LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HCR 2 HLS 21RS 531
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 15, 2021 7:54 AM Author: SCHEXNAYDER
Dept./Agy.: LDH/Medicaid
Subject: hospital stabilization formula Analyst: Shawn Hotstream
HOSPITALS EN +$106,646,197 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 for FY 22 shall
not exceed the lessor of the following: 1) the state portion of the costs (non federal share) associated with Medicaid expansion that are
directly attributable to payments to hospitals, excluding costs associated with Full Medicaid Pricing, supplemental payments and quality
program payments; or 2) 1 percent of the total inpatient and outpatient hospital net patient revenue of all hospitals included in the
assessment (as reported in the Medicare cost report ending in state FY 15. Proposed resolution provides that LDH pay hospital
reimbursement rates in an amount no less than the reimbursement rates in effect for dates of service on or after January 1, 2021.
Proposed resolution provides LDH to submit any state plan amendment to the Centers for Medicare and Medicaid no later than 120 days
from the date the resolution is adopted. Proposed resolution provides the legislative auditor shall collect any information from LDH to
provide a detailed analysis of the Medicaid hospital reimbursement methodology and supplemental payment system. Proposed resolution
exempts any hospital with 32 or fewer beds from the hospital tax, subject to CMS approval. Proposed law provides LDH to model various
Medicaid financing options, and report such options to JLCB in October, December, and Bebruary of FY 21/22.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $106,646,197 $81,911,202 $81,911,202 $81,911,202 $81,911,202 $434,291,005
Federal Funds $474,670,997 $173,025,622 $173,025,622 $173,025,622 $173,025,622 $1,166,773,485
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $581,317,194 $254,936,824 $254,936,824 $254,936,824 $254,936,824 $1,601,064,490
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $106,646,197 $0 $0 $0 $0 $106,646,197
Federal Funds $474,670,997 $0 $0 $0 $0 $474,670,997
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $581,317,194 $0 $0 $0 $0 $581,317,194
EXPENDITURE EXPLANATION
The proposed resolution requires that the hospital reimbursement rates in effect on or after January 1, 2021, be maintained.
The fiscal note assumes the cumulative rate increases authorized under prior hospital assessment resolutions remain in
effect in future years and are not conditioned upon any future assessments (reflected in the expenditure table above for
FY 23 through FY 26). Projections provided by LDH reflect the aggregate rate increases are estimated to cost $254.9 M
($74 M statutory dedication tax revenue used as state match) annually. The illustration below reflects the projected
expenditure allocation of the FY 22 assessment revenue with associated federal matching funds.
Balance FY 22 tax revenue
FY 22 Rate allocated for Medicaid FY 22
Expenditure: Increase Expansion costs Total
Stat Ded. $74,008,160 $32,638,037 $106,646,197
Federal $180,928,664 $293,742,333 $474,670,997
Total $254,936,824* $326,380,370 $581,317,194
*The $254.9 million is reflected in the totals for FY 23 through FY 26 with differences in the makeup of dedicated and federal
funds due to Federal Medical Assistance Percentage (FMAP) rates.
REVENUE EXPLANATION
Proposed resolution will generate approximately $106.6 M in statutory dedication revenue (Hospital Stabilization Fund) in
FY 22. The resolution provides that LDH shall calculate, levy, and collect a hospital provider assessment on certain hospitals.
The annual assessment is calculated on the lesser of the following: 1) the state portion of the inpatient hospital costs
associated with the Medicaid expansion (estimated to be $170,676,371); or 2) 1% of the total inpatient and outpatient net
patient revenues of all hospitals included in the assessment as reported in the Medicare cost report ending in state FY 15
(estimated to be $113,459,367). However, only $106.6 M is projected to be collected in FY 22, based on a Senate Finance
Committee amendment that exempted approximately 59 hospitals from the tax (all hospitals with 32 or fewer beds are
exempted). Assuming the exemptions, the assessment for FY 22 will be $106.6 M, reflected as a statutory dedication
revenue increase in the revenue table above. The statutory dedication revenue generated from this assessment will be used
to draw federal matching funds for inpatient and outpatient rate increases and for a portion of the Medicaid expansion costs
in FY 22. Revenue is not reflected beyond FY 21 as future resolutions must be filed and passed annually by the legislature to
generate additional assessment revenue.
Note: A Senate Finance Committee amendment that exempts any hospital with 32 or fewer beds from the hospital
assessment is subject to CMS approval.
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}
Alan M. Boxberger
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} Staff Director