Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:—

“Actual costs”, all direct and indirect costs incurred by a hospital or a community health center in providing medically necessary care and treatment to its patients, determined in accordance with generally accepted accounting principles.

“Acute hospital”, the teaching hospital of the University of Massachusetts Medical School and any hospital licensed under section fifty-one of chapter one hundred and eleven and which contains a majority of medical-surgical, pediatric, obstetric, and maternity beds, as defined by the department of public health.

[Definitions of “Ambulatory surgical center” and “Ambulatory surgical center services” effective as provided by 1997, 47, Sec. 36 as amended by 2003, 9, Sec. 37.]

“Ambulatory surgical center”, any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and meets the requirements of the federal Health Care Financing Administration for participation in the Medicare program.

“Ambulatory surgical center services”, services described for purposes of the Medicare program pursuant to 42 USC § 1395k(a)(2)(F)(I). These services include facility services only and do not include surgical procedures.

“Bad debt”, an account receivable based on services furnished to any patient which (i) is regarded as uncollectable, following reasonable collection efforts consistent with regulations of the division, which regulations shall allow third party payers to negotiate with hospitals to collect the bad debt of its enrollees, (ii) is charged as a credit loss, (iii) is not the obligation of any governmental unit or of the federal government or any agency thereof, and (iv) is not free care.

“Case mix”, the description and categorization of a hospital’s patient population according to criteria approved by the division including, but not limited to, primary and secondary diagnoses, primary and secondary procedures, illness severity, patient age and source of payment.

“Charge”, the uniform price for specific services within a revenue center of a hospital.

“Child”, a person who is under eighteen years of age.

“Commissioner”, the commissioner of the division of health care finance and policy.

“Community health centers”, health centers operating in conformance with the requirements of Section 330 of United States Public Law 95-626 and shall include all community health centers which file cost reports as requested by the division.

“Comprehensive cancer center”, the hospital of any institution so designated by the national cancer institute under the authority of 42 USC sections 408(a) and 408(b) organized solely for the treatment of cancer, and offered exemption from the medicare diagnosis related group payment system under 42 C.F.R. 405.475(f).

“Critical access services”, those medically necessary health care services which are generally provided only by acute hospitals, as further defined in regulations promulgated by the division.

“Dependent”, the spouse and children of any employee if such persons would qualify for dependent status under the Internal Revenue Code or for whom a support order could be granted under chapters two hundred and eight, two hundred and nine or two hundred and nine C.

“Disproportionate share hospital”, any acute hospital that exhibits a payer mix where a minimum of sixty-three per cent of the acute hospital’s gross patient service revenue is attributable to Title XVIII and Title XIX of the federal Social Security Act other government payors and free care.

“Division”, the division of health care finance and policy in the executive office of health and human services.

“DRG”, a patient classification scheme which provides a means of relating the type of patients a hospital treats, such as its case mix, to the cost incurred by the hospital.

“Eligible person”, a person who qualifies for financial assistance from a governmental unit in meeting all or part of the cost of general health supplies, care or rehabilitative services and accommodations.

“Emergency bad debt”, bad debt related to emergency services provided by an acute hospital to an uninsured individual.

“Emergency medical condition”, a medical condition, whether physical or mental, manifesting itself by symptoms of sufficient severity, including severe pain, that the absence of prompt medical attention could reasonably be expected by a prudent layperson who possesses an average knowledge of health and medicine, to result in placing the health of the person or another person in serious jeopardy, serious impairment to body function, or serious dysfunction of any body organ or part, or, with respect to a pregnant woman, as further defined in section 1867(e)(1)(B) of the Social Security Act, 42 U.S.C. section 1395dd(e)(1)(B).

“Emergency services”, medically necessary health care services provided to an individual with an emergency medical condition.

“Employee”, a person who performs services primarily in the commonwealth for remuneration for a commonwealth employer. A person who is self-employed shall not be deemed to be an employee.

“Employer”, an employer as defined in section one of chapter one hundred and fifty-one A.

“Enrollee”, a person who becomes a member of an insurance program of the division either individually or as a member of a family.

“Executive office”, executive office of health and human services.

“Financial requirements”, a hospital’s requirement for revenue which shall include, but not be limited to, reasonable operating, capital and working capital costs, the reasonable costs of depreciation of plant and equipment and the reasonable costs associated with changes in medical practice and technology.

“Fiscal year”, the twelve month period during which a hospital keeps its accounts and which ends in the calendar year by which it is identified.

“Free care”, the following medically necessary services provided to individuals determined to be financially unable to pay for their care, in whole or in part, pursuant to applicable regulations of the division: (1) emergency, urgent, and critical access services provided by acute hospitals; (2) services provided by community health centers; and (3) patients in situations of medical hardship in which major expenditures for health care have depleted or can reasonably be expected to deplete the financial resources of the individual to the extent that medical services cannot be paid, as determined by regulations of the division.

“General health supplies, care or rehabilitative services and accommodations”, all supplies, care and services of medical, optometric, dental, surgical, podiatric, psychiatric, therapeutic, diagnostic, rehabilitative, supportive or geriatric nature, including inpatient and outpatient hospital care and services, and accommodations in hospitals, sanatoria, infirmaries, convalescent and nursing homes, retirement homes, facilities established, licensed or approved pursuant to the provisions of chapter one hundred and eleven B and providing services of a medical or health-related nature, and similar institutions including those providing treatment, training, instruction and care of children and adults; provided, however, that rehabilitative service shall include only rehabilitative services of a medical or health-related nature which are eligible for reimbursement under the provisions of Title XIX of the Social Security Act.

“Governmental unit”, the commonwealth, any department, agency board or commission of the commonwealth, and any political subdivision of the commonwealth.

“Gross inpatient service revenue”, the total dollar amount of a hospital’s charges for inpatient services rendered in a fiscal year.

“Gross patient service revenue”, the total dollar amount of a hospital’s charges for services rendered in a fiscal year.

“Health care services”, supplies, care and services of medical, surgical, optometric, dental, podiatric, chiropractic, psychiatric, therapeutic, diagnostic, preventative, rehabilitative, supportive or geriatric nature including, but not limited to, inpatient and outpatient acute hospital care and services; services provided by a community health center or by a sanatorium, as included in the definition of “hospital” in Title XVIII of the federal Social Security Act, and treatment and care compatible with such services or by a health maintenance organization.

“Health insurance company”, a company as defined in section one of chapter one hundred and seventy-five which engages in the business of health insurance.

“Health insurance plan”, the medicare program or an individual or group contract or other plan providing coverage of health care services and which is issued by a health insurance company, a hospital service corporation, a medical service corporation or a health maintenance organization.

“Health maintenance organization”, a company which provides or arranges for the provision of health care services to enrolled members in exchange primarily for a prepaid per capita or aggregate fixed sum as further defined in section one of chapter one hundred and seventy-six G.

“Hospital”, any hospital licensed under section fifty-one of chapter one hundred and eleven, the teaching hospital of the University of Massachusetts Medical School and any psychiatric facility licensed under section nineteen of chapter nineteen.

“Hospital agreement”, an agreement between a nonprofit hospital service corporation and the hospital signatory thereto approved by the division under section five of chapter one hundred and seventy-six A.

“Hospital service corporation”, a corporation established for the purpose of operating a nonprofit hospital service plan as provided in chapter one hundred and seventy-six A.

“Managed health care plan”, a health insurance plan which provides or arranges for, supervises and coordinates health care services to enrolled participants, including plans administered by health maintenance organizations and preferred provider organizations.

“Medicaid program”, the medical assistance program administered by the division of medical assistance pursuant to chapter one hundred and eighteen E and in accordance with Title XIX of the Federal Social Security Act or any successor statute.

“Medical assistance program”, the medicaid program, the Veterans Administration health and hospital programs and any other medical assistance program operated by a governmental unit for persons categorically eligible for such program.

“Medically necessary services”, medically necessary inpatient and outpatient services as mandated under Title XIX of the Federal Social Security Act. Medically necessary services shall not include: (1) non-medical services, such as social, educational and vocational services; (2) cosmetic surgery; (3) canceled or missed appointments; (4) telephone conversations and consultations; (5) court testimony; (6) research or the provision of experimental or unproven procedures including, but not limited to, treatment related to sex-reassignment surgery, and pre-surgery hormone therapy; and (7) the provision of whole blood; and provided, however, that administrative and processing costs associated with the provision of blood and its derivatives shall be payable.

“Medical service corporation”, a corporation established for the purpose of operating a nonprofit medical service plan as provided in chapter one hundred and seventy-six B.

“Medicare program”, the medical insurance program established by Title XVIII of the Social Security Act.

“Non-acute hospital”, any hospital which is not an acute hospital.

[Definition of “Non-providing employer” inserted following definition of “Non-acute hospital” by 2006, 58, Sec. 32 and as amended by 2006, 324, Sec. 22 effective July 1, 2007. See, 2006, 58, Sec. 145 as amended by 2006, 324, Sec. 68 and 2006, 450, Sec. 7. See also 2006, 324, Sec. 78 as amended by 2006, 450, Sec. 9.]

“Non-providing employer”, an employer of a state-funded employee, as defined in this section; provided, however, that the term “non- providing employer” shall not include:—

(i) an employer who complies with chapter 151F for such employee;

(ii) an employer that is signatory to or obligated under a negotiated, bona fide collective bargaining agreement between such employer and bona fide employee representative which agreement governs the employment conditions of such person receiving free care;

(iii) an employer who participates in the Insurance Partnership Program; or

(iv) an employer that employs not more than 10. For the purposes of this definition, an employer shall not be considered to pay for or arrange for the purchase of health care services provided by acute hospitals and ambulatory surgical centers by making or arranging for any payments to the uncompensated care pool.

“Patient”, any natural person receiving health care services from a hospital.

[Definition of “Pool” effective as provided by 1997, 47, Sec. 36 as amended by 2003, 9, Sec. 37 until October 1, 2007. Deleted by 2006, 58, Sec. 31. See 2006, 58, Sec. 146.]

“Pool”, the uncompensated care pool established pursuant to section 18.

[Definition of “Payments subject to surcharge” effective as provided by 1997, 47, Sec. 36 as amended by 2003, 9, Sec. 37 until July 1, 2007. Deleted by 2006, 58, Sec. 33. See 2006, 58, Sec. 142 as amended by 2006, 324, Sec. 66; 2006, 450, Sec. 6; 2006, 58, Sec. 146 as amended by 2006, 324, Sec. 69 and 2006, 58, Sec. 145 as amended by 2006, 450, Sec. 7.]

“Payments subject to surcharge”, all amounts paid, directly or indirectly, by surcharge payors to acute hospitals for health services and ambulatory surgical centers for ambulatory surgical center services on or after the effective date of this section; provided, however, that “payments subject to surcharge” shall not include (i) payments, settlements, and judgments arising out of third party liability claims for bodily injury which are paid under the terms of property or casualty insurance policies, (ii) payments made on behalf of Medicaid recipients, Medicare beneficiaries, or persons enrolled in policies issued pursuant to chapter 176K or similar policies issued on a group basis; and provided further, that “payments subject to surcharge” may exclude amounts established in regulations promulgated by the division for which the costs and efficiency of billing a surcharge payor or enforcing collection of the surcharge from a surcharge payor would not be cost effective.

[Definition of “Payments from non-providing employers” inserted by 2006, 58, Sec. 33 and as amended by 2006, 324, Sec. 23 effective July 1, 2007. See 2006, 58, Sec. 142 as amended by 2006, 324, Sec. 66; 2006, 450, Sec. 6; 2006, 58, Sec. 146 as amended by 2006, 324, Sec. 69 and 2006, 58, Sec. 145 as amended by 2006, 450, Sec. 7. See also 2006, 324, Secs. 78 and 79 as amended by 2006, 450, Sec. 9.]

“Payments from non-providing employers”, all amounts paid to the Uncompensated Care Trust Fund or the General Fund or any successor fund by non-providing employers.

“Pediatric hospital”, an acute care hospital which limits services primarily to children and which qualifies as exempt from the Medicare Prospective Payment system regulations.

“Pediatric specialty unit”, a pediatric unit of an acute care hospital in which the ratio of licensed pediatric beds to total licensed hospital beds as of July 1, 1994, exceeded 0.20. In calculating that ratio, licensed pediatric beds shall include the total of all pediatric service beds, and the total of all licensed hospital beds shall include the total of all licensed acute care hospital beds, consistent with Medicare’s acute care hospital reimbursement methodology as put forth in the Provider Reimbursement Manual Part 1, Section 2405.3G.

[Definition of “Private sector charges” effective until October 1, 2007. Deleted by 2006, 58, Sec. 34. See 2006, 58, Sec. 146.]

“Private sector charges”, gross patient service revenue attributable to all patients less gross patient service revenue attributable to Titles XVIII and XIX, other publicly aided patients, free care and bad debt.

“Provider”, any person, corporation partnership, governmental unit, state institution or any other entity qualified under the laws of the commonwealth to perform or provide health care services.

“Publicly aided patient”, a person who receives hospital care and services for which a governmental unit is liable, in whole or in part, under a statutory program of public assistance.

“Public payer-dependent non-acute hospital”, any non-acute hospital that (1) was certified by the Secretary of the United States Department of Health and Human Services as participating in the federal medicare program pursuant to clause (iv) of 42 USC section 1395ww (d)(1)(B) on January first, nineteen hundred and ninety-six; (2) is not owned by the commonwealth; and (3) exhibits a payor mix in which a minimum of fifteen per cent of such hospital’s gross patient service revenue, as reported on the RSC-403 for hospital fiscal year nineteen hundred and ninety-four, was attributable to Title XIX of the federal Social Security Act. Such term does not include a hospital that was reimbursed for services provided to individuals entitled to medical assistance under chapter one hundred and eighteen E for fiscal year nineteen hundred and ninety-six pursuant to a contract between the hospital and the division of medical assistance.

“Purchaser”, a natural person responsible for payment for health care services rendered by a hospital.

“Revenue center”, a functioning unit of a hospital which provides distinctive services to a patient for a charge.

“Resident”, a person living in the commonwealth, as defined by the division by regulation; provided, however, that such regulation shall not define a resident as a person who moved into the commonwealth for the sole purpose of securing health insurance under this chapter. Confinement of a person in a nursing home, hospital or other medical institution shall not in and of itself, suffice to qualify such person as a resident.

“Secretary”, the secretary of health and human services.

“Self-employed”, a person who, at common law, is not considered to be an employee and whose primary source of income is derived from the pursuit of a bona fide business.

“Self-insurance health plan”, a plan which provides health benefits to the employees of a business, which is not a health insurance plan, and in which the business is liable for the actual costs of the health care services provided by the plan and administrative costs.

“Small business”, a business in which the total number of full-time employees, when averaged on an annual basis, does not exceed fifty, including only of the self-employed.

“Sole community provider”, any acute hospital which qualifies as a sole community provider under medicare regulations or under regulations promulgated by the division, which regulations shall consider factors including, but not limited to, such as isolated location, weather conditions, travel conditions, percentage of Medicare, Medicaid and free care provided and the absence of other reasonably accessible hospitals in the area. Such hospitals shall include those which are located more than twenty-five miles from other such hospitals in the commonwealth and which provide services for at least sixty percent of their primary service area.

“Specialty hospital”, an acute hospital which qualifies for an exemption from the medicare prospective payment system regulations or any acute hospital which limits its admissions to patients under active diagnosis and treatment of eyes, ears, nose and throat or to children or patients under obstetrical care.

[Definition of “State-funded employee” inserted following definition of “Specialty hospital” by 2006, 58, Sec. 35 effective July 1, 2007. See 2006, 58, Sec. 142 as amended by 2006, 324, Sec. 66; 2006, 450, Sec. 6; 2006, 58, Sec. 146 as amended by 2006, 324, Sec. 69 and 2006, 58, Sec. 145 as amended by 2006, 450, Sec. 7.]

“State-funded employee”, any employed person, or dependent of such person, who receives, on more than 3 occasions during any hospital fiscal year, health services paid for as free care; or any employed persons, or dependents of such persons, of a company that has 5 or more occurrences of health services paid for as free care by all employees in aggregate during any fiscal year. An occurrence shall include all healthcare related services incurred during a single visit to a health care professional.

“State institution”, any hospital, sanatorium, infirmary, clinic and other such facility owned, operated or administered by the commonwealth, which furnishes general health supplies, care or rehabilitative services and accommodations.

[Definition of “Surcharge payor” effective as provided by 1997, 47, Sec. 36 as amended by 2003, 9, Sec. 37 until October 1, 2007. Deleted by 2006, 58, Sec. 36. See 2006, 58, Sec. 146.]

“Surcharge payor,” an individual or entity that pays for or arranges for the purchase of health care services provided by acute hospitals and ambulatory surgical center services provided by ambulatory surgical centers; provided, however, that the terms “surcharge payor” shall not include Title XVIII and Title XIX programs and their beneficiaries or recipients, other governmental programs of public assistance and their beneficiaries or recipients, and the workers compensation program established pursuant to chapter 152.

“Third party payer”, an entity including, but not limited to, Title XVIII and Title XIX programs, other governmental payers, insurance companies, health maintenance organizations and nonprofit hospital service corporations. Third party payer shall not include a purchaser responsible for payment for health care services rendered by a hospital, either to the purchaser or to the hospital.

“Title XIX,” Title XIX of the Social Security Act, 42 USC 1396 et seq., or any successor statute enacted into federal law for the same purposes as Title XIX.

“Uninsured patient”, a patient who is not covered by a health insurance plan, a self-insurance health plan, or a medical assistance program.