GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	1 

SENATE BILL 908*

Short Title:  Increase Medicaid Reimbursement.	(Public)
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Sponsors: Senator Walker.
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Referred to:  Human Resources.
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May 13, 1991

A BILL TO BE ENTITLED
AN ACT TO INCREASE HOSPITAL MEDICAID REIMBURSEMENT AND TO EXPAND MEDICAID ELIGIBILITY TO COVER MORE ELDERLY, BLIND, AND DISABLED INDIVIDUALS.
The General Assembly of North Carolina enacts:
Section 1.  Part 6 of Article 2 of Chapter 108A is amended by adding the following new section:
"§ 108A-55.1.  Hospital Medicaid reimbursement increased; eligibility expanded.
(a)	Definitions.  As used in this section, unless the context clearly requires otherwise:
(1)	‘Assessment' means a tax assessment levied on hospitals pursuant to this section.
(2)	‘Department' means the Department of Human Resources.
(3)	‘Division' means the Division of Medical Assistance, Department of Human Resources.
(4)	‘Hospital' means an acute care hospital that is licensed under G.S. 131E-75 and that received Medicaid payments for inpatient services during the previous State fiscal year.
(5)	‘Medicaid Assessment Revolving Trust Fund' (MART) means the fund established to receive assessment moneys collected from hospitals which are to be matched with federal Medicaid funds as provided in this section.
(6)	‘Medicaid' means the North Carolina Medical Assistance program, as authorized by and regulated pursuant to Part 3 of Article 2 of Chapter 108A of the General Statutes, pertinent State rules the federal Medicaid program as defined in Title XIX of the Social Security Act and pertinent federal regulations.
(7)	Secretary.  The Secretary of Human Resources.
(b)	Rules.  The Secretary shall adopt rules necessary to implement this section.
(c)	Assessment.  Each year the Division shall determine each hospital's total costs for services to patients as reported by the hospital to the Division in the hospital's most recent Medicaid cost report.  Each hospital shall pay to the Department an assessment equal to ____percent (__%) of the hospital's total costs for services as determined by the Division.  Each hospital shall remit its assessment to the Division in equal quarterly installments according to a schedule adopted by rule.  The initial assessment for the quarter ending March 31, 1992, is payable on or before January 1, 1992.  The Secretary may allow necessary variations in payment schedules according to criteria set forth in rules adopted pursuant to this subsection.
The assessment due under this section shall bear interest at the rate established pursuant to G.S. 105-241.1(i)	from the date due until paid.  In addition, the penalties provided in G.S. 105-236 apply to the assessment levied in this section.  The Secretary may waive the penalties for good cause shown by the hospital.
(d)	MART Fund. The MART fund is established in the Department of State Treasurer.  All assessments paid pursuant to this section shall be credited to the MART fund and may be used only for the purposes set out in subsection (e) of this section.  All investment earnings of the fund shall be credited to the fund.  The fund shall be exempt from any State budget reduction acts.  All funds in the MART fund shall be appropriated to the Department.  These funds are supplementary only and shall not be used to replace funds appropriated to the Medicaid program by the General Assembly.  Unobligated funds at the end of each fiscal year shall be carried forward for use in the following fiscal year.
(e)	Use of Funds. The Division shall expend funds in the MART fund as follows:
(1)	A hold harmless amount shall be held in reserve from the MART fund that is sufficient to assure that each hospital receives as payment from the fund an amount not less than one hundred ten percent (110%) of the amount of that hospital's assessment during each calendar quarter.  The Department shall, on a quarterly basis, make a hold harmless payment to each hospital for which one hundred ten percent (110%) of its assessment for the preceding quarter exceeds the amount of total payments made in accordance with subdivision (5) of this subsection during the preceding quarter.  The hold harmless payment shall be calculated by subtracting the payments made by the hospital under subdivision (5) of this subsection from one hundred ten percent (110%) of the hospital's assessment amount.  The amount to be held in reserve for hold harmless payments shall be determined by the Department using payment projections.
(2)	Up to two percent (2%) of the funds shall be reserved for the nonfederal share of the necessary administrative expenditures of the Department.  These expenditures shall include necessary staff and associated administrative support services as determined by the Division.
(3)	Effective April 1, 1992, the Division shall pay the nonfederal share of expanded Medicaid eligibility to cover, to the full extent permitted by federal law, all elderly, blind, and disabled individuals receiving assistance under the Supplemental Security Income Program, and all elderly, blind, and disabled individuals whose family income is equal to or less than seventy-five percent (75%) of the federal poverty guidelines as revised annually by the United States Department of Health and Human Services.
(4)	The Division may maintain within the MART fund an undistributed contingency reserve of up to one million dollars ($1,000,000).
(5)	The Division shall pay the nonfederal share of increased reimbursement to hospitals effective for dates of service beginning January 1, 1992.  Hospital reimbursement shall be increased by:
a.	Increasing the Medicaid hospital per diem rates to an amount that in the aggregate does not exceed the Medicare upper limit restriction.  In determining the upper limit restriction, no hospital will have its nondisproportionate share per diem rate reduced;
b.	Eliminating ‘annual days' limits from the reimbursement plan for periods after the 1992-93 fiscal year; and
c.	Increasing the disproportionate share payment to hospitals in accordance with rules adopted by the Secretary.
		Increases proposed in this subdivision are subject to amounts permitted under federal reimbursement rules and the necessary State plan amendments.  Disbursements shall be made through higher per diem rates paid claim-by-claim.
(f)	The Department shall notify each hospital in writing of the results of determinations made pursuant to subsection (c) and subdivision (e)(5) of this section.  If no hospital submits a request for reconsideration, the determinations shall be considered final.  Requests for reconsideration shall be subject to the provisions of Chapter 150B of the General Statutes.
(g)	The requirements of this section shall apply only as long as federal funds under the Medicaid program are provided and the federal funds are at least sufficient to guarantee that each hospital receives an amount equal to the hold harmless provisions in subdivision (e)(1) of this section.  If the Secretary determines that federal Medicaid funds are insufficient to meet this purpose, this section is repealed effective on the last day of the quarter during which the Secretary determined that the Medicaid funds are insufficient, and hospital rates will be adjusted to the rates that would have been in effect had the payments in subdivision (e)(5) not been made."
Sec. 2.  This act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute repealed by this act before its repeal; nor does it affect the right to any refund or credit of a tax that would otherwise have been available under the repealed statute before its repeal.
Sec. 3.  This act becomes effective July 1, 1991.