ARTICLE 13 SUBSTITUTE A AS AMENDED

RELATING TO HOSPITAL PAYMENTS

SECTION 1. Effective July 1, 2007, the department of human services is hereby authorized and directed to amend its regulations and the Rhode Island State Plan for Medical Assistance pursuant to Title XIX of the Social Security Act for reimbursement to hospitals for outpatient services as follows:

Hospitals – Outpatient adjustment payments. – (a) Each hospital in the state of Rhode Island, as defined in section 23-17-38.1(b)(1), shall receive a quarterly adjustment payment during state fiscal year 2008 of an amount determined as follows:

(1) Determine the percent of the state's total Medicaid outpatient and emergency department services (exclusive of physician services) provided by each hospital during the hospital's fiscal year ending during 2006;

(2) Determine the sum of all Medicaid payments to hospitals made for outpatient and emergency department services (exclusive of physician services) provided during each hospital's fiscal year ending during 2006 not including any recoupments or settlements;

(3) Multiply the sum of all Medicaid payments as determined in (2) by 30.2 percent and then multiply that result by each hospital's percentage of the state's total Medicaid outpatient and emergency department services as determined in (1) to obtain the total outpatient adjustment for each hospital to be paid in SFY 2008;

(4) Pay each hospital on or about July 20, 2007, October 20, 2007, January 20, 2008, and April 20, 2008 one-quarter of its total outpatient adjustment as determined in (3) above.

(b) The amounts determined in subsection (a) are in addition to Medicaid outpatient payments and emergency services payments (exclusive of physician services) paid to hospitals in accordance with current state regulation and the Rhode Island Plan for Medicaid Assistance pursuant to Title XIX of the Social Security Act and are not subject to recoupment or settlement.

(c) The payments are expressly conditioned upon approval by the secretary of the United States Department of Health and Human Services, or his or her authorized representative, of any Medicaid state plan amendment necessary to secure for the state the benefit of federal financial participation in federal fiscal year 2008 for such payments, such amendment to be filed not later than July 9, 2007.

SECTION 2. Section 40-8-13.2 of the General Laws in Chapter 40-8 entitled “Medical Assistance” is hereby amended to read as follows:

40-8-13.2.  Prospective rate methodology for in-state hospital services. – As a condition of participation in the established prospective rate methodology for reimbursement of in-state hospital services, every hospital shall submit year-end settlement reports to the department within two (2) one years from the close of a hospital's fiscal year. In the event that a participating hospital fails to timely submit a year-end settlement report as required, the department shall withhold financial cycle payments due by any state agency with respect to this hospital by not more than ten percent (10%) until the report is received.

SECTION 3. This article shall take effect upon passage.