Chapter 120
2010 -- H 8270
Enacted 06/22/10
A N A C T
RELATING TO
MAKING APPROPRIATIONS IN SUPPORT OF FY 2011
Introduced By: Representatives Costantino, Melo, and Carter
Date Introduced: June 09, 2010
It is enacted by the General
Assembly as follows:
SECTION 1. Notwithstanding the provisions of 2010-H 7397
Substitute A, as amended,
Article 1 entitled
“Relating to Making Appropriations in Support of FY 2011” is hereby amended
on page on page 1, line 21, to change the number
"2,077,066" to the number "2,007,066", and is
further amended on page 2, line 18, to change the number
"3,776,902" to the number
"3,776,092".
SECTION 2. Section 40-8-13.4 of the General Laws in Chapter
40-8 entitled “Medical
Assistance” is hereby
amended to read as follows:
40-8-13.4. Rate
methodology for payment for in state and out of state hospital
services. -- (a)
The department of human services shall implement a new
methodology for
payment for in state and out of state hospital services in
order to ensure access to and the
provision of high quality and cost-effective hospital care to
its eligible recipients.
(b) In order to improve
efficiency and cost effectiveness, the department of human
services shall:
(1)(A) With respect to
inpatient services for persons in fee for service Medicaid, which
is non-managed care, implement a new payment methodology
for inpatient services utilizing the
Diagnosis Related Groups (DRG) method of payment,
which is, a patient classification method
which provides a means of relating payment to the hospitals
to the type of patients cared for by
the hospitals. It is understood that a payment method
based on Diagnosis Related Groups may
include cost outlier payments and other specific exceptions.
The department will review the DRG
payment method and the DRG base price annually, making
adjustments as appropriate in
consideration of such elements as trends in hospital input costs,
patterns in hospital coding,
beneficiary access to care, and the Center for Medicare and
Medicaid Services national CMS
Prospective Payment System (IPPS)
Hospital Input Price index.
(B) With respect to
inpatient services for persons enrolled in Medicaid managed care
plans, it is required effective January 1, 2011, that: (i) Medicaid managed care payment rates to
any hospital, in aggregate on a case mix adjusted basis
(adjusting payment for a beneficiary’s
condition and needs), shall not exceed one hundred and ten
percent (110%) of that hospital’s
Medicaid payment rates. (ii) Medicaid managed care payment rates between each
hospital and
health plan shall not exceed contracted payment rates
between the hospital and the health plan
that were in effect during calendar year 2009 as adjusted
by the Center for Medicare and
Medicaid Services national CMS Prospective Payment
System (IPPS) Hospital Input Price index
as measured annually and using calendar year 2009 as a
base year. Calculation of each hospital's
aggregate payment rates on a case mix adjusted basis, shall be
based using a single statewide rate
schedule notwithstanding hospital-specific rates that may be
paid on a transitional basis under
fee-for-service Medicaid; (iii) all hospitals licensed in
rates as payment in full; and (iv) for all such hospitals,
compliance with the provisions of this
section shall be a condition of participation in the Rhode
Island Medicaid program.
(2) With respect to
outpatient services and notwithstanding any provisions of the law to
the contrary, for persons enrolled in fee for service
Medicaid, the department will reimburse
hospitals for outpatient services using a rate methodology
determined by the department and in
accordance with federal regulations. The department will adjust
payment rates annually to reflect
CMS adjustments.
(B) With respect to
inpatient services, (i) it is required as of January
1, 2011 until
December 31, 2011, that the Medicaid managed care
payment rates between each hospital and
health plan shall not exceed ninety and one tenth percent
(90.1%) of the rate in effect as of June
30, 2010. Negotiated increases in inpatient hospital payments
for the twelve (12) month period
beginning January 1, 2012 may not exceed the Centers for
Medicare and Medicaid Services
national CMS Prospective Payment System (IPPS) Hospital Input
Price index for the applicable
period; (ii) The
and process to assure that savings associated with the
payment reductions will accrue directly to
the
be retained by the managed care plans; (iii) All
hospitals licensed in
such payment rates as payment in full; and (iv) for all
such hospitals, compliance with the
provisions of this section shall be a condition of participation
in the
program.
(2) With respect to
outpatient services and notwithstanding any provisions of the law to
the contrary, for persons enrolled in fee for service
Medicaid, the department will reimburse
hospitals for outpatient services using a rate methodology
determined by the department and in
accordance with federal regulations. With respect to the
outpatient rate, it is required as of
January 1, 2011 until December 31, 2011, that the
Medicaid managed care payment rates between
each hospital and health plan shall not exceed one hundred
percent (100%) of the rate in effect as
of June 30, 2010.
(c) It is intended that
payment utilizing the Diagnosis Related Groups method shall
reward hospitals for providing the most efficient care, and
provide the department the opportunity
to conduct value based purchasing of inpatient care.
(d) The director of the
department of human services and/or the secretary of executive
office of health and human services is hereby authorized to
promulgate such rules and regulations
consistent with this chapter, and to establish fiscal procedures
he or she deems necessary for the
proper implementation and administration of this chapter in
order to provide payment to hospitals
using the Diagnosis Related Group payment methodology.
Furthermore, amendment of the
Social Security Act is hereby authorized to provide
for payment to hospitals for services provided
to eligible recipients in accordance with this chapter.
(e) The department
shall comply with all public notice requirements necessary to
implement these rate changes.
(f) As a condition of
participation in the DRG methodology for payment of hospital
services, every hospital shall submit year-end settlement
reports to the department within one
year from the close of a hospital's fiscal year. Should a
participating hospital fail to timely submit
a year-end settlement report as required by this
section, 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 said report is submitted.
(g) The provisions of
this section shall be effective upon implementation of the
amendments and new payment methodology pursuant to this section
and section 40-8-13.3, which
shall in any event be no later than March 30, 2010, at
which time the provisions of §§ 40-8-13.2,
27-19-14, 27-19-15 and 27-19-16 shall be repealed in
their entirety.
(h) The director of the
Department of Human Services shall establish an independent
study commission comprised of representatives of the
hospital network, representatives from the
communities the hospitals serve, state and local policy makers
and any other stakeholders or
consumers interested in improving the access and affordability
of hospital care.
The study commission
shall assist the director in identifying: issues of concern and
priorities in the community hospital system, the delivery of
services and rate structures, including
graduate medical education and training programs; and
opportunities for building sustainable and
effective pubic-private partnerships that support the missions
of the department and the state's
community hospitals.
The director of the
Department of Human Services shall report to the chairpersons of the
House and Senate Finance Committees the findings and
recommendations of the study
commission by December 31, 2010.
SECTION 3. Sections 44-34.1-1 and 44-34.1-2 of the General Laws
in Chapter 44-34.1
entitled "Motor Vehicle and Trailer Excise Tax
Elimination Act of 1998" are hereby amended to
read as follows:
44-34.1-1.
Excise tax phase-out. -- (a) (1) Notwithstanding the provisions of chapter 34
of this title or any other provisions to the contrary,
the motor vehicle and trailer excise tax
established by section 44-34-1 may be phased out. The phase-out
shall apply to all motor vehicles
and trailers, including leased vehicles.
(2) Lessors
of vehicles that pay excise taxes directly to municipalities shall provide
lessees, at the time of entering into the lease agreement, an
estimate of annual excise taxes
payable throughout the term of the lease. In the event the
actual excise tax is less than the
estimated excise tax, the lessor
shall annually rebate to the lessee the difference between the
actual excise tax and the estimated excise tax.
(b) Pursuant to the
provisions of this section, all motor vehicles shall be assessed a value
by the vehicle value commission. That value shall be
assessed according to the provisions of
section 44-34-11(c)(1) and in accordance with the terms as
defined in subsection (d) of this
section; provided, however, that the maximum taxable value
percentage applicable to model year
values as of December 31, 1997, shall continue to be
applicable in future year valuations aged by
one year in each succeeding year.
(c) (1) The motor vehicle excise tax phase-out shall commence with
the excise tax bills
mailed to taxpayers for the fiscal year 2000. The phase-out,
beyond fiscal year 2003, shall be
subject to annual review and appropriation by the general
assembly. The tax assessors of the
various cities and towns and fire districts shall reduce the
average retail value of each vehicle
assessed by using the prorated exemptions from the following
table:
Local Fiscal Year State
fiscal year
Exempt from value Local Exemption Reimbursement
fiscal
year 1999 0 $1,500
fiscal
year 2000 $1,500 $2,500
fiscal
year 2001 $2,500 $3,500
fiscal
year 2002 $3,500 $4,500
fiscal
years 2003, 2004
and
2005 $4,500 $4,500
for
fiscal year 2006 and $5,000 $5,000
for
fiscal year 2007 $6,000 $6,000
for
fiscal years 2008, 2009 and 2010 the exemption and the state fiscal year
reimbursement shall be increased, at a minimum, to the maximum
amount to the nearest two
hundred and fifty dollar ($250) increment within the allocation
of one and twenty-two hundredths
percent (l.22%) of net terminal income derived from video
lottery games pursuant to the
provisions of section 42-61-15, and in no event shall the
exemption in any fiscal year be less than
the prior fiscal year.
for
fiscal year 2011 and thereafter, the exemption shall be five hundred dollars
($500).
Cities and towns may provide an additional exemption of
five thousand five hundred dollars
($5,500) or more; provided, however, any such additional exemption shall not be subject
to
reimbursement.
(2) The excise tax
phase-out shall provide levels of assessed value reductions until the tax
is eliminated or reduced as provided in this chapter.
(3) Current exemptions
shall remain in effect as provided in this chapter.
(4) The excise tax rates
and ratios of assessment shall be maintained at a level identical to
the level in effect for fiscal year 1998 for each city,
town, and fire district; provided, in the town
of
the level in effect for fiscal year 1999 levels and the
levy of a city, town, or fire district shall be
limited to the lesser of the maximum taxable value or net
assessed value for purposes of
collecting the tax in any given year. Provided, however, for
fiscal year 2011 and thereafter, the
rates and ratios of assessment may be less than but not
more than the rates described in this
subsection (4).
(d) Definitions.
(1) "Maximum
taxable value" means the value of vehicles as prescribed by section 44-34-
11 reduced by the percentage of assessed value
applicable to model year values as determined by
the
the commission as of December 31, 1997. For all vehicle
value types not valued by the Rhode
Island vehicle value commission as of December 31,
1997, the maximum taxable value shall be
the latest value determined by a local assessor from an
appropriate pricing guide, multiplied by
the ratio of assessment used by that city, town, or fire
district for a particular model year as of
December 31, 1997.
(2) "Net assessed
value" means the motor vehicle values as determined in accordance
with section 44-34-11 less all personal exemptions allowed
by cities, towns, fire districts, and the
state of
(e) If any provision of
this chapter shall be held invalid by any court of competent
jurisdiction, the remainder of this chapter and the applications
of the provisions hereof shall not
be effected thereby.
44-34.1-2. City
and town and fire district reimbursement. -- (a) In
fiscal years 2000
and thereafter, cities and towns and fire districts shall
receive reimbursements, as set forth in this
section, from state general revenues equal to the amount of
lost tax revenue due to the phase out
or reduction of the excise tax. Cities and towns and
fire districts shall receive advance
reimbursements through state fiscal year 2002. In the event the tax
is phased out, cities and towns
and fire districts shall receive a permanent distribution
of sales tax revenue pursuant to section
44-18-18 in an amount equal to any lost revenue
resulting from the excise tax elimination. Lost
revenues must be determined using a base tax rate fixed at
fiscal year 1998 levels for each city,
town, and fire district, except that the Town of
year 1999 level. Provided, however, for fiscal year
2011 and thereafter, the base tax rate may be
less than but not more than the rates described in this
subsection (a).
(b) (1) The director of administration shall determine the amount of
general revenues to
be distributed to each city and town and fire district
for the fiscal years 1999 and thereafter so that
every city and town and fire district is held harmless from
tax loss resulting from this chapter,
assuming that tax rates are indexed to inflation through
fiscal year 2003.
(2) The director of
administration shall index the tax rates for inflation by applying the
annual change in the December Consumer Price Index -- All
Urban Consumers (CPI-U),
published by the Bureau of Labor Statistics of the United
States Department of Labor, to the
indexed tax rate used for the prior fiscal year calculation;
provided, that for state reimbursements
in fiscal years 2004 and thereafter, the indexed tax
rate shall not be subject to further CPI-U
adjustments. The director shall apply the following principles in
determining reimbursements:
(i)
Exemptions granted by cities and towns and fire districts in the fiscal year
1998 must
be applied to assessed values prior to applying the
exemptions in section 44-34.1-1(c)(1). Cities
and towns and fire districts will not be reimbursed for
these exemptions.
(ii) City, town, and fire
districts shall be reimbursed by the state for revenue losses
attributable to the exemptions provided for in section 44-34.1-1
and the inflation indexing of tax
rates through fiscal 2003. Reimbursement for revenue losses
shall be calculated based upon the
difference between the maximum taxable value less personal
exemptions and the net assessed
value.
(iii) Inflation
reimbursements shall be the difference between:
(A) The levy calculated
at the tax rate used by each city and town and fire district for
fiscal year 1998 after adjustments for personal exemptions
but prior to adjustments for
exemptions contained in section 44-34.1-1(c)(1); provided, that
for the town of
rate used for fiscal year 1999 must be used for the calculation;
and
(B) The levy calculated
by applying the appropriate cumulative inflation adjustment
through state fiscal 2003 to the tax rate used by each city
and town and fire district for fiscal year
1998; provided, that for the town of
for the calculation after adjustments for personal
exemptions but prior to adjustments for
exemptions contained in section 44-34.1-1.
(c) (1) Funds shall be
distributed to the cities and towns and fire districts as follows:
(i)
On October 20, 1998, and each October 20 thereafter through October 20, 2001,
twenty-five percent (25%) of the amount calculated by the
director of administration to be the
difference for the upcoming fiscal year.
(ii) On February 20,
1999, and each February 20 thereafter through February 20, 2002,
twenty-five percent (25%) of the amount calculated by the
director of administration to be the
difference for the upcoming fiscal year.
(iii) On June 20, 1999,
and each June 20 thereafter through June 20, 2002, fifty percent
(50%) of the amount calculated by the director of
administration to be the difference for the
upcoming fiscal year.
(iv)
On August 1, 2002, and each August 1 thereafter, twenty-five percent
(25%) of the
amount calculated by the director of administration to be
the difference for the current fiscal year.
(v) On November 1,
2002, and each November 1 thereafter, twenty-five percent (25%)
of the amount calculated by the director of
administration to be the difference for the current
fiscal year.
(vi)
On February 1, 2003, and each February 1 thereafter, twenty-five percent
(25%) of
the amount calculated by the director of administration to
be the difference for the current fiscal
year.
(vii) On May 1, 2003,
and each May 1 thereafter, except May 1, 2010, twenty-five
percent (25%) of the amount calculated by the director of
administration to be the difference for
the current fiscal year.
(viii) On June 15, 2010,
twenty-five percent (25%) of the amount calculated by the
director of administration to be the difference for the
current fiscal year.
Provided, however, the
February and May payments, and June payment in 2010, shall be
subject to submission of final certified and reconciled motor
vehicle levy information.
(2) Each city, town, or
fire district shall submit final certified and reconciled motor
vehicle levy information by August 30 of each year. Any
adjustment to the estimated amounts
paid in the previous fiscal year shall be included or
deducted from the payment due November 1.
(3) On any of the
payment dates specified in paragraphs (1)(i) through (vii) of this
subsection, the director is authorized to deduct previously made
over-payments or add
supplemental payments as may be required to bring the
reimbursements into full compliance with
the requirements of this chapter.
(4) For the city of
on February 20, 1999, and each February 20 thereafter
through February 20, 2002, twenty-five
percent (25%) on June 20, 1999, and each June 20 thereafter
through June 20, 2002, which
includes final reconciliation of the previous year's payment,
and fifty percent (50%) on October
20, 1999, and each October 20
thereafter through October 20, 2002.
For local fiscal years 2003
and thereafter, the payment schedule is twenty-five
percent (25%) on each November 1, twenty-
five percent (25%) on each February 1, twenty-five percent
(25%) on each May 1, which includes
final reconciliation of the previous year's payment, and
twenty-five percent (25%) on each
August 1; provided, the May and August payments shall
be subject to submission of final
certified and reconciled motor vehicle levy information.
(5) When the tax is
phased out, funds distributed to the cities, towns, and fire districts for
the following fiscal year shall be calculated as the funds
distributed in the fiscal year of the phase-
out. Twenty-five percent (25%) of the amounts calculated
shall be distributed to the cities and
towns and fire districts on August 1, in the fiscal year of
the phase-out, twenty-five percent (25%)
on the following November 1, twenty-five percent (25%)
on the following February 1, and
twenty-five percent (25%) on the following May 1. The funds
shall be distributed to each city and
town and fire district in the same proportion as
distributed in the fiscal year of the phase-out.
(6) When the tax is
phased out to August 1, of the following fiscal year the director of
administration shall calculate to the nearest tenth of one cent
($.001) the number of cents of sales
tax received for the fiscal year ending June 30, of the
year following the phase-out equal to the
amount of funds distributed to the cities, towns, and fire
districts under this chapter during the
fiscal year following the phase-out and the percent of the
total funds distributed in the fiscal year
following the phase-out received by each city, town, and fire
district, calculated to the nearest
one-hundredth of one percent (0.01%). The director of the
department of administration shall
transmit those calculations to the governor, the speaker of
the house, the president of the senate,
the chairperson of the house finance committee, the
chairperson of the senate finance committee,
the house fiscal advisor, and the senate fiscal advisor.
The number of cents, applied to the sales
taxes received for the prior fiscal year, shall be the
basis for determining the amount of sales tax
to be distributed to the cities and towns and fire
districts under this chapter for second fiscal year
following the phase-out and each year thereafter. The cities
and towns and fire districts shall
receive that amount of sales tax in the proportions
calculated by the director of administration as
that received in the fiscal year following the phase-out.
(7) When the tax is
phased out, twenty-five percent (25%) of the funds shall be
distributed to the cities, towns, and fire districts on August 1,
of the following fiscal year and
every August 1 thereafter; twenty-five percent (25%) shall
be distributed on the following
November 1, and every November 1 thereafter;
twenty-five percent (25%) shall be distributed on
the following February 1, and every February 1
thereafter; and twenty-five percent (25%) shall be
distributed on the following May 1, and every May 1 thereafter.
(8) For the city of
(25%) shall be distributed on November 1, of the
following fiscal year and every November 1
thereafter, twenty-five percent (25%) shall be distributed on the
following February 1, and every
February 1 thereafter; twenty-five percent (25%) shall
be distributed on the following May 1, and
every May 1 thereafter; and twenty-five percent (25%) of
the funds shall be distributed on the
following August 1, and every August 1 thereafter.
(9) As provided for in
section 44-34-6, the authority of fire districts to tax motor vehicles
is eliminated effective with the year 2000 tax roll and
the state reimbursement for fire districts
shall be based on the provisions of section 44-34-6. All
references to fire districts in this chapter
do not apply to the year 2001 tax roll and thereafter.
(10) For reimbursements
payable in the year ending June 30, 2008 and thereafter, the
director of administration shall discount the calculated value
of the exemption to ninety-eight
percent (98%) in order to establish a collection rate that is
comparable to the collection rate
achieved by municipalities in the levy of the motor vehicle
excise tax.
(11) For reimbursements
payable in the year ending June 30, 2010, the director of
administration shall reimburse cities and towns eighty-eight percent
(88%) of the reimbursements
payable pursuant to subdivision (c)(10) above.
(12) For fiscal year
2011 and thereafter, the state shall reimburse cities and towns for the
exemption pursuant to subdivision (c)(10) above, ratably
reduced to the appropriation.
SECTION 4. Section 44-34-6 of the General Laws in Chapter
44-34 entitled "Excise on
Motor Vehicles and Trailers"
is hereby amended to read as follows:
44-34-6.
Fire districts. -- The provisions of this chapter
shall apply in all respects in the
case of taxes assessed upon motor vehicles by any fire
district. Effective with the year 2000 tax
roll based upon values of December 31, 1999, the authority
of fire districts as authorized by
general or public law to levy excise taxes on motor vehicles
is eliminated and each district shall
be reimbursed for one hundred percent (100%) of current
year lost revenues through fiscal year
2010 based upon what the levy net of personal
exemptions would otherwise have been. That
reimbursement shall be based upon submission of information to the
department of revenue on
the dates specified in section 44-34.1-2, and reimbursements
shall be paid on the dates specified
in that section. Future year reimbursements through
fiscal year 2010 shall be based upon the year
2000 tax roll and values of December 31, 1999, and
indexed by applying the annual change in the
December Consumer Price Index -- All
Urban Consumers (CPI-U). For
fiscal year 2011 and
thereafter the state shall not reimburse fire districts pursuant
to this chapter. Provided, for fiscal
year 2011, and thereafter, the authority of fire districts
to levy excise taxes shall be deemed
restored. The year 2010 tax roll shall be based upon values of
December 31, 2009, with
corresponding adjustments made for each subsequent year based on
the valuation of vehicles as
of December 31 of the year preceding the tax year.
SECTION
5. This article shall take effect upon passage.
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LC02930
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