SENATE BILL 400

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Gerald Ortiz y Pino

AN ACT

RELATING TO HEALTH CARE; ENACTING THE QUALITY ASSURANCE ASSESSMENT ACT; PROVIDING FOR FEES TO ENHANCE FEDERAL PARTICIPATION IN MEDICAID; PROVIDING FOR THE USE OF QUALITY ASSURANCE FEES TO INCREASE MEDICAID RATES AND SUPPORT QUALITY IMPROVEMENT IN SKILLED NURSING FACILITIES, INTERMEDIATE CARE FACILITIES AND INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL DISABILITIES; CREATING SEPARATE FUNDS FOR ASSESSED FEES; RESTRICTING THE USE OF ASSESSED FUNDS; PROVIDING FOR A DELAYED REPEAL; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Quality Assurance Assessment Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Quality Assurance Assessment Act:

          A. "department" means the human services department;

          B. "intermediate care facility" means a facility licensed by the department of health to provide intermediate nursing care, but does not include an intermediate care facility for individuals with intellectual disabilities;

          C. "intermediate care facility for individuals with intellectual disabilities" means a facility licensed by the department of health to provide food, shelter, health or rehabilitative and active treatment for individuals with intellectual disabilities or persons with related conditions;

          D. "medicaid" means the medical assistance program established pursuant to Title 19 of the federal Social Security Act and regulations promulgated pursuant to that act;

          E. "medicare" means coverage provided pursuant to the federal Health Insurance for the Aged Act, Title 18 of the Social Security Act Amendments of 1965, as then enacted or later amended;

          F. "medicare advantage" means insurance that expands a medicare beneficiary's options for participation in private sector health plans with networks of participating providers;

          G. "medicare part A" means insurance provided through medicare for inpatient hospital, home health, skilled nursing facility and hospice care;

          H. "net revenue" means gross inpatient revenue reported by the skilled nursing facility, intermediate care facility or intermediate care facility for individuals with intellectual disabilities for routine nursing and ancillary inpatient services provided to residents by such facility, less applicable contractual allowances and bad debt;

          I. "non-medicare bed day" means a day for which the primary payer is not medicare part A, medicare advantage or a special needs plan. A non-medicare bed day excludes any day on which a resident is not in the facility or the facility is paid to hold the bed while the resident is on leave;

          J. "quality assurance fee" means a fee assessed to enhance federal financial participation in medicaid to increase medicaid rates and support facility quality improvement efforts in skilled nursing facilities, intermediate care facilities and intermediate care facilities for individuals with intellectual disabilities;

          K. "resident day" means a calendar day of care provided to a resident in a skilled nursing facility, intermediate care facility or intermediate care facility for individuals with intellectual disabilities, including the day of admission and not including the day of discharge; provided that admission and discharge occurring on the same day shall constitute one resident day;

          L. "skilled nursing facility" means a facility licensed by the department of health to provide skilled nursing services;

          M. "special needs plan" means a specific type of medicare advantage plan that limits membership to individuals with specific diseases or characteristics; and

          N. "uniformity waiver" means a waiver of the uniform tax requirement for permissible health-care-related taxes as provided in federal law pursuant to 42 C.F.R. §433.68 (e)(2)(i) and (ii).

     SECTION 3. [NEW MATERIAL] DEPARTMENT DUTIES--POWERS--IMPOSITION OF QUALITY ASSURANCE FEE ON SKILLED NURSING AND INTERMEDIATE CARE FACILITIES--EXEMPT FACILITIES.--

          A. No later than thirty days following the effective date of the Quality Assurance Assessment Act, the department shall require each skilled nursing facility and intermediate care facility to report the number of resident days provided by the facility broken down by payer and the net revenue earned by the facility for each of the most recent three calendar quarters. Thereafter, the department shall require each skilled nursing facility and intermediate care facility to report quarterly the number of resident days provided by each facility broken down by payer and the net revenue earned by the facility in the previous calendar quarter no later than twenty days after the end of the calendar quarter.

          B. No later than sixty days following the effective date of the Quality Assurance Assessment Act, the department shall determine, based upon the aggregate information reported pursuant to Subsection A of this section by skilled nursing facilities and intermediate care facilities for the two most recent calendar quarters, a quality assurance fee per non-medicare bed day. The quality assurance fee shall be assessed quarterly and retroactively for the third and fourth quarters of calendar year 2017 and shall be due twenty days following the approval of the uniformity waiver for skilled nursing facilities and intermediate care facilities pursuant to the Quality Assurance Assessment Act from the federal centers for medicare and medicaid services and implementation of the rate increases authorized by Subsection B of Section 4 of the Quality Assurance Assessment Act.

          C. By December 1, 2017 and each December 1 thereafter, the department shall determine a quality assurance fee per non-medicare bed day to be paid by each skilled nursing facility and intermediate care facility subject to the quality assurance fee for the next calendar year. The department shall determine the 2018 calendar year fee and the fee for all subsequent calendar years based upon the aggregate information reported by skilled nursing facilities and intermediate care facilities for the most recent four calendar quarters. No later than December 15, 2017 and each December 15 thereafter, the department shall notify facilities subject to the quality assurance fee in writing of the amount of the fee per non-medicare bed day for the next calendar year.

          D. The quality assurance fee provided for in this section shall not be uniform or broad-based. Skilled nursing facilities or intermediate care facilities with sixty or fewer beds shall be exempt from this fee. The department may lower the fee for certain high-volume medicaid skilled nursing facilities to meet the uniformity waiver redistributive tests of 42 C.F.R. §433.68(e)(2). The amount of a facility's quality assurance fee shall not exceed the threshold, as determined by the federal centers for medicare and medicaid services, above which the fee is deemed to constitute an indirect guarantee not meeting federal requirements for permissible health-care-related taxes.

          E. No later than ninety days following the effective date of the Quality Assurance Assessment Act, the secretary of human services shall request the federal centers for medicare and medicaid services to approve a quality assurance fee uniformity waiver for skilled nursing facilities and intermediate care facilities pursuant to the Quality Assurance Assessment Act. The department may modify, add to or reduce the categories of facilities that are subject to the quality assurance fee as necessary to obtain federal centers for medicare and medicaid services approval; provided that the quality assurance fees assessed and collected are deposited, administered, disbursed and used as directed in Section 4 of the Quality Assurance Assessment Act.

          F. The department shall prepare and distribute a form for each skilled nursing facility and intermediate care facility that is subject to the quality assurance fee to:

                (1) report resident days broken down by payer and net revenue earned for the previous calendar quarter; and

                (2) calculate the facility's quality assurance fee due in the current calendar quarter.

          G. The quality assurance fee provided for in this section shall not be assessed unless the following conditions are met:

                (1) the federal centers for medicare and medicaid services has approved the state's imposition of a quality assurance fee upon skilled nursing facilities and intermediate care facilities pursuant to the Quality Assurance Assessment Act and has granted a uniformity waiver to the state; and

                (2) the full amount of the quality assurance fees assessed and collected pursuant to this section remains available for the purposes specified in Section 4 of the Quality Assurance Assessment Act.

     SECTION 4. [NEW MATERIAL] FACILITY QUALITY ASSURANCE FUND CREATED--ADMINISTRATION--USES.--

          A. The "facility quality assurance fund" is created as a nonreverting fund in the state treasury. The fund consists of appropriations and quality assurance fees paid by skilled nursing facilities and intermediate care facilities, income from the investment of the fund, gifts, grants, donations and bequests. The fund shall be administered by the department, and money in the fund is subject to appropriation by the legislature to the department to carry out its duties pursuant to the Quality Assurance Assessment Act. Money in the fund shall be disbursed on warrants signed by the secretary of finance and administration pursuant to vouchers signed by the secretary of human services or the secretary's authorized representative. Any balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.

          B. The facility quality assurance fund shall be used for the following purposes and in the following order of priority for skilled nursing facilities and intermediate care facilities to:

                (1) reimburse the medicaid share of the quality assurance fee as a pass-through, medicaid-allowable cost; and

                (2) increase each facility's respective medicaid fee-for-service and medicaid managed care reimbursement rates above those in effect on July 1, 2017.

          C. A maximum of fifteen percent of the total amount of annual quality assurance fees collected by the department from skilled nursing facilities and intermediate care facilities may be used for purposes other than those specified in Subsection B of this section. No quality assurance fees or money in the facility quality assurance fund shall be used to supplant any general fund support for the state medicaid program.

     SECTION 5. [NEW MATERIAL] DEPARTMENT DUTIES--IMPOSITION OF QUALITY ASSURANCE FEE ON INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL DISABILITIES.--

          A. No later than thirty days following the effective date of the Quality Assurance Assessment Act, the department shall require each intermediate care facility for individuals with intellectual disabilities to report the number of resident days provided by the facility broken down by payer and the net revenue earned by the facility for each of the most recent three calendar quarters. Thereafter, the department shall require each intermediate facility for individuals with intellectual disabilities to report quarterly the number of resident days provided by each facility broken down by payer and the net revenue earned by the facility in the previous calendar quarter no later than twenty days after the end of the calendar quarter.

          B. No later than sixty days following the effective date of the Quality Assurance Assessment Act, the department shall determine, based upon the aggregate information reported pursuant to Subsection A of this section for the two most recent calendar quarters, a uniform and broad-based quality assurance fee per resident day to be assessed retroactively and quarterly upon each intermediate care facility for individuals with intellectual disabilities for the third and fourth quarters of calendar year 2017.

          C. By December 1, 2017 and each December 1 thereafter, the department shall determine a uniform quality assurance fee for each intermediate care facility for individuals with intellectual disabilities per resident day to be paid by each facility for the next calendar year. The department shall determine the 2018 calendar year fee and the fee for all subsequent calendar years based upon the aggregate information reported by intermediate care facilities for individuals with intellectual disabilities pursuant to Subsection A of this section for the most recent four calendar quarters. By December 15, 2017 and each December 15 thereafter, the department shall notify intermediate care facilities for individuals with intellectual disabilities subject to the quality assurance fee in writing of the amount of the fee per resident day to be paid by each intermediate care facility for individuals with intellectual disabilities for the next calendar year.

          D. The amount of an intermediate care facility for individuals with intellectual disabilities' quality assurance fee pursuant to this section shall not exceed the threshold, as determined by the federal centers for medicare and medicaid services, above which the fee is deemed to constitute an indirect guarantee not meeting federal requirements for permissible health-care-related taxes.

          E. No later than ninety days following the effective date of the Quality Assurance Assessment Act, the department shall seek a state plan amendment from the federal centers for medicare and medicaid services to adjust medicaid reimbursement rates and implement medicaid reimbursement rate increases pursuant to Subsection B of Section 6 of the Quality Assurance Assessment Act.

          F. The department shall prepare and distribute a form for each intermediate care facility for individuals with intellectual disabilities to:

                (1) report resident days broken down by payer and net revenue earned for the previous quarter; and

                (2) calculate the facility's quality assurance fee due in the current quarter.

          G. The quality assurance fee provided for in this section shall not be assessed unless the full amount of the quality assurance fees assessed and collected pursuant to this section of the remains available for the purposes specified in Section 6 of the Quality Assurance Assessment Act.

     SECTION 6. [NEW MATERIAL] INTERMEDIATE CARE FACILITY FOR INDIVIDUALS WITH INTELLECTUAL DISABILITIES QUALITY ASSURANCE FUND CREATED--ADMINISTRATION--USES.--

          A. The "intermediate care facility for individuals with intellectual disabilities quality assurance fund" is created as a nonreverting fund in the state treasury. The fund consists of appropriations and quality assurance fees paid by intermediate care facilities for individuals with intellectual disabilities, income from the investment of the fund, gifts, grants, donations and bequests. The fund shall be administered by the department, and money in the fund is subject to appropriation by the legislature to the department to carry out its duties pursuant to the Quality Assurance Assessment Act. Money in the fund shall be disbursed on warrants signed by the secretary of finance and administration pursuant to vouchers signed by the secretary of human services or the secretary's authorized representative. Any balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.

          B. The intermediate care facility for individuals with intellectual disabilities quality assurance fund shall be used for the following purposes and in the following order of priority for intermediate care facilities for individuals with intellectual disabilities to:

                (1) reimburse the medicaid share of the quality assurance fee as a pass-through, medicaid-allowable cost; and

                (2) increase each facility's respective medicaid reimbursement rates above those in effect as of July 1, 2017.

          C. A maximum of fifteen percent of the amount of annual aggregate quality assurance fees collected by the department from intermediate care facilities for individuals with intellectual disabilities may be used for purposes other than those specified in Subsection B of this section. No quality assurance fees or money in the intermediate care facility for individuals with intellectual disabilities quality assurance fund shall be used to supplant any general fund support for the state medicaid program.

     SECTION 7. [NEW MATERIAL] QUALITY ASSURANCE FEE PAYMENTS--REFUNDS.--

          A. All quality assurance fees shall be paid to the department in the time and manner established by the department.

          B. The initial quality assurance fee assessed to a skilled nursing facility or intermediate care facility shall be due no later than twenty days after the state receives a uniformity waiver from the federal centers for medicare and medicaid services approving the imposition of the quality assurance fee pursuant to the Quality Assurance Assessment Act and the implementation of rate increases authorized by Subsection B of Section 4 of the Quality Assurance Assessment Act, retroactive to July 1, 2017.

          C. Subsequent payments of a quality assurance fee assessed to a skilled nursing facility or intermediate care facility shall be due no later than twenty days after the end of each calendar quarter as long as the state's uniformity waiver and medicaid rate increases implemented pursuant to the Quality Assurance Assessment Act remain in place.

          D. The initial quality assurance fee assessed to an intermediate care facility for individuals with intellectual disabilities shall be due no later than twenty days after the state receives approval of a state plan amendment from the federal centers for medicare and medicaid services for medicaid reimbursement rate increases authorized by Subsection B of Section 6 of the Quality Assurance Assessment Act and medicaid reimbursement rates have been increased in accordance with Subsection B of Section 6 of that act, retroactive to July 1, 2017.

          E. Subsequent payments of a quality assurance fee assessed to an intermediate care facility for individuals with intellectual disabilities shall be due no later than twenty days after the end of each calendar quarter as long as medicaid rate increases implemented pursuant to the Quality Assurance Assessment Act remain in place.

          F. If the department determines that a skilled nursing facility, intermediate care facility or intermediate care facility for individuals with intellectual disabilities has underpaid or overpaid the quality assurance fee, the department shall give written notice within ten calendar days of its determination to the facility of the amount due to the department or to be refunded by the department to the facility. An underpayment or refund shall be made within thirty days of the issuance of such written notice.

     SECTION 8. DELAYED REPEAL.--Sections 1 through 7 of this act are repealed effective January 1, 2021.

     SECTION 9. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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