Subsection (b) of Section 13F of Chapter 118E of the general laws, as appearing in the 2016 official edition, is hereby amended by inserting the following new paragraph at the end thereof:

In its contracts with acute hospitals, the executive office and any third party under contract with the executive office to provide medical benefits for medical assistance recipients under Title XIX, shall limit any financial penalty related to potentially preventable readmissions to no more than 4.4 percent of a hospital’s total annual inpatient payments covered under said contract. Furthermore, total penalties across all acute hospitals shall not exceed the penalty amount assessed in hospital rate year 2018. Notwithstanding the provisions of section 38 of this chapter, any appeal regarding an overpayment recovery for potentially preventable readmissions which is not adjudicated by the executive office or its third party contractors within 180 days that the provider submits a timely claim for an adjudicatory hearing shall be nullified and any payment recoveries made by the executive office or a third party contractor shall be repaid to the hospital.