Budget Amendment ID: FY2014-S3-598-R2

2nd Redraft EHS 598

Sustainable Medicaid Rates for Disproportionate Share Hospitals

Messrs. Welch, Finegold, Moore, Wolf and Downing and Ms. Candaras and Ms. Chang-Diaz and Mr. Rush and Ms. O'Connor Ives and Messrs. Rodrigues, Pacheco, McGee, Brownsberger, Eldridge, Keenan and Knapik and Ms. Clark moved that the proposed new text be amended by inserting after section 139 the following section:-

“SECTION 139A.  (a) Notwithstanding any general or special law to the contrary, the health policy commission shall enter into an interagency agreement with the executive office of health and human services to provide up to $39,978,000 in available funding from the Distressed Hospital Trust Fund established in section 2GGGG of chapter 29 of the General Laws during fiscal year 2014, for payments to acute care hospitals that have greater than 63 per cent of their gross patient service revenue from governmental payers and free care as described in subsection (b).  Additional payments under this section shall be paid directly to each such qualifying acute care hospital.  The comptroller shall deposit in the fund all federal reimbursements paid to the commonwealth as a result of these payments.

(b) Notwithstanding any general or special law to the contrary, the office of Medicaid shall expend from any funds received pursuant to an interagency agreement under this section, subject to all required federal approvals and the availability of federal financial participation, to provide:

(i) an additional 5 per cent of its standard payment amount per discharge, or SPAD, or of reimbursement provided under any subsequent inpatient payment methodologies to any acute care hospital that has greater than 63 per cent of its gross patient service revenue from governmental payers and free care as determined by the executive office of health and human services;

(ii) an additional 5 per cent of its outpatient payment amount per episode or PAPE, or of reimbursement provided under any subsequent outpatient payment methodologies to any acute care hospital that has greater than 63 per cent of its gross patient service revenue from governmental payers and free care as determined by the executive office of health and human services; and

(iii) an additional amount, totaling the remainder of any sum transferred pursuant to subsection (a), to be used as an additional percentage of SPAD and outpatient PAPE rates, for inpatient discharges for behavioral and mental health services and outpatient episodes for behavioral and mental health services provided by any acute care hospital that that has greater than 63 per cent of its gross patient service revenue from governmental payers and free care as determined by the executive office of health and human services; provided, however, that subject to all required federal approvals and the availability of federal financial participation, such add on amounts shall be prioritized for services provided to children and adolescents.

(c) Any acute hospital receiving enhanced rates under this section shall report to the health policy commission not later than June 30, 2014 describing how enhanced rates to that hospital supports the commonwealth’s efforts to meet the health care cost growth benchmark established in section 9 of chapter 6D of the General Laws and whether such enhanced rates: (1) improve and enhance the ability of the hospital to serve populations efficiently and effectively; (2) advance the adoption of health information technology, including interoperable electronic health records systems; (3) accelerate the ability to electronically exchange information with other providers in the community to ensure continuity of care; (4) support infrastructure investments necessary for the transition to alternative payment methodologies, including technology investments; (5) aid in the development of care practices and other operational standards necessary for certification as an ACO under section 15 of said chapter 6D; or (6) improve the affordability and quality of care.

(d) The interagency agreement under subsection (a) shall be effective upon deposit of sufficient funds into the Distressed Hospital Trust Fund under section 241 of chapter 224 of the acts of 2012.”