SB-0176, As Passed Senate, February 15, 2007

SUBSTITUTE FOR

SENATE BILL NO. 176

      A bill to amend 1978 PA 368, entitled

"Public health code,"

by amending section 20161 (MCL 333.20161), as amended by 2005 PA

187.

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

1  outpatient facilities................$238.00 per facility.

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

3       (c) Nursing homes, county

4  medical care facilities, and

5  hospital long-term care units........$2.20 per licensed bed.

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

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

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

9                                       survey; and $20.00 per

10                                      licensed bed.

11      (g) Subject to subsection

12 (13), quality assurance assessment

13 for nursing homes and hospital

14 long-term care units.................an amount resulting

15                                      in not more than 6%

16                                      of total industry

17                                      revenues.

18      (h) Subject to subsection

19 (14), quality assurance assessment

20 for hospitals........................at a fixed or variable

21                                      rate that generates

22                                      funds not more than the

23                                      maximum allowable under

24                                      the federal matching

25                                      requirements, after

26                                      consideration for the

27                                      amounts in subsection

28                                      (14)(a) and (i).

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

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

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

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

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

 4  20155.

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

 6  each application. For a project requiring a projected capital

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

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

 9  For a project requiring a projected capital expenditure of

10  $4,000,000.00 or more, an additional fee of $7,000.00 shall be

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

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

13  certificate of need program. Funds remaining in the certificate

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

15  the general fund but shall remain available to fund the

16  certificate of need program in subsequent years.

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

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

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

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

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

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

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

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

25  certificate is revoked before its expiration date, the department

26  shall not refund fees paid to the department.

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

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

 2  expiration date of a temporary permit without an additional fee

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

 4  requirements for licensure are met.

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

 6  purchase or production and distribution of proficiency evaluation

 7  samples that are supplied to clinical laboratories pursuant to

 8  section 20521(3).

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

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

11  department for each reissuance during the licensure period of the

12  clinical laboratory's license.

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

14  license fees.

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

16  $200.00 plus $40.00 per hour for the professional services and

17  travel expenses directly related to processing the application.

18  The travel expenses shall be calculated in accordance with the

19  state standardized travel regulations of the department of

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

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

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

23  209.

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

25  and assessments collected under this section shall be deposited

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

27        (13) The quality assurance assessment collected under

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

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

 3  under the following specific circumstances:

 4        (a) The quality assurance assessment and all federal

 5  matching funds attributed to that assessment shall be used to

 6  finance medicaid nursing home reimbursement payments. Only

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

 8  assessed the quality assurance assessment and participate in the

 9  medicaid program are eligible for increased per diem medicaid

10  reimbursement rates under this subdivision.

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

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

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

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

15  patients within the immediately preceding year and shall be

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

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

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

19  assessment is assessed.

20        (c) Within 30 days after the effective date of the

21  amendatory act that added this subdivision September 30, 2005,

22  the department shall submit an application to the federal centers

23  for medicare and medicaid services to request a waiver pursuant

24  to 42 CFR 433.68(e) to implement this subdivision as follows:

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

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

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

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

 2  secure federal approval of the application is $2.00 per

 3  nonmedicare patient day of care provided within the immediately

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

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

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

 7  the quality assurance assessment rate is to be calculated by

 8  dividing the total statewide maximum allowable assessment

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

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

11  40 or with the maximum number, or more than the maximum number,

12  of licensed beds necessary to secure federal approval of the

13  application by the total number of nonmedicare patient days of

14  care provided within the immediately preceding year by those

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

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

17  federal approval. The quality assurance assessment, as provided

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

19  after federal approval of the waiver and shall be subsequently

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

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

22  assessment is assessed.

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

24  centers are exempt from the quality assurance assessment if the

25  continuing care retirement center requires each center resident

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

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

 1  residency and services and the continuing care retirement center

 2  utilizes all of the initial life interest payment before the

 3  resident becomes eligible for medical assistance under the

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

 5  care retirement center" means a nursing care facility that

 6  provides independent living services, assisted living services,

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

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

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

10  longer assess or collect the quality assurance assessment or

11  apply for federal matching funds.

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

13  health shall increase the per diem nursing home medicaid

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

15  subsequent year in which the quality assurance assessment is

16  assessed and collected, the department of community health shall

17  maintain the medicaid nursing home reimbursement payment increase

18  financed by the quality assurance assessment.

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

20  section in a manner that complies with federal requirements

21  necessary to assure that the quality assurance assessment

22  qualifies for federal matching funds.

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

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

25  department of community health may assess the nursing home or

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

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

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

 2  health may also refer for collection to the department of

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

 4  122, MCL 205.13.

 5        (h) The medicaid nursing home quality assurance assessment

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

 7  community health shall deposit the revenue raised through the

 8  quality assurance assessment with the state treasurer for deposit

 9  in the medicaid nursing home quality assurance assessment fund.

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

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

12        (j) The quality assurance assessment collected under

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

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

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

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

17  installment due date.

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

19  medicaid reimbursement rates shall not be reduced below the

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

21  direct result of the quality assurance assessment collected under

22  subsection (1)(g).

23        (l) In fiscal year 2005-2006, $39,900,000.00 of the quality

24  assurance assessment collected pursuant to subsection (1)(g)

25  shall be appropriated to the department of community health to

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

27  funds shall offset an identical amount of general fund/general

 1  purpose revenue originally appropriated for that purpose.

 2        (14) The quality assurance dedication is an earmarked

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

 4  all federal matching funds attributed to that assessment shall be

 5  used only for the following purpose and under the following

 6  specific circumstances:

 7        (a) To maintain the increased medicaid reimbursement rate

 8  increases as provided for in subdivision (c).

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

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

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

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

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

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

15  includes medicare payments and amounts collected for coinsurance

16  and deductibles.

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

18  health shall increase the hospital medicaid reimbursement rates

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

20  the quality assurance assessment is assessed and collected, the

21  department of community health shall maintain the hospital

22  medicaid reimbursement rate increase financed by the quality

23  assurance assessments.

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

25  section in a manner that complies with federal requirements

26  necessary to assure that the quality assurance assessment

27  qualifies for federal matching funds.

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

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

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

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

 5  50% of the assessment. The department of community health may

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

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

 8        (f) The hospital quality assurance assessment fund is

 9  established in the state treasury. The department of community

10  health shall deposit the revenue raised through the quality

11  assurance assessment with the state treasurer for deposit in the

12  hospital quality assurance assessment fund.

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

14  quality assurance assessment shall only be collected and expended

15  if medicaid hospital inpatient DRG and outpatient reimbursement

16  rates and disproportionate share hospital and graduate medical

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

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

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

20  provided in subdivision (h).

21        (h) The quality assurance assessment collected under

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

23  September 30, 2008, or in the event that the quality assurance

24  assessment is not eligible for federal matching funds. Any

25  portion of the quality assurance assessment collected from a

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

27  returned to the hospital.

 1        (i) In fiscal year 2005-2006, $42,400,000.00 $46,400,000.00

 2  of the quality assurance assessment collected pursuant to

 3  subsection (1)(h) shall be appropriated to the department of

 4  community health to support medicaid expenditures for hospital

 5  services and therapy. These funds shall offset an identical

 6  amount of general fund/general purpose revenue originally

 7  appropriated for that purpose.

 8        (15) The quality assurance assessment provided for under

 9  this section is a tax that is levied on a health facility or

10  agency.

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

12  defined in section 22207.