HB-4787, As Passed House, October 1, 2013HB-4787, As Passed Senate, October 1, 2013

SUBSTITUTE FOR

HOUSE BILL NO. 4787

      A bill to amend 1978 PA 368, entitled

"Public health code,"

by amending section 20161 (MCL 333.20161), as amended by 2011 PA

144.

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 as provided in the

 6  following schedule:

7       (a) Freestanding surgical

8  outpatient facilities................$238.00 per facility.

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

10      (c) Nursing homes, county

1  medical care facilities, and

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

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

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

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

6                                       survey; and $20.00 per

7                                       licensed bed.

8       (g) Subject to subsection

9  (13), quality assurance assessment

10 for nursing homes and hospital

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

12                                      in not more than 6%

13                                      of total industry

14                                      revenues.

15      (h) Subject to subsection

16 (14), quality assurance assessment

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

18                                      rate that generates

19                                      funds not more than the

20                                      maximum allowable under

21                                      the federal matching

22                                      requirements, after

23                                      consideration for the

24                                      amounts in subsection

25                                      (14)(a) and (i).

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

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

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

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

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

 1  20155.

 2        (3) All of the following apply to the assessment under this

 3  section for certificates of need:

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

 5  $3,000.00 for each application. For a project requiring a

 6  projected capital expenditure of more than $500,000.00 but less

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

 8  $5,000.00 is added to the base fee. For a project requiring a

 9  projected capital expenditure of $4,000,000.00 or more but less

10  than $10,000,000.00, an additional fee of $7,000.00 shall be

11  $8,000.00 is added to the base fee. For a project requiring a

12  projected capital expenditure of $10,000,000.00 or more, an

13  additional fee of $12,000.00 is added to the base fee.

14        (b) In addition to the fees under subdivision (a), the

15  applicant shall pay $3,000.00 for any designated complex project

16  including a project scheduled for comparative review or for a

17  consolidated licensed health facility application for acquisition

18  or replacement.

19        (c) If required by the department, the applicant shall pay

20  $1,000.00 for a certificate of need application that receives

21  expedited processing at the request of the applicant.

22        (d) The department shall charge a fee of $500.00 to review

23  any letter of intent requesting or resulting in a waiver from

24  certificate of need review and any amendment request to an

25  approved certificate of need.

26        (e) A health facility or agency that offers certificate of

27  need covered clinical services shall pay $100.00 for each

 1  certificate of need approved covered clinical service as part of

 2  the certificate of need annual survey at the time of submission

 3  of the survey data.

 4        (f) The department of community health shall use the fees

 5  collected under this subsection only to fund the certificate of

 6  need program. Funds remaining in the certificate of need program

 7  at the end of the fiscal year shall not lapse to the general fund

 8  but shall remain available to fund the certificate of need

 9  program in subsequent years.

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

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

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

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

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

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

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

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

18  certificate is revoked before its expiration date, the department

19  shall not refund fees paid to the department.

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

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

22  expiration date of a temporary permit without an additional fee

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

24  requirements for licensure are met.

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

26  purchase or production and distribution of proficiency evaluation

27  samples that are supplied to clinical laboratories pursuant to

 1  under section 20521(3).

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

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

 4  department for each reissuance during the licensure period of the

 5  clinical laboratory's license.

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

 7  license fees.

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

 9  $200.00 plus $40.00 per hour for the professional services and

10  travel expenses directly related to processing the application.

11  The travel expenses shall be calculated in accordance with the

12  state standardized travel regulations of the department of

13  technology, management, and budget in effect at the time of the

14  travel.

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

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

17  209.

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

19  and assessments collected under this section shall be deposited

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

21  department may use the unreserved fund balance in fees and

22  assessments for the criminal history check program required under

23  this article.

24        (13) The quality assurance assessment collected under

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

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

27  under the following specific circumstances:

 1        (a) The quality assurance assessment and all federal

 2  matching funds attributed to that assessment shall be used to

 3  finance medicaid nursing home reimbursement payments. Only

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

 5  assessed the quality assurance assessment and participate in the

 6  medicaid program are eligible for increased per diem medicaid

 7  reimbursement rates under this subdivision. A nursing home or

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

 9  assessment and that does not pay the assessment required under

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

11  accordance with a written payment agreement with the state shall

12  not receive the increased per diem medicaid reimbursement rates

13  under this subdivision until all of its outstanding quality

14  assurance assessments and any penalties assessed pursuant to

15  subdivision (f) have been paid in full. Nothing in this

16  subdivision shall be construed to authorize or require the

17  department to overspend tax revenue in violation of the

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

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

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

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

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

23  patients within the immediately preceding year and shall be

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

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

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

27  assessment is assessed.

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

 2  shall submit an application to the federal centers for medicare

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

 4  433.68(e) to implement this subdivision as follows:

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

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

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

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

 9  secure federal approval of the application is $2.00 per

10  nonmedicare patient day of care provided within the immediately

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

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

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

14  the quality assurance assessment rate is to be calculated by

15  dividing the total statewide maximum allowable assessment

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

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

18  40 or with the maximum number, or more than the maximum number,

19  of licensed beds necessary to secure federal approval of the

20  application by the total number of nonmedicare patient days of

21  care provided within the immediately preceding year by those

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

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

24  federal approval. The quality assurance assessment, as provided

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

26  after federal approval of the waiver and shall be subsequently

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

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

 2  assessment is assessed.

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

 4  centers are exempt from the quality assurance assessment if the

 5  continuing care retirement center requires each center resident

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

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

 8  residency and services and the continuing care retirement center

 9  utilizes all of the initial life interest payment before the

10  resident becomes eligible for medical assistance under the

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

12  care retirement center" means a nursing care facility that

13  provides independent living services, assisted living services,

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

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

16        (d) Beginning May 10, 2002, the department of community

17  health shall increase the per diem nursing home medicaid

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

19  subsequent year in which the quality assurance assessment is

20  assessed and collected, the department of community health shall

21  maintain the medicaid nursing home reimbursement payment increase

22  financed by the quality assurance assessment.

23        (e) The department of community health shall implement this

24  section in a manner that complies with federal requirements

25  necessary to assure that the quality assurance assessment

26  qualifies for federal matching funds.

27        (f) If a nursing home or a hospital long-term care unit

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

 2  department of community health may assess the nursing home or

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

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

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

 6  health may also refer for collection to the department of

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

 8  122, MCL 205.13.

 9        (g) The medicaid nursing home quality assurance assessment

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

11  community health shall deposit the revenue raised through the

12  quality assurance assessment with the state treasurer for deposit

13  in the medicaid nursing home quality assurance assessment fund.

14        (h) The department of community health shall not implement

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

16        (i) The quality assurance assessment collected under

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

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

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

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

21  installment due date.

22        (j) In each fiscal year governed by this subsection,

23  medicaid reimbursement rates shall not be reduced below the

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

25  direct result of the quality assurance assessment collected under

26  subsection (1)(g).

27        (k) The state retention amount of the quality assurance

 1  assessment collected pursuant to subsection (1)(g) shall be equal

 2  to 13.2% of the federal funds generated by the nursing homes and

 3  hospital long-term care units quality assurance assessment,

 4  including the state retention amount. The state retention amount

 5  shall be appropriated each fiscal year to the department of

 6  community health to support medicaid expenditures for long-term

 7  care services. These funds shall offset an identical amount of

 8  general fund/general purpose revenue originally appropriated for

 9  that purpose.

10        (l) Beginning October 1, 2015, the department shall no longer

11  assess or collect the quality assurance assessment or apply for

12  federal matching funds. The quality assurance assessment

13  collected under subsection (1)(g) shall no longer be assessed or

14  collected after September 30, 2011, in the event that the quality

15  assurance assessment is not eligible for federal matching funds.

16  Any portion of the quality assurance assessment collected from a

17  nursing home or hospital long-term care unit that is not eligible

18  for federal matching funds shall be returned to the nursing home

19  or hospital long-term care unit.

20        (14) The quality assurance dedication is an earmarked

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

22  all federal matching funds attributed to that assessment shall be

23  used only for the following purpose and under the following

24  specific circumstances:

25        (a) To maintain the increased medicaid reimbursement rate

26  increases as provided for in subdivision (c).

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

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

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

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

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

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

 6  includes medicare payments and amounts collected for coinsurance

 7  and deductibles.

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

 9  health shall increase the hospital medicaid reimbursement rates

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

11  the quality assurance assessment is assessed and collected, the

12  department of community health shall maintain the hospital

13  medicaid reimbursement rate increase financed by the quality

14  assurance assessments.

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

16  section in a manner that complies with federal requirements

17  necessary to assure that the quality assurance assessment

18  qualifies for federal matching funds.

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

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

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

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

23  50% of the assessment. The department of community health may

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

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

26        (f) The hospital quality assurance assessment fund is

27  established in the state treasury. The department of community

 1  health shall deposit the revenue raised through the quality

 2  assurance assessment with the state treasurer for deposit in the

 3  hospital quality assurance assessment fund.

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

 5  quality assurance assessment shall only be collected and expended

 6  if medicaid hospital inpatient DRG and outpatient reimbursement

 7  rates and disproportionate share hospital and graduate medical

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

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

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

11  provided in subdivision (h).

12        (h) The quality assurance assessment collected under

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

14  September 30, 2011 in the event that the quality assurance

15  assessment is not eligible for federal matching funds. Any

16  portion of the quality assurance assessment collected from a

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

18  returned to the hospital.

19        (i) The state retention amount of the quality assurance

20  assessment collected pursuant to subsection (1)(h) shall be equal

21  to 13.2% of the federal funds generated by the hospital quality

22  assurance assessment, including the state retention amount. The

23  state retention percentage shall be applied proportionately to

24  each hospital quality assurance assessment program to determine

25  the retention amount for each program. The state retention amount

26  shall be appropriated each fiscal year to the department of

27  community health to support medicaid expenditures for hospital

 1  services and therapy. These funds shall offset an identical

 2  amount of general fund/general purpose revenue originally

 3  appropriated for that purpose.

 4        (15) The quality assurance assessment provided for under

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

 6  agency.

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

 8  defined in section 22207.

 9        Enacting section 1. This amendatory act takes effect October

10  1, 2013.