ARTICLE 13 SUBSTITUTE A

Relating To Hospital Uncompensated Care

SECTION 1. Sections 40-8.3-2 and 40-8.3-3 of the General Laws in Chapter 40-8.3 entitled “Uncompensated Care” are hereby amended to read as follows:

§ 40-8.3-2.  Definitions. – As used in this chapter:

(1) "Base year" means for the purpose of calculating a disproportionate share payment for any fiscal year ending after September 30, 2005, the period from October 1, 2003 through September 30, 2004.

(2) "Medical assistance inpatient utilization rate for a “hospital” means a fraction (expressed as a percentage) the numerator of which is the hospital's number of inpatient days during the base year attributable to patients who were eligible for medical assistance during the base year and the denominator of which is the total number of the hospital's inpatient days in the base year.

(3) "Participating hospital" means any nongovernment and nonpsychiatric hospital that: (i) was licensed as a hospital in accordance with chapter 17 of title 23 during the base year, (ii) achieved a medical assistance inpatient utilization rate of at least one percent (1%) during the base year, and (iii) continues to be licensed as a hospital in accordance with chapter 17 of title 23 during the payment year.

(4) "Uncompensated care costs" means, as to any hospital, the sum of: (i) the cost incurred by such hospital during the base year for inpatient or outpatient services attributable to charity care (free care and bad debts) for which the patient has no health insurance or other third-party coverage less payments, if any, received directly from such patients and (ii) the cost incurred by such hospital during the base year for inpatient or out-patient services attributable to medicaid beneficiaries less any medicaid reimbursement received therefor; multiplied by the uncompensated care index.

(5) "Uncompensated care index" means the annual percentage increase for hospitals established pursuant to § 27-19-14 for each year after the base year, up to and including the payment year, provided, however, that the uncompensated care index for the payment year ending September 30, 2005 shall be deemed to be five and eighty-five hundredths percent (5.85%), and that the uncompensated care index for the payment year ending September 30, 2006 shall be deemed to be five and fifty hundredths percent (5.50%). , and that the uncompensated care index for the payment year ending September 30, 2007 shall be deemed to be five and forty-seven hundredths percent (5.47%).

§ 40-8.3-3.  Implementation. – (a) For the fiscal year commencing on October 1, 2006 and ending September 30, 2006 2007, the department of human services shall submit to the Secretary of the U.S. Department of Health and Human Services a state plan amendment to the Rhode Island Medicaid state plan for disproportionate share hospital payments (DSH Plan) to provide:

(1) Disproportionate share hospital payments to all participating hospitals not to exceed an aggregate limit of $97.8 million, to be allocated by the department to the Pool A, Pool C and Pool D components of the DSH Plan;

(2) That the Pool D allotment shall be distributed among the participating hospitals in direct proportion to the individual participating hospitals uncompensated care costs for the base year inflated by the uncompensated care index to the total uncompensated care costs for the base year inflated by uncompensated care index for all participating hospitals. The disproportionate share payments shall be made on or before December 15, 2005 July 16, 2007 and are expressly conditioned upon approval on or before December 8, 2005 July 9, 2007 by the Secretary of the U.S. Department of Health and Human Services, or his or her authorized representative, of all Medicaid state plan amendments necessary to secure for the state the benefit of federal financial participation in federal fiscal year 2006 2007 for the disproportionate share payments.

(b) No provision is made pursuant to this chapter for disproportionate share hospital payments to participating hospitals for uncompensated care costs related to graduate medical education programs.

SECTION 2. This article shall take effect upon passage.