Bill Text: NJ S1489 | 2010-2011 | Regular Session | Introduced
Bill Title: Modifies basis for calculating charity care reimbursements, and increases certain insurance premium assessments and taxes to fund reimbursements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-02-22 - Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee [S1489 Detail]
Download: New_Jersey-2010-S1489-Introduced.html
Sponsored by:
Senator RONALD L. RICE
District 28 (Essex)
SYNOPSIS
Modifies basis for calculating charity care reimbursements, and increases certain insurance premium assessments and taxes to fund reimbursements.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the distribution of charity care funds, providing additional revenues therefor, and amending various parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 8 of P.L.1992, c.160 (C.26:2H-18.58) is amended to read as follows:
8. There is established the Health Care Subsidy Fund in the Department of Health and Senior Services.
a. The fund shall be comprised of revenues from employee and employer contributions made pursuant to section 29 of P.L.1992, c.160 (C.43:21-7b), revenues from the hospital assessment made pursuant to section 12 of P.L.1992, c.160 (C.26:2H-18.62), revenues pursuant to section 11 of P.L.1996, c.28 (C.26:2H-18.58c), revenues from the tax on taxable premiums allocated to the fund pursuant to subsection (b) of section 2 of P.L.1945, c.132 (C.54:18A-2) and subsection (b) of section 3 of P.L.1945, c.132 (C.54:18A-3), revenues from interest and penalties collected pursuant to this act and revenues from such other sources as the Legislature shall determine. Interest earned on the monies in the fund shall be credited to the fund. The fund shall be a nonlapsing fund dedicated for use by the State to: (1) distribute charity care and other uncompensated care disproportionate share payments to hospitals, and other eligible providers pursuant to section 8 of P.L.1996, c.28 (C.26:2H-18.59f), provide subsidies for the Health Access New Jersey program established pursuant to section 15 of P.L.1992, c.160 (C.26:2H-18.65), and provide funding for [children's] family health care coverage pursuant to [P.L.1997, c.272 (C.30:4I-1 et seq.)] the "Family Health Care Coverage Act," P.L.2005, c.156 (C.30:4J-8 et al.); (2) provide funding for federally qualified health centers pursuant to section 12 of P.L.1992, c.160 (C.26:2H-18.62); and (3) provide for the payment in State fiscal year 2002 of appropriate Medicaid expenses, subject to the approval of the Director of the Division of Budget and Accounting.
b. The fund shall be administered by a person appointed by the commissioner.
The administrator of the fund is responsible for overseeing and coordinating the collection and reimbursement of fund monies. The administrator is responsible for promptly informing the commissioner if monies are not or are not reasonably expected to be collected or disbursed.
c. The commissioner shall adopt rules and regulations to ensure the integrity of the fund, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
d. The administrator shall establish separate accounts for the charity care component of the disproportionate share hospital subsidy, other uncompensated care component of the disproportionate share hospital subsidy, federally qualified health centers funding and the payments for subsidies for insurance premiums to provide care in disproportionate share hospitals, known as the Health Access New Jersey subsidy account, respectively.
e. In the event that the charity care component of the disproportionate share hospital subsidy account has a surplus in a given year after payments are distributed pursuant to the methodology established in section 13 of P.L.1995, c.133 (C.26:2H-18.59b) and section 7 of P.L.1996, c.28 (C.26:2H-18.59e) and within the limitations provided in subsection e. of section 9 of P.L.1992, c.160 (C.26:2H-18.59), the surplus monies in calendar years 2002, 2003 and 2004 shall lapse to the unemployment compensation fund established pursuant to R.S.43:21-9, and each year thereafter shall lapse to the charity care component of the disproportionate share hospital subsidy account for distribution in subsequent years.
(cf: P.L.2005, c.237, s.1)
2. Section 3 of P.L.2004, c.113 (C.26:2H-18.59i) is amended to read as follows:
3. a. Beginning July 1, 2004 and each year thereafter:
(1) Reimbursed documented charity care shall be equal to the Medicaid-priced amounts of charity care claims submitted to the Department of Health and Senior Services for the average of the three most recent calendar [year] years, adjusted, as necessary, to reflect the annual audit results. These amounts shall be augmented to reflect payments to hospitals by the Medicaid program for Graduate Medical Education and Indirect Medical Education based on the most recent Graduate Medical Education and Indirect Medical Education formulas utilized by the federal Medicare program.
(2) Hospital-specific reimbursed documented charity care shall be equal to the Medicaid-priced dollar amount of charity care provided by a hospital as submitted to the Department of Health and Senior Services for the most recent calendar year. A sample of the claims submitted by the hospital to the department shall be subject to an annual audit conducted pursuant to applicable charity care eligibility criteria.
b. Beginning July 1, 2004 and each year thereafter, the charity care subsidy shall be determined according to the following methodology:
(1) Each hospital shall be ranked in order of its hospital-specific, relative charity care percentage, or RCCP, by dividing the amount of hospital-specific gross revenue for charity care patients by the hospital's total gross revenue for all patients.
(2) The nine hospitals with the highest RCCPs shall receive a charity care payment equal to 96% of each hospital's hospital- specific reimbursed documented charity care. The hospital ranked number 10 shall receive a charity care payment equal to 94% of its hospital-specific reimbursed documented charity care, and each hospital ranked number 11 and below shall receive two percentage points less than the hospital ranked immediately above that hospital.
(3) Notwithstanding the provisions of paragraph (2) of this subsection to the contrary, each of the hospitals located in the 10 municipalities in the State with the lowest median annual household income according to the most recent census data, shall be ranked from the hospital with the highest hospital-specific reimbursed documented charity care to the hospital with the lowest hospital-specific reimbursed documented charity care. The hospital in each of the 10 municipalities, if any, with the highest documented hospital-specific charity care shall receive a charity care payment equal to 96% of its hospital-specific reimbursed documented charity care.
(4) Notwithstanding the provisions of this subsection to the contrary, no hospital shall receive reimbursement for less than 43% of its hospital-specific reimbursed documented charity care.
c. To ensure that charity care subsidy payments remain viable and appropriate, the State shall maintain the charity care subsidy at an amount not less than 75% of the Medicaid-priced amounts of charity care provided by hospitals in the State. In addition, these amounts shall be augmented to reflect payments to hospitals by the Medicaid program for Graduate Medical Education and Indirect Medical Education based on the most recent Graduate Medical Education and Indirect Medical Education formulas utilized by the federal Medicare program.
d. Notwithstanding any other provisions of this section to the contrary, in the event that the change from the charity care subsidy formula in effect for fiscal year 2004 to the formula established pursuant to this section in effect for fiscal year 2005, reduces, for any reason, the amount of the charity care subsidy payment to a hospital below the amount that the hospital received under the formula in effect in fiscal year 2004, the hospital shall receive a payment equal to the amount it would have received under the formula in effect for fiscal year 2004.
(cf: P.L.2004, c.113, s.3)
3. Section 3 of P.L.2004, c.49 (C.26:2J-47) is amended to read as follows:
3. a. (1) For the fiscal years 2005 and 2006, the Commissioner of Banking and Insurance shall issue, in accordance with the provisions of this section, a special interim assessment of one percent, and in fiscal year 2007 [and each fiscal year thereafter] through 2010, an annual assessment, in the amount of two percent, and in fiscal year 2011, and each fiscal year thereafter, an annual assessment in the amount of 2.25 percent, on the net written premiums received by each health maintenance organization granted a certificate of authority to operate in this State pursuant to P.L.1973, c.337 (C.26:2J-1 et seq.), to be allocated to the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58) for the purpose of providing charity care payments to hospitals in accordance with the formula used for the distribution of charity care subsidies that are provided pursuant to P.L.1992, c.160 (C.26:2H-18.51 et al.).
(2) "Net written premiums received" means direct premiums as reported on the annual financial statement submitted pursuant to section 9 of P.L.1973, c.337 (C.26:2J-9), and to the commissioner on a quarterly basis.
b. The commissioner shall certify the amount of the annual assessment issued to each health maintenance organization as calculated pursuant to subsection a. of this section. Each health maintenance organization shall remit the amount so certified on a quarterly basis in each fiscal year to the Department of Banking and Insurance in accordance with the procedures established in P.L.1995, c.156 (C.17:1C-19 et seq.), and as prescribed by the commissioner, who may adjust the quarterly payments from time to time as necessary to meet the current and estimated assessment obligation of each health maintenance organization in each fiscal year.
c. Amounts collected by the commissioner shall be allocated to the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58) and used solely for the purpose of providing charity care payments to hospitals in accordance with the formula used for the distribution of charity care subsidies that are provided pursuant to P.L.1992, c.160 (C.26:2H-18.51 et al.).
d. (1) A health maintenance organization shall not impose any additional premium, fee or surcharge on its premium or enrollee charge to recoup any assessment paid pursuant to this section.
(2) The provisions of paragraph (1) of this subsection shall not apply to a health maintenance organization with respect to any federally funded program underwritten by that health maintenance organization.
(cf: P.L.2006, c.43, s.1)
4. Section 2 of P.L.1945, c.132 (C.54:18A-2) is amended to read as follows:
2. (a) The tax specified in subsection (a) of section 1 of this act, except as to life insurance companies and except as to marine insurance as described by chapter 16 of Title 54 of the Revised Statutes, shall, except as hereinafter provided, be 2% upon the taxable premiums collected by such company during the year ending December 31 next preceding on all business of the company in this State, less the amount of taxes on its property, exclusive of taxes on real estate and of taxes payable pursuant to this section, paid in this State by the company pursuant to any law of this State during the said year. Any taxes paid to the treasurer of any firemen's relief association of this State pursuant to R.S.54:18-1 shall be considered a part of the tax payable under this act. An additional tax of 0.1% upon such taxable premiums of such insurers shall also be paid, which amount shall be dedicated to the Department of Banking and Insurance for payment of administrative costs related to its statutory duties.
(b) Taxable premiums, collected after December 31, 1965 by an insurance company subject to the provisions of subsection (a) hereof under group accident and health insurance policies on residents of this State, and taxable premiums collected under legal insurance policies as defined in section 3 of P.L.1981, c.160 (C.17:46C-3) on residents of this State, shall be subject to tax at the following rates:
As to taxes payable in 1967 1 3/4 %
As to taxes payable in 1968 1 1/2 %
As to taxes payable in 1969 1 1/4 %
As to taxes payable in 1970 through 2008 1%
As to taxes payable in 2009 1.35%
As to taxes payable in 2010 and thereafter 1%
As to taxes payable in 2011 and thereafter, an additional tax of 1% upon taxable premiums subject to this subsection (b) shall be paid, to be allocated to the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58) for the purpose of providing charity care payments to hospitals in accordance with the formula used for the distribution of charity care subsidies that are provided pursuant to P.L.1992, c.160 (C.26:2H-18.51 et al.).
An additional tax of 0.05% upon such taxable premiums of such insurers shall also be paid, which amount shall be dedicated to the Department of Banking and Insurance for payment of administrative costs related to its statutory duties.
(cf: P.L.2009, c.75, s.1)
5. Section 3 of P.L.1945, c.132 (C.54:18A-3) is amended to read as follows:
3. [Amount of tax, life insurance companies; additional tax.] (a) The tax specified in subsection (a) of section 1 of this act as to life insurance companies, shall, except as hereinafter provided, be 2% upon the taxable premiums collected by the company during the year ending December 31 next preceding under all policies or contracts of insurance on residents of this State, less the amount of taxes on its property, exclusive of taxes on real estate and of taxes payable pursuant to this section, paid in this State by the company pursuant to any law of this State during the said year. An additional tax of 0.1% upon such taxable premiums of such insurers shall also be paid, which amount shall be dedicated to the Department of Banking and Insurance for payment of administrative costs related to its statutory duties.
(b) Taxable premiums, collected after December 31, 1965 by an insurance company subject to the provisions of subsection (a) hereof under group accident and health insurance policies on residents of this State, and taxable premiums collected under legal insurance policies as defined in section 3 of P.L.1981, c.160 (C.17:46C-3) on residents of this State, shall be subject to tax at the following rates:
As to taxes payable in 1967 1 3/4%
As to taxes payable in 1968 1 1/2%
As to taxes payable in 1969 1 1/4%
As to taxes payable in 1970 through 2008 1%
As to taxes payable in 2009 1.35%
As to taxes payable in 2010 and thereafter 1%
As to taxes payable in 2011 and thereafter, an additional tax of 1% upon taxable premiums subject to this subsection (b) shall be paid, to be allocated to the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58) for the purpose of providing charity care payments to hospitals in accordance with the formula used for the distribution of charity care subsidies that are provided pursuant to P.L.1992, c.160 (C.26:2H-18.51 et al.).
An additional tax of 0.05% upon such taxable premiums of such insurers shall also be paid, which amount shall be dedicated to the Department of Banking and Insurance for payment of administrative costs related to its statutory duties.
(cf: P.L.2009, c.75, s.2)
6. This act shall take effect on July 1, 2010.
STATEMENT
This bill revises the charity care distribution methodology established pursuant to statutory law to provide that charity care reimbursements to hospitals shall be based on Medicaid-priced claims for the average of the three most recent calendar years, rather than the most recent calendar year. The revised distribution methodology will provide for a more equitable distribution of charity care funds among the hospitals, and will better reflect their actual experience in providing charity care to indigent patients.
The bill also increases the revenue sources for the Health Care Subsidy Fund, the fund used to provide charity care reimbursements, by including revenues raised through enhanced assessments on insurance carriers as provided by the bill. Specifically, the bill increases: 1) the annual assessment on net written premiums received by health maintenance organizations to support charity care from 2 percent to 2.25 percent; and 2) the tax rate on taxable premiums for group accident and health insurance, and legal insurance, from 1 percent to 2 percent, with the additional 1 percent dedicated to charity care.
