S.F. _____ Section 1. INTENT OF THE GENERAL ASSEMBLY. It is the intent 1 of the general assembly that the hospital health care access 2 assessment program created in this Act be implemented as a 3 three-year pilot program to determine its efficacy in providing 4 adequate reimbursement to hospitals in the state, reducing the 5 level of uncompensated care and cost-shifting, enhancing the 6 health care workforce, and expanding access to quality health 7 care for low-income and uninsured Iowans. It is the intent of 8 the general assembly that the pilot program be evaluated for 9 such efficacy prior to the program’s repeal or continuation. 10 Sec. 2. NEW SECTION . 249M.1 Title. 11 This chapter shall be known as the “Hospital Health Care 12 Access Assessment Program” . 13 Sec. 3. NEW SECTION . 249M.2 Definitions. 14 As used in this chapter, unless the context otherwise 15 requires: 16 1. “Assessment” means the hospital health care access 17 assessment imposed pursuant to this chapter. 18 2. “Department” means the department of human services. 19 3. “Net patient revenue” means all revenue reported by a 20 hospital on the hospital’s 2008 Medicare cost report for acute 21 patient care and services, but does not include contractual 22 adjustments, charity care, bad debt, Medicare revenue, or other 23 revenue derived from sources other than hospital operations 24 including but not limited to nonoperating revenue, other 25 operating revenue, skilled nursing facility revenue, physician 26 revenue, and long-term care revenue. 27 4. “Nonoperating revenue” means income from activities not 28 relating directly to the day-to-day operations of a hospital 29 such as gains from disposal of a hospital’s assets, dividends 30 and interests from security investments, gifts, grants, and 31 endowments. 32 5. “Other operating revenue” means income from nonpatient 33 care services including but not limited to tax levy receipts, 34 laundry services, gift shop operations, meal services 35 -1- LSB 6248XC (9) 83 pf/nh 1/ 9

S.F. _____ to individuals other than patients, and vending machine 1 commissions. 2 6. “Participating hospital” means a nonstate-owned hospital 3 licensed under chapter 135B that is paid on a prospective 4 payment system basis by Medicare and the medical assistance 5 program for inpatient and outpatient services. 6 7. “Program” means the hospital health care access 7 assessment program created in this chapter. 8 8. “Trust fund” means the hospital health care access trust 9 fund created in section 249M.4. 10 9. “Upper payment limit” means the maximum ceiling imposed 11 by federal regulation on a participating hospital’s medical 12 assistance program reimbursement for inpatient services under 13 42 C.F.R. § 447.272 and outpatient services under 42 C.F.R. 14 § 447.321, calculated separately for hospital inpatient and 15 outpatient services, and excluding from the calculation medical 16 assistance program disproportionate share hospital payments. 17 Sec. 4. NEW SECTION . 249M.3 Hospital health care access 18 assessment program —— termination of program. 19 1. A hospital health care access assessment is imposed on 20 each participating hospital in this state to be used to promote 21 access to health care services for Iowans, including those 22 served by the medical assistance program. 23 2. The assessment rate for a participating hospital shall be 24 calculated as one and twenty-six one hundredths percent of net 25 patient revenue as specified in the hospital’s fiscal year 2008 26 Medicare cost report. 27 3. If a participating hospital’s fiscal year 2008 Medicare 28 cost report is not contained in the file of the centers 29 for Medicare and Medicaid services health care cost report 30 information system dated June 30, 2009, the hospital shall 31 submit a copy of the hospital’s 2008 Medicare cost report 32 to the department to allow the department to determine the 33 hospital’s net patient revenue for fiscal year 2008. 34 4. A participating hospital paid under the prospective 35 -2- LSB 6248XC (9) 83 pf/nh 2/ 9

S.F. _____ payment system by Medicare and the medical assistance program 1 that was not in existence prior to fiscal year 2008, shall 2 submit a prospective Medicare cost report to the department to 3 determine anticipated net patient revenue. 4 5. Net patient revenue as reported on each participating 5 hospital’s fiscal year 2008 Medicare cost report shall be 6 the sole basis for the health care access assessment for the 7 duration of the program. 8 6. A participating hospital shall pay the assessment to 9 the department in equal amounts on a quarterly basis. A 10 participating hospital shall submit the assessment amount no 11 later than thirty days following the end of each calendar 12 quarter. 13 7. A participating hospital shall retain and preserve 14 the Medicare cost report and financial statements used to 15 prepare the cost report for a period of three years. All 16 information obtained by the department under this subsection is 17 confidential and does not constitute a public record. 18 8. The department shall collect the assessment imposed and 19 shall deposit all revenues collected in the hospital health 20 care access trust fund created in section 249M.4. 21 9. If the department determines that a participating 22 hospital has underpaid or overpaid the assessment, the 23 department shall notify the participating hospital of the 24 amount of the unpaid assessment or refund due. Such payment 25 or refund shall be due or refunded within thirty days of the 26 issuance of the notice. 27 10. a. A participating hospital that fails to pay the 28 assessment within the time frame specified in this section 29 shall pay, in addition to the outstanding assessment, a penalty 30 of one and five-tenths percent of the assessment amount owed 31 for each month or portion of each month that the payment is 32 overdue. However, if the department determines that good cause 33 is shown for failure to comply with payment of the assessment, 34 the department shall waive the penalty or a portion of the 35 -3- LSB 6248XC (9) 83 pf/nh 3/ 9

S.F. _____ penalty. 1 b. If an assessment is not received by the department by 2 the last day of the month in which the payment is due, the 3 department shall withhold an amount equal to the assessment and 4 penalty owed from any payment due such participating hospital 5 under the medical assistance program. 6 c. The assessment imposed under this chapter constitutes a 7 debt due the state and may be collected by civil action under 8 any method provided for by law. 9 d. Any penalty collected pursuant to this subsection shall 10 be credited to the hospital health care access trust fund 11 created in section 249M.4. 12 11. If the federal government fully funds Iowa’s medical 13 assistance program, if federal law changes to negatively impact 14 the assessment program as determined by the department, or if 15 a federal audit determines the assessment program is invalid, 16 the department shall terminate the imposition of the assessment 17 and the program beginning on the date the federal statutory, 18 regulatory, or interpretive change takes effect. 19 Sec. 5. NEW SECTION . 249M.4 Hospital health care access 20 trust fund —— board. 21 1. A hospital health care access trust fund is created 22 in the state treasury under the authority of the department. 23 Moneys received through the collection of the hospital health 24 care access assessment imposed under this chapter and any 25 other moneys specified for deposit in the trust fund shall be 26 deposited in the trust fund. 27 2. Moneys in the trust fund shall be used, subject to 28 their appropriation by the general assembly, by the department 29 to reimburse participating hospitals the medical assistance 30 program upper payment limit for inpatient and outpatient 31 hospital services as calculated in this section. Following 32 payment of such upper payment limit to participating hospitals, 33 any remaining funds in the trust fund on an annual basis may be 34 used for any of the following purposes: 35 -4- LSB 6248XC (9) 83 pf/nh 4/ 9

S.F. _____ a. To support medical assistance program utilization 1 shortfalls. 2 b. To maintain the state’s capacity to provide access to and 3 delivery of services for vulnerable Iowans. 4 c. To support payments to nonparticipating hospitals under 5 the IowaCare program pursuant to chapter 249J. 6 d. To fund the health care workforce support initiative 7 created pursuant to section 135.175. 8 e. To support access to health care services for uninsured 9 Iowans. 10 f. To support Iowa hospital programs and services which 11 expand access to health care services for Iowans. 12 3. The trust fund shall be separate from the general fund 13 of the state and shall not be considered part of the general 14 fund. The moneys in the trust fund shall not be considered 15 revenue of the state, but rather shall be funds of the hospital 16 health care access assessment program. The moneys deposited 17 in the trust fund are not subject to section 8.33 and shall not 18 be transferred, used, obligated, appropriated, or otherwise 19 encumbered, except to provide for the purposes of this chapter. 20 Notwithstanding section 12C.7, subsection 2, interest or 21 earnings on moneys deposited in the trust fund shall be 22 credited to the trust fund. 23 4. The department shall adopt rules pursuant to chapter 24 17A to administer the trust fund and reimbursements and 25 expenditures as specified in this chapter made from the trust 26 fund. 27 5. a. Beginning July 1, 2010, or the implementation date 28 of the hospital health care access assessment program as 29 determined by receipt of approval from the centers for Medicare 30 and Medicaid services of the United States department of health 31 and human services, whichever is later, the department shall 32 increase the diagnostic related groups and ambulatory patient 33 classifications base rates to provide payments to participating 34 hospitals at the Medicare upper payment limit for the fiscal 35 -5- LSB 6248XC (9) 83 pf/nh 5/ 9

S.F. _____ year beginning July 1, 2010, calculated as of July 31, 2010. 1 Each participating hospital shall receive the same percentage 2 increase, but the percentage may differ depending on whether 3 the basis for the base rate increase is the diagnostic related 4 groups or ambulatory patient classifications. 5 b. The percentage increase shall be calculated by dividing 6 the amount calculated under subparagraph (1) by the amount 7 calculated under subparagraph (2) as follows: 8 (1) The amount under the Medicare upper payment limit for 9 the fiscal year beginning July 1, 2010, for participating 10 hospitals. 11 (2) The projected expenditures for participating hospitals 12 for the fiscal year beginning July 1, 2010, as determined by 13 the fiscal management division of the department, plus the 14 amount calculated under subparagraph (1). 15 6. For the fiscal year beginning July 1, 2011, and for 16 each fiscal year beginning July 1, thereafter, the payments to 17 participating hospitals shall continue to be calculated based 18 on the upper payment limit as calculated for the fiscal year 19 beginning July 1, 2010. 20 7. Reimbursement of participating hospitals shall 21 incorporate the rebasing process for inpatient and outpatient 22 services for state fiscal year 2012. However, the total amount 23 of increased funding available for reimbursement attributable 24 to rebasing shall not exceed four million five hundred thousand 25 dollars for state fiscal year 2012 and six million dollars for 26 state fiscal year 2013. 27 8. Any payments to participating hospitals under this 28 section shall result in budget neutrality to the general fund 29 of the state. 30 9. a. A hospital health care access trust fund board is 31 established consisting of the following members: 32 (1) The co-chairpersons and the ranking members of the 33 joint appropriations subcommittee on health and human services. 34 (2) The Iowa medical assistance program director. 35 -6- LSB 6248XC (9) 83 pf/nh 6/ 9

S.F. _____ (3) Two hospital executives representing the two largest 1 private health care systems in the state. 2 (4) The president of the Iowa hospital association. 3 (5) A representative of a consumer advocacy group, involved 4 in both state and national initiatives, that provides data on 5 key indicators of well-being for children and families in order 6 to inform policymakers to help children and families succeed. 7 b. The board shall do all of the following: 8 (1) Provide oversight of the trust fund. 9 (2) Make recommendations regarding the hospital health care 10 access assessment program, including recommendations regarding 11 the assessment calculation, assessment amounts, payments to 12 participating hospitals, and use of the moneys in the trust 13 fund. 14 (3) Submit an annual report to the governor and the general 15 assembly regarding the use and expenditure of moneys deposited 16 in the trust fund. 17 c. The department shall provide administrative assistance 18 to the board. 19 Sec. 6. NEW SECTION . 249M.5 Future repeal. 20 This chapter is repealed June 30, 2013. 21 Sec. 7. DIRECTIVE TO DEPARTMENT OF HUMAN SERVICES. Upon 22 enactment of this Act, the department of human services shall 23 request any waivers or medical assistance state plan amendments 24 necessary to implement this Act from the United States 25 department of health and human services. 26 Sec. 8. CONTINGENCY PROVISIONS. 27 1. The hospital health care access assessment created in 28 this Act shall not be imposed retroactively prior to July 1, 29 2010. 30 2. The assessment shall not be collected until the 31 department of human services has received approval of the 32 assessment from the centers for Medicare and Medicaid services 33 of the United States department of health and human services. 34 Sec. 9. EFFECTIVE UPON ENACTMENT AND CONTINGENT 35 -7- LSB 6248XC (9) 83 pf/nh 7/ 9

S.F. _____ IMPLEMENTATION. This Act, being deemed of immediate 1 importance, takes effect upon enactment. However, the 2 department of human services shall only implement this Act if 3 the department receives approval of the requests relating to 4 waivers and medical assistance state plan amendments necessary 5 to implement this Act. 6 EXPLANATION 7 This bill establishes the hospital health care access 8 assessment program. The bill provides definitions, including 9 for “participating hospital”, which means a nonstate owned 10 licensed hospital that is paid on a prospective payment 11 system basis by Medicare and Medicaid. The bill provides that 12 a participating hospital in the state shall be assessed a 13 hospital health care access assessment to be used in promoting 14 access to health care services for Iowans, including those 15 served by the medical assistance program. The bill establishes 16 the methods for calculating the assessment and reimbursement 17 to the participating hospitals. The bill specifies the 18 process for a participating hospital to pay the assessment to 19 the department of human services (DHS) on a quarterly basis. 20 Revenues collected are to be deposited in the hospital health 21 care access trust fund created in the bill. The bill provides 22 for repayment of overpaid assessments as well as for payment of 23 unpaid assessments, penalties for nonpayment of the assessment, 24 and withholding of medical assistance payments as a means of 25 collecting unpaid assessments. Any penalties collected are to 26 be credited to the hospital health care access trust fund. 27 The bill provides that if the federal government fully funds 28 Iowa’s medical assistance program, if federal law changes to 29 negatively impact the assessment program as determined by DHS, 30 or if a federal audit determines the assessment program is 31 invalid, DHS shall terminate the imposition of the assessment 32 and the program beginning on the date the federal statutory, 33 regulatory, or interpretive change takes effect. 34 The bill establishes the hospital health care access trust 35 -8- LSB 6248XC (9) 83 pf/nh 8/ 9

S.F. _____ fund and provides for the use of the moneys in the trust fund, 1 subject to their appropriation by the general assembly to 2 DHS, to reimburse participating hospitals for inpatient and 3 outpatient hospital services. Following this payment the 4 remaining moneys, on an annual basis, may be used for: support 5 of medical assistance program utilization shortfalls; to 6 maintain the state’s capacity to provide access to and delivery 7 of services for vulnerable Iowans; payments to nonparticipating 8 hospitals under the IowaCare program; funding of the health 9 care workforce support initiative created pursuant to Code 10 section 135.175; supporting access to health care services 11 for uninsured Iowans; or supporting Iowa hospital programs 12 and services which expand access to health care services 13 for Iowans. The department is directed to adopt rules to 14 administer the trust fund and reimbursements and expenditures 15 made from the trust fund. 16 The bill also establishes a hospital health care access 17 trust fund board and specifies the board membership and duties. 18 The Code chapter is repealed June 30, 2013. 19 The bill includes directives to DHS to request any waivers 20 or medical assistance state plan amendments necessary to 21 implement the bill and provides that the bill takes effect 22 upon enactment, but shall only be implemented if DHS receives 23 approval of the requests relating to waivers and medical 24 assistance state plan amendments necessary to implement the 25 bill. Additionally, the bill prohibits the assessment from 26 being imposed retroactively prior to July 1, 2010, and from 27 being collected until DHS has received necessary federal 28 approval. 29 -9- LSB 6248XC (9) 83 pf/nh 9/ 9