2024 -- S 2751

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LC005490

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

____________

A N   A C T

RELATING TO HEALTH AND SAFETY -- LICENSING OF HEALTHCARE FACILITIES

     Introduced By: Senators DiPalma, Britto, Murray, Zurier, F. Lombardi, DiMario, Picard,
Gu, Bissaillon, and Miller

     Date Introduced: March 08, 2024

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled "Licensing

of Healthcare Facilities" is hereby amended to read as follows:

     23-17-38.1. Hospitals — Licensing fee.

     (a) There is imposed a hospital licensing fee for state fiscal year 2022 against each hospital

in the state. The hospital licensing fee is equal to five and six hundred fifty-six thousandths percent

(5.656%) of the net patient-services revenue of every hospital for the hospital’s first fiscal year

ending on or after January 1, 2020, except that the license fee for all hospitals located in Washington

County, Rhode Island shall be discounted by thirty-seven percent (37%). The discount for

Washington County hospitals is subject to approval by the Secretary of the U.S. Department of

Health and Human Services of a state plan amendment submitted by the executive office of health

and human services for the purpose of pursuing a waiver of the uniformity requirement for the

hospital license fee. This licensing fee shall be administered and collected by the tax administrator,

division of taxation within the department of revenue, and all the administration, collection, and

other provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to

the tax administrator on or before July 13, 2022, and payments shall be made by electronic transfer

of monies to the general treasurer and deposited to the general fund. Every hospital shall, on or

before June 15, 2022, make a return to the tax administrator containing the correct computation of

net patient-services revenue for the hospital fiscal year ending September 30, 2020, and the

licensing fee due upon that amount. All returns shall be signed by the hospital’s authorized

representative, subject to the pains and penalties of perjury.

     (b)(a) There is also imposed a hospital licensing fee for state fiscal year 2023 against each

hospital in the state. The hospital licensing fee is equal to five and forty-two hundredths percent

(5.42%) of the net patient-services revenue of every hospital for the hospital’s first fiscal year

ending on or after January 1, 2021, except that the license fee for all hospitals located in Washington

County, Rhode Island shall be discounted by thirty-seven percent (37%). The discount for

Washington County hospitals is subject to approval by the Secretary of the U.S. Department of

Health and Human Services of a state plan amendment submitted by the executive office of health

and human services for the purpose of pursuing a waiver of the uniformity requirement for the

hospital license fee. This licensing fee shall be administered and collected by the tax administrator,

division of taxation within the department of revenue, and all the administration, collection, and

other provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to

the tax administrator on or before June 30, 2023, and payments shall be made by electronic transfer

of monies to the general treasurer and deposited to the general fund. Every hospital shall, on or

before May 25, 2023, make a return to the tax administrator containing the correct computation of

net patient-services revenue for the hospital fiscal year ending September 30, 2021, and the

licensing fee due upon that amount. All returns shall be signed by the hospital’s authorized

representative, subject to the pains and penalties of perjury.

     (c)(b) There is also imposed a hospital licensing fee described in subsections (d)(c) through

(g)(f) for state fiscal years 2024 and 2025 against net patient-services revenue of every non-

government owned hospital as defined herein for the hospital’s first fiscal year ending on or after

January 1, 2022. The hospital licensing fee shall have three (3) tiers with differing fees based on

inpatient and outpatient net patient-services revenue. The executive office of health and human

services, in consultation with the tax administrator, shall identify the hospitals in each tier, subject

to the definitions in this section, by July 15, 2023, and shall notify each hospital of its tier by August

1, 2023.

     (d)(c) Tier 1 is composed of hospitals that do not meet the description of either Tier 2 or

Tier 3.

     (1) The inpatient hospital licensing fee for Tier 1 is equal to thirteen and twelve hundredths

percent (13.12%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 1 hospital.

     (2) The outpatient hospital licensing fee for Tier 1 is equal to thirteen and thirty hundredths

percent (13.30%) of the net patient-services revenue derived from outpatient net patient-services

revenue of every Tier 1 hospital.

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     (e)(d) Tier 2 is composed of high Medicaid/uninsured cost hospitals and independent

hospitals.

     (1) The inpatient hospital licensing fee for Tier 2 is equal to two and sixty-three hundredths

percent (2.63%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 2 hospital.

     (2) The outpatient hospital licensing fee for Tier 2 is equal to two and sixty-six hundredths

percent (2.66%) of the outpatient net patient-services revenue derived from outpatient net patient-

services revenue of every Tier 2 hospital.

     (f)(e) Tier 3 is composed of hospitals that are Medicare-designated low-volume hospitals

and rehabilitative hospitals.

     (1) The inpatient hospital licensing fee for Tier 3 is equal to one and thirty-one hundredths

percent (1.31%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 3 hospital.

     (2) The outpatient hospital licensing fee for Tier 3 is equal to one and thirty-three

hundredths percent (1.33%) of the outpatient net patient-services revenue derived from outpatient

net patient-services revenue of every Tier 3 hospital.

     (g)(f) There is also imposed a hospital licensing fee for state fiscal year years 2024 and

2025 against state-government owned and operated hospitals in the state as defined herein. The

hospital licensing fee is equal to five and twenty-five hundredths percent (5.25%) of the net patient-

services revenue of every hospital for the hospital’s first fiscal year ending on or after January 1,

2022.

     (h)(g) The hospital licensing fee described in subsections (c)(b) through (g)(f) is subject to

U.S. Department of Health and Human Services approval of a request to waive the requirement

that healthcare-related taxes be imposed uniformly as contained in 42 C.F.R. § 433.68(d).

     (i)(h) This hospital licensing fee shall be administered and collected by the tax

administrator, division of taxation within the department of revenue, and all the administration,

collection, and other provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the

licensing fee to the tax administrator before June 30 of each fiscal year, and payments shall be made

by electronic transfer of monies to the tax administrator and deposited to the general fund. Every

hospital shall, on or before August 1, 2023, make a return to the tax administrator containing the

correct computation of inpatient and outpatient net patient-services revenue for the hospital fiscal

year ending in 2022, and the licensing fee due upon that amount. All returns shall be signed by the

hospital’s authorized representative, subject to the pains and penalties of perjury.

     (j)(i) For purposes of this section the following words and phrases have the following

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meanings:

     (1) “Gross patient-services revenue” means the gross revenue related to patient care

services.

     (2) “High Medicaid/uninsured cost hospital” means a hospital for which the hospital’s

total uncompensated care, as calculated pursuant to § 40-8.3-2(4), divided by the hospital’s total

net patient-services revenues, is equal to six percent (6.0%) or greater.

     (3) “Hospital” means the actual facilities and buildings in existence in Rhode Island,

licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on

that license, regardless of changes in licensure status pursuant to chapter 17.14 of this title (hospital

conversions) and § 23-17-6(b) (change in effective control), that provides short-term acute inpatient

and/or outpatient care to persons who require definitive diagnosis and treatment for injury, illness,

disabilities, or pregnancy. Notwithstanding the preceding language, the negotiated Medicaid

managed care payment rates for a court-approved purchaser that acquires a hospital through

receivership, special mastership, or other similar state insolvency proceedings (which court-

approved purchaser is issued a hospital license after January 1, 2013) shall be based upon the newly

negotiated rates between the court-approved purchaser and the health plan, and such rates shall be

effective as of the date that the court-approved purchaser and the health plan execute the initial

agreement containing the newly negotiated rate. The rate-setting methodology for inpatient hospital

payments and outpatient hospital payments set forth in §§ 40-8-13.4(b) and 40-8-13.4(b)(2),

respectively, shall thereafter apply to negotiated increases for each annual twelve-month (12)

period as of July 1 following the completion of the first full year of the court-approved purchaser’s

initial Medicaid managed care contract.

     (4) “Independent hospitals” means a hospital not part of a multi-hospital system.

     (5) “Inpatient net patient-services revenue” means the charges related to inpatient care

services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

     (6) “Medicare-designated low-volume hospital” means a hospital that qualifies under 42

C.F.R. 412.101(b)(2) for additional Medicare payments to qualifying hospitals for the higher

incremental costs associated with a low volume of discharges.

     (7) “Net patient-services revenue” means the charges related to patient care services less

(i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual allowances.

     (8) “Non-government owned hospitals” means a hospital not owned and operated by the

state of Rhode Island.

     (9) “Outpatient net patient-services revenue” means the charges related to outpatient care

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services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

     (10) “Rehabilitative hospital” means Rehabilitation Hospital Center licensed by the Rhode

Island department of health.

     (11) “State-government owned and operated hospitals” means a hospital facility licensed

by the Rhode Island department of health, owned and operated by the state of Rhode Island.

     (k)(j) The tax administrator in consultation with the executive office of health and human

services shall make and promulgate any rules, regulations, and procedures not inconsistent with

state law and fiscal procedures that he or she deems necessary for the proper administration of this

section and to carry out the provisions, policy, and purposes of this section.

     (l)(k) The licensing fee imposed by subsection (a) shall apply to hospitals as defined herein

that are duly licensed on July 1, 2021 2022, and shall be in addition to the inspection fee imposed

by § 23-17-38 and to any licensing fees previously imposed in accordance with this section.

     (m) The licensing fee imposed by subsection (b) shall apply to hospitals as defined herein

that are duly licensed on July 1, 2022, and shall be in addition to the inspection fee imposed by §

23-17-38 and to any licensing fees previously imposed in accordance with this section.

     (n)(l) The licensing fees imposed by subsections (c)(b) through (g)(f) shall apply to

hospitals as defined herein that are duly licensed on July 1, 2023, and shall be in addition to the

inspection fee imposed by § 23-17-38 and to any licensing fees previously imposed in accordance

with this section.

     SECTION 2. Section 40-8-19 of the General Laws in Chapter 40-8 entitled "Medical

Assistance" is hereby amended to read as follows:

     40-8-19. Rates of payment to nursing facilities.

     (a) Rate reform.

     (1) The rates to be paid by the state to nursing facilities licensed pursuant to chapter 17 of

title 23, and certified to participate in Title XIX of the Social Security Act for services rendered to

Medicaid-eligible residents, shall be reasonable and adequate to meet the costs that must be

incurred by efficiently and economically operated facilities in accordance with 42 U.S.C. §

1396a(a)(13). The executive office of health and human services (“executive office”) shall

promulgate or modify the principles of reimbursement for nursing facilities in effect as of July 1,

2011, to be consistent with the provisions of this section and Title XIX, 42 U.S.C. § 1396 et seq.,

of the Social Security Act.

     (2) The executive office shall review the current methodology for providing Medicaid

payments to nursing facilities, including other long-term-care services providers, and is authorized

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to modify the principles of reimbursement to replace the current cost-based methodology rates with

rates based on a price-based methodology to be paid to all facilities with recognition of the acuity

of patients and the relative Medicaid occupancy, and to include the following elements to be

developed by the executive office:

     (i) A direct-care rate adjusted for resident acuity;

     (ii) An indirect-care and other direct-care rate comprised of a base per diem for all facilities;

     (iii) Revision of rates as necessary based on increases in direct and indirect costs beginning

October 2024 utilizing data from the most recent finalized year of facility cost report. The per diem

rate components deferred in subsections (a)(2)(i) and (a)(2)(ii) of this section shall be adjusted

accordingly to reflect changes in direct and indirect care costs since the previous rate review;

     (iv) Application of a fair-rental value system;

     (v) Application of a pass-through system; and

     (vi) Adjustment of rates by the change in a recognized national nursing home inflation

index to be applied on October 1 of each year, beginning October 1, 2012. This adjustment will not

occur on October 1, 2013, October 1, 2014, or October 1, 2015, but will occur on April 1, 2015.

The adjustment of rates will also not occur on October 1, 2017, October 1, 2018, October 1, 2019,

and October 2022. Effective July 1, 2018, rates paid to nursing facilities from the rates approved

by the Centers for Medicare and Medicaid Services and in effect on October 1, 2017, both fee-for-

service and managed care, will be increased by one and one-half percent (1.5%) and further

increased by one percent (1%) on October 1, 2018, and further increased by one percent (1%) on

October 1, 2019. Effective October 1, 2022, rates paid to nursing facilities from the rates approved

by the Centers for Medicare and Medicaid Services and in effect on October 1, 2021, both fee-for-

service and managed care, will be increased by three percent (3%). In addition to the annual nursing

home inflation index adjustment, there shall be a base rate staffing adjustment of one-half percent

(0.5%) on October 1, 2021, one percent (1.0%) on October 1, 2022, and one and one-half percent

(1.5%) on October 1, 2023. The inflation index shall be applied without regard for the transition

factors in subsections (b)(1) and (b)(2). For purposes of October 1, 2016, adjustment only, any rate

increase that results from application of the inflation index to subsections (a)(2)(i) and (a)(2)(ii)

shall be dedicated to increase compensation for direct-care workers in the following manner: Not

less than 85% of this aggregate amount shall be expended to fund an increase in wages, benefits,

or related employer costs of direct-care staff of nursing homes. For purposes of this section, direct-

care staff shall include registered nurses (RNs), licensed practical nurses (LPNs), certified nursing

assistants (CNAs), certified medical technicians, housekeeping staff, laundry staff, dietary staff, or

other similar employees providing direct-care services; provided, however, that this definition of

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direct-care staff shall not include: (i) RNs and LPNs who are classified as “exempt employees”

under the federal Fair Labor Standards Act (29 U.S.C. § 201 et seq.); or (ii) CNAs, certified medical

technicians, RNs, or LPNs who are contracted, or subcontracted, through a third-party vendor or

staffing agency. By July 31, 2017, nursing facilities shall submit to the secretary, or designee, a

certification that they have complied with the provisions of this subsection (a)(2)(vi) with respect

to the inflation index applied on October 1, 2016. Any facility that does not comply with the terms

of such certification shall be subjected to a clawback, paid by the nursing facility to the state, in the

amount of increased reimbursement subject to this provision that was not expended in compliance

with that certification.

     (3) Commencing on October 1, 2021, eighty percent (80%) of any rate increase that results

from application of the inflation index to subsections (a)(2)(i) and (a)(2)(ii) of this section shall be

dedicated to increase compensation for all eligible direct-care workers in the following manner on

October 1, of each year.

     (i) For purposes of this subsection, compensation increases shall include base salary or

hourly wage increases, benefits, other compensation, and associated payroll tax increases for

eligible direct-care workers. This application of the inflation index shall apply for Medicaid

reimbursement in nursing facilities for both managed care and fee-for-service. For purposes of this

subsection, direct-care staff shall include registered nurses (RNs), licensed practical nurses (LPNs),

certified nursing assistants (CNAs), certified medication technicians, licensed physical therapists,

licensed occupational therapists, licensed speech-language pathologists, mental health workers

who are also certified nurse assistants, physical therapist assistants, housekeeping staff, laundry

staff, dietary staff or other similar employees providing direct-care services; provided, however

that this definition of direct-care staff shall not include:

     (A) RNs and LPNs who are classified as “exempt employees” under the federal Fair Labor

Standards Act (29 U.S.C. § 201 et seq.); or

     (B) CNAs, certified medication technicians, RNs or LPNs who are contracted or

subcontracted through a third-party vendor or staffing agency.

     (4)(i) By July 31, 2021, and July 31 of each year thereafter, nursing facilities shall submit

to the secretary or designee a certification that they have complied with the provisions of subsection

(a)(3) of this section with respect to the inflation index applied on October 1. The executive office

of health and human services (EOHHS) shall create the certification form nursing facilities must

complete with information on how each individual eligible employee’s compensation increased,

including information regarding hourly wages prior to the increase and after the compensation

increase, hours paid after the compensation increase, and associated increased payroll taxes. A

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collective bargaining agreement can be used in lieu of the certification form for represented

employees. All data reported on the compliance form is subject to review and audit by EOHHS.

The audits may include field or desk audits, and facilities may be required to provide additional

supporting documents including, but not limited to, payroll records.

     (ii) Any facility that does not comply with the terms of certification shall be subjected to a

clawback and twenty-five percent (25%) penalty of the unspent or impermissibly spent funds, paid

by the nursing facility to the state, in the amount of increased reimbursement subject to this

provision that was not expended in compliance with that certification.

     (iii) In any calendar year where no inflationary index is applied, eighty percent (80%) of

the base rate staffing adjustment in that calendar year pursuant to subsection (a)(2)(vi) of this

section shall be dedicated to increase compensation for all eligible direct-care workers in the

manner referenced in subsections (a)(3)(i), (a)(3)(i)(A), and (a)(3)(i)(B) of this section.

     (b) Transition to full implementation of rate reform. For no less than four (4) years after

the initial application of the price-based methodology described in subsection (a)(2) to payment

rates, the executive office of health and human services shall implement a transition plan to

moderate the impact of the rate reform on individual nursing facilities. The transition shall include

the following components:

     (1) No nursing facility shall receive reimbursement for direct-care costs that is less than

the rate of reimbursement for direct-care costs received under the methodology in effect at the time

of passage of this act; for the year beginning October 1, 2017, the reimbursement for direct-care

costs under this provision will be phased out in twenty-five-percent (25%) increments each year

until October 1, 2021, when the reimbursement will no longer be in effect; and

     (2) No facility shall lose or gain more than five dollars ($5.00) in its total, per diem rate the

first year of the transition. An adjustment to the per diem loss or gain may be phased out by twenty-

five percent (25%) each year; except, however, for the years beginning October 1, 2015, there shall

be no adjustment to the per diem gain or loss, but the phase out shall resume thereafter; and

     (3) The transition plan and/or period may be modified upon full implementation of facility

per diem rate increases for quality of care-related measures. Said modifications shall be submitted

in a report to the general assembly at least six (6) months prior to implementation.

     (4) Notwithstanding any law to the contrary, for the twelve-month (12) period beginning

July 1, 2015, Medicaid payment rates for nursing facilities established pursuant to this section shall

not exceed ninety-eight percent (98%) of the rates in effect on April 1, 2015. Consistent with the

other provisions of this chapter, nothing in this provision shall require the executive office to restore

the rates to those in effect on April 1, 2015, at the end of this twelve-month (12) period.

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     SECTION 3. 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, 2022 2023, the period from October 1, 2020 2021,

through September 30, 2021 2022, and for any fiscal year ending after September 30, 2023 2024,

the period from October 1, 2021 2022, through September 30, 2022 2023.

     (2) “Medicaid 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

and shall mean the actual facilities and buildings in existence in Rhode Island, licensed pursuant to

§ 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on that license, regardless

of changes in licensure status pursuant to chapter 17.14 of title 23 (hospital conversions) and § 23-

17-6(b) (change in effective control), that provides short-term, acute inpatient and/or outpatient

care to persons who require definitive diagnosis and treatment for injury, illness, disabilities, or

pregnancy. Notwithstanding the preceding language, the negotiated Medicaid managed care

payment rates for a court-approved purchaser that acquires a hospital through receivership, special

mastership, or other similar state insolvency proceedings (which court-approved purchaser is issued

a hospital license after January 1, 2013), shall be based upon the newly negotiated rates between

the court-approved purchaser and the health plan, and the rates shall be effective as of the date that

the court-approved purchaser and the health plan execute the initial agreement containing the newly

negotiated rate. The rate-setting methodology for inpatient hospital payments and outpatient

hospital payments set forth in §§ 40-8-13.4(b)(1)(ii)(C) and 40-8-13.4(b)(2), respectively, shall

thereafter apply to negotiated increases for each annual twelve-month (12) period as of July 1

following the completion of the first full year of the court-approved purchaser’s initial Medicaid

managed care contract;

     (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.

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     (4) “Uncompensated-care costs” means, as to any hospital, the sum of: (i) The cost incurred

by the 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 the hospital

during the base year for inpatient or outpatient services attributable to Medicaid beneficiaries less

any Medicaid reimbursement received therefor; multiplied by the uncompensated-care index.; and

(iii) The sum of subsections (4)(i) and 4(ii) of this section shall be offset by the estimated hospital’s

commercial equivalent rates state directed payment for the current SFY in which the

disproportionate share hospital (DHS) payment is made. The sum of subsections (4)(i), (4)(ii) and

(4)(iii) of this section shall be multiplied by the uncompensated care index.

     (5) “Uncompensated-care index” means the annual percentage increase for hospitals

established pursuant to § 27-19-14 [repealed] 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, 2007, shall be deemed to be five and thirty-eight hundredths percent (5.38%),

and that the uncompensated-care index for the payment year ending September 30, 2008, shall be

deemed to be five and forty-seven hundredths percent (5.47%), and that the uncompensated-care

index for the payment year ending September 30, 2009, shall be deemed to be five and thirty-eight

hundredths percent (5.38%), and that the uncompensated-care index for the payment years ending

September 30, 2010, September 30, 2011, September 30, 2012, September 30, 2013, September

30, 2014, September 30, 2015, September 30, 2016, September 30, 2017, September 30, 2018,

September 30, 2019, September 30, 2020, September 30, 2021, September 30, 2022, September

30, 2023, and September 30, 2024, and September 30, 2025 shall be deemed to be five and thirty

hundredths percent (5.30%).

     40-8.3-3. Implementation.

     (a) For federal fiscal year 2022, commencing on October 1, 2021, and ending September

30, 2022, the executive office of health and human services shall submit to the Secretary of the

United States Department of Health and Human Services a state plan amendment to the Rhode

Island Medicaid DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$145.1 million, shall be allocated by the executive office of health and human services to the Pool

D component of the DSH Plan; and

     (2) That the Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s uncompensated-care costs for the base year,

inflated by the uncompensated-care index to the total uncompensated-care costs for the base year

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inflated by the uncompensated-care index for all participating hospitals. The disproportionate share

payments shall be made on or before June 30, 2022, and are expressly conditioned upon approval

on or before July 5, 2022, by the Secretary of the United States 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 2022 for

the disproportionate share payments.

     (b)(a) For federal fiscal year 2023, commencing on October 1, 2022, and ending September

30, 2023, the executive office of health and human services shall submit to the Secretary of the

United States Department of Health and Human Services a state plan amendment to the Rhode

Island Medicaid DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$159.0 million, shall be allocated by the executive office of health and human services to the Pool

D component of the DSH Plan; and

     (2) That the Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s 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 the uncompensated-care index for all participating hospitals. The disproportionate share

payments shall be made on or before June 15, 2023, and are expressly conditioned upon approval

on or before June 23, 2023, by the Secretary of the United States 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 2023 for

the disproportionate share payments.

     (c)(b) For federal fiscal year 2024, commencing on October 1, 2023, and ending September

30, 2024, the executive office of health and human services shall submit to the Secretary of the

United States Department of Health and Human Services a state plan amendment to the Rhode

Island Medicaid DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$14.8 million, shall be allocated by the executive office of health and human services to the Pool

D component of the DSH Plan; and

     (2) That the Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s 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 the uncompensated-care index for all participating hospitals. The disproportionate share

payments shall be made on or before June 15, 2024, and are expressly conditioned upon approval

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on or before June 23, 2024, by the Secretary of the United States 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 2024 for

the disproportionate share payments.

     (c) For federal fiscal year, 2025, commencing on October 1, 2024, and ending September

30, 2025, the executive office of health and human services shall submit to the Secretary of the

United States Department of Health and Human Services a state plan amendment to the Rhode

Island Medicaid DSH Plan to provide:

     (1) That the DHS Plan to all participating hospitals, not to exceed an aggregate limit of

fourteen million, seven hundred thousand dollars ($14,700,000), shall be allocated by the executive

office of health and human services to the Pool D component of the DSH Plan; and

     (2) That the Pool D allotment shall be distributed among the participating hospitals in direct

proportion to the individual participating hospital’s 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 the uncompensated-care index of all participating hospitals. The disproportionate share

payments shall be made on or before June 23, 2025, by the Secretary of the United States

Department of Health and Human Services, or their authorized representative, of all Medicaid state

plan amendments necessary to secure for the state the benefit of federal financial participating in

federal fiscal year 2025 for the disproportionate share payments.

     (d) 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.

     (e) The executive office of health and human services is directed, on at least a monthly

basis, to collect patient-level uninsured information, including, but not limited to, demographics,

services rendered, and reason for uninsured status from all hospitals licensed in Rhode Island.

     (f) [Deleted by P.L. 2019, ch. 88, art. 13, § 6.]

     SECTION 4. Section 40.1-8.5-8 of the General Laws in Chapter 40.1-8.5 entitled

"Community Mental Health Services" is hereby amended to read as follows:

     40.1-8.5-8. Certified community behavioral health clinics.

     (a) The executive office of health and human services is authorized and directed to submit

to the Secretary of the United States Department of Health and Human Services a state plan

amendment for the purposes of establishing Certified Community Behavioral Health Clinics in

accordance with Section 223 of the federal Protecting Access to Medicare Act of 2014.

     (b) The executive office of health and human services shall amend its Title XIX state plan

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pursuant to Title XIX [42 U.S.C. § 1396 et seq.] and Title XXI [42 U.S.C § 1397 et seq.] of the

Social Security Act as necessary to cover all required services for persons with mental health and

substance use disorders at a certified community behavioral health clinic through a monthly

bundled payment methodology that is specific to each organization’s anticipated costs and inclusive

of all required services within Section 223 of the federal Protecting Access to Medicare Act of

2014. Such certified community behavioral health clinics shall adhere to the federal model,

including payment structures and rates. Any change in federal requirements and/or guidance may

result in and necessitate the executive office of health and human services delaying the

implementation of such certified clinics.

     (c) A certified community behavioral health clinic means any licensed behavioral health

organization that meets the federal certification criteria of Section 223 of the Protecting Access to

Medicare Act of 2014. The department of behavioral healthcare, developmental disabilities and

hospitals shall define additional criteria to certify the clinics including, but not limited to, the

provision of these services:

     (1) Outpatient mental health and substance use services;

     (2) Twenty-four (24) hour mobile crisis response and hotline services;

     (3) Screening, assessment, and diagnosis, including risk assessments;

     (4) Person-centered treatment planning;

     (5) Primary care screening and monitoring of key indicators of health risks;

     (6) Targeted case management;

     (7) Psychiatric rehabilitation services;

     (8) Peer support and family supports;

     (9) Medication-assisted treatment;

     (10) Assertive community treatment; and

     (11) Community-based mental health care for military service members and veterans.

     (d) Subject to the approval from the United States Department of Health and Human

Services’ Centers for Medicare & Medicaid Services, the certified community behavioral health

clinic model pursuant to this chapter shall be established by February 1, 2024 July 1, 2024, and

include any enhanced Medicaid match for required services or populations served.

     (e) By August 1, 2022, the executive office of health and human services will issue the

appropriate purchasing process and vehicle for organizations that want to participate in the Certified

Community Behavioral Health Clinic model program.

     (f) The organizations will submit a detailed cost report developed by the department of

behavioral healthcare, developmental disabilities and hospitals with approval from the executive

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office of health and human services, that includes the cost for the organization to provide the

required services.

     (g) The department of behavioral healthcare, developmental disabilities and hospitals, in

coordination with the executive office of health and human services, will prepare an analysis of

proposals, determine how many behavioral health clinics can be certified in FY 2024 and the costs

for each one. Funding for the Certified Behavioral Health Clinics will be included in the FY 2024

budget recommended by the Governor.

     (h) The executive office of health and human services shall apply for the federal Certified

Community Behavioral Health Clinics Demonstration Program if another round of funding

becomes available.

     SECTION 5. Rhode Island Medicaid Reform Act of 2008 Resolution.

     WHEREAS, The General Assembly enacted Chapter 12.4 of Title 42 entitled “The Rhode

Island Medicaid Reform Act of 2008”; and

     WHEREAS, A legislative enactment is required pursuant to Rhode Island General Laws

section 42-12.4-1, et seq.; and

      WHEREAS, Rhode Island General Laws section 42-7.2-5(3)(i) provides that the secretary

of the executive office of health and human Services is responsible for the review and coordination

of any Medicaid section 1115 demonstration waiver requests and renewals as well as any initiatives

and proposals requiring amendments to the Medicaid state plan or category II or III changes as

described in the demonstration, “with potential to affect the scope, amount, or duration of publicly-

funded health care services, provider payments or reimbursements, or access to or the availability

of benefits and services provided by Rhode Island general and public laws”; and

     WHEREAS, In pursuit of a more cost-effective consumer choice system of care that is

fiscally sound and sustainable, the secretary requests legislative approval of the following proposals

to amend the demonstration; and

     WHEREAS, Implementation of adjustments may require amendments to the Rhode

Island’s Medicaid state plan and/or section 1115 waiver under the terms and conditions of the

demonstration. Further, adoption of new or amended rules, regulations and procedures may also be

required:

     (a) Nursing Facility Payment Technical Correction. The executive office of health and

human services will clarify that the “other direct care” component of the nursing facility per diem

may be revised as necessary based on increases from the most recently finalized year of the cost

report used in the State’s rate review.

     (b) DSH Uncompensated Care Calculation. The executive office of health and human

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services proposes to seek approval from the federal centers for Medicare and Medicaid services to

evaluate the impact of the recently enacted hospital directed payments for payments as a percentage

of commercial equivalent rates in the calculation of base year uncompensated care used for

disproportionate share hospital payments.

     (c) Provider Reimbursement Rates. The secretary of the executive office of health and

human services is authorized to pursue and implement any waiver amendments, state plan

amendments, and/or changes to the applicable department’s rules, regulations, and procedures

required to implement updates to Medicaid provider reimbursement rates consisting of rate

increases equal to one third (1/3) of the increases recommended in the Social and Human Service

Programs Review Final Report produced by the office of the health insurance commissioner

pursuant to Rhode Island General Laws section 42-14.5-3(t)(2)(x) and including any revisions to

these recommendations noted by the executive office of health and human services in its SFY 25

budget submission. except that one hundred (100) percent of the recommended rate increases for

Early Intervention shall be implemented in SFY 25, rather than one third of the increases. This shall

further include the recommendation that these rate updates shall be effective on October 1, 2024.

     (d) Federal Financing Opportunities. The executive off health and human services proposes

that it shall review Medicaid requirements and opportunities under the U.S. Patient Protection and

Affordable Care Act of 2010 (PPACA) and various other recently enacted federal laws and pursue

any changes in the Rhode Island Medicaid program that promote, increase and enhance service

quality, access and cost-effectiveness that may require a Medicaid state plan amendment or

amendment under the terms and conditions of Rhode Island’s section 1115 waiver, its successor,

or any extension thereof. Any such actions by the executive office of health and human services

shall not have an adverse impact on beneficiaries or cause there to be an increase in expenditures

beyond the amount appropriated for state fiscal year 2025.

     (e) Adjust Medicaid reimbursement for dental procedures performed in ambulatory

centers. All of the following shall apply to the new Healthcare Common Procedure Coding System

(HCPCS) procedure code G0330, which was adopted by the EOHHS as of January 1, 2024:

     (1) EOHHS shall not reimburse ambulatory surgical centers based solely on the length of

the procedure. As of July 1, 2024, EOHHS shall reimburse ambulatory surgical centers so that

services billed under procedure code G0330 are reimbursed at ninety-five percent (95%) of the

total payment rate listed on the Medicare Part B Hospital Outpatient Prospective Payment System

(OPPS), in effect as of January 1, 2024. Starting January 1, 2025, and each year thereafter, EOHHS

shall update these rates annually so that services are reimbursed at ninety-five percent (95%) of the

Medicare Part B OPPS payment rate, in effect as of January 1, for that procedure code; and

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     (2) Because services billed under procedure code G0330 are surgical procedures and not

traditional dental procedures, all Medicaid benefit plans shall be required to cover these procedures.

     Now, therefore, be it:

     RESOLVED, That the General Assembly hereby approves the proposals stated above in

the recitals; and be it further;

     RESOLVED, That the secretary of the executive office of health and human services is

authorized to pursue and implement any waiver amendments, state plan amendments, and/or

changes to the applicable department’s rules, regulations and procedures approved herein and as

authorized by Rhode Island General Laws section 42-12.4; and be it further;

     RESOLVED, That this Joint Resolution shall take effect on July 1, 2024.

     SECTION 6. This act shall take effect upon passage, except for Section 6 which shall take

effect as of July 1, 2024.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HEALTH AND SAFETY -- LICENSING OF HEALTHCARE FACILITIES

***

     This act would amend various provisions relative to hospital licensing fees, would redefine

base year for purposes of calculating disproportionate share payments for fiscal years.

     This act would take effect upon passage, except for Section 6 which would take effect as

of July 1, 2024.

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