SENATE BILL No. 671

 

 

June 30, 2005, Introduced by Senator STAMAS and referred to the Committee on Appropriations.

 

 

 

     A bill to amend 1978 PA 368, entitled

 

"Public health code,"

 

by amending section 20161 (MCL 333.20161), as amended by 2004 PA

 

469.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 20161. (1) The department shall assess fees and other

 

assessments for health facility and agency licenses and

 

certificates of need on an annual basis as provided in this

 

article. Except as otherwise provided in this article, fees and

 

assessments shall be paid in accordance with the following

 

schedule:

 

     (a) Freestanding surgical outpatient

 

facilities................................   $238.00 per facility.

 


     (b) Hospitals.......................   $8.28 per licensed bed.

 

     (c) Nursing homes, county medical care

 

facilities, and hospital long-term care

 

units ....................................   $2.20 per licensed bed.

 

     (d) Homes for the aged..............   $6.27 per licensed bed.

 

     (e) Clinical laboratories...........   $475.00 per laboratory.

 

     (f) Hospice residences..............   $200.00 per license

 

                                             survey; and $20.00 per

 

                                            licensed bed.

 

     (g) Subject to subsection (13), quality

 

assurance assessment for nongovernmentally

 

owned nursing homes and hospital long-term

 

care units................................   an amount resulting in

 

                                             not more than 6% of

 

                                             total industry

 

                                             revenues.

 

     (h) Subject to subsection (14), quality

 

assurance assessment for hospitals........   at a fixed or variable

 

                                             rate that generates

 

                                             funds not more than the

 

                                             maximum allowable under

 

                                             the federal matching

 

                                             requirements, after

 

                                             consideration for the

 

                                             amounts in subsection

 

                                             (14)(a) and (j).

 

     (2) If a hospital requests the department to conduct a

 


certification survey for purposes of title XVIII or title XIX of

 

the social security act, the hospital shall pay a license fee

 

surcharge of $23.00 per bed. As used in this subsection, "title

 

XVIII" and "title XIX" mean those terms as defined in section

 

20155.

 

     (3) The base fee for a certificate of need is $1,500.00 for

 

each application. For a project requiring a projected capital

 

expenditure of more than $500,000.00 but less than $4,000,000.00,

 

an additional fee of $4,000.00 shall be added to the base fee. For

 

a project requiring a projected capital expenditure of

 

$4,000,000.00 or more, an additional fee of $7,000.00 shall be

 

added to the base fee. The department of community health shall use

 

the fees collected under this subsection only to fund the

 

certificate of need program. Funds remaining in the certificate of

 

need program at the end of the fiscal year shall not lapse to the

 

general fund but shall remain available to fund the certificate of

 

need program in subsequent years.

 

     (4) If licensure is for more than 1 year, the fees described

 

in subsection (1) are multiplied by the number of years for which

 

the license is issued, and the total amount of the fees shall be

 

collected in the year in which the license is issued.

 

     (5) Fees described in this section are payable to the

 

department at the time an application for a license, permit, or

 

certificate is submitted. If an application for a license, permit,

 

or certificate is denied or if a license, permit, or certificate is

 

revoked before its expiration date, the department shall not refund

 

fees paid to the department.

 


     (6) The fee for a provisional license or temporary permit is

 

the same as for a license. A license may be issued at the

 

expiration date of a temporary permit without an additional fee for

 

the balance of the period for which the fee was paid if the

 

requirements for licensure are met.

 

     (7) The department may charge a fee to recover the cost of

 

purchase or production and distribution of proficiency evaluation

 

samples that are supplied to clinical laboratories pursuant to

 

section 20521(3).

 

     (8) In addition to the fees imposed under subsection (1), a

 

clinical laboratory shall submit a fee of $25.00 to the department

 

for each reissuance during the licensure period of the clinical

 

laboratory's license.

 

     (9) The cost of licensure activities shall be supported by

 

license fees.

 

     (10) The application fee for a waiver under section 21564 is

 

$200.00 plus $40.00 per hour for the professional services and

 

travel expenses directly related to processing the application. The

 

travel expenses shall be calculated in accordance with the state

 

standardized travel regulations of the department of management and

 

budget in effect at the time of the travel.

 

     (11) An applicant for licensure or renewal of licensure under

 

part 209 shall pay the applicable fees set forth in part 209.

 

     (12) Except as otherwise provided in this section, the fees

 

and assessments collected under this section shall be deposited in

 

the state treasury, to the credit of the general fund.

 

     (13) The quality assurance assessment collected under

 


subsection (1)(g) and all federal matching funds attributed to that

 

assessment shall be used only for the following purposes and under

 

the following specific circumstances:

 

     (a) The quality assurance assessment and all federal matching

 

funds attributed to that assessment shall be used to finance

 

medicaid nursing home reimbursement payments. Only licensed nursing

 

homes and hospital long-term care units that are assessed the

 

quality assurance assessment and participate in the medicaid

 

program are eligible for increased per diem medicaid reimbursement

 

rates under this subdivision.

 

     (b) The quality assurance assessment shall be implemented on

 

May 10, 2002.

 

     (c)  The  Except as otherwise provided under subdivision (d),

 

beginning October 1, 2005, the quality assurance assessment is

 

based on the  number of licensed nursing home beds and the number

 

of licensed hospital long-term care unit beds in existence on July

 

1 of each year, shall be assessed upon implementation pursuant to

 

subdivision (b)  total number of patient days of care each nursing

 

home and hospital long-term care unit provided to nonmedicare

 

patients within the immediately preceding year and shall be

 

assessed at a uniform rate on October 1, 2005 and subsequently on

 

October 1 of each following year, and is payable on a quarterly

 

basis, the first payment due 90 days after the date the assessment

 

is assessed.

 

     (d) The department shall immediately submit an application to

 

the federal centers for medicare and medicaid services to request a

 

waiver of the uniformity tax requirement pursuant to 42 CFR

 


433.68(e)(2) to implement this subdivision. Subject to approval of

 

the uniformity waiver, the quality assurance assessment rate for a

 

nursing home or hospital long-term care unit with less than 40

 

licensed beds or more than 330 licensed beds is $2.00 per

 

nonmedicare patient day of care provided within the immediately

 

preceding year or a rate as otherwise altered on the application

 

for the uniformity waiver to obtain federal approval. Subject to

 

approval of the uniformity waiver, for all other nursing homes and

 

long-term care units the quality assurance assessment rate is to be

 

calculated by dividing the total statewide maximum allowable

 

assessment permitted under subsection (1)(g) less the total amount

 

to be paid by the nursing homes and long-term care units with fewer

 

than 40 or more than 330 licensed beds by the total number of

 

nonmedicare patient days of care provided within the immediately

 

preceding year by those nursing homes and long-term care units with

 

more than 39, but less than 330, licensed beds.  The quality

 

assurance assessment, as provided under this subdivision, shall be

 

assessed on the October 1 immediately following federal approval of

 

the waiver and subsequently on October 1 of each following year,

 

and is payable on a quarterly basis, the first payment due 90 days

 

after the date the assessment is assessed.

 

     (e)  (d)  Beginning October 1, 2007, the department shall no

 

longer assess or collect the quality assurance assessment or apply

 

for federal matching funds.

 

     (f)  (e) Upon implementation pursuant to subdivision (b)

 

Beginning May 10, 2002, the department of community health shall

 

increase the per diem nursing home medicaid reimbursement rates for

 


the balance of that year. For each subsequent year in which the

 

quality assurance assessment is assessed and collected, the

 

department of community health shall maintain the medicaid nursing

 

home reimbursement payment increase financed by the quality

 

assurance assessment.

 

     (g)  (f)  The department of community health shall implement

 

this section in a manner that complies with federal requirements

 

necessary to assure that the quality assurance assessment qualifies

 

for federal matching funds.

 

     (h)  (g)  If a nursing home or a hospital long-term care unit

 

fails to pay the assessment required by subsection (1)(g), the

 

department of community health may assess the nursing home or

 

hospital long-term care unit a penalty of 5% of the assessment for

 

each month that the assessment and penalty are not paid up to a

 

maximum of 50% of the assessment. The department of community

 

health may also refer for collection to the department of treasury

 

past due amounts consistent with section 13 of 1941 PA 122, MCL

 

205.13.

 

     (i)  (h)  The medicaid nursing home quality assurance

 

assessment fund is established in the state treasury. The

 

department of community health shall deposit the revenue raised

 

through the quality assurance assessment with the state treasurer

 

for deposit in the medicaid nursing home quality assurance

 

assessment fund.

 

     (j)  (i)  The department of community health shall not

 

implement this subsection in a manner that conflicts with 42 USC

 

1396b(w).

 


     (k)  (j)  The quality assurance assessment collected under

 

subsection (1)(g) shall be prorated on a quarterly basis for any

 

licensed beds added to or subtracted from a nursing home or

 

hospital long-term care unit since the immediately preceding July

 

1. Any adjustments in payments are due on the next quarterly

 

installment due date.

 

     (l)  (k)  In each fiscal year governed by this subsection,

 

medicaid reimbursement rates shall not be reduced below the

 

medicaid reimbursement rates in effect on April 1, 2002 as a direct

 

result of the quality assurance assessment collected under

 

subsection (1)(g).

 

     (m)  (l)  In fiscal year 2004-2005, $21,900,000.00 of the

 

quality assurance assessment collected pursuant to subsection

 

(1)(g) shall be appropriated to the department of community health

 

to support medicaid expenditures for long-term care services. These

 

funds shall offset an identical amount of general fund/general

 

purpose revenue originally appropriated for that purpose.

 

     (14) The quality assurance dedication is an earmarked

 

assessment collected under subsection (1)(h). That assessment and

 

all federal matching funds attributed to that assessment shall be

 

used only for the following purposes and under the following

 

specific circumstances:

 

     (a) Part of the quality assurance assessment shall be used to

 

maintain the increased medicaid reimbursement rate increases as

 

provided for in subdivision (d). A portion of the funds collected

 

from the quality assurance assessment may be used to offset any

 

reduction to existing intergovernmental transfer programs with

 


public hospitals that may result from implementation of the

 

enhanced medicaid payments financed by the quality assurance

 

assessment. Any portion of the funds collected from the quality

 

assurance assessment reduced because of existing intergovernmental

 

transfer programs shall be used to finance medicaid hospital

 

appropriations.

 

     (b) The quality assurance assessment shall be implemented on

 

October 1, 2002.

 

     (c) The quality assurance assessment shall be assessed on all

 

net patient revenue, before deduction of expenses, less medicare

 

net revenue, as reported in the most recently available medicare

 

cost report and is payable on a quarterly basis, the first payment

 

due 90 days after the date the assessment is assessed. As used in

 

this subdivision, "medicare net revenue" includes medicare payments

 

and amounts collected for coinsurance and deductibles.

 

     (d)  Upon implementation pursuant to subdivision (b)  

 

Beginning October 1, 2002, the department of community health shall

 

increase the hospital medicaid reimbursement rates for the balance

 

of that year. For each subsequent year in which the quality

 

assurance assessment is assessed and collected, the department of

 

community health shall maintain the hospital medicaid reimbursement

 

rate increase financed by the quality assurance assessments.

 

     (e) The department of community health shall implement this

 

section in a manner that complies with federal requirements

 

necessary to assure that the quality assurance assessment qualifies

 

for federal matching funds.

 

     (f) If a hospital fails to pay the assessment required by

 


subsection (1)(h), the department of community health may assess

 

the hospital a penalty of 5% of the assessment for each month that

 

the assessment and penalty are not paid up to a maximum of 50% of

 

the assessment. The department of community health may also refer

 

for collection to the department of treasury past due amounts

 

consistent with section 13 of 1941 PA 122, MCL 205.13.

 

     (g) The hospital quality assurance assessment fund is

 

established in the state treasury. The department of community

 

health shall deposit the revenue raised through the quality

 

assurance assessment with the state treasurer for deposit in the

 

hospital quality assurance assessment fund.

 

     (h) In each fiscal year governed by this subsection, the

 

quality assurance assessment shall only be collected and expended

 

if medicaid hospital inpatient DRG and outpatient reimbursement

 

rates and disproportionate share hospital and graduate medical

 

education payments are not below the level of rates and payments in

 

effect on April 1, 2002 as a direct result of the quality assurance

 

assessment collected under subsection (1)(h), except as provided in

 

subdivision (i).

 

     (i) The quality assurance assessment collected under

 

subsection (1)(h) shall no longer be assessed or collected after

 

September 30, 2007, or in the event that the quality assurance

 

assessment is not eligible for federal matching funds. Any portion

 

of the quality assurance assessment collected from a hospital that

 

is not eligible for federal matching funds shall be returned to the

 

hospital.

 

     (j) In fiscal year 2004-2005, $18,900,000.00 of the quality

 


assurance assessment collected pursuant to subsection (1)(h) shall

 

be appropriated to the department of community health to support

 

medicaid expenditures for hospital services and therapy. These

 

funds shall offset an identical amount of general fund/general

 

purpose revenue originally appropriated for that purpose.

 

     (15) The quality assurance assessment provided for under this

 

section is a tax that is levied on a health facility or agency.

 

     (16) As used in this section, "medicaid" means that term as

 

defined in section 22207.