[Text of section effective as provided by 1997, 47, Sec. 36 as amended by 2003, 9, Sec. 37 until October 1, 2007. Repealed by 2006, 58, Sec. 43. See 2006, 58, Sec. 146.]
Section 18. (a) There is hereby established an Uncompensated Care Trust Fund, which shall be administered by the division. Expenditures from said Trust Fund shall not be subject to appropriation unless otherwise required by law. The purpose of said fund is to reimburse hospitals and community health centers for care provided to low-income, uninsured and underinsured residents of the commonwealth. The division shall administer said fund using such methods, policies, procedures, standards and criteria that it deems necessary for the proper and efficient operation of said fund and the programs funded thereby in a manner consistent with simplicity of administration, the provisions of this chapter and the best interests of low income uninsured and underinsured persons.
(b) The Uncompensated Care Trust Fund shall consist of all amounts paid by acute hospitals and surcharge payors for the purposes of the uncompensated care pool pursuant to this section and section 18A; all appropriations for the purpose of uncompensated acute hospital care or uncompensated community health center care; any sums paid by acute hospitals pursuant to section 56 of chapter 495 of the acts of 1991; all property and securities acquired by and through the use of monies belonging to said fund and all interest thereon; less payments therefrom for the purposes of the uncompensated care pool and amounts transferred to the separate MassHealth account established by subsection (c). All interest earned on the amounts in said fund shall be deposited or retained in said fund. The commissioner shall from time to time requisition from said fund such amounts as the commissioner deems necessary to meet the current obligations of the division for the purposes of said fund and estimated obligations for a reasonable future period.
(c) Within said fund, the division shall establish a separate account for the insurance reimbursement program component of the MassHealth demonstration program established by section 9C of chapter 118E. This separate account shall consist of amounts transferred from the Uncompensated Care Trust Fund, any federal funds transferred from the Children’s and Seniors’ Health Care Assistance Fund established by section 2FF of chapter 29, and any funds as may be appropriated for deposit into this account. The division shall administer this account and disburse funds from this account for the purposes of said insurance reimbursement program component of said MassHealth program. Funds deposited in this account shall be kept separate and shall not be commingled with funds of the uncompensated care pool. The comptroller is hereby authorized and directed to effect the transfers authorized by this subsection pursuant to a spending plan filed by the division of medical assistance with the secretary of administration and finance and the house and senate committees on ways and means.
(d) Within said fund, the division shall administer an uncompensated care pool consisting of revenues produced by acute hospital assessments and the surcharge percentage calculated by the division pursuant to this section and section 18A and all appropriations for the purpose of uncompensated care provided by acute hospitals, or community health centers, including, but not limited to, federal funds made available for uncompensated care payments to certain acute hospitals as may be appropriated from the General Fund or any other fund. For purposes of this subsection, the words “revenues produced by acute hospital assessments” shall equal the value of and have the same meaning as the words “acute hospitals’ liability to the pool” established pursuant to subsection (e) and the words “revenues produced by the surcharge percentage” shall equal the value of and have the same meaning as the words “surcharge payors’ liability to the pool” as established pursuant to section 18A. Amounts placed in the Uncompensated Care Trust Fund, except for amounts transferred into the separate MassHealth account established in subsection (c), shall be expended by the division for the purposes of the uncompensated care pool; provided, however, that the division may expend up to $5,000,000 annually for demonstration projects where the division finds that such projects reduce the liability of said pool to acute hospitals and community health centers by at least the amount expended by said pool on such projects. The division shall administer the uncompensated care pool and require payments to the pool and disburse funds from the pool consistent with the surcharge payors’ and acute hospitals’ liability to the pool and the pool’s liability to an acute hospital or a community health center. The division shall specify by regulation appropriate mechanisms that provide for interim determination and payment of a surcharge payor’s liability to the pool and an acute hospital’s liability to and from the pool during each fiscal year and for final settlement of the pool for each fiscal year. The division may promulgate regulations which authorize the assessment of interest on any unpaid liability at a rate not to exceed an annual percentage rate of 18 per cent and late fees at a rate not to exceed 5 per cent per month. The division may calculate final settlements when it determines that data for a fiscal year are substantially complete and that further refinements would not materially affect the calculation. The division may incorporate final settlement amounts by prospective adjustment of acute hospitals’ and surcharge payors’ liability rather than by retrospective payments or assessments.
(e) An acute hospital’s liability to said pool shall equal the product of (1) the ratio of its private sector charges to all acute hospitals’ private sector charges; and (2) the private sector liability to the uncompensated care pool as determined by law less the surcharge payors’ liability established pursuant to section 18A. Before October 1 of each year, the division shall establish each acute hospital’s liability to the pool using the best data available, as determined by the division. The division shall update each acute hospital’s liability to the pool as updated information becomes available. For any fiscal year, an acute hospital’s final liability to said pool shall be calculated in accordance with subsection (d). The division shall specify by regulation an appropriate mechanism for interim determination and payment of an acute hospital’s liability to and from said pool.
(f) An acute hospital’s liability to said pool shall in the case of a transfer of ownership be assumed by the successor in interest to the acute hospital.
(g) The division shall establish by regulation an appropriate mechanism for enforcing an acute hospital’s liability to the pool in the event that an acute hospital does not make a scheduled payment to said pool. Such enforcement mechanism may include notification to the division of medical assistance requiring an offset of payments on the Title XIX claims of any such acute hospital, any health care provider under common ownership with the acute hospital or any successor in interest to the acute hospital, from the division of medical assistance in the amount of payment owed to said pool including any interest and late fees, and to transfer the withheld funds into said pool. If the division of medical assistance offsets claims payments as ordered by the division, it shall be deemed not to be in breach of contract or any other obligation for payment of noncontracted services, and providers to which payment is offset under order of the division shall serve all Title XIX recipients in accordance with the contract then in effect with the division of medical assistance, or, in the case of a noncontracting or disproportionate share hospital, in accordance with its obligation for providing services to Title XIX recipients pursuant to this chapter. In no event shall the division direct the division of medical assistance to offset claims unless an acute hospital has maintained an outstanding obligation to the uncompensated care pool for a period longer than 45 days and has received proper notice that said division intends to initiate enforcement actions in accordance with the regulations of said division.
(h) Said pool’s liability to an acute hospital shall be calculated periodically by the division based on the best data available. Such data shall include, but not be limited to, allowable free care charges as determined by the division and the cost-to-charge ratio, which shall be calculated by the division for each acute hospital. The final settlement of the pool’s liability to a hospital shall equal the product of allowable actual free care charges, adjusted for any audit findings, multiplied by its final cost-to-charge ratio. In the case of non-disproportionate share hospitals, such calculation shall represent the ratio of the reasonable actual costs of patient care services, as determined by the division, to gross patient service revenue for the most recent year for which audited financial statements for the hospital are available. In the case of disproportionate share hospitals, such calculation shall represent the ratio of the hospital’s reasonable financial requirements, as determined by the division, to gross patient service revenue for the most recent year for which audited financial statements for such hospital are available. The division shall, throughout the year, update each acute hospital’s ratio in the event more current audited financial statement information becomes available. Said division shall further establish, for each non-disproportionate share acute hospital for any given fiscal year, a final ratio using the reasonable costs for patient care services and gross patient service revenues as appearing in the audited financial statements for the fiscal year. For disproportionate share hospitals, said division shall establish a final ratio based upon its reasonable financial requirements, as defined by the division, and actual gross patient service revenues as appearing in the audited financial statements for the fiscal year. The final settlement of the pool’s liability to an acute hospital shall be calculated in accordance with subsection (d).The pool’s liability to a community health center shall be calculated periodically by the division based on the best data available as determined by the division. Such data shall include, but not be limited to, allowable free care charges as determined by the division and the rates established by the division to be paid for free care services. Such rates shall represent the community health center’s reasonable financial requirements, as determined by the division.
(i) The division shall manage said pool in order to encourage maximum efficiency and appropriateness in the utilization of services. The division shall promulgate regulations detailing the definition of free care, including, but not limited to, defining the qualifications of eligible persons and the scope of eligible services, setting standards for reasonable efforts to notify uninsured or underinsured persons of the various insurance options as well as the availability of free care, and setting standards for reasonable efforts to collect costs of emergency care and setting standards to determine medical hardship. Said regulations shall include provision for the review of determinations of eligibility for free care and the establishment of penalties for acute hospitals or community health centers which upon audit show an excessive rate of incorrect eligibility determinations. The division shall adopt regulations prohibiting payments from said pool for non-urgent and non-emergency health care services provided to residents of other states and foreign countries. The division shall implement a utilization review program designed to monitor the appropriateness of services paid for by said pool and to promote the delivery of care in the most appropriate setting; provided, further, that the division may deny payment from the pool for services which it determines are not medically necessary. After consultation with consumer representatives and representatives of acute hospitals and community health centers, the division shall develop programs and guidelines to encourage maximum enrollment of pool beneficiaries into health care plans and programs of health insurance offered by public and private sources, and to promote the delivery of care in the most appropriate setting, through coordination of care and referral of primary care cases to community health centers. Such programs and guidelines shall not deny payments on the ground that services should have been provided in a more appropriate setting if the hospital was required to provide such services pursuant to 42 USC 1395(dd). The division may adopt regulations requiring disproportionate share hospitals to use a portion of payments received from said pool to reimburse physicians for the costs of free care which such physicians provide in such hospitals. In adopting regulations under this subsection, the division shall consult and work cooperatively with representatives of low income uninsured and underinsured persons, health care providers who provide health care to such persons, and organizations representing said persons and providers.
(j) The division shall adopt any other regulations necessary to manage said pool including, but not limited to, regulations: requiring data submissions, setting pool audit standards, establishing enforcement mechanisms consistent with this section, and establishing reasonable controls on utilization. The division shall require acute hospitals and community health centers to submit data that the division determines necessary to efficiently and effectively administer the uncompensated care pool. Said data may include, but shall not be limited to, charge and cost data, patient diagnoses and types of uncompensated service provided, patient demographics, write-off amounts, unique patient identifiers and other such data that would enable the division to conduct analyses, verify eligibility and calculate settlements on a case-by-case basis. The division shall consider all available options for collecting said data, including claims and electronic data submission, and shall implement the most efficient and effective method after consultation with interested parties. If the division finds that hospitals are not complying with the data submission requirements or if the data submitted are not sufficient to enable the division to verify eligibility and calculate settlements on a case-by-case basis, the division may adopt regulations providing for a claims adjudication process for payments from the uncompensated care pool. Such claims adjudication process shall maximize administrative simplicity to the extent practicable and shall not significantly delay cash flow from said pool. The division shall consult with interested parties, including the Massachusetts hospital association, in developing the methodology for such claims adjudication process and shall submit the methodology to the joint committee on health care 90 days in advance of adopting such regulations. The division shall analyze the data collected under this section in conjunction with any other pertinent data to determine the demographic characteristics and the clinical and social needs of uncompensated care recipients. If said analysis indicates that one or more managed care or case management programs would better meet the needs of low income individuals, the division shall consult with representatives of the uninsured and underinsured and the providers who serve them and other interested parties regarding the potential for managed care or case management approaches to improve care provided under said pool. If the division determines that such approaches would improve care, the division may contract with health care delivery or management organizations or to enter interagency service agreements with the division of medical assistance or the department of public health for the purpose of contracts with health care or managed care providers to deliver services to individuals eligible for free care or; provided, however, that no such contract shall be entered into until the division finds that the cost of such contract does not exceed the amounts that would otherwise have been expended on free care for these individuals; and, provided further, that the expenditures for such contracts shall not exceed $5,000,000 in any hospital fiscal year.
(k) The division, in conjunction with the division of medical assistance, shall promulgate regulations to develop and implement procedures to verify the eligibility of individuals for free care and to ensure that other coverage options are utilized fully before free care is granted. Said regulations shall require that the division of medical assistance review all applications for free care to determine whether the applicant is eligible for medical assistance pursuant to chapter 118E and whether any third party is financially responsible for the costs of care provided to the applicant. These systems may include but are not limited to investigation and recovery of third party liabilities, and penalties for noncompliance. The division shall compile and maintain a catalog of program information for all programs of health care coverage for low income persons including those sponsored by public and private organizations. The catalog shall include, at a minimum, eligibility criteria, benefits and services offered, enrollment procedures and information necessary for contact and follow-up. The division shall ensure that if free care is granted for the copayment and deductible of an eligible person with other coverage, no payments shall be made from the uncompensated care pool which would cause the total payment to the provider to exceed the applicable rates for free care services. The division shall refuse to allow payments or shall disallow payments to acute hospitals and community health centers for free care provided to individuals if reimbursement is available from other public or private sources including, but not limited to, the Medicaid or Medicare program, or if the individual is not eligible for free care. The division shall require acute hospitals and community health centers to screen each free care applicant for other sources of coverage and for potential eligibility for government programs, and to document the results of such screening. If an acute hospital or community health center determines that an applicant is potentially eligible for Medicaid or another government program, said acute hospital or community health center shall assist the applicant in applying for benefits under such program. The division shall audit free care accounts of acute hospitals and community health centers to determine compliance with this section and shall deny pool payment for any audited account for any acute hospital or community health center that fails to document compliance with this section.
(l) The division shall enter into interagency agreements with the department of revenue to verify income data for recipients of free care and to recover payments made by the pool on behalf of individuals who are ineligible for free care or on whose behalf the pool has paid for emergency bad debt. Such written agreements shall include provisions permitting the division to provide a list of persons receiving or applying for free care, including any applicable members of the households of such recipients or applicants which would be counted in determining eligibility, and to furnish relevant information including, but not limited to, name, social security number, if available, and other data required to assure positive identification. Such written agreements shall include provisions permitting the department of revenue to examine the data available under the wage reporting system established under section 3 of chapter 62E and make positive identification of cases in which recipients or applicants for free care, individually or as part of a household unit, are receiving wages in excess of any threshold eligibility requirements established by the division. The department of revenue is hereby authorized to furnish the division with information on the cases of persons so identified, including, but not limited to, name, social security number and other data to ensure positive identification, name and identification number of employer, and amount of wages received. The division may inform acute hospitals and community health centers only of an individuals eligibility or noneligibility for free care based on information obtained from the department of revenue, but may not release any specific information concerning the individual.
The division shall promulgate regulations requiring acute hospitals to submit data that will enable the department of revenue to pursue recoveries from individuals who are ineligible for free care payments and on whose behalf the pool has made payments to acute hospitals for emergency bad debt.
(m) The division shall deposit any amounts received pursuant to chapter 62D in the Uncompensated Care Trust Fund to reimburse the uncompensated care pool for expenditures made for persons who received free care through said pool or on whose behalf the pool paid emergency bad debt and who, upon review, were determined to be ineligible for free care based upon applicable income standards.
(n) The division shall not at any time make payments from said pool for any period in excess of amounts that have been paid into or are available in said pool for such period; provided, however, that the division may temporarily prorate payments from said pool for cash flow purposes. In the event that after making allowable free care payments to community health centers, there exists a shortfall of pool revenue, excluding any revenue in the separate MassHealth insurance reimbursement program account, in any fiscal year to cover allowable free care payments to acute hospitals, the division shall allocate such payments so that those acute hospitals with the greatest proportional requirement for pool income shall receive a greater proportional payment from said pool. In the event that there exists a surplus of pool revenue in any fiscal year over that necessary to cover allowable free care payments, the division shall apply such surplus to allowable free care payments for any succeeding fiscal year in which there is a shortfall of pool revenue.
The division shall establish fines or penalties not to exceed $10,000 per diversion for any hospital which diverts a free care patient from care at the hospital without the consent of the hospital to which the patient is being diverted. Any amount collected shall be deposited into the Uncompensated Care Trust Fund.
(o) Within the Uncompensated Care Trust Fund, there shall be established a medical assistance account, administered by the secretary of health and human services, consisting of any funds directed to the commonwealth from public entities and federal reimbursements related to medical assistance payments funded by this account. All amounts credited to this account shall be held in trust and shall be available for expenditure by the secretary to be used for medical assistance payments to entities authorized by the general court, and for which a public entity has contractually agreed to direct funds to the account. Any amount in excess of such medical assistance payments may be credited to the General Fund and the amount of all such expenditures shall be subject to annual approval by the general court. The maximum payments from the account shall not exceed those permissible for federal reimbursement under Title XIX or Title XXI of the Social Security Act or any successor federal law. The comptroller may make payments, including payments during the accounts payable period, in anticipation of revenues, including receivables due and collectibles during the months of July and August, and shall establish procedures for reconciling overpayments or underpayments from the account. Such procedures shall include, but not be limited to, appropriate mechanisms for refunding public funds directed to the account and federal reimbursements upon recoupment of any such overpayments. The executive office of health and human services shall ensure that the division of health care finance and policy is informed regarding revenue and expenditure activity within the account and submit to the secretary of administration and finance and the house and senate committees on ways and means a schedule of such payments 10 days before any expenditures, and no funds shall be expended without an enforceable agreement with or legal obligation imposed upon a public entity to make an intergovernmental transfer in an appropriate amount to the account.
(p) Within the Uncompensated Care Trust Fund, there shall be established a department of mental retardation transfer account, administered by the secretary of health and human services, consisting of any receipts from the assessment collected pursuant to section 27, including transfers by the department of mental retardation of amounts sufficient to pay the assessment for public facilities, any federal financial participation received by the commonwealth as a result of expenditures funded by such assessments, and any interest thereon. The secretary may authorize expenditures of amounts from such account without further appropriation. The comptroller shall transfer no later than the first business day of each quarter, the amounts indicated by the department of mental retardation to provide the appropriate payment adjustments for operating the intermediate care facilities for the mentally retarded and the community residences serving individuals with mental retardation. The comptroller shall establish such procedures as may be necessary to accomplish the purpose of this section, including procedures for the proper transfer, accounting and expenditures of funds under this section. The comptroller may make payments in anticipation of receipts and shall establish procedures for reconciling overpayments and underpayments from said account. The secretary shall account for revenue and expenditure activity within said account.
(q) Within the Medical Assistance Trust Fund as established in section 2QQQ of chapter 29, there shall be a MassHealth provider payment account, administered by the secretary of health and human services. Subject to the availability of federal financial participation, funds may be expended from this account for supplemental Medicaid payments to qualifying providers pursuant to an approved state plan or federal waiver. All Title XIX federal financial participation revenues generated by hospital payments funded by the Medical Assistance Trust Fund, whether the payments are made by the division of health care finance and policy or the executive office of health and human services, shall be credited to the General Fund.