hb4559 intr

H. B. 4559

(By Delegates Leach, Warner, Campbell,
Compton, Hall, Faircloth and Doyle)

[Introduced February 16, 2000; referred to the

Committee on Finance.]

A BILL to amend and reenact sections nine and fifteen, article twenty-seven, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to permitting hospitals paying medicaid provider tax to provide health care services to medicaid recipients.

Be it enacted by the Legislature of West Virginia:

That sections nine and fifteen, article twenty-seven, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:

ARTICLE 27. HEALTH CARE PROVIDER TAXES.

§11-27-9. Imposition of tax on providers of inpatient hospital services.

(a) Imposition of tax. -- For the privilege of engaging or continuing within this state in the business of providing inpatient hospital services, there is hereby levied and shall be collected from every person rendering such service an annual broad-based health care related tax. ~~Provided,~~ That a hospital which meets all the requirements of section twenty-one, article twenty-nine-b, chapter sixteen of this code and regulations thereunder may change or amend its schedule of rates to the extent necessary to compensate for the tax in accordance with the following procedures:
(1) The health care cost review authority shall allow a temporary change in a hospital's rates which may be effective immediately upon filing and in advance of review procedures when a hospital files a verified claim that such temporary rate changes are in the public interest, and are necessary to prevent insolvency, to maintain accreditation or for emergency repairs or to relieve undue financial hardship. The verified claim shall state the facts supporting the hospital's position, the amount of increase in rates required to alleviate the situation and shall summarize the overall effect of the rate increase. The claim shall be verified by either the chairman of the hospital's governing body or by the chief executive officer of the hospital.
(2) Following receipt of the verified claim for temporary relief, the health care cost review authority shall review the claim through its usual procedures and standards; however, this power of review does not affect the hospital's ability to place the temporary rate increase into effect immediately. The review of the hospital's claim shall be for a permanent rate increase and the health care cost review authority may include such other factual information in the review as may be necessary for a permanent rate increase review. As a result of its findings from the permanent review, the health care cost review authority may allow the temporary rate increase to become permanent, to deny any increase at all, to allow a lesser increase, or to allow a greater increase.
(3) When any change affecting an increase in rates goes into effect before a final order is entered in the proceedings, for whatever reasons, where it deems it necessary and practicable, the health care cost review authority may order the hospital to keep a detailed and accurate account of all amounts received by reason of the increase in rates and the purchasers and third- party payors from whom such amounts were received. At the conclusion of any hearing, appeal or other proceeding, the health care cost review authority may order the hospital to refund with interest to each affected purchaser and/or third-party payor any part of the increase in rates that may be held to be excessive or unreasonable. In the event a refund is not practicable, the hospital shall, under appropriate terms and conditions determined by the health care cost review authority, charge over and amortize by means of a temporary decrease in rates whatever income is realized from that portion of the increase in rates which was subsequently held to be excessive or unreasonable.
(4) The health care cost review authority, upon a determination that a hospital has overcharged purchasers or charged purchasers at rates not approved by the health care cost review authority or charged rates which were subsequently held to be excessive or unreasonable, may prescribe rebates to purchasers and third-party payors in effect by the aggregate total of the overcharge.
~~(5) The rate adjustment provided for in this section is limited to a single adjustment during the initial year of the imposition of the tax provided for in this section.~~

(b) Rate and measure of tax. -- The tax imposed in subsection (a) of this section shall be two and one-half percent of the gross receipts derived by the taxpayer from furnishing inpatient hospital services in this state.

(1) "Gross receipts" means the amount received or receivable, whether in cash or in kind, from patients, third-party payors and others for inpatient hospital services furnished by the provider, including retroactive adjustments under reimbursement agreements with third-party payors, without any deduction for any expenses of any kind: Provided, That accrual basis providers shall be allowed to reduce gross receipts by their contractual allowances, to the extent such allowances are included therein, and by bad debts, to the extent the amount of such bad debts was previously included in gross receipts upon which the tax imposed by this section was paid.

(2) "Contractual allowances" means the difference between revenue (gross receipts) at established rates and amounts realizable from third-party payors under contractual agreements.

(3) "Inpatient hospital services" means those services that are inpatient hospital services for purposes of Section 1903(w) of the Social Security Act.

(d) Effective date. -- The tax imposed by this section shall apply to gross receipts received or receivable by providers after the thirty-first day of May, one thousand nine hundred ninety-three.

(e) Notwithstanding any other section of this code, any health insurer or managed care organization which contracts with the state for inpatient hospital services for medicaid beneficiaries and which contracts for the services in a county in which medicaid beneficiaries are mandated to participate in a managed care program, shall contract with all hospitals serving the county which are required to pay the tax imposed by this section. All terms and conditions of the contract shall be similar to those offered to other hospitals serving the county and shall not discriminate against any hospital. The provision of this subsection shall expire on the thirtieth day of June, two thousand three.

§11-27-15. Imposition of tax on providers of outpatient hospital services.

(a) Imposition of tax. -- For the privilege of engaging or continuing within this state in the business of providing outpatient hospital services, there is hereby levied and shall be collected from every person rendering such service an annual broad-based health care related tax.

(b) Rate and measure of tax. -- The tax imposed in subsection (a) of this section shall be two and one-half percent of the gross receipts derived by the taxpayer from furnishing outpatient hospital services in this state.

(1) "Gross receipts" means the amount received or receivable, whether in cash or in kind, from patients, third- party payors and others for outpatient hospital services furnished by the provider, including retroactive adjustments under reimbursement agreements with third-party payors, without any deduction for any expenses of any kind: Provided, That accrual basis providers shall be allowed to reduce gross receipts by their contractual allowances, to the extent such allowances are included therein, and by bad debts, to the extent the amount of such bad debts was previously included in gross receipts upon which the tax imposed by this section was paid.

(2) "Contractual allowances" means the difference between revenue (gross receipts) at established rates and amounts realizable from third-party payors under contractual agreements.

(3) "Outpatient hospital services" means those services that are outpatient hospital services for purposes of Section 1903(w) of the Social Security Act.

(d) Effective date. -- The tax imposed by this section shall apply to gross receipts received or receivable by providers after the thirty-first day of May, one thousand nine hundred ninety- three.

(e) Notwithstanding any other section of this code, any health insurer or managed care organization which contracts with the state for outpatient hospital services for medicaid beneficiaries and which contracts for the services in a county in which medicaid beneficiaries are mandated to participate in a managed care program, shall contract with all hospitals serving the county which are required to pay the tax imposed by this section. All terms and conditions of the contract shall be similar to those offered to other hospitals serving the county and shall not discriminate against any hospital. The provision of this subsection shall expire on the thirtieth day of June, two thousand three.

NOTE: The purpose of this bill is to permit hospitals paying Medicaid provider tax to provide health care services to Medicaid recipients.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.