HB-5834, As Passed Senate, September 18, 2008

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5834

A bill to amend 1978 PA 368, entitled

"Public health code,"

by amending section 20161 (MCL 333.20161), as amended by 2008 PA

173; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

2 assessments for health facility and agency licenses and

3 certificates of need on an annual basis as provided in this

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

5 assessments shall be paid in accordance with the following

6 schedule:

7	(a) Freestanding surgical
8	outpatient facilities................$238.00 per facility.
9	(b) Hospitals...................$8.28 per licensed bed.

1	(c) Nursing homes, county
2	medical care facilities, and
3	hospital long-term care units........$2.20 per licensed bed.
4	(d) Homes for the aged..........$6.27 per licensed bed.
5	(e) Clinical laboratories.......$475.00 per laboratory.
6	(f) Hospice residences..........$200.00 per license
7	survey; and $20.00 per
8	licensed bed.
9	(g) Subject to subsection
10	(13), quality assurance assessment
11	for nursing homes and hospital
12	long-term care units.................an amount resulting
13	in not more than 6%
14	of total industry
15	revenues.
16	(h) Subject to subsection
17	(14), quality assurance assessment
18	for hospitals........................at a fixed or variable
19	rate that generates
20	funds not more than the
21	maximum allowable under
22	the federal matching
23	requirements, after
24	consideration for the
25	amounts in subsection
26	(14)(a) and (i).

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

28 certification survey for purposes of title XVIII or title XIX of

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

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

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

2 20155.

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

4 each application. For a project requiring a projected capital

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

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

7 For a project requiring a projected capital expenditure of

8 $4,000,000.00 or more, an additional fee of $7,000.00 shall be

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

10 use the fees collected under this subsection only to fund the

11 certificate of need program. Funds remaining in the certificate

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

13 the general fund but shall remain available to fund the

14 certificate of need program in subsequent years.

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

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

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

18 collected in the year in which the license is issued.

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

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

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

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

23 certificate is revoked before its expiration date, the department

24 shall not refund fees paid to the department.

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

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

27 expiration date of a temporary permit without an additional fee

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

2 requirements for licensure are met.

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

4 purchase or production and distribution of proficiency evaluation

5 samples that are supplied to clinical laboratories pursuant to

6 section 20521(3).

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

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

9 department for each reissuance during the licensure period of the

10 clinical laboratory's license.

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

12 license fees.

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

14 $200.00 plus $40.00 per hour for the professional services and

15 travel expenses directly related to processing the application.

16 The travel expenses shall be calculated in accordance with the

17 state standardized travel regulations of the department of

18 management and budget in effect at the time of the travel.

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

20 under part 209 shall pay the applicable fees set forth in part

21 209.

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

23 and assessments collected under this section shall be deposited

24 in the state treasury, to the credit of the general fund. The

25 department may use the unreserved fund balance in fees and

26 assessments for the background check program required under this

27 article.

1 (13) The quality assurance assessment collected under

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

3 that assessment shall be used only for the following purposes and

4 under the following specific circumstances:

5 (a) The quality assurance assessment and all federal

6 matching funds attributed to that assessment shall be used to

7 finance medicaid nursing home reimbursement payments. Only

8 licensed nursing homes and hospital long-term care units that are

9 assessed the quality assurance assessment and participate in the

10 medicaid program are eligible for increased per diem medicaid

11 reimbursement rates under this subdivision. A nursing home or

12 long-term care unit that is assessed the quality assurance

13 assessment and that does not pay the assessment required under

14 subsection (1)(g) in accordance with subdivision (c)(i) or in

15 accordance with a written payment agreement with the state shall

16 not receive the increased per diem medicaid reimbursement rates

17 under this subdivision until all of its outstanding quality

18 assurance assessments and any penalties assessed pursuant to

19 subdivision (g) have been paid in full. Nothing in this

20 subdivision shall be construed to authorize or require the

21 department to overspend tax revenue in violation of the

22 management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594.

23 (b) Except as otherwise provided under subdivision (c),

24 beginning October 1, 2005, the quality assurance assessment is

25 based on the total number of patient days of care each nursing

26 home and hospital long-term care unit provided to nonmedicare

27 patients within the immediately preceding year and shall be

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

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

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

4 assessment is assessed.

5 (c) Within 30 days after September 30, 2005, the department

6 shall submit an application to the federal centers for medicare

7 and medicaid services to request a waiver pursuant to 42 CFR

8 433.68(e) to implement this subdivision as follows:

9 (i) If the waiver is approved, the quality assurance

10 assessment rate for a nursing home or hospital long-term care

11 unit with less than 40 licensed beds or with the maximum number,

12 or more than the maximum number, of licensed beds necessary to

13 secure federal approval of the application is $2.00 per

14 nonmedicare patient day of care provided within the immediately

15 preceding year or a rate as otherwise altered on the application

16 for the waiver to obtain federal approval. If the waiver is

17 approved, for all other nursing homes and long-term care units

18 the quality assurance assessment rate is to be calculated by

19 dividing the total statewide maximum allowable assessment

20 permitted under subsection (1)(g) less the total amount to be

21 paid by the nursing homes and long-term care units with less than

22 40 or with the maximum number, or more than the maximum number,

23 of licensed beds necessary to secure federal approval of the

24 application by the total number of nonmedicare patient days of

25 care provided within the immediately preceding year by those

26 nursing homes and long-term care units with more than 39, but

27 less than the maximum number of licensed beds necessary to secure

1 federal approval. The quality assurance assessment, as provided

2 under this subparagraph, shall be assessed in the first quarter

3 after federal approval of the waiver and shall be subsequently

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

5 quarterly basis, the first payment due 90 days after the date the

6 assessment is assessed.

7 (ii) If the waiver is approved, continuing care retirement

8 centers are exempt from the quality assurance assessment if the

9 continuing care retirement center requires each center resident

10 to provide an initial life interest payment of $150,000.00, on

11 average, per resident to ensure payment for that resident's

12 residency and services and the continuing care retirement center

13 utilizes all of the initial life interest payment before the

14 resident becomes eligible for medical assistance under the

15 state's medicaid plan. As used in this subparagraph, "continuing

16 care retirement center" means a nursing care facility that

17 provides independent living services, assisted living services,

18 and nursing care and medical treatment services, in a campus-like

19 setting that has shared facilities or common areas, or both.

20 (d) Beginning October 1, 2011, the department shall no

21 longer assess or collect the quality assurance assessment or

22 apply for federal matching funds.

23 (e) Beginning May 10, 2002, the department of community

24 health shall increase the per diem nursing home medicaid

25 reimbursement rates for the balance of that year. For each

26 subsequent year in which the quality assurance assessment is

27 assessed and collected, the department of community health shall

1 maintain the medicaid nursing home reimbursement payment increase

2 financed by the quality assurance assessment.

3 (f) The department of community health shall implement this

4 section in a manner that complies with federal requirements

5 necessary to assure that the quality assurance assessment

6 qualifies for federal matching funds.

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

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

9 department of community health may assess the nursing home or

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

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

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

13 health may also refer for collection to the department of

14 treasury past due amounts consistent with section 13 of 1941 PA

15 122, MCL 205.13.

16 (h) The medicaid nursing home quality assurance assessment

17 fund is established in the state treasury. The department of

18 community health shall deposit the revenue raised through the

19 quality assurance assessment with the state treasurer for deposit

20 in the medicaid nursing home quality assurance assessment fund.

21 (i) The department of community health shall not implement

22 this subsection in a manner that conflicts with 42 USC 1396b(w).

23 (j) The quality assurance assessment collected under

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

25 licensed beds added to or subtracted from a nursing home or

26 hospital long-term care unit since the immediately preceding July

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

1 installment due date.

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

3 medicaid reimbursement rates shall not be reduced below the

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

5 direct result of the quality assurance assessment collected under

6 subsection (1)(g).

7 (l) In ~~each~~ fiscal year 2007-2008, $39,900,000.00 of the

8 quality assurance assessment collected pursuant to subsection

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

10 health to support medicaid expenditures for long-term care

11 services. The state retention amount of the quality assurance

12 assessment collected pursuant to subsection (1)(g) for fiscal

13 year 2008-2009 shall be $41,473,500.00, and for each subsequent

14 fiscal year shall be equal to 13.2% of the federal funds

15 generated by the nursing homes and hospital long-term care units

16 quality assurance assessment, including the state retention

17 amount. The state retention amount shall be appropriated each

18 fiscal year to the department of community health to support

19 medicaid expenditures for long-term care services. These funds

20 shall offset an identical amount of general fund/general purpose

21 revenue originally appropriated for that purpose.

22 (14) The quality assurance dedication is an earmarked

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

24 all federal matching funds attributed to that assessment shall be

25 used only for the following purpose and under the following

26 specific circumstances:

27 (a) To maintain the increased medicaid reimbursement rate

1 increases as provided for in subdivision (c).

2 (b) The quality assurance assessment shall be assessed on

3 all net patient revenue, before deduction of expenses, less

4 medicare net revenue, as reported in the most recently available

5 medicare cost report and is payable on a quarterly basis, the

6 first payment due 90 days after the date the assessment is

7 assessed. As used in this subdivision, "medicare net revenue"

8 includes medicare payments and amounts collected for coinsurance

9 and deductibles.

10 (c) Beginning October 1, 2002, the department of community

11 health shall increase the hospital medicaid reimbursement rates

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

13 the quality assurance assessment is assessed and collected, the

14 department of community health shall maintain the hospital

15 medicaid reimbursement rate increase financed by the quality

16 assurance assessments.

17 (d) The department of community health shall implement this

18 section in a manner that complies with federal requirements

19 necessary to assure that the quality assurance assessment

20 qualifies for federal matching funds.

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

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

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

24 that the assessment and penalty are not paid up to a maximum of

25 50% of the assessment. The department of community health may

26 also refer for collection to the department of treasury past due

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

1 (f) The hospital quality assurance assessment fund is

2 established in the state treasury. The department of community

3 health shall deposit the revenue raised through the quality

4 assurance assessment with the state treasurer for deposit in the

5 hospital quality assurance assessment fund.

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

7 quality assurance assessment shall only be collected and expended

8 if medicaid hospital inpatient DRG and outpatient reimbursement

9 rates and disproportionate share hospital and graduate medical

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

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

12 assurance assessment collected under subsection (1)(h), except as

13 provided in subdivision (h).

14 (h) The quality assurance assessment collected under

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

16 September 30, ~~2008, or~~ 2011 in the event that the quality

17 assurance assessment is not eligible for federal matching funds.

18 Any portion of the quality assurance assessment collected from a

19 hospital that is not eligible for federal matching funds shall be

20 returned to the hospital.

21 (i) ~~In fiscal year 2005-2006, $46,400,000.00 of the quality~~

22 ~~assurance assessment collected pursuant to subsection (1)(h)~~

23 ~~shall be appropriated to the department of community health to~~

24 ~~support medicaid expenditures for hospital services and therapy.~~

25 ~~In fiscal year 2006-2007, $66,400,000.00 of the quality assurance~~

26 ~~assessment collected pursuant to subsection (1)(h) shall be~~

27 ~~appropriated to the department of community health to support~~

1 ~~medicaid expenditures for hospital services and therapy. Except~~

2 ~~as otherwise provided in this subdivision, in~~ In fiscal year

3 2007-2008, ~~$66,400,000.00~~ $98,850,000.00 of the quality assurance

4 assessment collected pursuant to subsection (1)(h) shall be

5 appropriated to the department of community health to support

6 medicaid expenditures for hospital services and therapy. ~~However,~~

7 ~~if the state receives approval from the centers for medicare and~~

8 ~~medicaid services to increase medicaid health maintenance~~

9 ~~organization hospital payment rates that increase medicaid~~

10 ~~payments to hospitals by $120,000,000.00 or more in fiscal year~~

11 ~~2007-2008, then in fiscal year 2007-2008, $81,400,000.00, instead~~

12 ~~of $66,400,000.00, of the quality assurance assessment collected~~

13 ~~pursuant to subsection (1)(h) shall be appropriated to the~~

14 ~~department of community health to support medicaid expenditures~~

15 ~~for hospital services and therapy.~~ The state retention amount of

16 the quality assurance assessment collected pursuant to subsection

17 (1)(h) for fiscal year 2008-2009 and each subsequent fiscal year

18 shall be equal to 13.2% of the federal funds generated by the

19 hospital quality assurance assessment, including the state

20 retention amount. The state retention percentage shall be applied

21 proportionately to each hospital quality assurance assessment

22 program to determine the retention amount for each program. The

23 state retention amount shall be appropriated each fiscal year to

24 the department of community health to support medicaid

25 expenditures for hospital services and therapy. These funds shall

26 offset an identical amount of general fund/general purpose

27 revenue originally appropriated for that purpose.