HB-4185, As Passed Senate, September 26, 2007

 

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 4185

 

 

 

 

 

 

 

 

 

 

 

 

      A bill to amend 1978 PA 368, entitled

 

"Public health code,"

 

by amending section 20161 (MCL 333.20161), as amended by 2007 PA

 

5.

 

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:

 

 

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     (a) Freestanding surgical


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outpatient facilities................$238.00 per facility.

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

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     (c) Nursing homes, county

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medical care facilities, and

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hospital long-term care units........$2.20 per licensed bed.

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

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

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

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                                     survey; and $20.00 per

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                                     licensed bed.

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     (g) Subject to subsection

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(13), quality assurance assessment

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for nursing homes and hospital

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long-term care units.................an amount resulting

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                                     in not more than 6%

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                                     of total industry

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                                     revenues.

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     (h) Subject to subsection

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(14), quality assurance assessment

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for hospitals........................at a fixed or variable

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                                     rate that generates

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                                     funds not more than the

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                                     maximum allowable under

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                                     the federal matching

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                                     requirements, after

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                                     consideration for the

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                                     amounts in subsection

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                                     (14)(a) and (i).

 

 

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

 

30  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 $1,500.00 for

 

 6  each application. For a project requiring a projected capital

 

 7  expenditure of more than $500,000.00 but less than $4,000,000.00,

 

 8  an additional fee of $4,000.00 shall be added to the base fee.

 

 9  For a project requiring a projected capital expenditure of

 

10  $4,000,000.00 or more, an additional fee of $7,000.00 shall be

 

11  added to the base fee. The department of community health shall

 

12  use the fees collected under this subsection only to fund the

 

13  certificate of need program. Funds remaining in the certificate

 

14  of need program at the end of the fiscal year shall not lapse to

 

15  the general fund but shall remain available to fund the

 

16  certificate of need program in subsequent years.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25  certificate is revoked before its expiration date, the department

 

26  shall not refund fees paid to the department.

 

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

 


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

 

 2  expiration date of a temporary permit without an additional fee

 

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

 

 4  requirements for licensure are met.

 

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

 

 6  purchase or production and distribution of proficiency evaluation

 

 7  samples that are supplied to clinical laboratories pursuant to

 

 8  section 20521(3).

 

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

 

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

 

11  department for each reissuance during the licensure period of the

 

12  clinical laboratory's license.

 

13        (9) The cost of licensure activities shall be supported by

 

14  license fees.

 

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

 

16  $200.00 plus $40.00 per hour for the professional services and

 

17  travel expenses directly related to processing the application.

 

18  The travel expenses shall be calculated in accordance with the

 

19  state standardized travel regulations of the department of

 

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

 

21        (11) An applicant for licensure or renewal of licensure

 

22  under part 209 shall pay the applicable fees set forth in part

 

23  209.

 

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

 

25  and assessments collected under this section shall be deposited

 

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

 

27        (13) The quality assurance assessment collected under

 


    House Bill No. 4185 as amended September 26, 2007

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

 

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

 

 3  under the following specific circumstances:

 

 4        (a) The quality assurance assessment and all federal

 

 5  matching funds attributed to that assessment shall be used to

 

 6  finance medicaid nursing home reimbursement payments. Only

 

 7  licensed nursing homes and hospital long-term care units that are

 

 8  assessed the quality assurance assessment and participate in the

 

 9  medicaid program are eligible for increased per diem medicaid

 

10  reimbursement rates under this subdivision. <<A NURSING HOME OR LONG-TERM

    CARE UNIT THAT IS ASSESSED THE QUALITY ASSURANCE ASSESSMENT AND THAT DOES

    NOT PAY THE ASSESSMENT REQUIRED UNDER SUBSECTION (1)(G) IN ACCORDANCE

    WITH SUBDIVISION (C)(i) OR IN ACCORDANCE WITH A WRITTEN PAYMENT AGREEMENT

    WITH THE STATE SHALL NOT RECEIVE THE INCREASED PER DIEM MEDICAID

    REIMBURSEMENT RATES UNDER THIS SUBDIVISION UNTIL ALL OF ITS OUTSTANDING

    QUALITY ASSURANCE ASSESSMENTS AND ANY PENALTIES ASSESSED PURSUANT TO

    SUBDIVISION (G) HAVE BEEN PAID IN FULL. NOTHING IN THIS SUBDIVISION SHALL

    BE CONSTRUED TO AUTHORIZE OR REQUIRE THE DEPARTMENT TO OVERSPEND TAX

    REVENUE IN VIOLATION OF THE MANAGEMENT AND BUDGET ACT, 1984 PA 431, MCL

    18.1101 TO 18.1594.>>

11        (b) Except as otherwise provided under subdivision (c),

12  beginning October 1, 2005, the quality assurance assessment is

13  based on the total number of patient days of care each nursing

14  home and hospital long-term care unit provided to nonmedicare

15  patients within the immediately preceding year and shall be

 

16  assessed at a uniform rate on October 1, 2005 and subsequently on

 

17  October 1 of each following year, and is payable on a quarterly

 

18  basis, the first payment due 90 days after the date the

 

19  assessment is assessed.

 

20        (c) Within 30 days after September 30, 2005, the department

 

21  shall submit an application to the federal centers for medicare

 

22  and medicaid services to request a waiver pursuant to 42 CFR

 

23  433.68(e) to implement this subdivision as follows:

 

24        (i) If the waiver is approved, the quality assurance

 

25  assessment rate for a nursing home or hospital long-term care

 

26  unit with less than 40 licensed beds or with the maximum number,

 

27  or more than the maximum number, of licensed beds necessary to

 


 1  secure federal approval of the application is $2.00 per

 

 2  nonmedicare patient day of care provided within the immediately

 

 3  preceding year or a rate as otherwise altered on the application

 

 4  for the waiver to obtain federal approval. If the waiver is

 

 5  approved, for all other nursing homes and long-term care units

 

 6  the quality assurance assessment rate is to be calculated by

 

 7  dividing the total statewide maximum allowable assessment

 

 8  permitted under subsection (1)(g) less the total amount to be

 

 9  paid by the nursing homes and long-term care units with less than

 

10  40 or with the maximum number, or more than the maximum number,

 

11  of licensed beds necessary to secure federal approval of the

 

12  application by the total number of nonmedicare patient days of

 

13  care provided within the immediately preceding year by those

 

14  nursing homes and long-term care units with more than 39, but

 

15  less than the maximum number of licensed beds necessary to secure

 

16  federal approval. The quality assurance assessment, as provided

 

17  under this subparagraph, shall be assessed in the first quarter

 

18  after federal approval of the waiver and shall be subsequently

 

19  assessed on October 1 of each following year, and is payable on a

 

20  quarterly basis, the first payment due 90 days after the date the

 

21  assessment is assessed.

 

22        (ii) If the waiver is approved, continuing care retirement

 

23  centers are exempt from the quality assurance assessment if the

 

24  continuing care retirement center requires each center resident

 

25  to provide an initial life interest payment of $150,000.00, on

 

26  average, per resident to ensure payment for that resident's

 

27  residency and services and the continuing care retirement center

 


 1  utilizes all of the initial life interest payment before the

 

 2  resident becomes eligible for medical assistance under the

 

 3  state's medicaid plan. As used in this subparagraph, "continuing

 

 4  care retirement center" means a nursing care facility that

 

 5  provides independent living services, assisted living services,

 

 6  and nursing care and medical treatment services, in a campus-like

 

 7  setting that has shared facilities or common areas, or both.

 

 8        (d) Beginning October 1, 2007 2011, the department shall no

 

 9  longer assess or collect the quality assurance assessment or

 

10  apply for federal matching funds.

 

11        (e) Beginning May 10, 2002, the department of community

 

12  health shall increase the per diem nursing home medicaid

 

13  reimbursement rates for the balance of that year. For each

 

14  subsequent year in which the quality assurance assessment is

 

15  assessed and collected, the department of community health shall

 

16  maintain the medicaid nursing home reimbursement payment increase

 

17  financed by the quality assurance assessment.

 

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

 

19  section in a manner that complies with federal requirements

 

20  necessary to assure that the quality assurance assessment

 

21  qualifies for federal matching funds.

 

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

 

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

 

24  department of community health may assess the nursing home or

 

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

 

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

 

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

 


 1  health may also refer for collection to the department of

 

 2  treasury past due amounts consistent with section 13 of 1941 PA

 

 3  122, MCL 205.13.

 

 4        (h) The medicaid nursing home quality assurance assessment

 

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

 

 6  community health shall deposit the revenue raised through the

 

 7  quality assurance assessment with the state treasurer for deposit

 

 8  in the medicaid nursing home quality assurance assessment fund.

 

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

 

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

 

11        (j) The quality assurance assessment collected under

 

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

 

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

 

14  hospital long-term care unit since the immediately preceding July

 

15  1. Any adjustments in payments are due on the next quarterly

 

16  installment due date.

 

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

 

18  medicaid reimbursement rates shall not be reduced below the

 

19  medicaid reimbursement rates in effect on April 1, 2002 as a

 

20  direct result of the quality assurance assessment collected under

 

21  subsection (1)(g).

 

22        (l) In each fiscal year, 2005-2006, $39,900,000.00 of the

 

23  quality assurance assessment collected pursuant to subsection

 

24  (1)(g) shall be appropriated to the department of community

 

25  health to support medicaid expenditures for long-term care

 

26  services. These funds shall offset an identical amount of general

 

27  fund/general purpose revenue originally appropriated for that

 


 1  purpose.

 

 2        (14) The quality assurance dedication is an earmarked

 

 3  assessment collected under subsection (1)(h). That assessment and

 

 4  all federal matching funds attributed to that assessment shall be

 

 5  used only for the following purpose and under the following

 

 6  specific circumstances:

 

 7        (a) To maintain the increased medicaid reimbursement rate

 

 8  increases as provided for in subdivision (c).

 

 9        (b) The quality assurance assessment shall be assessed on

 

10  all net patient revenue, before deduction of expenses, less

 

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

 

12  medicare cost report and is payable on a quarterly basis, the

 

13  first payment due 90 days after the date the assessment is

 

14  assessed. As used in this subdivision, "medicare net revenue"

 

15  includes medicare payments and amounts collected for coinsurance

 

16  and deductibles.

 

17        (c) Beginning October 1, 2002, the department of community

 

18  health shall increase the hospital medicaid reimbursement rates

 

19  for the balance of that year. For each subsequent year in which

 

20  the quality assurance assessment is assessed and collected, the

 

21  department of community health shall maintain the hospital

 

22  medicaid reimbursement rate increase financed by the quality

 

23  assurance assessments.

 

24        (d) The department of community health shall implement this

 

25  section in a manner that complies with federal requirements

 

26  necessary to assure that the quality assurance assessment

 

27  qualifies for federal matching funds.

 


 1        (e) If a hospital fails to pay the assessment required by

 

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

 

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

 

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

 

 5  50% of the assessment. The department of community health may

 

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

 

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

 

 8        (f) The hospital quality assurance assessment fund is

 

 9  established in the state treasury. The department of community

 

10  health shall deposit the revenue raised through the quality

 

11  assurance assessment with the state treasurer for deposit in the

 

12  hospital quality assurance assessment fund.

 

13        (g) In each fiscal year governed by this subsection, the

 

14  quality assurance assessment shall only be collected and expended

 

15  if medicaid hospital inpatient DRG and outpatient reimbursement

 

16  rates and disproportionate share hospital and graduate medical

 

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

 

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

 

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

 

20  provided in subdivision (h).

 

21        (h) The quality assurance assessment collected under

 

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

 

23  September 30, 2008, or in the event that the quality assurance

 

24  assessment is not eligible for federal matching funds. Any

 

25  portion of the quality assurance assessment collected from a

 

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

 

27  returned to the hospital.

 


    House Bill No. 4185 as amended September 25, 2007

 

 1        (i) In fiscal year 2005-2006, $46,400,000.00 of the quality

 

 2  assurance assessment collected pursuant to subsection (1)(h)

 

 3  shall be appropriated to the department of community health to

 

 4  support medicaid expenditures for hospital services and therapy.

 

 5  In fiscal year 2006-2007, $66,400,000.00 of the quality assurance

 

 6  assessment collected pursuant to subsection (1)(h) shall be

 

 7  appropriated to the department of community health to support

 

 8  medicaid expenditures for hospital services and therapy. <<Except as

 

 9  otherwise provided in this subdivision, in fiscal year 2007-2008,

 

10  $66,400,000.00 of the quality assurance assessment collected pursuant to

 

11  subsection (1)(h) shall be appropriated to the department of community

 

12  health to support medicaid expenditures for hospital services and

    therapy. However, if the state receives approval from the centers for

    medicare and medicaid services to increase medicaid health maintenance

    organization hospital payment rates that increase medicaid payments to

    hospitals by $120,000,000.00 or more in fiscal year 2007-2008, then in

    fiscal year 2007-2008, $81,400,000.00, instead of $66,400,000.00, of the

    quality assurance assessment collected pursuant to subsection (1)(h)

    shall be appropriated to the department of community health to support

    medicaid expenditures for hospital services and therapy.>> These

 

13  funds shall offset an identical amount of general fund/general

 

14  purpose revenue originally appropriated for that purpose.

 

15        (15) The quality assurance assessment provided for under

 

16  this section is a tax that is levied on a health facility or

 

17  agency.

 

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

 

19  defined in section 22207.