Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately provide for the equitable and cost efficient establishment of public assistance rates for chronic disease hospitals, therefore it is hereby declared an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. Section 32 of chapter 6A of the General Laws, as appearing in the 1986 Official Edition, is hereby amended by inserting after the tenth paragraph the following four paragraphs:-
In establishing rates of payments for hospitals with a majority of their beds licensed by the department of public health to provide chronic disease or rehabilitation hospital services, the commission shall annually establish rates of payment which may include administratively necessary day rates. Each rate established by the commission shall meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable quality and safety standards. Such rates as may be established from time to time for payment of administratively necessary days shall meet the reasonable costs of each individual hospital providing such care.
In the event the commission does establish administratively necessary day rates, it shall also establish, and separately calculate, rates of payment for other public assistance patients so that each rate of payment meets the reasonable costs of the individual hospital for services provided to the patient for whom the rate applies and that total reimbursement received by the individual hospital is no less than its total reasonable costs, as defined by the commission. Such administratively necessary day rates for chronic disease or rehabilitation hospitals as may be established from time to time shall only apply to patients for whom medically necessary care is usually provided to public assistance recipients admitted to nonhospital facilities within a twenty-five mile radius of the domicile of any individual recipient or his family. Determinations as to the medical necessity of patient care shall only be made by physician members of each hospital's utilization review committee, and may only be subject to review by such peer review organizations as are duly authorized under the Social Security Act, 42 USC 1320c, et seq., which find and certify that the medical services required by the individual patient are usually provided to public assistance recipients in nonhospital facilities located within said twenty-five mile radius of the domicile of any individual patient. Determinations of the medical necessity of care provided to patients by non-acute hospitals shall not be subject to any substantive standards other than generally accepted medical practice.
Administratively necessary day rates shall operate prospectively and shall only apply to hospital services provided subsequent to the individual patient, the patient's representative, or attending physician receiving notice and an opportunity for an adjudicatory hearing to be conducted by the division of administrative law appeals established by section four H of chapter seven. In the event a physician or hospital, but not a patient interposes an appeal, the decision, including any administratively necessary day rates, shall operate retroactively to the date such notice was given. In the event a patient interposes an appeal, the decision, including any administratively necessary day rates, shall operate prospectively from the date of a decision by the division. Said hearing shall determine whether the decision of the peer review organization or utilization review committee was correct and in accordance with law.
In the event the commission does establish administratively necessary day rates, it shall provide exemptions therefrom authorized by 42 USC 1395x (v) (G). In addition to such other criteria as the commission may establish, each non-acute hospital with an average occupancy of eighty per cent or more of its staffed beds, which has had a majority of patient admissions subject to review by the provider review organizations pursuant to 42 USC 1320c, et seq., shall be entitled to an exemption from administratively necessary day rates. The provisions of this section shall, at the option of an individual hospital, be applied to settle disputes which were filed in court on or before June first, nineteen hundred and eighty-eight, between a non-acute hospital, the commission or the department of public welfare concerning the determination of administratively necessary days and rates.
SECTION 2. Said chapter 6A is hereby further amended by inserting after section 37 the following section:-
Section 37A. (a) For the purpose of determining rates of payment under section thirty-two and approving the charges, reasonable financial requirements and budgets of non-acute hospitals under sections thirty-seven, thirty-eight and thirty-nine the commission shall increase the composite inflation allowance of each non-acute hospital by a factor of two-hundredths. Said increase in the composite inflation allowance of each hospital shall be expended during each fiscal year, commencing with the fiscal year nineteen hundred and eighty-eight, for the compensation of technicians, nurses, and nursing aides, orderlies and attendants, and occupational, speech, recreational, physical, and respiratory therapists. Any amount not so expended by a non-acute hospital during any fiscal year shall be reduced by the commission in its approval of rates, charges and reasonable financial requirements for such non-acute hospital in the next subsequent year. The commission shall in addition to any inflation and volume allowance, provide non-acute hospitals allowances to remedy labor shortages of full time equivalent employees and for wage parity requirements of the individual non-acute hospital. The commission shall not impose any limitation on the grounds upon which a non-acute hospital may apply for such relief under this paragraph, but shall review the merits of each application. Grounds upon which relief to remedy a labor shortage or to provide for wage parity requirements shall include, but not be limited to:
(1) where an employee vacancy rate exists in excess of the number of full time equivalent patient care employees contained in a plan of correction which has been accepted by the department of public health after it has issued a deficiency citation that patient care services are insufficient at a non-acute hospital or where an insufficient number of patient care personnel exists as determined by any patient care assessment method used by an individual non-acute hospital for accreditation by the joint commission on accreditation of hospitals;
(2) where the individual non-acute hospital demonstrates that after engaging in bona fide recruitment efforts it has experienced difficulty recruiting and retaining employees due to its location or for any other reason and, therefore, must make expenditures in excess of the amount allowed by the commission to recruit and retain labor.
For the purposes of making an application under the provisions of this section, any hospital may use annual wage data reported by the Massachusetts hospital association and the United States bureau of labor statistics which shall constitute evidence that the non-acute hospital is entitled to an allowance under this section.
(b) The allowances granted under the provisions of this section shall assure that the allowed total compensation for full time equivalent employees is sufficient for each non-acute hospital to attract and retain a sufficient number of employees within each classification of employees to provide quality patient care. Where a non-acute hospital is entitled to an allowance under the provisions of this section due to its reliance on patient care personnel acquired through temporary employment agencies, such allowance shall reflect full time equivalent compensation which is no less than the annualized hourly charge of such temporary employment agencies for each class of employees, less an imputed amount of fifteen per cent for agency overhead or actual average agency overhead if obtained and verified by the commission, less the amount otherwise allowed in base year costs per full time equivalent employee within the job classifications for which relief is provided.
SECTION 3. Said chapter 6A is hereby further amended by striking out section 42, as appearing in the 1986 Official Edition, and inserting in place thereof the following section:-
Section 42. Any non-acute hospital aggrieved by any action or failure to act by the commission under this chapter, unless another appeal is provided for by this chapter or chapter one hundred and seventy-six A, may file an appeal with the division of administrative law appeals established pursuant to section four H of chapter seven. Said appeal shall be filed within thirty days of a hospital's receipt of notice of any action by the commission or at any time in the event of inaction by the commission. On any such appeal the division of administrative law appeals shall conduct an adjudicatory proceeding which shall be governed by the provisions of chapter thirty A. The division shall determine whether the commission's application of its regulations to an individual hospital or any other action or failure to act by the commission is in conformity with law and, notwithstanding that the commission may have correctly applied its regulations, that all charges, allowed costs, reasonable financial requirements, costs, rates, prices or the like meet the provision of this chapter, are fair, reasonable and adequate in such specific circumstances as may be presented by the hospital, are not confiscatory and otherwise are in accordance with law. Judicial review of the division's decision and order shall be governed by section fourteen of chapter thirty A. Any hospital may seek interim relief from the superior court while any such appeal is pending.