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Session Law

1997

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Chapter 47 AN ACT ASSISTING IN MAKING HEALTH CARE AVAILABLE TO LOW INCOME UNINSURED AND UNDERINSURED RESIDENTS OF THE COMMONWEALTH.

Whereas , The deferred operation of this act would tend to defeat its purpose, which is immediately to assist in making health care services available to low income uninsured and underinsured residents of the commonwealth, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public health and convenience.


Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:


SECTION 1. The second sentence of section 2FF of chapter 29 of the General Laws, as appearing in the 1996 Official Edition, is hereby amended by striking out clause (b) and inserting in place thereof the following three clauses:- (b) any appropriations transferred to said fund pursuant to the provisions of subsection (9) of section 9B of chapter 118E, any federal reimbursement received for medical benefits provided to expansion beneficiaries as defined by subsection 2 of section 9A of said chapter 118E, any other appropriations or monies made available by law for the purposes of the demonstration project known as MassHealth established pursuant to said section 9A of chapter 118E, and any premiums, grants, gifts, or other contributions explicitly made to said fund; (c) any income derived from the investment of amounts credited to said fund; and (d) any federal reimbursements received for benefits and payments provided pursuant to section 9C of said chapter 118E.

SECTION 2. Subsection (b) of section 21 of chapter 62C of the General Laws is hereby amended by striking out clause (9), as appearing in the 1996 Official Edition, and inserting in place thereof the following clause:-

(9) The disclosure to the commissioner of transitional assistance or the commissioner of medical assistance, upon his written request, of the fact that a specific bank or other entity paying interest income, doing business in the commonwealth has filed for any year a report under section 8 with respect to interest paid by it to a designated recipient of transitional assistance under any program administered by the department of transitional assistance or the division of medical assistance and of the amount of the interest so reported, together with the identification of the account with respect to which the interest was paid.

SECTION 3. Section 1 of chapter 62D of the General Laws is hereby amended by striking out the definition of "Claimant agency", as so appearing, and inserting in place thereof the following definition:-

"Claimant agency", the IV-D agency as set forth in chapter 119A, the division of medical assistance, the division of employment and training, the department of transitional assistance, the higher education coordinating council in the exercise of its duty to aid and foster programs supporting higher education pursuant to chapter 15A, or the division of health care finance and policy in the exercise of its duty to administer the uncompensated care pool pursuant to chapter 118G.

SECTION 4. Said section 1 of said chapter 62D is hereby amended by striking out the definition of "Debt", as so appearing, and inserting in place thereof the following definition:-

"Debt", an unpaid spousal or child support obligation which is being enforced by the claimant agency, or which is collected or ordered to be collected by a court, whether or not there is an outstanding judgment for the sum; an amount owed the division of medical assistance by a debtor; an amount owed the department of transitional assistance by recipients, or former recipients, of public assistance; any liquidated sum due and owing to the corporation on an education loan made under any of the programs administered by the corporation in behalf of the commonwealth whether or not there is an outstanding judgment for that sum or any liquidated sum, certified by the comptroller as due and owing to any state agency, as defined in section 1 of chapter 29, or an amount owed the division of health care finance and policy on behalf of the uncompensated care pool by a person or a guarantor of a person who received free care services paid for in whole or in part by the uncompensated care pool, pursuant to subsection (m) of section 18 of chapter 118G.

SECTION 5. Said section 1 of said chapter 62D is hereby amended by striking out the definition of "Debtor", as so appearing, and inserting in place thereof the following definition:-

"Debtor", any individual owing money for support payments to the claimant agency or to persons for whom the claimant agency is providing enforcement services under state and federal law; any individual owing money to the division of medical assistance for costs incurred as a result of noncompliance by that individual with an order to provide coverage for the cost of health services to a child eligible for assistance under Title XIX of the Social Security Act, as further described in section 23 of chapter 118E; any individual owing money to the department of employment and training; any individual owing money to the department of transitional assistance for overpayments of public assistance; any individual owing money on an education loan to the corporation or any individual or entity owing a debt as defined herein, which obligation has not been adjudged satisfied by court order, set aside by court order, or discharged in bankruptcy; or any individual owing the Uncompensated Care Trust Fund administered by the division of health care finance and policy for the cost of free care services paid for in whole or in part by the uncompensated care pool, pursuant to subsection (m) of section 18 of chapter 118G.

SECTION 6. Section 8 of said chapter 62D, as so appearing, is hereby amended by adding the following paragraph:-

With respect to uncompensated care pool set-off proceeds, the division of health care finance and policy shall deposit such proceeds in the Uncompensated Care Trust Fund established by section 18 of chapter 118G.

SECTION 7. Section 10 of said chapter 62D, as so appearing, is hereby amended by inserting after the word "assistance,", in line 8, the following words:- , the division of health care finance and policy.

SECTION 8. Section 13 of said chapter 62D, as so appearing, is hereby amended by striking out clause (vii) and inserting in place thereof the following two clauses:-

(vii) the department of transitional assistance; and (viii) the division of health care finance and policy for obligations to the Uncompensated Care Trust Fund for the unreimbursed costs of health care services from the uncompensated care pool, pursuant to subsection (m) of section 18 of chapter 118G.

SECTION 9. Section 3 of chapter 62E of the General Laws, as so appearing, is hereby amended by inserting after the word "authorities", in line 7, the following words:- ; and including the division of health care finance and policy with respect to payments for free care services made from the uncompensated care pool pursuant to chapter 118G.

SECTION 10. Chapter 118E of the General Laws is hereby amended by inserting after section 9B, as so appearing, the following section:-

Section 9C. (1) For purposes of this section, the following words shall have the following meanings:-

"Eligible employer", (i) an individual or an unincorporated business that employs one or more residents of the commonwealth, (ii) a corporation, including a foreign corporation, other than a governmental entity, that employs at least one or more residents of the commonwealth, or (iii) a corporation or an unincorporated entity that is exempt from taxation under the provisions of section 501(c) of the Internal Revenue Code of the United States, as amended and in effect for the taxable year; provided however, that to be eligible said employer employs no more than 50 employees and meets the eligibility requirements set forth in this section and in regulations promulgated by the division; and provided, further, that the method of determining the number of employees an employer has and the amount and types subsidies available to an eligible employer based upon employee family status shall be determined by the division.

"Eligible employee", (i) an employee of an eligible employer; (ii) who resides in the commonwealth; (iii) who has not attained age 65; and (iv) who meets the financial and other eligibility standards set forth in regulations promulgated by the division; provided, however, that the gross family income standard shall not exceed 200 per cent of the federal poverty level.

"Eligible self-employed single individual", a person with or without dependents (i) who receives any gross income from self-employment; (ii) who resides in the commonwealth; (iii) who has not attained age 65; and (iv) who meets the financial and other eligibility standards set forth in regulations promulgated by the division, provided that the gross family income standard shall not exceed 200 per cent of the federal poverty level.

"Eligible self-employed husband and wife", a married couple with or without dependents (i) where either spouse receives any gross income from self employment; (ii) where both spouses reside in the commonwealth; (iii) where neither spouse has attained age 65; and (iv) who meets the financial and other eligibility standards set forth in regulations promulgated by the division, provided that the gross family income standard shall not exceed 200 per cent of the federal poverty level.

"Qualified medical insurance", shall mean "qualified medical insurance", "qualified individual medical insurance", "qualified two-person family medical insurance" and "qualified family medical insurance" as defined in regulations promulgated by the commissioner of insurance pursuant to section 3C of chapter 175.

(2) The division may, subject to the provisions of this section, establish an insurance reimbursement program for certain employees and employers for the purpose of reducing or eliminating the amount of contributions or payments made by such employees and employers toward the cost of qualified medical insurance and which shall consist of the following three programs:

(A) an employee subsidy program to assist eligible employees with reducing or eliminating their contribution to premiums or other employment-based costs of qualified medical insurance provided by an eligible employer for which said employer pays not less than 50 per cent of said premium or cost; and provided, further, that the amount of said subsidies may vary with the contribution of said employees to the cost of their qualified medical insurance, and with the income of said employees and their families, in accordance with one or more sliding fee schedules set forth in regulations promulgated by the division and may be paid directly to or on behalf of said eligible employees.

(B) a subsidy program to assist the self-employed single individual and the self-employed husband and wife with reducing or eliminating the cost of premiums or other costs of purchasing qualified medical insurance; provided, further, that the amount of said subsidies may vary with the income or insurance costs of said persons and their families in accordance with one or more sliding fee schedules set forth in regulations promulgated by the division and may be paid directly to or on behalf of said persons; and provided further, the division may choose various options in establishing said program, including but not limited to establishing, (i) subsidies for the self employed which may be for an amount which incorporates payments otherwise available to such self-employed individual or spouse under subsection (5); (ii) sliding fee schedules that may incorporate such payments; or (iii) sliding fee schedules which may be otherwise adjusted so that such persons receive overall assistance comparable, but not necessarily identical, in its effect to that received by similarly situated eligible employees under the program established under paragraph (A).

(C) an employer health care incentive program for the purpose of reducing the cost to said employers of providing or maintaining qualified medical insurance for their eligible low-income employees; provided, however, that said eligible employer pays 50 per cent or more of the premium cost of such qualified medical insurance; and provided, further, that the division may limit payments under this program, using a reasonable methodology, in relation to the participation of said employer's employees in the subsidy program provided for in paragraph (A).

(3) The subsidy programs described in paragraphs (A) and (B) of subsection (2) shall constitute additional medical benefits to expansion beneficiaries in accordance with the terms and conditions of a demonstration project as defined in subsection (1) of section 9A. The division may, subject to the terms and conditions of said demonstration project, include in the demonstration project the program described in paragraph (C) of subsection (2); provided, however, that the division may implement said program if it is not included within said demonstration project.

(4) The amount of payments for each employer under paragraph (C) of subsection (2) shall be as follows: (i) $400 for each eligible employee for whom the eligible employer pays 50 per cent or more of the cost of qualified individual medical insurance; (ii) $800 for each eligible employee for whom the eligible employer pays 50 per cent or more of the cost of qualified two-person family medical insurance, and (iii) $1,000 for each eligible employee for whom the eligible employer pays 50 per cent or more of the cost of qualified family medical insurance; provided that the division may use any reasonable data sources in determining the number of eligible employees of an eligible employer qualifying for such payments under clauses (i), (ii) and (iii).

(5) The amount of payments for each self-employed single individual or each self-employed husband and wife under paragraph (B) of subsection (2) may include the following amounts: (i) $400 for an eligible self-employed single individual if the individual purchases qualified individual medical insurance; (ii) $800 for an eligible self-employed single individual with a dependent child or for an eligible self-employed husband and wife filing a joint return and who have no dependent children, if the individual or husband and wife purchase qualified two-person family medical insurance; or (iii) $1,000 for an eligible self-employed single individual with two or more dependent children, or for an eligible self-employed husband and wife filing a joint return and who have dependent children, if the individual or the husband and wife purchase qualified family medical insurance; provided that the payment shall not exceed the amount of the net premium cost to said self-employed persons of said insurance, and shall be in conformity with the regulations of the division.

(6) The division may require, as a condition for receiving benefits under this section and solely for the purposes of determining the eligibility of any employee, self-employed single individual, or self-employed husband and wife, the consent of any applicant to the disclosure to the division and to the United States Department of Health and Human Services pursuant to subsection (10) of prior year's tax information and any other information demonstrating the income level of such persons. The division may employ additional eligibility criteria to ensure, where appropriate, that no person or employer receives payments or assistance under more than one category of persons or employers eligible for payment or assistance.

(7) The income and other eligibility requirements for the programs provided under subsection (1) may be modified from time to time to ensure that projected expenditures for such benefits are within the amounts available and within the amounts projected to be available. The division shall set forth in regulations changes in eligibility requirements, including changes necessary to ensure compliance with the budget neutrality requirements of section 9B.

(8) The division may, in lieu of cash payments or otherwise, issue to individuals vouchers or other documents certifying that the division will pay a specified amount for medical insurance under specified circumstances.

(9) If, during the term of the demonstration project as it pertains to programs authorized under this section, the division proposes modifications to the demonstration project which require approval by the Secretary, the division may implement said modifications upon the Secretary's approval, subject to the terms of that approval, and, if required, the enactment of authorizing legislation.

(10) Data and information obtained by the division pursuant to subsection (6) to determine eligibility under this chapter shall be available for inspection by the Secretary or his delegate for the specific purpose of substantiating expenditures made under this section.

(11) The division may implement the provisions of this section through arrangements with other agencies of the commonwealth, including the department of revenue, as provided in subsection (11) of section 9A.

(12) The provisions of this section shall not give rise to, nor be construed as giving rise to, enforceable legal rights for any party or an enforceable entitlement to benefits other than to the extent that such rights or entitlements exist pursuant to the regulations of the commissioner of insurance and the regulations of the commissioner of revenue under the provisions referenced in subsection (1), the regulations of the division, or the terms and conditions of the demonstration project.

(13) Expenditures under this section shall, subject to appropriation, be funded by the MassHealth insurance reimbursement program account established by subsection (c) of section 18 of chapter 118G. Aggregate expenditures made by the division for said insurance reimbursement program shall not exceed $120,000,000 in any fiscal year, nor exceed $56,000,000 in the fiscal year when said program commences and shall be further subject to the requirements of the budget neutrality plan established by section 9B.

(14) Ninety days prior to implementing one or more of the programs under this section, the division shall provide a plan or plans for implementing said programs to the committee on health care and to the house and senate committee on ways and means. Said programs may be offered separately and implemented at different times, and a plan relative to each program may be submitted separately.

SECTION 11. Section 1 of chapter 118G of the General Laws, as so appearing, is hereby amended by inserting after the definition of "Acute hospital" the following two definitions:-

"Ambulatory surgical center", any 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 pursuant to 42 USC {1395k(a)(2)(F)(I). These services include facility services only and do not include surgical procedures.

SECTION 12. Said section 1 of said chapter 118G, as so appearing, is hereby further amended by inserting after the definition of "Patient" the following two definitions:-

"Pool", the uncompensated care pool established pursuant to section 18.

"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 on or after the effective date of this section; 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 pursuant to chapter 176K or similar policies issued on a group basis; and provided further, that "payments subject to surcharge" may exclude amounts established in 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.

SECTION 13. Said section 1 of said chapter 118G, as so appearing, is hereby further amended by inserting after the definition of "State institution" the following definition:-

"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; provided, however, that the terms "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 pursuant to chapter 152.

SECTION 14. Said chapter 118G is hereby further amended by striking out section 18, as so appearing, and inserting in place thereof the following two sections:-

Section 18. (a) There is hereby established an Uncompensated Care Trust Fund, which shall be administered by the division. Expenditures from said Trust Fund shall not be subject to appropriation unless otherwise required by law. The purpose of said fund shall be to provide access to health care for low income uninsured and underinsured residents of the commonwealth. The division shall administer said fund using such methods, policies, procedures, standards and criteria that it deems necessary for the proper and efficient operation of said fund and the programs funded thereby in a manner consistent with simplicity of administration, the provisions of this chapter and the best interests of low income uninsured and underinsured persons.

(b) The Uncompensated Care Trust Fund shall consist of all amounts paid by acute hospitals and surcharge payors for the purposes of the uncompensated care pool pursuant to this section and section 18A; all appropriations for the purpose of uncompensated acute hospital care or uncompensated community health center care; any sums paid by acute hospitals pursuant to section 56 of chapter 495 of the acts of 1991; all property and securities acquired by and through the use of monies belonging to said fund and all interest thereon; less payments therefrom for the purposes of the uncompensated care pool and amounts transferred to the separate MassHealth account established by subsection (c). All interest earned on the amounts in said fund shall be deposited or retained in said fund. The commissioner shall from time to time requisition from said fund such amounts as the commissioner deems necessary to meet the current obligations of the division for the purposes of said fund and estimated obligations for a reasonable future period.

(c) Within said fund, the division shall establish a separate account for the insurance reimbursement program component of the MassHealth demonstration program established by section 9C of chapter 118E. This separate account shall consist of amounts transferred from the Uncompensated Care Trust Fund, any federal funds transferred from the Children's and Seniors' Health Care Assistance Fund established by section 2FF of chapter 29, and any funds as may be appropriated for deposit into this account. The division shall administer this account and disburse funds from this account for the purposes of said insurance reimbursement program component of said MassHealth program. Funds deposited in this account shall be kept separate and not be commingled with funds of the uncompensated care pool established pursuant to subsection (d). The comptroller is hereby authorized and directed to effect the transfers authorized by this subsection pursuant to a spending plan filed by the division of medical assistance with the secretary of administration and finance and the house and senate committees on ways and means.

(d) Within said fund, the division shall administer an uncompensated care pool consisting of revenues produced by acute hospital assessments and the surcharge percentage calculated by the division pursuant to this section and section 18A and all appropriations for the purpose of uncompensated care provided by acute hospitals, or community health centers, including, but not limited to, federal funds made available for uncompensated care payments to certain acute hospitals as may be appropriated from the General Fund or any other fund. For purposes of this subsection, the words "revenues produced by acute hospital assessments" shall equal the value of and have the same meaning as the words "acute hospitals' liability to the pool" established pursuant to subsection (e) and the words "revenues produced by the surcharge percentage" shall equal the value of and have the same meaning as the words "surcharge payors' liability to the pool" as established pursuant to section 18A. Amounts placed in the Uncompensated Care Trust Fund, except for amounts transferred into the separate MassHealth account established in subsection (c), shall be expended by the division for the purposes of the uncompensated care pool; provided, however, that the division may expend up to $5,000,000 annually for demonstration projects where the division finds that such projects reduce the liability of said pool to acute hospitals and community health centers by at least the amount expended by said pool on such projects. The division shall administer the uncompensated care pool and require payments to the pool and disburse funds from the pool consistent with the surcharge payors' and acute hospitals' liability to the pool and the pool's liability to an acute hospital or a community health center. The division shall specify by regulation appropriate mechanisms that provide for interim determination and payment of a surcharge payor's liability to the pool and an acute hospital's liability to and from the pool during each fiscal year and for final settlement of the pool for each fiscal year. The division may promulgate regulations which authorize the assessment of interest on any unpaid liability at a rate not to exceed an annual percentage rate of 18 per cent and late fees at a rate not to exceed 5 per cent per month. The division may calculate final settlements when it determines that data for a fiscal year are substantially complete and that further refinements would not materially affect the calculation. The division may incorporate final settlement amounts by prospective adjustment of acute hospitals' and surcharge payors' liability rather than by retrospective payments or assessments.

(e) An acute hospital's liability to said pool shall equal the product of (1) the ratio of its private sector charges to all acute hospitals' private sector charges; and (2) the private sector liability to the uncompensated care pool as determined by law less the surcharge payors' liability established pursuant to section 18A. Before October 1 of each year, the division shall establish each acute hospital's liability to the pool using the best data available, as determined by the division. The division shall update each acute hospital's liability to the pool as updated information becomes available. For any fiscal year, an acute hospital's final liability to said pool shall be calculated in accordance with subsection (d). The division shall specify by regulation an appropriate mechanism for interim determination and payment of an acute hospital's liability to and from said pool.

(f) An acute hospital's liability to said pool shall in the case of a transfer of ownership be assumed by the successor in interest to the acute hospital.

(g) The division shall establish by regulation an appropriate mechanism for enforcing an acute hospital's liability to the pool in the event that an acute hospital does not make a scheduled payment to said pool. Such enforcement mechanism may include notification to the division of medical assistance requiring an offset of payments on the Title XIX claims of any such acute hospital, any health care provider under common ownership with the acute hospital or any successor in interest to the acute hospital, from the division of medical assistance in the amount of payment owed to said pool including any interest and late fees, and to transfer the withheld funds into said pool. If the division of medical assistance offsets claims payments as ordered by the division, it shall be deemed not to be in breach of contract or any other obligation for payment of noncontracted services, and providers to which payment is offset under order of the division shall serve all Title XIX recipients in accordance with the contract then in effect with the division of medical assistance, or, in the case of a noncontracting or disproportionate share hospital, in accordance with its obligation for providing services to Title XIX recipients pursuant to this chapter. In no event shall the division direct the division of medical assistance to offset claims unless an acute hospital has maintained an outstanding obligation to the uncompensated care pool for a period longer than 45 days and has received proper notice that said division intends to initiate enforcement actions in accordance with the regulations of said division.

(h) Said pool's liability to an acute hospital shall be calculated periodically by the division based on the best data available. Such data shall include, but not be limited to, allowable free care charges as determined by the division and the cost-to-charge ratio, which shall be calculated by the division for each acute hospital. The final settlement of the pool's liability to a hospital shall equal the product of allowable actual free care charges, adjusted for any audit findings, multiplied by its final cost-to-charge ratio. In the case of non-disproportionate share hospitals, such calculation shall represent the ratio of the reasonable actual costs of patient care services, as determined by the division, to gross patient service revenue for the most recent year for which audited financial statements for the hospital are available. In the case of disproportionate share hospitals, such calculation shall represent the ratio of the hospital's reasonable financial requirements, as determined by the division, to gross patient service revenue for the most recent year for which audited financial statements for such hospital are available. The division shall, throughout the year, update each acute hospital's ratio in the event more current audited financial statement information becomes available. Said division shall further establish, for each non-disproportionate share acute hospital for any given fiscal year, a final ratio using the reasonable costs for patient care services and gross patient service revenues as appearing in the audited financial statements for the fiscal year. For disproportionate share hospitals, said division shall establish a final ratio based upon its reasonable financial requirements, as defined by the division, and actual gross patient service revenues as appearing in the audited financial statements for the fiscal year. The final settlement of the pool's liability to an acute hospital shall be calculated in accordance with subsection (d). The pool's liability to a community health center shall be calculated periodically by the division based on the best data available as determined by the division. Such data shall include, but not be limited to, allowable free care charges as determined by the division and the rates established by the division to be paid for free care services. Such rates shall represent the community health center's reasonable financial requirements, as determined by the division.

(i) The division shall manage said pool in order to encourage maximum efficiency and appropriateness in the utilization of services. The division shall promulgate regulations detailing the definition of free care, including, but not limited to, defining the qualifications of eligible persons and the scope of eligible services, setting standards for reasonable efforts to notify uninsured or underinsured persons of the various insurance options as well as the availability of free care, and setting standards for reasonable efforts to collect costs of emergency care and setting standards to determine medical hardship. Said regulations shall include provision for the review of determinations of eligibility for free care and the establishment of penalties for acute hospitals or community health centers which upon audit show an excessive rate of incorrect eligibility determinations. The division shall adopt regulations prohibiting payments from said pool for non-urgent and non-emergency health care services provided to residents of other states and foreign countries. The division may require utilization review in accordance with section 6. After consultation with consumer representatives and representatives of acute hospitals and community health centers, the division shall develop programs and guidelines to encourage maximum enrollment of pool beneficiaries 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, through coordination of care and referral of primary care cases to community health centers. Such programs and guidelines shall not deny payments on the ground that services should have been provided in a more appropriate setting if the hospital was required to provide such services pursuant to 42 USC 1395(dd). The division may adopt regulations requiring disproportionate share hospitals to use a portion of payments received from said pool to reimburse physicians for the costs of free care which such physicians provide in such hospitals. In adopting regulations under this subsection, the division shall consult and work cooperatively with representatives of low income uninsured and underinsured persons, health care providers who provide health care to such persons, and organizations representing said persons and providers.

(j) The division shall adopt any other regulations necessary to manage said pool including, but not limited to, regulations: requiring data submissions, setting pool audit standards, establishing enforcement mechanisms consistent with this section, and establishing reasonable controls on utilization. The division shall require acute hospitals and community health centers to submit data that the division determines necessary to efficiently and effectively administer the uncompensated care pool. Said data may include, but shall not be limited to, charge and cost data, patient diagnoses and types of uncompensated service provided, patient demographics, write-off amounts, unique patient identifiers and other such data that would enable the division to conduct analyses, verify eligibility and calculate settlements on a case-by-case basis. The division shall consider all available options for collecting said data, including claims and electronic data submission, and shall implement the most efficient and effective method after consultation with interested parties. If the division finds that hospitals are not complying with the data submission requirements or if the data submitted are not sufficient to enable the division to verify eligibility and calculate settlements on a case-by-case basis, the division may adopt regulations providing for a claims adjudication process for payments from the uncompensated care pool. Such claims adjudication process shall maximize administrative simplicity to the extent practicable and shall not significantly delay cash flow from said pool. The division shall consult with interested parties, including the Massachusetts hospital association, in developing the methodology for such claims adjudication process and shall submit the methodology to the joint committee on health care 90 days in advance of adopting such regulations. The division shall analyze the data collected under this section in conjunction with any other pertinent data to determine the demographic characteristics and the clinical and social needs of uncompensated care recipients. If said analysis indicates that one or more managed care or case management programs would better meet the needs of low income individuals, the division shall consult with representatives of the uninsured and underinsured and the providers who serve them and other interested parties regarding the potential for managed care or case management approaches to improve care provided under said pool. If the division determines that such approaches would improve care, the division may contract with health care delivery or management organizations or to enter interagency service agreements with the division of medical assistance or the department of public health for the purpose of contracts with health care or managed care providers to deliver services to individuals eligible for free care or; provided, however, that no such contract shall be entered into until the division finds that the cost of such contract does not exceed the amounts that would otherwise have been expended on free care for these individuals; and, provided further, that the expenditures for such contracts shall not exceed $5,000,000 in any hospital fiscal year.

(k) The division shall promulgate regulations to develop and implement methods and procedures to verify the eligibility of individuals for free care and to ensure that other coverage options are utilized fully before free care is granted. These systems may include but are not limited to investigation and recovery of third party liabilities, and penalties for noncompliance. The division shall compile and maintain a catalog of program information for all programs of health care coverage for low income persons including those sponsored by public and private organizations. The catalog shall include, at a minimum, eligibility criteria, benefits and services offered, enrollment procedures and information necessary for contact and follow-up. The division shall ensure that if free care is granted for the copayment and deductible of an eligible person with other coverage, no payments shall be made from the uncompensated care pool which would cause the total payment to the provider to exceed the applicable rates for free care services. The division 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 including, but not limited to, the Medicaid or Medicare program, or if the individual is not eligible for free care. The division shall require acute hospitals and community health centers to screen each free care applicant for other sources of coverage and for potential eligibility for government programs, and to document the results of such screening. If an acute hospital or community health center determines that an applicant is potentially eligible for Medicaid or another government program, said acute hospital or community health center shall assist the applicant in applying for benefits under such program. The division shall audit free care accounts of acute hospitals and community health centers to determine compliance with this section and shall deny pool payment for any audited account for any acute hospital or community health center that fails to document compliance with this section.

(l) The division may enter into interagency agreements with the department of revenue to verify income data for recipients of free care. Such written agreements shall include provisions permitting the division to provide a list of persons receiving or applying for free care, including any applicable members of the households of such recipients or applicants which would be counted in determining eligibility, and to furnish relevant information including, but not limited to, name, social security number, if available, and other data required to assure positive identification. Such written agreements shall include provisions permitting the department of revenue to examine the data available under the wage reporting system established under section 3 of chapter 62E and make positive identification of cases in which recipients or applicants for free care, individually or as part of a household unit, are receiving wages in excess of any threshold eligibility requirements established by the division. The department of revenue is hereby authorized to furnish the division with information on the cases of persons so identified, including, but not limited to, name, social security number and other data to ensure positive identification, name and identification number of employer, and amount of wages received. The division may inform acute hospitals and community health centers only of an individuals eligibility or noneligibility for free care based on information obtained from the department of revenue, but may not release any specific information concerning the individual.

(m) The division shall deposit any amounts received pursuant to chapter 62D in the Uncompensated Care Trust Fund to reimburse the uncompensated care pool for expenditures made for persons who received free care through said pool and who, upon review, was determined to be ineligible for uncompensated care based upon applicable income standards.

(n) The division shall not at any time make payments from said pool for any period in excess of amounts that have been paid into or are available in said pool for such period; provided, however, that the division may temporarily prorate payments from said pool for cash flow purposes. In the event that after making allowable free care payments to community health centers, there exists a shortfall of pool revenue, excluding any revenue in the separate MassHealth insurance reimbursement program account, in any fiscal year to cover allowable free care payments to acute hospitals, the division shall allocate such payments so that those acute hospitals with the greatest proportional requirement for pool income shall receive a greater proportional payment from said pool. In the event that there exists a surplus of pool revenue in any fiscal year over that necessary to cover allowable free care payments, the division shall apply such surplus to allowable free care payments for any succeeding fiscal year in which there is a shortfall of pool revenue.

Section 18A. (a) Acute hospitals and ambulatory surgical centers shall assess a surcharge on all payments subject to surcharge as defined in section 1. 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 said services by a surcharge payor. The division shall calculate the surcharge percentage by dividing $100,000,000 by the projected annual aggregate payments subject to surcharge. The division shall determine the surcharge percentage before the effective date of this section and may redetermine the surcharge percentage before the following April 1 if the division projects that the initial surcharge established the previous October will produce less than $90,000,000 or more than $110,000,000. Before each succeeding October 1, the division shall redetermine the surcharge percentage incorporating any adjustments from prior years. In each determination or redetermination of the surcharge percentage, the division 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 under subsection (e). The division 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 such surcharge amount to the division for deposit in the uncompensated care pool on behalf of said acute hospital or ambulatory surgical center. Upon the written request of a surcharge payor, the division may implement another billing or collection method for such surcharge payor; provided, however, that the division has received all information that it requests which is necessary to implement such billing or collection method; and provided further, that the division shall specify by regulation the criteria for reviewing and approving such requests and the elements of such alternative method or methods.

(c) The division 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 said pool shall in the case of a transfer of ownership be assumed by the successor in interest to the surcharge payor.

(e) The division shall establish by regulation an appropriate mechanism for enforcing a surcharge payor's liability to said pool in the event that a surcharge payor does not make a scheduled payment to said pool; provided, however, that the division 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 division of medical assistance 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 division of medical assistance in the amount of payment owed to said pool including any interest and penalties, and to transfer the withheld funds into said pool. If the division of medical assistance offsets claims payments as ordered by the division, said division of medical assistance shall be deemed not to be in breach of contract or any other obligation for payment of noncontracted services, and a surcharge payor to which payment is offset under order of the division shall serve all Title XIX recipients in accordance with the contract then in effect with the division of medical assistance. In no event shall the division direct the division of medical assistance to offset claims unless the surcharge payor has maintained an outstanding liability to the uncompensated care pool for a period longer than 45 days and has received proper notice that said division intends to initiate enforcement actions in accordance with the regulations of the division.

(f) Any surcharge payor that fails to file any data, statistics or schedules or other information required under this chapter or by any regulation promulgated by the division or which falsifies the same, shall be subject to a civil penalty of not more than $5,000 for each day on which such 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, as may be necessary for the enforcement of the provisions of this chapter.

SECTION 15. Chapter 175 of the General Laws is hereby amended by inserting after section 3B, as so appearing, the following section:-

Section 3C. The commissioner shall promulgate regulations, subject to the approval of the commissioner of medical assistance, defining "qualified medical insurance", "qualified individual medical insurance", "qualified two-person family medical insurance", and "qualified family medical insurance" as those terms are employed in section 9C of chapter 118E. In promulgating said regulations, the commissioner shall make reasonable efforts to conform the definitions of such qualified plans to the standards in effect for small group insurance policies issued pursuant to chapter 176J.

SECTION 16. Section 1 of chapter 176N of the General Laws, as so appearing, is hereby amended striking out the definition of "late enrollee", and inserting in place thereof the following definition:-

"Late enrollee," an eligible employee or dependent who requests enrollment in a group health plan or insurance arrangement after the plan initial enrollment period, their initial eligibility date provided under the terms of the plan or arrangement or the group's annual open enrollment period; provided, however, that an insured shall not be considered a late enrollee if the request for enrollment to the insurer is made within 30 days after termination of coverage provided under another health insurance plan or arrangement where such coverage has ceased due to termination of the spouse's employment or death of the spouse or if the request for enrollment is made pursuant to section 9C of chapter 118E.

SECTION 17. Section 25 of chapter 203 of the acts of 1996 is hereby amended by adding the following paragraph:-

In conjunction with said surveys, the division shall also arrange for independent evaluations of the effectiveness of MassHealth programs, the senior pharmacy assistance program, the children's medical security plan and the uncompensated care pool established pursuant to chapter 118G of the General Laws. Said evaluations shall utilize data collected by the division pursuant to this section and said chapter 118G, data collected by the division of medical assistance for the federal government pursuant to the demonstration waiver and sections 9A, 9B and 9C of chapter 118E, and such other data as the division may require. Said evaluations shall include estimates of the impact of said programs on the rate of uninsurance, the proportion of beneficiaries of said programs who were previously insured and previously uninsured, the extent to which said programs have influenced the provision of health care coverage by employers, the impact of said programs on the health of residents of the commonwealth and such other information as may be useful in evaluating said programs. Said evaluations shall be filed with the house and senate committees on ways and means and the committee on health care on or before March 1, 1998 and on or before March 1, 2000.

SECTION 18. Section 29 of said chapter 203 is hereby amended by adding the following sentence:- The division of medical assistance and the division of health care finance and policy are hereby authorized and directed to assure that the intergovernmental transfer program shall reduce by at least $70,000,000, the allowable uncompensated care costs of the two said hospitals from the uncompensated care pool authorized pursuant to chapter 118G of the General Laws.

SECTION 19. For hospital fiscal year 1992, an acute hospital's liability to the uncompensated care pool established pursuant to section 15 of chapter 118F of the General Laws as then in effect, shall equal the product of the uniform statewide allowance previously in effect, multiplied by private sector patient care costs established pursuant to the most recent hospital agreement. This liability shall be calculated net of all payments made by the acute hospital to the extent it participated in the uncompensated care pool on a voluntary basis prior to the calculations made in accordance with said section 15. For fiscal year 1992, payments by purchasers and third party payors exclusive of Titles XVIII and XIX and publicly aided patients for purposes of said pool, shall be made using the allowance previously in effect and included in charges.

For hospital fiscal year 1992 and hospital fiscal year 1993, in calculating the cost-to-charge ratio for acute hospitals pursuant to section 18 of chapter 118G of the General Laws, the division of health care finance and policy shall exclude from the numerator and the denominator private sector charges attributable to noncontracting, noninsured individuals which have exceeded the applicable price cap calculated pursuant to section 51 of chapter 495 of the acts of 1991 and other private sector charges in excess of an acute hospital's maximum gross inpatient service revenue limitation calculated pursuant to said section 51. Terms used in this section that are defined in section 1 or section 18 of said chapter 118G shall have the same meaning as provided for in said sections 1 or 18.

Notwithstanding any general or special law to the contrary, for hospital fiscal years prior to and including 1997, the division of health care finance and policy shall expeditiously complete all pertinent pending final settlements of the uncompensated care pool, using such thresholds, allowances and other measures it deems necessary, fair and reasonable. The division shall specify, in regulation, the methodology for expediting such settlements.

SECTION 20. By August 1, 1997, the division of health care finance and policy shall promulgate regulations setting forth the enforcement mechanisms established pursuant to subsection (g) of section 18 of chapter 118G of the General Laws and subsection (e) of section 18A of said chapter 118G. By September 1, 1997, said division shall promulgate the remaining regulations necessary to govern the calculation of the surcharge percentage established by said section 18A of said chapter 118G.

To accommodate contractual obligations of surcharge payors, the division may by regulation delay the enforcement of the surcharge percentage intended by this act to be implemented on October 1, 1997 in hospital fiscal year 1998 until January 1, 1998, provided no such delay shall occur unless and until the following five conditions are met: (1) funds are appropriated from the General Fund or another fund and transferred to the uncompensated care pool in an amount equivalent to four months' projected revenues that would otherwise be collected from the surcharge percentage authorized by said section 18A; (2) the amounts so made available and transferred are designated as a temporary start-up loan to accommodate the delay between the beginning of the hospital fiscal year and the commencement of enforcement of the surcharge percentage; (3) the amounts so made available and transferred are restricted to that portion of the pool's liability payments to acute hospitals that otherwise would have been collected from surcharge payors during the months of October through December, 1997 and in January 1998; (4) the division establishes the surcharge percentage for hospital fiscal year 1998 at a level sufficient to generate $100,000,000 in revenues from the surcharge percentage between January 1, 1998 and September 30, 1998; (5) the division assures the comptroller that the amount so loaned to the uncompensated care pool shall be fully repaid to the General Fund or such other fund, without interest, not later than June 30, 1998, or such other date the comptroller deems permissible to close the books on state fiscal year 1998. The comptroller is hereby authorized and directed to effectuate the repayment of said loan. If the division allows the enforcement of said surcharge percentage to be delayed pursuant to this paragraph, the division shall authorize by regulation that the surcharge percentage billed by hospitals to surcharge payors on said January 1 and for the remainder of said hospital fiscal year shall be based on the payments made by surcharge payors to acute hospitals and ambulatory surgical centers from the beginning of the hospital fiscal year commencing with payments made in October, 1997. If the division allows the enforcement of said surcharge percentage to be delayed pursuant to this paragraph, the division may redetermine the surcharge percentage as of May 1, 1998 and as of July 1, 1998 if the division projects that the surcharge percentage established previously will produce less than $90,000,000 or more than $100,000,000, or if the adjustment is necessary in order to fully repay the General Fund or other fund, as required by condition (5) of this section.

By April 1, 1998, the division shall promulgate regulations pursuant to said section 18 of said chapter 118G, for the purpose of further defining allowable free care and to establish revised data collection requirements. By October 1, 1998, the division shall promulgate regulations pursuant to said section 18 providing for the design and implementation of systems to verify the eligibility of individuals for uncompensated care and to ensure that other coverage options are utilized fully before such care is reimbursed by the uncompensated care pool.

SECTION 21. Notwithstanding any general or special law to the contrary, in each hospital fiscal year 1998 to 2002, inclusive, the division of health care finance and policy is hereby authorized and directed to allocate not more than $40,000 annually to the Hampshire Health Access project in Northampton and $40,000 annually for the EcuCare Project in North Adams to link uninsured and underinsured individuals and families with health care providers willing to treat such persons at reduced or no cost. Any amounts so allocated shall be subject to the provisions of subsection (j) of section 18 of chapter 118G of the General Laws and any regulations the division promulgates thereunder.

SECTION 22. Notwithstanding any general or special law to the contrary, in fiscal years 1998 to 2002, inclusive, the division of health care finance and policy shall allocate $2,000,000 annually for a Massachusetts Fishermen's Partnership, Inc. demonstration project under subsection (d) of section 18 of chapter 118G of the General Laws; provided, however, that such demonstration project otherwise meets the requirements of said subsection (d).

SECTION 23. The division of health care finance and policy shall monitor the operation of the uncompensated care pool, including the payments of acute hospitals liabilities to and from said pool, collections from surcharge payors, the demographics of persons using the pool and the services they use which qualify for free care. The division shall file quarterly reports with the executive office of health and human services and the joint committee on health care concerning utilization of the uncompensated care pool including but not limited to number of inpatient admissions and outpatient visits by age category, income category, diagnostic category, and average charge per admission. The division shall file reports every six months with the executive office of health and human services and the joint committee on health care concerning its estimates of the demand for and supply of uncompensated care pool revenue in the current and upcoming fiscal years. The division shall notify the executive office of health and human services and the joint committee on health care if at any time the division estimates that uncompensated care pool revenue, excluding any revenue in the separate MassHealth account, in any fiscal year falls below 75 per cent of allowable free care costs as reviewed and adjusted by the division.

SECTION 24. Nothing in this act shall be construed to require any acute hospital or community health center to take any action which would be inconsistent with the provisions of section 432 of the Personal Responsibility and Work Opportunity Act (8 U.S.C. 1642), as inserted by section 508 of the Omnibus Consolidated Appropriations Act of 1997.

SECTION 25. The special commission established by section 30 of chapter 203 of the acts of 1996 shall be revived under the same terms as provided by said section if at any time the division of health care finance and policy estimates and certifies to the executive office of health and human services and the committee on health care that uncompensated care pool revenues, excluding any revenue in the separate MassHealth account, are less than 75 per cent of allowable free care cost or greater than 125 per cent of allowable free care cost. Said commission shall have three months from the date of its revival to file its report on ensuring the adequacy of revenues in said pool, including any proposed legislation, with the governor and with the clerks of the senate and the house of representatives.

SECTION 26. For each hospital fiscal year beginning with fiscal year 1998 and ending with hospital fiscal year 2002 or the hospital fiscal year in which this act expires, the private sector liability of purchasers and third party payors to the Uncompensated Care Trust Fund established pursuant to section 18 of chapter 118G of the General Laws shall be $315,000,000. For state fiscal years 1998 to 2002, inclusive, subject to appropriation, $30,000,000 generated by federal financial participation made available under Title XIX of the Social Security Act shall be deposited into said fund.

SECTION 27. (A) If the attorney general certifies that a court of competent jurisdiction has temporarily or preliminarily restrained any provision relating to the surcharges established pursuant to section 18A of chapter 118G of the General Laws pending the results of litigation, including any order that such surcharge payments may or shall be placed in escrow or not actually remitted pending the results of litigation, and a stay of any such orders has not been granted within 30 days of the issuance of any such order, such that the Uncompensated Care Trust Fund established pursuant to section 18 of said chapter 118G will not receive funds from one or more surcharge payors pursuant to said section 18A, then the provisions of said section 18A shall have no force or effect unless and until such time that said attorney general certifies that such temporary or preliminary order is no longer in effect.

(B) If the attorney general certifies that a court of competent jurisdiction has issued a final adjudication on the merits invalidating or otherwise precluding surcharge payments pursuant to said section 18A, then the provisions of said section 18A shall have no force or effect unless and until such time that said attorney general certifies that an appellate court of competent jurisdiction has finally adjudicated that said section 18A is valid and enforceable.

(C) If said certification is made pursuant to subsection (A) or (B), the special commission established by section 30 of chapter 203 of the acts of 1996 shall be revived under the same terms. Said commission shall have three months from the date of such revival to file its report, including any proposed legislation, with the clerks of the senate and the house of representatives and with the governor.

(D) If said section 18A is determined not to be in effect pursuant to the operation of this section, then from the date of the certification by the attorney general until the following December 31, the liability of an acute hospital to the uncompensated care pool established by section 18 of said chapter 118G shall consist of (1) the assessment on the acute hospital pursuant to said section 18, calculated by multiplying (I) the ratio of its private sector charges to all acute hospitals' private sector charges by (II) one-half the private sector liability to the uncompensated care pool as determined by law, and (2) the proceeds of a surcharge which shall be assessed by acute hospitals on all payments for services provided on or after the date of such certification; provided, however, that such surcharge shall not apply to (I) payments by Title XVIII and Title XIX programs or their beneficiaries, other programs of governmental assistance and the workers compensation program established pursuant to chapter 152 of the General Laws, (II) payments under policies issued pursuant to chapter 176K of the General Laws or similar policies issued on a group basis and (III) payments, settlements and judgments arising out of third party liability claims for bodily injury and paid under the terms of property or casualty insurance policies. The surcharge amount shall be distinct from any other payment for services to acute hospitals. The surcharge amount shall equal the product of (I) the surcharge percentage and (II) the amount of the payment for services. The division of health care finance and policy shall determine the surcharge percentage by dividing $157,500,000, to which the division may add an amount not to exceed 2 per cent of the amount of the surcharge to cover the additional expenses of hospitals for administering collections pursuant to this section, by the projected annual aggregate payments subject to the surcharge. In determining the surcharge percentage, the division may include an adjustment for amounts which the division projects will be uncollectable. The proceeds of such assessment on acute hospitals and such surcharge on payments to acute hospitals, less any reasonable administrative expenses so allowed by the division, shall be deposited in the Uncompensated Care Trust Fund established pursuant to said section 18.

(E) During any period subsequent to the following December 31 referenced in paragraph (D), in which said section 18A is not in effect pursuant to the operation of this section, the liability of acute hospitals to the Uncompensated Care Trust Fund established by section 18 of said chapter 118G shall equal the proceeds of a surcharge which shall be assessed by acute hospitals on all payments for services provided on or after the beginning of such remaining period; provided, however, that such surcharge shall not apply to (I) payments by Title XVIII and Title XIX programs, other programs of governmental assistance and the workers compensation program established pursuant to chapter 152 of the General Laws, (II) payments under policies issued pursuant to chapter 176K of the General Laws or similar policies issued on a group basis, and (III) payments, settlements and judgments arising out of third party liability claims for bodily injury and paid under the terms of property or casualty insurance policies. The surcharge amount shall be distinct from any other payment for services to acute hospitals. The surcharge amount shall equal the product of (I) the surcharge percentage and (II) the amount of the payment for services. The division of health care finance and policy shall determine the surcharge percentage by dividing the private sector liability to the uncompensated care pool as determined by law by the projected annual aggregate payments subject to the surcharge. Said division shall determine the surcharge percentage before January 1, using the best data available as determined by the division. Before each succeeding October 1, the division shall redetermine the surcharge percentage, prospectively incorporating any adjustments from prior years. In determining the surcharge percentage, the division may include an adjustment for amounts which the division projects will be uncollectable. The proceeds of such surcharges shall be deposited in the Uncompensated Care Trust Fund established pursuant to said section 18.

(F) Terms used in this section that are defined in section 1 or 18 of chapter 118G of the General Laws shall have the same meaning as is provided for in said section 1 or 18. The division shall issue regulations to implement and enforce the billing and collection of the surcharge described in this section. The division shall authorize hospitals to employ administrative agents as a means to achieve economies in the billing and collection of the surcharge and may establish payment thresholds below which enforcement may be modified or waived.

(G) Promptly upon receipt of any certification by the attorney general pursuant to subsection (A) or (B), the division of health care finance and policy shall promulgate emergency regulations to implement the provisions of this section.

SECTION 28. Any prepaid health plan offered by the Boston Medical Center Corporation, by the Boston public health commission, or by the Cambridge public health commission, or by the subsidiary or affiliate of said corporation or said commissions, shall, pursuant to a written agreement with the division of medical assistance, not be deemed to be the business of insurance and shall not be subject to the provisions of chapter 175 of the General Laws or chapter 176A to 176N, inclusive, of the General Laws.

SECTION 29. Not later than October 1, 1997, each disproportionate share hospitals shall file with the division of health care finance and policy and with the house and senate committees on ways and means a report concerning their plans for fiscal years 1998 to 2002, inclusive, for providing care to low income uninsured individuals in a cost-effective manner, including, but not limited to, such care provided through existing community health centers licensed or otherwise utilized by said hospitals. Said plans shall include measures and targets for improving the provision of said care. No later than October 1 of each year from 1998 to 2002, inclusive, each disproportionate share hospital shall file with the division of health care finance and policy a progress report describing the degree to which said hospital met said measures and targets included in its plan, as well as any modifications to said plan. The division of health care finance and policy shall file an annual report with the house and senate committees on ways and means summarizing the hospital progress reports.

SECTION 30. In the event that any section of this act or any assessment imposed under the provisions of this act is determined by the Secretary of the United States Department of Health and Human Services to be an impermissible tax or donation, as those terms are defined at section 1903(w) of the federal Social Security Act, or is determined by said Secretary to necessitate reductions in the amounts recognized as state financial participation under Title XIX of the Social Security Act, or is otherwise not approvable by said Secretary under federal laws or regulations governing the availability of federal financial participation, the division of health care finance and policy shall administer the uncompensated care pool in a manner consistent with the purposes of the uncompensated care pool and which maximizes the availability of federal financial participation. If the assessment imposed under section 18A of chapter 118G of the General Laws is determined to be ineligible for federal financial participation, such determination shall not affect the validity of any other provision of this act. This act shall be interpreted liberally to effect its purposes.

SECTION 31. The comptroller is hereby authorized and directed to monitor federal revenues generated by expenditures from the Uncompensated Care Trust Fund by the division of medical assistance and the division of health care finance and policy for the purposes of (A) making disproportionate share and other medicaid payments to acute hospitals and (B) for insurance reimbursement program payments authorized pursuant to section 9C of chapter 118E of the General Laws. If in any state fiscal year during which said expenditures are authorized by state and federal law the amount of federal revenue credited to the General Fund from said Uncompensated Care Trust Fund expenditures is less than the amount of federal revenue generated by expenditures made for the same or similar purposes in state fiscal year 1997, the comptroller is hereby authorized and directed, after consultation with the secretary for administration and finance and the commissioner of medical assistance, to transfer federal revenues deposited in the Children's and Seniors' Health Care Assistance Fund to the General Fund in order to remedy the deficiency in revenue deposited in the General Fund from uncompensated care pool expenditures.

SECTION 32. (A) If, by the laws of any state other than this state, or by the action of any public official of such other state, an insurer organized or domiciled in this state, or the duly authorized agents thereof, shall be required to pay taxes for the privilege of doing business in such other state, which taxes are imposed or assessed because of amounts imposed upon or required to be paid, pursuant to section 18A of chapter 118G of the General Laws, by insurers organized or domiciled in such other state, then to the extent such taxes are legally due to such other state, such insurer organized or domiciled in this state may apply for a reduction in the amount of its future liability to the uncompensated care pool pursuant to said section 18A of said chapter 118G, in accordance with the criteria and procedures and in amounts established pursuant to subsection (B) provided, however, that the amount of such reduction shall in no event exceed the lesser of (I) the amount of said taxes legally payable by said domestic insurer to such other state, or (II) the assessment liability, imposed under said section 18A of said chapter 118G, of said domestic insurer during the taxable year with respect to which such taxes have been imposed or assessed by such other state. For purposes of this section, the term "taxes for the privilege of doing business" shall include, but not be limited to, a tax on or measured by income.

(B) The division of insurance, in consultation with the department of revenue and the division of health care finance and policy, shall establish criteria and procedures for determining an insurer's eligibility for a reduction in its future uncompensated care pool liability and the amount of any reduction, pursuant to subsection (A). Said criteria and procedures shall be approved by the secretary of administration and finance and shall be filed with the house and senate ways and means committees not fewer than 60 days prior to implementation.

(C) For purposes of this section, the word "insurer" shall have the same meaning as the words "surcharge payor", as defined in section 1 of said chapter 118G.

SECTION 33. Notwithstanding any general or special law to the contrary, no funds shall be expended by the division of medical assistance on the MassHealth insurance reimbursement program established by section 9C of chapter 118E of the General Laws unless the commissioner of medical assistance has certified to the committee on health care and the house and senate committees on ways and means that said division has, subject to federal law, implemented clause (b) of subsection (2) of section 9A of said chapter 118E with respect to providing medical benefits to children through age 12 whose financial eligibility does not exceed 200 per cent of the federal poverty level.

SECTION 34. The division of medical assistance shall not implement any plan pursuant to section 9C of chapter 118E of the General Laws, inserted by section 11 of this act, before an appropriation is made available for the initial start-up and operation of said plan.

SECTION 35. Notwithstanding the provisions of any general or special law or regulations to the contrary, the Martha's Vineyard Hospital, Inc. shall have all liability to and from the uncompensated care pool trust fund permanently extinguished and of no further force or effect.

SECTION 36. The provisions of this act shall expire on September 30, 2002, unless the term of the MassHealth demonstration project approved by the Secretary of the United States Department of Health and Human Services pursuant to section 1115 of the Social Security Act is extended or renewed on substantially similar terms, in which case, the provisions of this act shall expire on the date of the expiration of said demonstration project.

SECTION 37. Sections 18 and 20 of this act shall take effect as of July 1, 1997. The remainder of this act shall take effect on October 1, 1997.

Approved July 11, 1997.

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