This is not the official budget document.

General Appropriations Act FY2008

Division of Health Care Finance and Policy
Data Current as of:  10/29/2007



Move Nursing Home Assessment to General Fund for MassHealth

SECTION 14.   Section 25 of chapter 118G of the General Laws, as so appearing, is hereby amended by striking out, in lines 24 and 25, the words "Health Care Security Trust Fund established pursuant to chapter 29D" and inserting in place thereof the following words:- General Fund.

 

Transfer of the Health Safety Net Office to HCFP (3 of 3)

SECTION 15.   Said chapter 118G is hereby further amended by adding the following 6 sections:-

Section 34. As used in sections 34 to 39, inclusive, the following words shall, unless the context clearly requires otherwise, have the following meanings:-

"Acute hospital", the teaching hospital of the University of Massachusetts medical school and any hospital licensed under section 51 of chapter 111 and which contains a majority of medical-surgical, pediatric, obstetric and maternity beds, as defined by the department of public health.

"Allowable reimbursement", payment to acute hospitals and community health centers for health services provided to uninsured or underinsured patients of the commonwealth under section 39 and any further regulations promulgated by the health safety net office.

"Ambulatory surgical center", a distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and meets the requirements of the federal Health Care Financing Administration for participation in the Medicare program.

"Ambulatory surgical center services", services described for purposes of the Medicare program under 42 U.S.C. 1395k(a)(2)(F)(I). These services include facility services only and do not include surgical procedures.

"Bad debt", an account receivable based on services furnished to a patient which: (i) is regarded as uncollectible, following reasonable collection efforts consistent with regulations of the office, which regulations shall allow third party payers to negotiate with hospitals to collect the bad debts of its enrollees; (ii) is charged as a credit loss; (iii) is not the obligation of a governmental unit or the federal government or any agency thereof; and (iv) is not a reimbursable health care service.

"Community health center", a health center operating in conformance with the requirements of Section 330 of United States Public Law 95-626, including all community health centers which file cost reports as requested by the division of health care finance and policy.

"Critical access services", those health services which are generally provided only by acute hospitals, as further defined in regulations promulgated by the division.

"Director", the director of the health safety net office.

"DRG", a patient classification scheme known as diagnosis related grouping, which provides a means of relating the type of patients a hospital treats, such as its case mix, to the cost incurred by the hospital.

"Emergency bad debt", bad debt resulting from emergency services provided by an acute hospital to an uninsured or underinsured patient or other individual who has an emergency medical condition that is regarded as uncollectible, following reasonable collection efforts consistent with regulations of the office.

"Emergency medical condition", a medical condition, whether physical or mental, manifesting itself by symptoms of sufficient severity, including severe pain, that the absence of prompt medical attention could reasonably be expected by a prudent layperson who possesses an average knowledge of health and medicine to result in placing the health of the person or another person in serious jeopardy, serious impairment to body function or serious dysfunction of any body organ or part or, with respect to a pregnant woman, as further defined in section 1867(e)(1)(B) of the Social Security Act, 42 U.S.C. 1295dd(e)(1)(B).

"Emergency services", medically necessary health care services provided to an individual with an emergency medical condition.

"Financial requirements", a hospital's requirement for revenue which shall include, but not be limited to, reasonable operating, capital and working capital costs, the reasonable costs of depreciation of plant and equipment and the reasonable costs associated with changes in medical practice and technology.

"Fund", the Health Safety Net Trust Fund established under section 36.

"Fund fiscal year", the 12-month period starting in October and ending in September.

"Gross patient service revenue", the total dollar amount of a hospital's charges for services rendered in a fiscal year.

"Health services", medically necessary inpatient and outpatient services as mandated under Title XIX of the federal Social Security Act. Health services shall not include: (1) nonmedical services, such as social, educational and vocational services; (2) cosmetic surgery; (3) canceled or missed appointments; (4) telephone conversations and consultations; (5) court testimony; (6) research or the provision of experimental or unproven procedures including, but not limited to, treatment related to sex-reassignment surgery and pre-surgery hormone therapy; and (7) the provision of whole blood, but the administrative and processing costs associated with the provision of blood and its derivatives shall be payable.

"Office", the health safety net office established under section 35.

"Payments subject to surcharge", all amounts paid, directly or indirectly, by surcharge payors to acute hospitals for health services and ambulatory surgical centers for ambulatory surgical center services; provided, however, that "payments subject to surcharge" shall not include: (i) payments, settlements and judgments arising out of third party liability claims for bodily injury which are paid under the terms of property or casualty insurance policies; (ii) payments made on behalf of Medicaid recipients, Medicare beneficiaries or persons enrolled in policies issued under chapter 176K or similar policies issued on a group basis; and provided further, that "payments subject to surcharge" may exclude amounts established under regulations promulgated by the division for which the costs and efficiency of billing a surcharge payor or enforcing collection of the surcharge from a surcharge payor would not be cost effective.

"Pediatric hospital", an acute care hospital which limits services primarily to children and which qualifies as exempt from the Medicare Prospective Payment system regulations.

"Pediatric specialty unit", a pediatric unit of an acute care hospital in which the ratio of licensed pediatric beds to total licensed hospital beds as of July 1, 1994 exceeded 0.20. In calculating that ratio, licensed pediatric beds shall include the total of all pediatric service beds, and the total of all licensed hospital beds shall include the total of all licensed acute care hospital beds, consistent with Medicare's acute care hospital reimbursement methodology as put forth in the Provider Reimbursement Manual Part 1, Section 2405.3G.

"Private sector charges", gross patient service revenue attributable to all patients less gross patient service revenue attributable to Titles XVIII and XIX, other public-aided patients, reimbursable health services and bad debt.

"Reimbursable health services", health services provided to uninsured and underinsured patients who are determined to be financially unable to pay for their care, in whole or part, under applicable regulations of the office; provided that the health services are emergency, urgentand critical access services provided by acute hospitals or services provided by community health centers; and provided further, that such services shall not be eligible for reimbursement by any other public or private third-party payer.

"Resident", a person living in the commonwealth, as defined by the office by regulation; provided, however, that such regulation shall not define as a resident a person who moved into the commonwealth for the sole purpose of securing health insurance under this chapter. Confinement of a person in a nursing home, hospital or other medical institution shall not in and of itself, suffice to qualify such person as a resident.

"Surcharge payor", an individual or entity that pays for or arranges for the purchase of health care services provided by acute hospitals and ambulatory surgical center services provided by ambulatory surgical centers, as defined in this section; provided, however, that the term "surcharge payor" shall not include Title XVIII and Title XIX programs and their beneficiaries or recipients, other governmental programs of public assistance and their beneficiaries or recipients and the workers' compensation program established under chapter 152.

"Underinsured patient", a patient whose health insurance plan or self-insurance health plan does not pay, in whole or in part, for health services that are eligible for reimbursement from the health safety net trust fund, provided that such patient meets income eligibility standards set by the office.

"Uninsured patient", a patient who is a resident of the commonwealth, who is not covered by a health insurance plan or a self-insurance health plan and who is not eligible for a medical assistance program.

Section 35. (a) There shall be established within the division of health care finance and policy a health safety net office which shall be under the supervision and control of a director. The director shall be appointed by the commissioner, in consultation with the secretary of health and human services and the Medicaid director, and shall be a person of skill and experience in the field of health care finance and administration. The director shall be the executive and administrative head of the office and shall be responsible for administering and enforcing the provisions of law relative to the office and to each administrative unit thereof. The director shall receive such salary as may be determined by law, and shall devote his full time to the duties of his office. In the case of an absence or vacancy in the office of the director, or in the case of disability as determined by the commissioner, the commissioner may designate an acting director to serve as director until the vacancy is filled or the absence or disability ceases. The acting director shall have all the powers and duties of the director and shall have similar qualifications as the director.

(b) The office shall have the following powers and duties: (1) to administer the Health Safety Net Trust Fund, established under section 36, and to require payments to the fund consistent with acute hospitals' and surcharge payors' liability to the fund, as determined under sections 37 and 38, and any further regulations promulgated by the office; (2) to set, after consultation with the office of Medicaid, reimbursement rates for payments from the fund to acute hospitals and community health centers for reimbursable health services provided to uninsured and underinsured patients and to disburse monies from the fund consistent with such rates; provided that the office shall implement a fee-for-service reimbursement system for acute hospitals; (3) to promulgate regulations further defining: (a) eligibility criteria for reimbursable health services; (b) the scope of health services that are eligible for reimbursement by the Health Safety Net Trust Fund; (c) standards for medical hardship; and (d) standards for reasonable efforts to collect payments for the costs of emergency care. The office shall implement procedures for verification of eligibility using the eligibility system of the office of Medicaid and other appropriate sources to determine the eligibility of uninsured and underinsured patients for reimbursable health services and shall establish other procedures to ensure that payments from the fund are made for health services for which there is no other public or private third party payer, including disallowance of payments to acute hospitals and community health centers for health services provided to individuals if reimbursement is available from other public or private sources; (4) to develop programs and guidelines to encourage maximum enrollment of uninsured individuals who receive health services reimbursed by the fund into health care plans and programs of health insurance offered by public and private sources and to promote the delivery of care in the most appropriate setting, provided that the programs and guidelines are developed in consultation with the commonwealth health insurance connector, established under chapter 176Q. These programs shall not deny payments from the fund because services should have been provided in a more appropriate setting if the hospital was required to provided the services under 42 U.S.C. 1395 (dd); (5) to conduct a utilization review program designed to monitor the appropriateness of services for which payments were made by the fund and to promote the delivery of care in the most appropriate setting; and to administer demonstration programs that reduce health safety net trust fund liability to acute hospitals, including a demonstration program to enable disease management for patients with chronic diseases, substance abuse and psychiatric disorders through enrollment of patients in community health centers and community mental health centers and through coordination between these centers and acute hospitals, provided, that the office shall report the results of these reviews annually to the joint committee on health care financing and the house and senate committees on ways and means; (6) to administer, in consultation with the office of Medicaid, the Essential Community Provider Trust Fund, established under section 2PPP of chapter 29, and to make expenditures from that fund without further appropriation for the purpose of improving and enhancing the ability of acute hospitals and community health centers to serve populations in need more efficiently and effectively, including, but not limited to, the ability to provide community-based care, clinical support, care coordination services, disease management services, primary care services, and pharmacy management services through a grant program. The office shall consider applications from acute hospitals and community health centers in awarding the grants. The criteria for selection shall include, but not be limited to, the following: (a) the financial performance of the provider as determined, in the case of applications from acute hospitals, quarterly by the division of health care finance and policy and by consulting other appropriate measurements of financial performance; (b) the percentage of patients with mental or substance abuse disorders served by a provider; (c) the numbers of patients served by a provider who are chronically ill, elderly, or disabled; (d) the payer mix of the provider, with preference given to acute hospitals where a minimum of 63 per cent of the acute hospital's gross patient service revenue is attributable to Title XVIII and Title XIX of the federal Social Security Act or other governmental payors, including reimbursements from the Health Safety Net Trust Fund; (e) the percentage of total annual operating revenue that funding received in fiscal years 2005 and 2006 from the Distressed Provider Expendable Trust Fund comprised for the provider; and (f) the cultural and linguistic challenges presented by the populations served by the provider; (7) to enter into agreements or transactions with any federal, state or municipal agency or other public institution or with a private individual, partnership, firm, corporation, association or other entity, and to make contracts and execute all instruments necessary or convenient for the carrying on of its business; (8) to secure payment, without imposing undue hardship upon any individual, for unpaid bills owed to acute hospitals by individuals for health services that are ineligible for reimbursement from the Health Safety Net Trust Fund which have been accounted for as bad debt by the hospital and which are voluntarily referred by a hospital to the department for collection; provided, however that such unpaid charges shall be considered debts owed to the commonwealth and all payments received shall be credited to the fund; and provided, further, that all actions to secure such payments shall be conducted in compliance with a protocol previously submitted by the office to the joint committee on health care financing; (9) to require hospitals and community health centers to submit to the office data that it reasonably considers necessary; (10) to make, amend and repeal rules and regulations to effectuate the efficient use of monies from the Health Safety Net Trust Fund; provided, however, that the regulations shall be promulgated only after notice and hearing and only upon consultation with the board of the commonwealth health insurance connector, the secretary of health and human services, the director of the office of Medicaid and representatives of the Massachusetts Hospital Association, the Massachusetts Council of Community Hospitals, the Alliance of Massachusetts Safety Net Hospitals and the Massachusetts League of Community Health Centers; and (11) to provide an annual report at the close of each fund fiscal year, in consultation with the office of Medicaid, to the joint committee on health care financing and the house and senate committees on ways and means, evaluating the processes used to determine eligibility for reimbursable health services, including the Virtual Gateway. The report shall include, but not be limited to, the following: (i) an analysis of the effectiveness of these processes in enforcing eligibility requirements for publicly-funded health programs and in enrolling uninsured residents into programs of health insurance offered by public and private sources; (ii) an assessment of the impact of these processes on the level of reimbursable health services by providers; and (iii) recommendations for ongoing improvements that will enhance the performance of eligibility determination systems and reduce hospital administrative costs.

Section 36. (a) There shall be established and set up on the books of the commonwealth a fund to be known as the Health Safety Net Trust Fund, in this section and in sections 37 to 39, inclusive, called the fund, which shall be administered by the office. Expenditures from the fund shall not be subject to appropriation unless otherwise required by law. The purpose of the fund shall be to maintain a health care safety net by reimbursing hospitals and community health centers for a portion of the cost of reimbursable health services provided to low-income, uninsured or underinsured residents of the commonwealth. The office shall administer the fund using such methods, policies, procedures, standards and criteria that it deems necessary for the proper and efficient operation of the fund and programs funded by it in a manner designed to distribute the fund resources as equitably as possible.

(b) The fund shall consist of all amounts paid by acute hospitals and surcharge payors under sections 37 and 38; all appropriations for the purpose of payments to acute hospitals or community health centers for health services provided to uninsured and underinsured residents; any transfers from the Commonwealth Care Trust Fund, established under section 2OOO of chapter 29; and all property and securities acquired by and through the use of monies belonging to the fund and all interest thereon. Amounts placed in the fund shall, except for amounts transferred to the Commonwealth Care Trust Fund, be expended by the office for payments to hospitals and community health centers for reimbursable health services provided to uninsured and underinsured residents of the commonwealth, consistent with the requirements of this section and section 39 and the regulations promulgated by the office; provided, however, that $6,000,000 shall be expended annually from the fund for demonstration projects that use case management and other methods to reduce the liability of the fund to acute hospitals. Any annual balance remaining in the fund after these payments have been made shall be transferred to the Commonwealth Care Trust Fund. All interest earned on the amounts in the fund shall be deposited or retained in the fund. The director shall from time to time requisition from the fund amounts that he considers necessary to meet the current obligations of the office for the purposes of the fund and estimated obligations for a reasonable future period.

Section 37. (a) An acute hospital's liability to the fund shall equal the product of (1) the ratio of its private sector charges to all acute hospitals' private sector charges; and (2) $160,000,000. Annually, before October 1, the office, in consultation with the office of Medicaid, shall establish each acute hospital's liability to the fund using the best data available, as determined by the division, and shall update each acute hospital's liability to the fund as updated information becomes available. The office shall specify by regulation an appropriate mechanism for interim determination and payment of an acute hospital's liability to the fund. An acute hospital's liability to the fund shall in the case of a transfer of ownership be assumed by the successor in interest to the acute hospital.

(b) The office shall establish by regulation an appropriate mechanism for enforcing an acute hospital's liability to the fund in the event that an acute hospital does not make a scheduled payment to the fund. These enforcement mechanisms may include (1) notification to the office of Medicaid requiring an offset of payments on the Title XIX claims of any such acute hospital or any health care provider under common ownership with the acute care hospital or any successor in interest to the acute hospital, and (2) the withholding by the office of Medicaid of the amount of payment owed to the fund, including any interest and late fees, and the transfer of the withheld fundsinto the fund. If the office of Medicaid offsets claims payments as ordered by the office, it shall not be considered to be in breach of contract or any other obligation for the payment of non-contracted services, and providers whose payment is offset under an order of the division shall serve all Title XIX recipients under the contract then in effect with the office of Medicaid, or, in the case of a non-contracting or disproportionate share hospital, under its obligation for providing services to Title XIX recipients under this chapter. In no event shall the office direct the office of Medicaid to offset claims unless an acute hospital has maintained an outstanding obligation to the fund for a period longer than 45 days and has received proper notice that the division intends to initiate enforcement actions under regulations promulgated by the office.

Section 38. (a) Acute hospitals and ambulatory surgical centers shall assess a surcharge on all payments subject to surcharge as defined in section 34. The surcharge shall be distinct from any other amount paid by a surcharge payor for the services of an acute hospital or ambulatory surgical center. The surcharge amount shall equal the product of (i) the surcharge percentage and (ii) amounts paid for these services by a surcharge payor. The office shall calculate the surcharge percentage by dividing $160,000,000 by the projected annual aggregate payments subject to the surcharge. The office shall determine the surcharge percentage before the start of each fund fiscal year and may redetermine the surcharge percentage before April 1 of each fund fiscal year if the office projects that the initial surcharge established the previous October will produce less than $150,000,000 or more than $170,000,000. Before each succeeding October 1, the office shall redetermine the surcharge percentage incorporating any adjustments from earlier years. In each determination or redetermination of the surcharge percentage, the office shall use the best data available as determined by the division and may consider the effect on projected surcharge payments of any modified or waived enforcement pursuant to subsection (e). The office shall incorporate all adjustments, including, but not limited to, updates or corrections or final settlement amounts, by prospective adjustment rather than by retrospective payments or assessments.

(b) Each acute hospital and ambulatory surgical center shall bill a surcharge payor an amount equal to the surcharge described in subsection (a) as a separate and identifiable amount distinct from any amount paid by a surcharge payor for acute hospital or ambulatory surgical center services. Each surcharge payor shall pay the surcharge amount to the office for deposit in the Health Safety Net Trust Fund on behalf of said acute hospital or ambulatory surgical center. Upon the written request of a surcharge payor, the office may implement another billing or collection method for the surcharge payor; provided, however, that the office has received all information that it requests which is necessary to implement such billing or collection method; and provided further, that the office shall specify by regulation the criteria for reviewing and approving such requests and the elements of such alternative method or methods.

(c) The office shall specify by regulation appropriate mechanisms that provide for determination and payment of a surcharge payor's liability, including requirements for data to be submitted by surcharge payors, acute hospitals and ambulatory surgical centers.

(d) A surcharge payor's liability to the fund shall in the case of a transfer of ownership be assumed by the successor in interest to the surcharge payor.

(e) The office shall establish by regulation an appropriate mechanism for enforcing a surcharge payor's liability to the fund if a surcharge payor does not make a scheduled payment to the fund; provided, however, that the office may, for the purpose of administrative simplicity, establish threshold liability amounts below which enforcement may be modified or waived. Such enforcement mechanism may include assessment of interest on the unpaid liability at a rate not to exceed an annual percentage rate of 18 per cent and late fees or penalties at a rate not to exceed 5 per cent per month. Such enforcement mechanism may also include notification to the office of Medicaid requiring an offset of payments on the claims of the surcharge payor, any entity under common ownership or any successor in interest to the surcharge payor, from the office of Medicaid in the amount of payment owed to the fund including any interest and penalties, and to transfer the withheld funds into said fund. If the office of Medicaid offsets claims payments as ordered by the office, the office of Medicaid shall be considered not to be in breach of contract or any other obligation for payment of non-contracted services, and a surcharge payor whose payment is offset under an order of the division shall serve all Title XIX recipients under the contract then in effect with the executive office of health and human services. In no event shall the office direct the office of Medicaid to offset claims unless the surcharge payor has maintained an outstanding liability to the fund for a period longer than 45 days and has received proper notice that the office intends to initiate enforcement actions under regulations promulgated by the office.

(f) If a surcharge payor fails to file any data, statistics or schedules or other information required under this chapter or by any regulation promulgated by the office, the office shall provide written notice to the payor. If a surcharge payor fails to provide required information within 14 days after the receipt of written notice, or falsifies the same, he shall be subject to a civil penalty of not more than $5,000 for each day on which the violation occurs or continues, which penalty may be assessed in an action brought on behalf of the commonwealth in any court of competent jurisdiction. The attorney general shall bring any appropriate action, including injunctive relief, necessary for the enforcement of this chapter.

Section 39. (a) Reimbursements from the fund to hospitals and community health centers for health services provided to uninsured and underinsured individuals shall be subject to further rules and regulations promulgated by the office and shall be made in the following manner:-

(1) Reimbursements made to acute hospitals shall be based on actual claims for health services provided to uninsured and underinsured patients that are submitted to the office, and shall be made only after determination that the claim is eligible for reimbursement under this chapter and any additional regulations promulgated by the office. Reimbursements for health services provided to residents of other states and foreign countries shall be prohibited, and the office shall make payments to acute hospitals using fee-for-service rates calculated as provided in paragraphs (4) and (5).

(2) The office shall, in consultation with the office of Medicaid, develop and implement procedures to verify the eligibility of individuals for whom health services are billed to the fund and to ensure that other coverage options are used fully before services are billed to the fund, including procedures adopted under section 36. The office shall review all claims billed to the fund to determine whether the patient is eligible for medical assistance under the provisions of this chapter and whether any third party is financially responsible for the costs of care provided to the patient. In making these determinations, the office shall verify the insurance status of each individual for whom a claim is made using all sources of data available to the office. The office shall refuse to allow payments or shall disallow payments to acute hospitals and community health centers for free care provided to individuals if reimbursement is available from other public or private sources; provided, that payments shall not be denied from the fund because services should have been provided in a more appropriate setting if the hospital was required to provide these services under 42 U.S.C. 1395(dd).

(3) The office shall require acute hospitals and community health centers to screen each applicant for reimbursed care for other sources of coverage and for potential eligibility for government programs, and to document the results of that screening. If an acute hospital or community health center determines that an applicant is potentially eligible for Medicaid or for the commonwealth care health insurance program, established pursuant to chapter 118H, or another assistance program, the acute hospital or community health center shall assist the applicant in applying for benefits under that program. The office shall audit the accounts of acute hospitals and community health centers to determine compliance with this section and shall deny payments from the fund for any acute hospital or community health center that fails to document compliance with this section.

(4) For the purposes of paying community health centers for health services provided to uninsured individuals under this section, the office shall pay community health centers a base rate that shall be no less than the then-current Medicare Federally Qualified Health Center rate as required under 42 U.S.C. 13951 (a)(3), and the office shall add payments for additional services not included in the base rate, including, but not limited to, EPSDT services, 340B pharmacy, urgent care, and emergency room diversion services.

(5) Reimbursements to acute hospitals and community health centers for bad debt shall be made upon submission of evidence, in a form to be determined by the office, that reasonable efforts to collect the debt have been made.

(6) The office shall reimburse acute hospitals for health services provided to individuals based on the payment systems in effect for acute hospitals used by the United States Department of Health and Human Services Centers for Medicare & Medicaid Services to administer the Medicare Program under Title XVIII of the Social Security Act, including all of Medicare's adjustments for direct and indirect graduate medical education, disproportionate share, outliers, organ acquisition, bad debt, new technology and capital and the full amount of the annual increase in the Medicare hospital market basket index. The office shall, in consultation with the office of Medicaid and the Massachusetts Hospital Association, promulgate regulations necessary to modify these payment systems to account for: (i) the differences between the program administered by the office and the Title XVIII Medicare program, including the services and benefits covered; (ii) grouper and DRG relative weights for purposes of calculating the payment rates to reimburse acute hospitals at rates no less than the rates they are reimbursed by Medicare; (iii) the extent and duration of covered services; (iv) the populations served; and (v) any other adjustments to the payment methodology under this section as considered necessary by the office, based upon circumstances of individual hospitals.

Following implementation of this section, the office shall ensure that the allowable reimbursement rates under this section for health services provided to uninsured individuals shall not thereafter be less than rates of payment for comparable services under the Medicare program, taking into account the adjustments required by this section.

(b) By April 1 of the year preceding the start of the fund fiscal year, the office shall, after consultation with the office of Medicaid, and using the best data available, provide an estimate of the projected total reimbursable health services provided by acute hospitals and community health centers and emergency bad debt costs, the total funding available, and any projected shortfall after adjusting for reimbursement payments to community health centers. If a shortfall in revenue exists in any fund fiscal year to cover projected costs for reimbursement of health services, the office shall allocate that shortfall in a manner that reflects each hospital's proportional financial requirement for reimbursements from the fund, including, but not limited to, the establishment of a graduated reimbursement system and under any additional regulations promulgated by the office.

(c) The executive office of health and human services directly or through the division shall enter into interagency agreements with the department of revenue to verify income data for patients whose health care services are reimbursed by the Health Safety Net Trust Fund and to recover payments made by the fund for services provided to individuals who are ineligible to receive reimbursable health services or on whose behalf the fund has paid for emergency bad debt. The division shall promulgate regulations requiring acute hospitals to submit data that will enable the department of revenue to pursue recoveries from individuals who are ineligible for reimbursable health services and on whose behalf the fund has made payments to acute hospitals for such services or emergency bad debt. Any amounts recovered, including amounts received under chapter 62D, shall be deposited in the Health Safety Net Trust Fund, established in section 36.

(d) The office shall not at any time make payments from the fund for any period in excess of amounts that have been paid into or are available in the fund for that period, but the office may temporarily prorate payments from the fund for cash flow purposes.

 

Hospital Rate Pay for Performance

SECTION 40.   Said chapter 58 is hereby further amended by striking out section 128, as amended by section 62 of chapter 324 of the acts of 2006, and inserting in place thereof the following section:-

Section 128. Notwithstanding any general or special law to the contrary and in accordance with section 13B of chapter 118E of the General Laws, in fiscal year 2007, $90,000,000 shall be made available from the Commonwealth Care Trust Fund, established pursuant to section 2OOO of chapter 29 of the General Laws, to pay for an increase in the Medicaid rates paid to acute hospitals and physicians; and provided further, that not less than 15 per cent of the increase shall be allocated to rate increases for physicians; provided, further, that for fiscal year 2008, an additional $90,000,000 for a total of $180,000,000, shall be made available from the Commonwealth Care Trust Fund in accordance with this section, to pay for an increase in the Medicaid rates paid to acute hospitals and physicians; provided, however, that not less than 15 per cent of the increase shall be allocated to rate increases for physicians. In fiscal year 2009, an additional $90,000,000, for a total of $270,000,000, shall be made available to pay for an increase in the Medicaid rates paid to acute hospitals, as defined in section 1 of chapter 118G of the General Laws, and physicians; provided, that not less than 15 per cent of the increase shall be allocated to rate increases for physicians. In fiscal year 2008, not more than $20,000,000 of the amounts to be made available to acute hospitals under this section shall be contingent on hospital adherence to quality standards and achievement of performance benchmarks, including the reduction of racial and ethnic disparities in the provision of health care, in accordance with said section 13B of said chapter 118E. For fiscal year 2008, any such performance benchmarks shall be determined by the secretary of health and human services without any limitation but in consultation with hospitals, the MassHealth payment policy advisory board and the health care quality and cost council, and may include measures to be reported by hospitals to the federal Centers for Medicare & Medicaid Services for Reporting Hospital Quality Data for Annual Payment Update, to the Joint Commission on Accreditation of Healthcare Organizations for core measures, or to the MassHealth Program pursuant to Appendix G of the contract between MassHealth and acute hospitals for Rate Year 2007 or other nationally-recognized measures that are drawn on those approved by the National Quality Forum and adopted by the Hospitals Quality Alliance Performance benchmarks and quality measures related to racial and ethnic disparities in the provision of health care. The secretary shall, after consultation required by said section 13B of said chapter 118E, issue final quality standards and performance benchmarks for use in the hospital fiscal year beginning October 1, 2007. For purposes of payments to hospital pursuant to this section, fiscal year shall mean the hospitals fiscal year and, for purposes of any payments to physicians pursuant to this section, fiscal year shall mean the state fiscal year.

 

Transfer Health Care Security Trust to General Fund

SECTION 53.   ** Item is being returned for amendment. Text of recommendations can be found in Attachment E.



Notwithstanding any general or special law to the contrary, the comptroller shall not less than 10 days after the effective date of this act, transfer $150,000,000 to the General Fund from the Health Care Security Trust Fund, established in section 1 of chapter 29D of the General Laws.

 

Transfers Among Health Care Funds

SECTION 55.   Notwithstanding any general or special law to the contrary, the comptroller shall, in consultation with the state treasurer, the secretary of administration and finance and the secretary of health and human services, develop a schedule for transferring funds among the General Fund, the Commonwealth Care Trust Fund established pursuant to section 2OOO of chapter 29 of the General Laws and the Health Safety Net Trust Fund, established in section 36 of chapter 118G of the General Laws. Not less than $789,650,000 shall be transferred from the General Fund to the Commonwealth Care Trust Fund and not less than $33,900,000 shall be transferred from the Commonwealth Care Trust Fund to the Health Safety Net Trust Fund; provided further, that the executive office of health and human services shall make expenditures required for fiscal year 2008 pursuant to section 122 of chapter 58 of the acts of 2006. The schedule shall provide for transfers in increments considered appropriate to meet the cash flow needs of these funds. The transfers shall not begin before July 1, 2007 and shall be completed on or before June 30, 2008. The secretary of administration and finance, in consultation with the secretary of health and human services and the executive director of the commonwealth health insurance connector, shall on a quarterly basis evaluate the revenue needs of the health safety net program funded by the Health Safety Net Trust Fund and the Commonwealth Care subsidized health insurance program funded from the Commonwealth Care Trust Fund, and if necessary, transfer monies between these funds for the purpose of ensuring that sufficient revenues are available to support projected program expenditures. The secretary of health and human services in consultation with the secretary of administration and finance and the executive director of the commonwealth health insurance connector shall submit a quarterly report to the house and senate committees on ways and means and joint committee on healthcare financing which shall include, but not be limited to, the projected and actual expenditures and revenues for the Commonwealth Care Trust Fund and any transfers made between the Health Safety Net Trust Fund and the Commonwealth Care Trust Fund.

 

Initial Gross Payments to Qualifying Acute Care Hospitals

SECTION 56.   Notwithstanding any general or special law to the contrary, on or before October 1, 2007 and without further appropriation, the comptroller shall transfer from the General Fund to the Health Safety Net Trust Fund, established in section 36 of chapter 118G of the General Laws, an amount not to exceed $45,000,000 for the purpose of making initial gross payments to qualifying acute care hospitals and community health centers for the hospital fiscal year beginning October 1, 2007. These payments shall be made to hospitals before, and in anticipation of, the payment by hospitals of their gross liability to this fund. The comptroller shall transfer from this fund to the General Fund not later than June 30, 2008, the amount of the transfer authorized in this section and any allocation of that amount as certified by the director of the health safety net office.

 

Essential Community Provider Trust Fund

SECTION 60.   Notwithstanding any general or special law to the contrary, the comptroller, in consultation with the secretary of health and human services, shall develop a schedule for transferring not less than $28,000,000 from the General Fund to the Essential Community Provider Trust Fund, established in section 2PPP of chapter 29 of the General Laws for the purpose of making payments to hospitals and community health centers in fiscal year 2008. The secretary shall authorize expenditures from the fund without further appropriation for the purpose of a grant program to improve and enhance the ability of hospitals and community health centers to serve populations in need, more efficiently and effectively, including, but not limited to, the ability to provide community-based care, clinical support, care coordination services, disease management services, primary care services and pharmacy management services through a grant program. The office shall consider applications from acute hospitals, non-acute hospitals, and community health centers in awarding the grants; provided, however, that the office shall publicize the existence of the grant program to eligible providers and shall award grants on or before September 1, 2007. The criteria for selection shall include, but not be limited to, the following: (i) financial performance measures including negative operating margins, insufficient cash flow, technical bond default and the uncertain ability to cover long-term obligations, as well as potential for loss of critical community services; (ii) the percentage of patients with mental or substance abuse disorders served by a provider; (iii) the numbers of patients served by a provider who are chronically ill, elderly, or disabled, provided that in the case of a community health center, that preference be given to the provision of a program of all-inclusive care for the elderly; (iv) the payer mix of the provider, with preference given to acute hospitals where a minimum of 63 per cent of the acute hospital's gross patient service revenue is attributable to Title XVIII and Title XIX of the federal Social Security Act or other governmental payors, including reimbursements from the Health Safety Net Trust Fund; (v) the percentage of total annual operating revenue that received funding in fiscal years 2005 and 2006 from the Distressed Provider Expendable Trust Fund comprised for the provider; (vi) the percentage of total annual operating revenue that received funding in fiscal year 2007 from the Essential Community Provided Trust Fund, established in section 36 of chapter 118G of the General Laws; (vii) the cultural and linguistic challenges presented by the populations served by the provider; (viii) a documented critical need for investment in information technology such as computerized physician order entry systems but without access to capital to finance such investments; and (ix) the provision by a community health center of 24 hour emergency services. The secretary may further authorize distributions on an emergency basis to acute hospitals, non-acute hospitals and community health centers facing extreme financial distress or closure upon petition from the provider. The emergency funds shall be distributed by the secretary within 14 days of petition by a provider that is determined to be facing extreme financial distress or closure at an amount determined by the secretary.

 

Report to Legislature on Claims-Based Reimbursement System

SECTION 76.   Notwithstanding any general or special law to the contrary, the secretary of health and human services shall submit a report on the reimbursement methodology to be used in hospital fiscal year 2008 for health services from the Health Safety Net Trust Fund as determined by the health safety net office pursuant to section 39 of chapter 118G of the General Laws. The report shall detail all modifications made to the payment systems in effect for acute hospitals used by the United States Department of Health and Human Services Centers for Medicare & Medicaid Services to administer the Medicare Program under Title XVIII of the Social Security Act, including any adjustments to account for: (1) the differences between the program administered by the office and the Title XVIII Medicare program, including the services and benefits covered; (2) grouper and DRG relative weights for purposes of calculating the payment rates to reimburse acute hospitals at rates no less than the rates they are reimbursed by Medicare; (3) the extent and duration of covered services; (4) the populations served; and (5) any other adjustments based upon circumstances of individual hospitals. The report shall also detail what, if any, adjustments were made under clause (4) for disproportionate share hospitals, as defined in section 1 of said chapter 118G, or for a free-standing pediatric hospital with a disproportionately low volume of Title XVIII payments. The secretary shall submit the report to the joint committee on health care financing and the house and senate committees on ways and means on or before August 1, 2007.

 

Pool Audit Unit at the IGO

SECTION 79.   Notwithstanding any general or special law to the contrary, in hospital fiscal year 2008, the office of the inspector general may continue to expend funds appropriated pursuant to section 1 of chapter 240 of the acts of 2004 from the Uncompensated Care Trust Fund, or any successor fund, for the costs associated with maintaining a pool audit unit within said office. The unit shall continue to oversee and examine the practices in all Massachusetts' hospitals including, but not limited to, the care of the uninsured and the resulting free care charges. The inspector general shall submit a report to the house and senate committees on ways and means on the results of the audits and any other completed analyses not later than March 1, 2008. For the purposes of said audits, allowable free care services shall be defined pursuant to chapter 118G of the General Laws and any regulations promulgated pursuant thereto.

 

Electronic Health Records System Task Force

SECTION 86.   ** Item is being returned for amendment. Text of recommendations can be found in Attachment F.



(a) Notwithstanding any general or special law to the contrary, the executive office of health and human services shall establish an electronic health records system task force to provide a structure that enables the state to act in a leadership role in the development of state and federal standards for, and in the implementation and use of, an electronic health records system for children in foster care, individuals and dependents enrolled in the MassHealth and SCHIP programs, and individuals and dependents enrolled in commonwealth care or safety net care programs.



(b) The task force shall consist of not more than 9 members, appointed by the secretary of health and human services, who shall represent entities with expertise in developing or implementing electronic health records including, but not limited to, the United States Veterans Administration facilities in the commonwealth, multi-facility hospital systems in the commonwealth, the University of Massachusetts medical school, the e-Rx Collaborative, MA-SHARE, the Massachusetts Health Data Consortium, the Massachusetts e-Health Collaborative, and MassPro, the commonwealth's federally designated Quality Improvement Organization. The chief information officer for the executive office of health and human services shall serve as coordinator of the task force. The task force shall also consist of 2 members of the senate to be appointed by the president of the senate and 1 member of the senate to be appointed by the minority leader of the senate, 2 members of the house of representatives to be appointed by the speaker of the house and 1 member of the house of representatives to be appointed by the minority leader of the house of representatives, the commissioner of insurance, the commissioner of medical assistance, the commissioner of social services, the commissioner of health care finance and policy, the executive director of the Betsy Lehman Center for Patient Safety, and the executive director of the commonwealth connector shall serve as ex officio, nonvoting members of the task force.



(c) The task force shall: (1) develop an electronic health records system that provides linkages between multiple settings including, but not limited to, the MassHealth and SCHIP programs, programs administered by the commonwealth connector and programs serving children in foster care, that utilize health records and that is consistent with requirements for community health records and electronic prescribing; (2) evaluate the economic model and the anticipated benefits of electronic health records; and (3) provide quarterly updates to the governor and the chairs of the house and senate committees on ways and means and the chairs of the joint committee on health care financing regarding progress in the development of national standards and the work of the task force.