LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HCR 3 HLS 24RS 468
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 2, 2024 5:41 PM Author: MCFARLAND
Dept./Agy.: LDH/Medicaid
Subject: Hospital Stabilization Formula Analyst: Shawn Hotstream
HOSPITALS EN +$314,552,060 SD RV See Note Page 1 of 1
Provides for a hospital stabilization formula
Proposed resolution provides for a hospital assessment. Proposed resolution provides the total assessment for the state in FY 25 based on
a tiered assessment methodology by hospital provider type. Proposed resolution provides for exclusions to the hospital assessment.
Proposed resolution provides for the use of the revenues generated through the assessment. LDH is required to pay hospital
reimbursement rates in an amount no less than the reimbursement rates in effect for dates of service on or after January 1, 2024. In
addition, revenues generated from the assessment will be used for a directed payment arrangement (upon approval of the Centers for
Medicare and Medicaid Services). Proposed resolution provides that in the event CMS approves either an assessment different than the
provisions set forth in this measure, LDH shall seek ratification of such changes from the Joint Legislative Committee on the Budget.
Proposed resolution provides for reporting requirements of LDH.
EXPENDITURES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $314,552,060 $0 $0 $0 $0 $314,552,060
Federal Funds $1,137,027,991 $0 $0 $0 $0 $1,137,027,991
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $1,451,580,051 $0 $0 $0 $0 $1,451,580,051
REVENUES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $314,552,060 $0 $0 $0 $0 $314,552,060
Federal Funds $1,137,027,991 $0 $0 $0 $0 $1,137,027,991
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $1,451,580,051 $0 $0 $0 $0 $1,451,580,051
EXPENDITURE EXPLANATION
The statutory dedication revenue generated from this assessment will be used to draw federal matching funds for payments for the
following: 1) historical inpatient and outpatient rate increases added in prior resolutions (rates in effect for dates of service on or after
January 1, 2024, are required to be maintained); and 2) to partially fund “directed payments” to hospital providers (subject to CMS
approval).
Note: Information provided by LDH indicates total expenditures anticipated to be spent in directed payments in FY 25 is approximately
$2.8 B. The department will utilize additional state match sources in addition to the portion of the statutory dedication revenues generated
under this measure allocated ($200.3 M) for directed payments. The additional state match resources are currently appropriated in the
Medicaid budget, including SGF, Medical Assistance Trust Fund (MATF) revenues, and Intergovernmental Transfer (IGT) means of finance.
REVENUE EXPLANATION
Proposed resolution will generate approximately $314.5 M in statutory dedication revenue (deposited into the Hospital Stabilization Fund)
in FY 25. The total statutory dedication collections reflected in the revenue table above is comprised of the historical hospital assessment
($114,253,283), and an additional assessment (totaling $200,298,777) to partially support a hospital directed payment model. Upon
approval by CMS of the directed payment arrangement, LDH is authorized to levy and collect a provider assessment on certain hospitals.
The assessment rates (%) for FY 24/25 are tiered by hospital, and applied to hospitals’ inpatient net patient revenue and outpatient net
patient revenue as reported in the Medicare cost report ending in state fiscal year 2019. The rates are reflected below:
1) Long-term acute care, psychiatric and rehabilitation hospitals: 1.38% of inpatient and outpatient net patient revenue.
2) Certain hospital service district hospitals: 2.48% of inpatient net patient revenue up to $125 M, 2.48% of outpatient net
patient revenue up to $125 M.
3) Acute care hospitals: 3.23% of inpatient net patient revenue up to $125 M, and 3.35% of outpatient net patient revenue up
to $125 M.
4) Certain hospital service district hospitals and all other acute care hospitals: 1.38% of inpatient net patient revenue
exceeding $125 M, and 1.38% of outpatient net patient revenue exceeding $125 M.
Note: This resolution excludes certain hospitals from the assessment, including certain acute care hospitals with 40 beds or less,
freestanding psychiatric Medicaid DSH hospitals, and rural hospitals as defined in R.S. 40:1189.1. Revenue is not reflected beyond FY 25
as future resolutions must be filed and passed annually by the legislature to generate additional assessment revenue.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Patrice Thomas
x 13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Deputy Fiscal Officer