter expires shall be used to pay any outstanding costs of collection, and the remainder shall be returned to the general acute care hospitals paying the assessment on a pro rata basis.

SECTION 4. This Act takes effect September 1, 2013.