SB-1146, As Passed Senate, September 9, 2004                                

SUBSTITUTE FOR

SENATE BILL NO. 1146

                                                                             A bill to amend 1978 PA 368, entitled                                             

"Public health code,"                                                       

by amending section 20161 (MCL 333.20161), as amended by 2003 PA            

234.                                                                        

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 20161.  (1) The department shall assess fees and other                 

2   assessments for health facility and agency licenses and                     

3   certificates of need on an annual basis as provided in this                 

4   article.  Except as otherwise provided in this article, fees and            

5   assessments shall be paid in accordance with the following                  

6   schedule:                                                                   

7     (a) Freestanding surgical outpatient                                      

8   facilities.............................. $238.00 per facility.              

9     (b) Hospitals......................... $8.28 per licensed bed.            

10    (c) Nursing homes, county medical care                                    

1   facilities, and hospital long-term care                                     

2   units................................... $2.20 per licensed bed.            

3     (d) Homes for the aged................ $6.27 per licensed bed.            

4     (e) Clinical laboratories............. $475.00 per laboratory.            

5     (f) Hospice residences................ $200.00 per license                

6                                            survey; and $20.00 per             

7                                            licensed bed.                      

8     (g) Subject to subsection (13),                                           

9   quality assurance assessment for                                            

10  nongovernmentally owned nursing homes                                       

11  and hospital long-term care units....... an amount resulting in             

12                                           not more than 6% of                

13                                           total industry                     

14                                           revenues.                          

15    (h) Subject to subsection (14),                                           

16  quality assurance assessment for                                            

17  hospitals............................... at a fixed or variable             

18                                           rate that generates                

19                                           funds not more than the            

20                                           maximum allowable under            

21                                           the federal matching               

22                                           requirements, after                

23                                           consideration for the              

24                                           amounts in subsection              

25                                           (14)(a) and  (k) (j).             

26      (2) If a hospital requests the department to conduct a                      

27  certification survey for purposes of title XVIII or title XIX of            

1   the social security act, the hospital shall pay a license fee               

2   surcharge of $23.00 per bed.  As used in this subsection, "title            

3   XVIII" and "title XIX" mean those terms as defined in section               

4   20155.                                                                      

5       (3) The base fee for a certificate of need is $750.00 for                   

6   each application.  For a project requiring a projected capital              

7   expenditure of more than $150,000.00 but less than $1,500,000.00,           

8   an additional fee of $2,000.00 shall be added to the base fee.              

9   For a project requiring a projected capital expenditure of                  

10  $1,500,000.00 or more, an additional fee of $3,500.00 shall be              

11  added to the base fee.                                                      

12      (4) If licensure is for more than 1 year, the fees described                

13  in subsection (1) are multiplied by the number of years for which           

14  the license is issued, and the total amount of the fees shall be            

15  collected in the year in which the license is issued.                       

16      (5) Fees described in this section are payable to the                       

17  department at the time an application for a license, permit, or             

18  certificate is submitted.  If an application for a license,                 

19  permit, or certificate is denied or if a license, permit, or                

20  certificate is revoked before its expiration date, the department           

21  shall not refund fees paid to the department.                               

22      (6) The fee for a provisional license or temporary permit is                

23  the same as for a license.  A license may be issued at the                  

24  expiration date of a temporary permit without an additional fee             

25  for the balance of the period for which the fee was paid if the             

26  requirements for licensure are met.                                         

27      (7) The department may charge a fee to recover the cost of                  

1   purchase or production and distribution of proficiency evaluation           

2   samples that are supplied to clinical laboratories pursuant to              

3   section 20521(3).                                                           

4       (8) In addition to the fees imposed under subsection (1), a                 

5   clinical laboratory shall submit a fee of $25.00 to the                     

6   department for each reissuance during the licensure period of the           

7   clinical laboratory's license.                                              

8       (9) Except for the licensure of clinical laboratories, not                  

9   more than half the annual cost of licensure activities as                   

10  determined by the department shall be provided by license fees.             

11      (10) The application fee for a waiver under section 21564 is                

12  $200.00 plus $40.00 per hour for the professional services and              

13  travel expenses directly related to processing the application.             

14  The travel expenses shall be calculated in accordance with the              

15  state standardized travel regulations of the department of                  

16  management and budget in effect at the time of the travel.                  

17      (11) An applicant for licensure or renewal of licensure under               

18  part 209 shall pay the applicable fees set forth in part 209.               

19      (12) Except as otherwise provided in this section, the fees                 

20  and assessments collected under this section shall be deposited             

21  in the state treasury, to the credit of the general fund.                   

22      (13) The quality assurance assessment collected under                       

23  subsection (1)(g) and all federal matching funds attributed to              

24  that assessment shall be used only for the following purposes and           

25  under the following specific circumstances:                                 

26      (a) The quality assurance assessment and all federal matching               

27  funds attributed to that assessment shall be used to finance                

1   medicaid nursing home reimbursement payments.  Only licensed                

2   nursing homes and hospital long-term care units that are assessed           

3   the quality assurance assessment and participate in the medicaid            

4   program are eligible for increased per diem medicaid                        

5   reimbursement rates under this subdivision.                                 

6       (b) The quality assurance assessment shall be implemented on                

7   May 10, 2002.                                                               

8       (c) The quality assurance assessment is based on the number                 

9   of licensed nursing home beds and the number of licensed hospital           

10  long-term care unit beds in existence on July 1 of each year,               

11  shall be assessed upon implementation pursuant to subdivision (b)           

12  and subsequently on October 1 of each following year, and is                

13  payable on a quarterly basis, the first payment due 90 days after           

14  the date the assessment is assessed.                                        

15      (d) Beginning October 1, 2007, the department shall no longer               

16  assess or collect the quality assurance assessment or apply for             

17  federal matching funds.                                                     

18      (e) Upon implementation pursuant to subdivision (b), the                    

19  department of community health shall increase the per diem                  

20  nursing home medicaid reimbursement rates for the balance of that           

21  year.  For each subsequent year in which the quality assurance              

22  assessment is assessed and collected, the department of community           

23  health shall maintain the medicaid nursing home reimbursement               

24  payment increase financed by the quality assurance assessment.              

25      (f) The department of community health shall implement this                 

26  section in a manner that complies with federal requirements                 

27  necessary to assure that the quality assurance assessment                   

1   qualifies for federal matching funds.                                       

2       (g) If a nursing home or a hospital long-term care unit fails               

3   to pay the assessment required by subsection (1)(g), the                    

4   department of community health may assess the nursing home or               

5   hospital long-term care unit a penalty of 5% of the assessment              

6   for each month that the assessment and penalty are not paid up to           

7   a maximum of 50% of the assessment.  The department of community            

8   health may also refer for collection to the department of                   

9   treasury past due amounts consistent with section 13 of 1941                

10  PA 122, MCL 205.13.                                                         

11      (h) The medicaid nursing home quality assurance assessment                  

12  fund is established in the state treasury.  The department of               

13  community health shall deposit the revenue raised through the               

14  quality assurance assessment with the state treasurer for deposit           

15  in the medicaid nursing home quality assurance assessment fund.             

16      (i) The department of community health shall not implement                  

17  this subsection in a manner that conflicts with 42 USC 1396b(w).            

18      (j) The quality assurance assessment collected under                        

19  subsection (1)(g) shall be prorated on a quarterly basis for any            

20  licensed beds added to or subtracted from a nursing home or                 

21  hospital long-term care unit since the immediately preceding                

22  July 1.  Any adjustments in payments are due on the next                    

23  quarterly installment due date.                                             

24      (k) In each fiscal year governed by this subsection, medicaid               

25  reimbursement rates shall not be reduced below the medicaid                 

26  reimbursement rates in effect on April 1, 2002 as a direct result           

27  of the quality assurance assessment collected under                         

1   subsection (1)(g).                                                          

2   (l) The amounts listed in this subdivision are appropriated                         

3   for the department of community health, subject to the conditions           

4   set forth in this subsection, for the fiscal year ending                    

5   September 30, 2003:                                                         

6   MEDICAL SERVICES                                                            

7     Long-term care services...................... $   1,469,003,900

8     Gross appropriation.......................... $   1,469,003,900           

9         Appropriated from:                                                    

10      Federal revenues:                                                       

11    Total federal revenues.......................       814,122,200           

12      Special revenue funds:                                                  

13    Medicaid quality assurance assessment........        44,829,000           

14    Total local revenues.........................         8,445,100           

15    State general fund/general purpose........... $    601,607,600

16  (l)  (m)  In fiscal year  2003-2004, $18,900,000.00

17  2004-2005, $21,900,000.00 of the quality assurance assessment               

18  collected pursuant to subsection (1)(g) shall be appropriated to            

19  the department of community health to support medicaid                      

20  expenditures for long-term care services.  These funds shall                

21  offset an identical amount of general fund/general purpose                  

22  revenue originally appropriated for that purpose.                           

23      (14) The quality assurance dedication is an earmarked                       

24  assessment collected under subsection (1)(h).  That assessment              

25  and all federal matching funds attributed to that assessment                

26  shall be used only for the following purposes and under the                 

27  following specific circumstances:                                           

1       (a) Part of the quality assurance assessment shall be used to               

2   maintain the increased medicaid reimbursement rate increases as             

3   provided for in subdivision (d).  A portion of the funds                    

4   collected from the quality assurance assessment may be used to              

5   offset any reduction to existing intergovernmental transfer                 

6   programs with public hospitals that may result from                         

7   implementation of the enhanced medicaid payments financed by the            

8   quality assurance assessment.  Any portion of the funds collected           

9   from the quality assurance assessment reduced because of existing           

10  intergovernmental transfer programs shall be used to finance                

11  medicaid hospital appropriations.                                           

12      (b) The quality assurance assessment shall be implemented on                

13  October 1, 2002.                                                            

14      (c) The quality assurance assessment shall be assessed on all               

15  net patient revenue, before deduction of expenses, less medicare            

16  net revenue, as reported in the most recently available medicare            

17  cost report and is payable on a quarterly basis, the first                  

18  payment due 90 days after the date the assessment is assessed.              

19  As used in this subdivision, "medicare net revenue" includes                

20  medicare payments and amounts collected for coinsurance and                 

21  deductibles.                                                                

22      (d) Upon implementation pursuant to subdivision (b), the                    

23  department of community health shall increase the hospital                  

24  medicaid reimbursement rates for the balance of that year.  For             

25  each subsequent year in which the quality assurance assessment is           

26  assessed and collected, the department of community health shall            

27  maintain the hospital medicaid reimbursement rate increase                  

1   financed by the quality assurance assessments.                              

2       (e) The department of community health shall implement this                 

3   section in a manner that complies with federal requirements                 

4   necessary to assure that the quality assurance assessment                   

5   qualifies for federal matching funds.                                       

6       (f) If a hospital fails to pay the assessment required by                   

7   subsection (1)(h), the department of community health may assess            

8   the hospital a penalty of 5% of the assessment for each month               

9   that the assessment and penalty are not paid up to a maximum of             

10  50% of the assessment.  The department of community health may              

11  also refer for collection to the department of treasury past due            

12  amounts consistent with section 13 of 1941 PA 122, MCL 205.13.              

13      (g) The hospital quality assurance assessment fund is                       

14  established in the state treasury.  The department of community             

15  health shall deposit the revenue raised through the quality                 

16  assurance assessment with the state treasurer for deposit in the            

17  hospital quality assurance assessment fund.                                 

18      (h) In each fiscal year governed by this subsection, the                    

19  quality assurance assessment shall only be collected and expended           

20  if medicaid hospital inpatient DRG and outpatient reimbursement             

21  rates and disproportionate share hospital and graduate medical              

22  education payments are not below the level of rates and payments            

23  in effect on April 1, 2002 as a direct result of the quality                

24  assurance assessment collected under subsection (1)(h), except as           

25  provided in subdivision  (j) (i).                                          

26  (i) The amounts listed in this subdivision are appropriated                 

27  for the department of community health, subject to the conditions           

1   set forth in this subsection, for the fiscal year ending                    

2   September 30, 2003:                                                         

3   MEDICAL SERVICES                                                            

4     Hospital services and therapy................ $     149,200,000

5     Gross appropriation.......................... $     149,200,000           

6         Appropriated from:                                                    

7       Federal revenues:                                                       

8     Total federal revenues.......................        82,686,800           

9       Special revenue funds:                                                  

10    Medicaid quality assurance assessment........        66,513,500           

11    Total local revenues.........................                 0           

12    State general fund/general purpose........... $              0

13  (i)  (j)  The quality assurance assessment collected under                  

14  subsection (1)(h) shall no longer be assessed or collected after            

15  September 30,  2004 2007, or in the event that the quality                 

16  assurance assessment is not eligible for federal matching funds.            

17  Any portion of the quality assurance assessment collected from a            

18  hospital that is not eligible for federal matching funds shall be           

19  returned to the hospital.                                                   

20  (j)  (k)  In fiscal year  2002-2003, $18,900,000.00

21  2004-2005, $21,900,000.00 of the quality assurance assessment               

22  shall be deposited into the general fund.                                   

23  (k)  (l)  In fiscal year  2003-2004, $18,900,000.00

24  2004-2005, $21,900,000.00 of the quality assurance assessment               

25  collected pursuant to subsection (1)(h) shall be appropriated to            

26  the department of community health to support medicaid                      

27  expenditures for hospital services and therapy.  These funds                

1   shall offset an identical amount of general fund/general purpose            

2   revenue originally appropriated for that purpose.                           

3       (15) The quality assurance assessment provided for under this               

4   section is a tax that is levied on a health facility or agency.             

5       (16) As used in this section, "medicaid" means that term as                 

6   defined in section 22207.