Bill Summaries: S391 (2021)

  • Summary date: Mar 30 2021 - View summary

    Identical to H 383, filed 3/24/21.

    Repeals the following, effective July 1, 2020: SL 2020-88 Section 15.1(b) (which enacted Article 7A of GS Chapter 108A, Hospital Assessment Act), (b1), (c), and (d) (all setting out provisions for calculating hospital costs, supplemental assessments, and base assessments for specified time periods); Section 15.2 (setting out conditions under which funds can be transferred from the Medicaid Contingency Reserve to the Division of Health Benefits as needed to cover any shortfall in receipts from the supplemental or base assessment); and Section 15.3 (concerning a new fund code entitled Hospital Assessment Fund).

    Creates a new Article 7B, Hospital Assessment Act, in GS Chapter 108A, effective July 1, 2021, providing as follows. Specifies that this Article does not authorize a political subdivision of the State to license a hospital for revenue or impose a tax or assessment on a hospital. Sets out and defines 26 terms that are used in the Act, including defining acute care hospital as a hospital licensed in North Carolina that is not a freestanding psychiatric hospital, a freestanding rehabilitation hospital, a long-term care hospital, or a State-owned and State-operated hospital. Requires assessments to be calculated, imposed, and due quarterly and requires payment within seven days of the due date. Sets out actions that may be taken against hospitals owing a past-due assessment amount. Allows a hospital to appeal a determination of the assessment amount through a reconsideration review. Allows paid assessments to be included as allowable costs of a hospital for purposes of any applicable Medicaid reimbursement formula, except that assessments paid under this Article are excluded from cost settlement; prohibits adding assessments as a surtax or assessment on a patient's bill. Allows the Secretary of Health and Human Services to adopt rules to implement the Article. Provides that if the Centers for Medicare and Medicaid Services (CMS) determines that an assessment is impermissible or revokes approval of an assessment, then that assessment may not be imposed and the authority to collect the assessment is repealed.

    Sets out provisions for calculating the assessment imposed against public hospitals (applicable to all public acute care hospitals) and against private hospitals (applicable to all private acute care hospitals). Details the individual components of the formula used to calculate the assessment amount. Requires that the proceeds of the assessments, and all corresponding matching federal funds, be used to make the State's annual Medicaid payment to the State, to fund payments to hospitals made directly by the Department, to fund a portion of capitation payments to prepaid health plans attributable to hospital care, and to fund graduate medical education payments. Requires the Department of Health and Human Services (DHHS) to report to the specified NCGA committees and division when DHHS is notified of a possible change in hospital status. Defines hospital status as: (1) a hospital's status as a public acute care hospital, a private acute care hospital, or a hospital owned or controlled by the UNC Health Care system and (2) the operating status of an acute care hospital as open or closed, including new hospitals and hospital closures. Makes the report due 60 days after DHHS is notified of the possible change; specifies the report's contents. Requires DHHS to report to the specified NCGA committees and division when it is notified that a change in hospital status has occurred. Requires the report to be due 60 days after DHHS is notified of the change; specifies the report's contents.

    Sets out the percentages to be used in calculating the public hospital assessment and the private hospital assessment for the quarter beginning July 1, 2021. Sets out additional procedures that DHHS must use to determine the percentages used in calculating the public hospital assessment and the private hospital assessment for the quarter beginning October 1, 2021. 

    Requires DHHS to report to the specified NCGA committee and division by January 1, 2026, with a proposal to replace or adjust the market based percentage as the inflation factor that is used in the hospital assessments under this Article, as well as in the hospital base rates for Medicaid fee-for-service reimbursements, beginning July 1, 2026.

    Effective July 1, 2021.