Reprinted

April 21, 2011





ENGROSSED

SENATE BILL No. 460

_____


DIGEST OF SB 460 (Updated April 20, 2011 3:41 pm - DI 92)



Citations Affected: IC 12-7; IC 12-15; IC 16-18; IC 16-28.

Synopsis: Long term care issues. Requires and sets forth the procedure for an institutional provider and a noninstitutional provider to reimburse the office of the secretary of family and social services for, or appeal a determination of, certain Medicaid overpayments made to the provider. Provides that a provider has to repay an overpayment within 300 days instead of 60 days. Extends the collection of a nursing facility quality assessment fee until June 30, 2014. Changes the amount collected and the distribution of the fee revenue.

Effective: July 1, 2011.





Miller , Lawson C , Breaux
(HOUSE SPONSORS _ BROWN T, ESPICH, BROWN C, WELCH)




    January 12, 2011, read first time and referred to Committee on Health and Provider Services.
    January 27, 2011, amended, reported favorably _ Do Pass; reassigned to Committee on Appropriations.
    February 17, 2011, amended, reported favorably _ Do Pass.
    February 21, 2011, read second time, amended, ordered engrossed.
    February 22, 2011, engrossed. Read third time, passed. Yeas 34, nays 15.

HOUSE ACTION

    March 28, 2011, read first time and referred to Committee on Ways and Means.
    April 13, 2011, amended, reported _ Do Pass.
    April 20, 2011, read second time, amended, ordered engrossed.





Reprinted

April 21, 2011

First Regular Session 117th General Assembly (2011)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2010 Regular Session of the General Assembly.


ENGROSSED

SENATE BILL No. 460



    A BILL FOR AN ACT to amend the Indiana Code concerning health.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 12-7-2-119.5; (11)ES0460.2.1. -->     SECTION 1. IC 12-7-2-119.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 119.5. "Institutional provider", for purposes of IC 12-15-13-4, has the meaning set forth in IC 12-15-13-4(a).
SOURCE: IC 12-7-2-132.2; (11)ES0460.2.2. -->     SECTION 2. IC 12-7-2-132.2 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 132.2. "Noninstitutional provider", for purposes of IC 12-15-13-3, has the meaning set forth in IC 12-15-13-3.5(a).
SOURCE: IC 12-15-13-3.5; (11)ES0460.2.3. -->     SECTION 3. IC 12-15-13-3.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3.5. (a) As used in this section, "noninstitutional provider" means any Medicaid provider other than the following:
        (1) A health facility licensed under IC 16-28.
        (2) An ICF/MR (as defined in IC 16-29-4-2).
    (b) If the office of the secretary or the office of the secretary's designee believes that an overpayment to a noninstitutional provider has occurred, the office of the secretary or the office of the secretary's designee may submit to the noninstitutional provider a preliminary review of the draft audit findings.
    (c) A noninstitutional provider that receives a preliminary review of draft audit findings under subsection (b) may request administrative reconsideration of the preliminary review not later than forty-five (45) days after the issuance of the preliminary review. The noninstitutional provider may submit comments along with the request for administrative reconsideration. The noninstitutional provider must request administrative reconsideration before filing an appeal.
    (d) Following administrative reconsideration of the preliminary review of draft audit findings and any comments submitted along with the noninstitutional provider's request for administrative consideration and if the office of the secretary or the office of the secretary's designee believes that an overpayment has occurred, the office of the secretary or the office of the secretary's designee shall notify the noninstitutional provider in writing that the office of the secretary or the office of the secretary's designee:
        (1) believes that the overpayment has occurred; and
        (2) is issuing a final calculation of the overpayment.
    (e) A noninstitutional provider who receives a notice under subsection (d) may elect to do one (1) of the following:
        (1) Repay the amount of the final calculation not later than three hundred (300) days after the provider received the notice under subsection (d), including interest:
            (A) due from the noninstitutional provider; and
            (B) accruing from the date of overpayment.
        (2) Request a hearing by filing an administrative appeal not later than sixty (60) days after receiving the notice under subsection (d) and repay the amount of the final calculation of the overpayment under subsection (d) not later than three hundred (300) days after receiving the notice under subsection (d).
    (f) If:
        (1) a noninstitutional provider elects to proceed under subsection (e)(2); and
        (2) the office of the secretary or the office of the secretary's designee determines after the hearing and any subsequent appeal that the noninstitutional provider does not owe the

money that the office of the secretary or the office of the secretary's designee believed the noninstitutional provider owed;
the office of the secretary or the office of the secretary's designee shall return the amount of the alleged overpayment, and any interest paid by the noninstitutional provider, and pay the noninstitutional provider interest on the money from the date of the noninstitutional provider's repayment.
    (g) Interest that is due under this section shall be paid at a rate that is determined by the commissioner of the department of state revenue under IC 6-8.1-10-1(c) as follows:
        (1) Interest due from a noninstitutional provider to the state shall be paid at the rate set by the commissioner for interest payments from the department of state revenue to a taxpayer.
        (2) Interest due from the state to a noninstitutional provider shall be paid at the rate set by the commissioner for interest payments from the department of state revenue to a taxpayer.
    (h) Interest on an overpayment to a noninstitutional provider is not due from the noninstitutional provider if the overpayment is the result of an error of:
        (1) the office; or
        (2) a contractor of the office;
as determined by the office of the secretary or the office of the secretary's designee.
    (i) If interest on an overpayment to a noninstitutional provider is due from the noninstitutional provider, the secretary or the secretary's designee may, in the course of negotiations with the noninstitutional provider regarding an appeal filed under subsection (e), reduce the amount of interest due from the noninstitutional provider.
    (j) Proceedings under this section are subject to IC 4-21.5.

SOURCE: IC 12-15-13-4; (11)ES0460.2.4. -->     SECTION 4. IC 12-15-13-4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 4. (a) As used in this section, "institutional provider" means the following:
        (1) A health facility that is licensed under IC 16-28.
        (2) An ICF/MR (as defined in IC 16-29-4-2).
    (b) If the office of the secretary or the office of the secretary's designee believes that an overpayment to an institutional provider has occurred, the office of the secretary or the office of the secretary's designee may do the following:
        (1) Submit to the institutional provider a draft of the audit

findings and accept comments from the institutional provider for consideration by the office of the secretary or the office of the secretary's designee before the audit findings are finalized.
        (2) Finalize the audit findings and issue the preliminary recalculated Medicaid rate.
    (c) An institutional provider that receives a preliminary recalculated Medicaid rate under subsection (b)(2) may request administrative reconsideration of the preliminary recalculated Medicaid rate not later than forty-five (45) days after the issuance of the preliminary recalculated rate. The institutional provider must request administrative reconsideration before filing an appeal.
    (d) Following reconsideration of an institutional provider's comments, and if the office of the secretary or the office of the secretary's designee believes that an overpayment has occurred, the office of the secretary or the office of the secretary's designee shall notify the institutional provider in writing that the office of the secretary or the office of the secretary's designee:
        (1) believes that the overpayment has occurred; and
        (2) is issuing a final recalculated Medicaid rate.
    (e) Upon the next payment cycle, the office of the secretary or the office of the secretary's designee shall retroactively implement the final recalculated Medicaid rate.
    (f) If the institutional provider is dissatisfied with the reconsideration response issued by the office of the secretary or the office of the secretary's designee, the institutional provider may request a hearing by filing an appeal with the office of the secretary not later than sixty (60) days after the issuance of the reconsideration response.
    (g) If an institutional provider requests a hearing under subsection (f) and the office or the office's designee determines after the hearing and any subsequent appeal that the institutional provider does not owe the money that the office of the secretary or the office of the secretary's designee believed the institutional provider owed, the office of the secretary or the office of the secretary's designee shall repay the following to the institutional provider not later than thirty (30) days after the completion of the hearing:
        (1) The amount of the alleged overpayment.
        (2) Any interest paid by the institutional provider.
        (3) Interest on the money described in subdivisions (1) and (2) from the date of the institutional provider's repayment.


    (h) Interest due under this section by either the institutional provider or the office of the secretary shall be paid at a rate that is determined by the commissioner of the department of state revenue under IC 6-8.1-10-1(c) at the rate set by the commissioner for interest payments from the department of state revenue to a taxpayer.
    (i) Interest on an overpayment to an institutional provider is not due from the institutional provider if the office of the secretary or the office of the secretary's designee determines that the overpayment is the result of an error by the following:
        (1) The office of the secretary.
        (2) A contractor of the office of the secretary.
    (j) If interest on an overpayment to an institutional provider is due from the institutional provider, the office of the secretary or the office of the secretary's designee may, in the course of negotiations with the institutional provider concerning an appeal filed under subsection (c), reduce the amount of interest due from the institutional provider.

SOURCE: IC 12-15-23-2; (11)ES0460.2.5. -->     SECTION 5. IC 12-15-23-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. (a) If the office of the secretary of family and social services or administrator of the office determines that a provider has received payments the provider is not entitled to, the administrator may enter into an agreement with the provider stating that the amount of the overpayment shall be deducted from subsequent payments to the provider.
     (b) If the office of the secretary of family and social services or the administrator of the office and the provider cannot come to an agreement within sixty (60) days after it is determined that a provider has received payments that the provider is not entitled to, the administrator may recoup the amount of overpayment to the provider claimed by the state from subsequent payments to the provider.
SOURCE: IC 16-18-2-69.3; (11)ES0460.2.6. -->     SECTION 6. IC 16-18-2-69.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 69.3. "Continuing care retirement community", for purposes of IC 16-28-15, has the meaning set forth in IC 16-28-15-2.
SOURCE: IC 16-18-2-167; (11)ES0460.2.7. -->     SECTION 7. IC 16-18-2-167, AS AMENDED BY P.L.99-2007, SECTION 153, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 167. (a) "Health facility":
         (1) except for purposes of IC 16-28-15, means a building, a structure, an institution, or other place for the reception,

accommodation, board, care, or treatment extending beyond a continuous twenty-four (24) hour period in a week of more than four (4) individuals who need or desire such services because of physical or mental illness, infirmity, or impairment; and
        (2) for purposes of IC 16-28-15, has the meaning set forth in IC 16-28-15-3.

    (b) The term does not include the premises used for the reception, accommodation, board, care, or treatment in a household or family, for compensation, of a person related by blood to the head of the household or family (or to the spouse of the head of the household or family) within the degree of consanguinity of first cousins.
    (c) The term does not include any of the following:
        (1) Hotels, motels, or mobile homes when used as such.
        (2) Hospitals or mental hospitals, except for that part of a hospital that provides long term care services and functions as a health facility, in which case that part of the hospital is licensed under IC 16-21-2, but in all other respects is subject to IC 16-28.
        (3) Hospices that furnish inpatient care and are licensed under IC 16-25-3.
        (4) Institutions operated by the federal government.
        (5) Foster family homes or day care centers.
        (6) Schools for individuals who are deaf or blind.
        (7) Day schools for individuals with mental retardation.
        (8) Day care centers.
        (9) Children's homes and child placement agencies.
        (10) Offices of practitioners of the healing arts.
        (11) Any institution in which health care services and private duty nursing services are provided that is listed and certified by the Commission for Accreditation of Christian Science Nursing Organizations/Facilities, Inc.
        (12) Industrial clinics providing only emergency medical services or first aid for employees.
        (13) A residential facility (as defined in IC 12-7-2-165).
        (14) Maternity homes.
        (15) Offices of Christian Science practitioners.

SOURCE: IC 16-18-2-253.7; (11)ES0460.2.8. -->     SECTION 8. IC 16-18-2-253.7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 253.7. "Nursing facility", for purposes of IC 16-28-15, has the meaning set forth in IC 16-28-15-4.
SOURCE: IC 16-18-2-167; (11)ES0460.2.9. -->     SECTION 9. IC 16-18-2-167, AS AMENDED BY P.L.99-2007, SECTION 153, IS AMENDED TO READ AS FOLLOWS

[EFFECTIVE JULY 1, 2011]: Sec. 167. (a) Except for purposes of IC 16-28-15, "health facility" means a building, a structure, an institution, or other place for the reception, accommodation, board, care, or treatment extending beyond a continuous twenty-four (24) hour period in a week of more than four (4) individuals who need or desire such services because of physical or mental illness, infirmity, or impairment.
    (b) The term does not include the premises used for the reception, accommodation, board, care, or treatment in a household or family, for compensation, of a person related by blood to the head of the household or family (or to the spouse of the head of the household or family) within the degree of consanguinity of first cousins.
    (c) The term does not include any of the following:
        (1) Hotels, motels, or mobile homes when used as such.
        (2) Hospitals or mental hospitals, except for that part of a hospital that provides long term care services and functions as a health facility, in which case that part of the hospital is licensed under IC 16-21-2, but in all other respects is subject to IC 16-28.
        (3) Hospices that furnish inpatient care and are licensed under IC 16-25-3.
        (4) Institutions operated by the federal government.
        (5) Foster family homes or day care centers.
        (6) Schools for individuals who are deaf or blind.
        (7) Day schools for individuals with mental retardation.
        (8) Day care centers.
        (9) Children's homes and child placement agencies.
        (10) Offices of practitioners of the healing arts.
        (11) Any institution in which health care services and private duty nursing services are provided that is listed and certified by the Commission for Accreditation of Christian Science Nursing Organizations/Facilities, Inc.
        (12) Industrial clinics providing only emergency medical services or first aid for employees.
        (13) A residential facility (as defined in IC 12-7-2-165).
        (14) Maternity homes.
        (15) Offices of Christian Science practitioners.
     (d) "Health facility", for purposes of IC 16-28-15, has the meaning set forth in IC 16-28-15-3.

SOURCE: IC 16-18-2-253.7; (11)ES0460.2.10. -->     SECTION 10. IC 16-18-2-253.7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 253.7. "Nursing facility", for purposes of IC 16-28-15, has the meaning set forth in

IC 16-28-15-4.

SOURCE: IC 16-18-2-254.5; (11)ES0460.2.11. -->     SECTION 11. IC 16-18-2-254.5, AS AMENDED BY P.L.38-2010, SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 254.5. (a) "Office", for purposes of IC 16-19-13, refers to the office of women's health established by IC 16-19-13-2.
    (b) "Office", for purposes of IC 16-19-14, refers to the office of minority health established by IC 16-19-14-4.
     (c) "Office", for purposes of IC 16-28-15, has the meaning set forth in IC 16-28-15-5.
SOURCE: IC 16-28-15; (11)ES0460.2.12. -->     SECTION 12. IC 16-28-15 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]:
     Chapter 15. Health Facility Quality Assessment Fee
    Sec. 1. The imposition of a quality assessment fee under this chapter occurs after July 31, 2011.
    Sec. 2. As used in this chapter, "continuing care retirement community" means a health care facility that:
        (1) provides independent living services and health facility services in a campus setting with common areas;
        (2) holds continuing care agreements with at least twenty-five percent (25%) of its residents (as defined in IC 23-2-4-1);
        (3) uses the money from the agreements described in subdivision (2) to provide services to the resident before the resident may be eligible for Medicaid under IC 12-15; and
        (4) meets the requirements of IC 23-2-4.
    Sec. 3. As used in this chapter, "health facility" refers to a health facility that is licensed under this article as a comprehensive care facility.
    Sec. 4. As used in this chapter, "nursing facility" means a health facility that is certified for participation in the federal Medicaid program under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.).
    Sec. 5. As used in this chapter, "office" refers to the office of Medicaid policy and planning established by IC 12-8-6-1.
    Sec. 6. (a) Effective August 1, 2011, the office shall collect a quality assessment fee from each health facility.
    (b) The quality assessment fee must apply to all non-Medicare patient days of the health facility. The office shall determine the quality assessment rate per non-Medicare patient day in a manner that collects the maximum amount permitted by federal law, based on the latest nursing facility financial reports and nursing facility quality assessment data collection forms as of July 28, 2010.
    (c) The office shall offset the collection of the assessment fee for a health facility:
        (1) against a Medicaid payment to the health facility;
        (2) against a Medicaid payment to another health facility that is related to the health facility through common ownership or control; or
        (3) in another manner determined by the office.
    Sec. 7. The office shall implement the waiver approved by the United States Centers for Medicare and Medicaid Services under 42 CFR 433.68(e)(2), that provides for the following:
        (1) Non-uniform quality assessment fee rates.
        (2) An exemption from collection of a quality assessment fee from the following:
            (A) A continuing care retirement community as follows:
                (i) A continuing care retirement community that was registered with the securities commissioner as a continuing care retirement community on January 1, 2007, is not required to meet the definition of a continuing care retirement community in section 2 of this chapter.
                (ii) A continuing care retirement community that, for the period January 1, 2007, through June 30, 2009, operated independent living units, at least twenty-five percent (25%) of which are provided under contracts that require the payment of a minimum entrance fee of at least twenty-five thousand dollars ($25,000).
                (iii) An organization registered under IC 23-2-4 before July 1, 2009, that provides housing in an independent living unit for a religious order.
                (iv) A continuing care retirement community that meets the definition set forth in section 2 of this chapter.
            (B) A hospital based health facility.
            (C) The Indiana Veterans' Home.
Any revision to the state plan amendment or waiver request under this section is subject to and must comply with the provisions of this chapter.
    Sec. 8. (a) The money collected from the quality assessment fee during the first year following the enactment may be used only as follows:
        (1) Sixty-eight percent (68%) to pay the state's share of costs for Medicaid nursing facility services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.)
.
         (2) One and four-tenths percent (1.4%) to pay the state's share of costs for Medicaid aged and disabled waiver services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.).
        (3) Seventeen and six-tenths percent (17.6%) to pay the state's share of costs for other Medicaid services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.)
.
         (4) Four percent (4%) to be deposited in the office's Medicaid administration fund to pay the state's share of costs associated with the federal Patient Protection and Affordable Health Care Act.
        (5) Nine percent (9%) to pay prior year state nursing facility expenditures.

     (b) The money collected from the quality assessment fee during the second year following enactment may be used only as follows:
        (1) Sixty-eight percent (68%) to pay the state's share of costs for Medicaid nursing facility services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.)
.
         (2) One and four-tenths percent (1.4%) to pay the state's share of costs for Medicaid aged and disabled waiver services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.).
        (3) Twenty percent (20%) to pay the state's share of costs for other Medicaid services provided
under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.).
         (4) Six and four-tenths percent (6.4%) to be deposited in the office's Medicaid administration fund to pay the state's share of costs associated with the federal Patient Protection and Affordable Health Care Act.
        (5) Four and two-tenths percent (4.2%) to pay prior year state nursing facility expenditures.

     (c) The money collected from the quality assessment fee after the second year following enactment may be used only as follows:
        (1) Seventy-two and two-tenths percent (72.2%) to pay the state's share of the costs for Medicaid nursing facility services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.)
.
        (2) One and four-tenths percent (1.4%) to pay the state's share of costs for Medicaid aged and disabled waiver services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.)
.
        (3) Twenty percent (20%) to pay the state's share of costs for other Medicaid services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.)
.
        (4) Six and four-tenths percent (6.4%) to be deposited in the office's Medicaid administration fund to pay the state's share of costs associated with the federal Patient Protection and Affordable Health Care Act.
    (d) Any increase in reimbursement for Medicaid nursing facility services resulting from maximizing the quality assessment under section 6(b) of this chapter shall be directed exclusively to initiatives determined by the office to promote and enhance improvements in quality of care to nursing facility residents.
    (e) The office may establish a method to allow a health facility to enter into an agreement to pay the quality assessment fee collected under this chapter under an installment plan.
    Sec. 9. If federal financial participation becomes unavailable to match money collected from the quality assessment fees for the purpose of enhancing reimbursement to nursing facilities for Medicaid services provided under Title XIX of the federal Social Security Act (42 U.S.C. 1396 et seq.), the office shall cease collection of the quality assessment fee under this chapter.

     Sec. 10. The office shall adopt rules under IC 4-22-2 necessary to implement this chapter.
     Sec. 11. (a) If a health facility fails to pay the quality assessment under this chapter not later than ten (10) days after the date the payment is due, the health facility shall pay interest on the quality assessment at the same rate as determined under IC 12-15-21-3(6)(A).
     (b) The office shall report to the state department each nursing facility and each health facility that either fails to submit patient day information requested by the office to calculate the quality assessment fee or fails to pay the quality assessment fee under this chapter not later than one hundred twenty (120) days after the patient day information or payment of the quality assessment fee is due.
     Sec. 12. (a) The state department shall do the following:
        (1) Notify each nursing facility and each health facility reported under section 11 of this chapter that the nursing facility's license or health facility's license under IC 16-28 will be revoked if the patient day information is not submitted, or the quality assessment fee is not paid.
        (2) Revoke the nursing facility's license or health facility's

license under IC 16-28 if the nursing facility or the health facility fails to submit the patient day information or fails to pay the quality assessment fee.
     (b) An action taken under subsection (a)(2) is governed by:
        (1) IC 4-21.5-3-8; or
        (2) IC 4-21.5-4.

     Sec. 13. The select joint commission on Medicaid oversight established by IC 2-5-26-3 shall review the implementation of this chapter.
     Sec. 14. This chapter expires June 30, 2014.

SOURCE: IC 12-15-13-3; (11)ES0460.2.13. -->     SECTION 13. IC 12-15-13-3 IS REPEALED [EFFECTIVE JULY 1, 2011].