HB-4734, As Passed House, September 13, 2011HB-4734

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 4734

 

 

 

 

 

 

 

 

 

 

 

 

      A bill to amend 1978 PA 368, entitled

 

"Public health code,"

 

by amending section 20161 (MCL 333.20161), as amended by 2008 PA

 

277.

 

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:

 

 

     (a) Freestanding surgical


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

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

     (c) Nursing homes, county

medical care facilities, and

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

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

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

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

                                     survey; and $20.00 per

10                                      licensed bed.

11      (g) Subject to subsection

12 (13), quality assurance assessment

13 for nursing homes and hospital

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

15                                      in not more than 6%

16                                      of total industry

17                                      revenues.

18      (h) Subject to subsection

19 (14), quality assurance assessment

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

21                                      rate that generates

22                                      funds not more than the

23                                      maximum allowable under

24                                      the federal matching

25                                      requirements, after

26                                      consideration for the

27                                      amounts in subsection

28                                      (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  technology, management, and budget in effect at the time of the

 

21  travel.

 

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

 

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

 

24  209.

 

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

 

26  and assessments collected under this section shall be deposited

 

27  in the state treasury, to the credit of the general fund. The

 


 1  department may use the unreserved fund balance in fees and

 

 2  assessments for the background criminal history check program

 

 3  required under this article.

 

 4        (13) The quality assurance assessment collected under

 

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

 

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

 

 7  under the following specific circumstances:

 

 8        (a) The quality assurance assessment and all federal

 

 9  matching funds attributed to that assessment shall be used to

 

10  finance medicaid nursing home reimbursement payments. Only

 

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

 

12  assessed the quality assurance assessment and participate in the

 

13  medicaid program are eligible for increased per diem medicaid

 

14  reimbursement rates under this subdivision. A nursing home or

 

15  long-term care unit that is assessed the quality assurance

 

16  assessment and that does not pay the assessment required under

 

17  subsection (1)(g) in accordance with subdivision (c)(i) or in

 

18  accordance with a written payment agreement with the state shall

 

19  not receive the increased per diem medicaid reimbursement rates

 

20  under this subdivision until all of its outstanding quality

 

21  assurance assessments and any penalties assessed pursuant to

 

22  subdivision (g) (f) have been paid in full. Nothing in this

 

23  subdivision shall be construed to authorize or require the

 

24  department to overspend tax revenue in violation of the

 

25  management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594.

 

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

 

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

 


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

 

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

 

 3  patients within the immediately preceding year and shall be

 

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

 

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

 

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

 

 7  assessment is assessed.

 

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

 

 9  shall submit an application to the federal centers for medicare

 

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

 

11  433.68(e) to implement this subdivision as follows:

 

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

 

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

 

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

 

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

 

16  secure federal approval of the application is $2.00 per

 

17  nonmedicare patient day of care provided within the immediately

 

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

 

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

 

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

 

21  the quality assurance assessment rate is to be calculated by

 

22  dividing the total statewide maximum allowable assessment

 

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

 

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

 

25  40 or with the maximum number, or more than the maximum number,

 

26  of licensed beds necessary to secure federal approval of the

 

27  application by the total number of nonmedicare patient days of

 


 1  care provided within the immediately preceding year by those

 

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

 

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

 

 4  federal approval. The quality assurance assessment, as provided

 

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

 

 6  after federal approval of the waiver and shall be subsequently

 

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

 

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

 

 9  assessment is assessed.

 

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

 

11  centers are exempt from the quality assurance assessment if the

 

12  continuing care retirement center requires each center resident

 

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

 

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

 

15  residency and services and the continuing care retirement center

 

16  utilizes all of the initial life interest payment before the

 

17  resident becomes eligible for medical assistance under the

 

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

 

19  care retirement center" means a nursing care facility that

 

20  provides independent living services, assisted living services,

 

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

 

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

 

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

 

24  longer assess or collect the quality assurance assessment or

 

25  apply for federal matching funds.

 

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

 

27  health shall increase the per diem nursing home medicaid

 


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

 

 2  subsequent year in which the quality assurance assessment is

 

 3  assessed and collected, the department of community health shall

 

 4  maintain the medicaid nursing home reimbursement payment increase

 

 5  financed by the quality assurance assessment.

 

 6        (e) (f) The department of community health shall implement

 

 7  this section in a manner that complies with federal requirements

 

 8  necessary to assure that the quality assurance assessment

 

 9  qualifies for federal matching funds.

 

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

 

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

 

12  department of community health may assess the nursing home or

 

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

 

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

 

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

 

16  health may also refer for collection to the department of

 

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

 

18  122, MCL 205.13.

 

19        (g) (h) The medicaid nursing home quality assurance

 

20  assessment fund is established in the state treasury. The

 

21  department of community health shall deposit the revenue raised

 

22  through the quality assurance assessment with the state treasurer

 

23  for deposit in the medicaid nursing home quality assurance

 

24  assessment fund.

 

25        (h) (i) The department of community health shall not

 

26  implement this subsection in a manner that conflicts with 42 USC

 

27  1396b(w).

 


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

 

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

 

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

 

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

 

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

 

 6  installment due date.

 

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

 

 8  medicaid reimbursement rates shall not be reduced below the

 

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

 

10  direct result of the quality assurance assessment collected under

 

11  subsection (1)(g).

 

12        (k) (l) In fiscal year 2007-2008, $39,900,000.00 of the

 

13  quality assurance assessment collected pursuant to subsection

 

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

 

15  health to support medicaid expenditures for long-term care

 

16  services. The state retention amount of the quality assurance

 

17  assessment collected pursuant to subsection (1)(g) for fiscal

 

18  year 2008-2009 shall be $41,473,500.00, and for each subsequent

 

19  fiscal year shall be equal to 13.2% of the federal funds

 

20  generated by the nursing homes and hospital long-term care units

 

21  quality assurance assessment, including the state retention

 

22  amount. The state retention amount shall be appropriated each

 

23  fiscal year to the department of community health to support

 

24  medicaid expenditures for long-term care services. These funds

 

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

 

26  revenue originally appropriated for that purpose.

 

27        (l) Beginning October 1, 2015, the department shall no longer

 


 1  assess or collect the quality assurance assessment or apply for

 

 2  federal matching funds. The quality assurance assessment

 

 3  collected under subsection (1)(g) shall no longer be assessed or

 

 4  collected after September 30, 2011, in the event that the quality

 

 5  assurance assessment is not eligible for federal matching funds.

 

 6  Any portion of the quality assurance assessment collected from a

 

 7  nursing home or hospital long-term care unit that is not eligible

 

 8  for federal matching funds shall be returned to the nursing home

 

 9  or hospital long-term care unit.

 

10        (14) The quality assurance dedication is an earmarked

 

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

 

12  all federal matching funds attributed to that assessment shall be

 

13  used only for the following purpose and under the following

 

14  specific circumstances:

 

15        (a) To maintain the increased medicaid reimbursement rate

 

16  increases as provided for in subdivision (c).

 

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

 

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

 

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

 

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

 

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

 

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

 

23  includes medicare payments and amounts collected for coinsurance

 

24  and deductibles.

 

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

 

26  health shall increase the hospital medicaid reimbursement rates

 

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

 


 1  the quality assurance assessment is assessed and collected, the

 

 2  department of community health shall maintain the hospital

 

 3  medicaid reimbursement rate increase financed by the quality

 

 4  assurance assessments.

 

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

 

 6  section in a manner that complies with federal requirements

 

 7  necessary to assure that the quality assurance assessment

 

 8  qualifies for federal matching funds.

 

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

 

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

 

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

 

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

 

13  50% of the assessment. The department of community health may

 

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

 

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

 

16        (f) The hospital quality assurance assessment fund is

 

17  established in the state treasury. The department of community

 

18  health shall deposit the revenue raised through the quality

 

19  assurance assessment with the state treasurer for deposit in the

 

20  hospital quality assurance assessment fund.

 

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

 

22  quality assurance assessment shall only be collected and expended

 

23  if medicaid hospital inpatient DRG and outpatient reimbursement

 

24  rates and disproportionate share hospital and graduate medical

 

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

 

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

 

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

 


 1  provided in subdivision (h).

 

 2        (h) The quality assurance assessment collected under

 

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

 

 4  September 30, 2011 in the event that the quality assurance

 

 5  assessment is not eligible for federal matching funds. Any

 

 6  portion of the quality assurance assessment collected from a

 

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

 

 8  returned to the hospital.

 

 9        (i) In fiscal year 2007-2008, $98,850,000.00 of the quality

 

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

 

11  shall be appropriated to the department of community health to

 

12  support medicaid expenditures for hospital services and therapy.

 

13  The state retention amount of the quality assurance assessment

 

14  collected pursuant to subsection (1)(h) for fiscal year 2008-2009

 

15  and each subsequent fiscal year shall be equal to 13.2% of the

 

16  federal funds generated by the hospital quality assurance

 

17  assessment, including the state retention amount. The state

 

18  retention percentage shall be applied proportionately to each

 

19  hospital quality assurance assessment program to determine the

 

20  retention amount for each program. The state retention amount

 

21  shall be appropriated each fiscal year to the department of

 

22  community health to support medicaid expenditures for hospital

 

23  services and therapy. These funds shall offset an identical

 

24  amount of general fund/general purpose revenue originally

 

25  appropriated for that purpose.

 

26        (15) The quality assurance assessment provided for under

 

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

 


 1  agency.

 

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

 

 3  defined in section 22207.