HB 75 — AN ACT relating to hospital rate improvement programs and declaring an emergency.

UNOFFICIALCHAPTER COPY21 231 RSCHAPTER 21 ( HB 75/GA75 ) AN ACT relating to hospital rate improvement programs and declaring an emergency.

(a) For hospital inpatient services, the difference between the maximum actuarially sound amount that can be included in managed care rates for hospital inpatient services provided by qualifying hospitals [and out-of-state hospitals ]and the amount of total payments for hospital inpatient services Page 1 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA provided by qualifying hospitals [and out-of-state hospitals ]paid by managed care organizations.

(10) "Non-state government-owned hospital" means the same as non-state government-government-owned owned or operated facilities in 42 C.F.R.

PageLegislative 2Research ofCommission 12PDF HB007510.100Version -ACTS 405OF -THE XXXXGENERAL 2/17/2023ASSEMBLY 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA (15) "Psychiatric access hospital" means an in-state psychiatric hospital licensed under KRS Chapter 216B that:

(17) "Qualifying hospital disproportionate share percentage" means a percentage equal to the amount of hospital provider taxes paid pursuant to KRS 142.303 by qualifying hospitals in state fiscal year 2016-2017 divided by the amount of hospital provider taxes paid pursuant to KRS 142.303 by all hospitals in state fiscal year 2016-2017;2016- 2017;

(18) "University hospital disproportionate share percentage" means a percentage equal to the amount of hospital provider taxes paid pursuant to KRS 142.303 by university Page 3 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA hospitals and state mental hospitals, as defined in KRS 205.639, in state fiscal year 2016-2017 divided by the amount of hospital provider taxes paid pursuant to KRS 142.303 by all hospitals in fiscal year 2016-2017;

and (20) "UPL gap" means the difference between the UPL and amount of total fee-for-fee-for-service service payments paid by the department for hospital inpatient services provided by non-state government-owned hospitals and private hospitals to Medicaid beneficiaries and excluding payments established under KRS 205.6405 to 205.6408.

A separate UPL gap shall be estimated for the non-state government-government-owned owned hospitals and private hospitals.

(a) A program to increase inpatient reimbursement to qualifying hospitals within the Medicaid fee-for-servicefee-for- service program in an aggregate amount equivalent to the UPL gap;[ and] (b) A program to increase inpatient reimbursement to qualifying hospitals within the Medicaid managed care program in an aggregate amount equivalent to the managed care gap for inpatient services;

and (c) A program to increase outpatient reimbursement to qualifying hospitals within the Medicaid managed care program in an aggregate amount Page 4 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA equivalent to the managed care gap for outpatient services.

(c) A per discharge uniform add-on amount to be applied to Medicaid fee-for-fee-for-service service discharges at qualifying hospitals for that program year, determined by dividing the UPL gap for the applicable ownership group by total fee-for-fee-for-service service hospital inpatient discharges at qualifying hospitals in the data used to calculate the UPL gap.

Claims for discharges that already receive an enhanced rate at qualifying CHAPTER 21 3 hospitals that also are classified as a pediatric teaching hospital or as a psychiatric access hospital shall be excluded from the calculation of the per discharge uniform add-on, unless the department is required to include these claims to obtain federal approval;

and (g) A uniform add-on amount to be paid to each qualifying hospital to Page 5 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA supplement Medicaid managed care payments for outpatient services performed by the qualifying hospital in a program year.

The uniform add-add-on on amount payable to each qualifying hospital shall be:

(a) Calculate a fee-for-service quarterly supplemental payment for each qualifying hospital using fee-for-servicefee-for- service claims for inpatient discharges paid in the quarter to the qualifying hospital multiplied by the uniform add-on amount determined in subsection (2)(c) of this section;

(c) Calculate a managed care quarterly supplemental payment for each Page 6 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA qualifying hospital to be paid by each managed care organization as determined in subsection (2)(g) of this section;

(h)[(g)] For purposes of the inpatient program authorized by subsection (1)(b) of this section, determine a per discharge hospital inpatient assessment for the quarter for each qualifying hospital, which shall be calculated by first applying towards the state share determined[calculated] under paragraph (g)[(f)] of this subsection the qualifying hospital disproportionate share percentage of the Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY excess disproportionate share taxes and then dividing the remaining state share by the total discharges reported by all in-state qualifying hospitals on the Medicare cost report filed by those qualifying hospitals in the calendar year two (2) years prior to the program year;

(i)[(h)] Determine each qualifying hospital's quarterly inpatient assessment by multiplying the assessment established in paragraph (h)[(g)] of this subsection Page 7 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA by the hospital's total discharges from the qualifying hospital's Medicare cost report filed in the calendar year two (2) years prior to the program year;[ and] (j)[(i)](j)[(i)]For For purposes of the outpatient program authorized by subsection (1)(c) of this section, determine each qualifying hospital's assessment to be contributed to the state's share of this outpatient program as calculated under paragraph (g) of this subsection.

(4) In calculating the quarterly supplemental payments under subsection (3)(a), (b), and (c)[(b)] of this section for qualifying hospitals that are also classified as a pediatric Page 8 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA teaching hospital or as a psychiatric access hospital, no add-on shall be applied to the paid claims for the services for which that hospital also receives supplemental payments pursuant to state plan methodologies and managed care contracts in effect on January 1, 2019.

A Page 9 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA qualifying hospital shall have no obligation to pay an assessment if any federal agency determines that federal financial participation is not available for any assessment.

CHAPTER 21 5 (12) The assessment authorized under KRS 205.6405 to 205.6408 shall be restricted for use to accomplish the inpatient and outpatient reimbursement increases established under this section.

(a) The amount of funds the department may receive to administer the programs Page 10 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA as stated in subsection (12) of this section shall be replaced by an administrative fee that shall be calculated to be an amount equal to four percent (4%) of the assessment collected under this section.

Whereas hospitals are severely stressed by the shortage of health care providers, an emergency is declared to exist, and this Act takes effect upon its passage Page 11 of 12 HB007510.100 - 405 - XXXX 2/17/2023 9:24 AM GA UNOFFICIAL COPY 23 RS HB 75/GA and approval by the Governor or upon its otherwise becoming a law.

PageSigned 12by ofGovernor 12March HB007510.10020, -2023. 405 - XXXX 2/17/2023 9:24 AM GA

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