Registration
Except as described in 101 CMR 614.05(3)(a), all institutional surcharge payers must register with the Health Safety Net (HSN) by completing the surcharge registration form provided below and sending it to the HSN. An institutional payer only needs to register once, except that an institutional payer that is also a Managed Care Organization must register separately as a Managed Care Organization.
E-Mail: SurchargeHSNO@mass.gov
Mail: Health Safety Net Surcharge Registration
100 Hancock Street, 6th floor
Quincy, MA 02171
Payment process for institutional surcharge payers
The HSN will send a monthly notice to all registered institutional payers directing them to make a surcharge payment by the next payment date. Each institutional surcharge payer must determine the amount of the payments it made in the previous month that are subject to the surcharge and multiply that amount by the surcharge percentage in effect during that month. This formula determines the surcharge amount owed. (Example: If claims are paid in January, then the related surcharge is due by the following March 1st). The institutional surcharge payer will then tear off the payment stub from the top of the notice received and write in that amount. The institutional surcharge payer will then send the payment stub and a check made payable to the Commonwealth of Massachusetts for the amount of surcharge owed in the pre-addressed envelope.
The payment should be mailed to:
Executive Office of Health and Human Services
Commonwealth of MA, Health Safety Net Surcharge
P.O. Box 3441
Boston, MA 02241-3441
PLEASE NOTE: THE INSTITUTIONAL SURCHARGE PAYER MUST RETURN THE PAYMENT STUB EVERY MONTH, EVEN IF IT OWES $0 IN SURCHARGE FOR THE PREVIOUS MONTH. IN THIS CASE THE PAYER SHOULD DENOTE $0 ON THE “AMOUNT ENCLOSED” LINE OF THE PAYMENT STUB.
- To calculate the surcharge due, multiply total payments made to Massachusetts acute hospitals and ambulatory surgical centers at the end of each calendar month by the surcharge percentage in effect during that month. Effective on October 1, 2023, the surcharge percentage is 1.35%.
- Surcharge payments are due on or before the first business day of each month. Please mail your payment in time to reach the lock box by the first of each month.
- Third Party Administrators (TPAs) that make payments to hospitals and ambulatory surgical centers on behalf of one or more insurance carriers (not self-insured plans) must file an annual electronic report with the HSN. This report must include the name of each insurance carrier on behalf of which the TPA paid.
- Institutional surcharge payers may be required to file a monthly report with the HSN documenting its payments, exemptions, and net payments to the surcharge.
Penalties
If an institutional surcharge payer fails to forward surcharge payments to the HSN, the HSN shall impose a 1.5% interest penalty on the outstanding balance. The interest shall be calculated from the due date and an additional 1.5% penalty shall accrue for each month a payment remains delinquent.
Any institutional surcharge payer that fails to file data, statistics, schedules, or other information pursuant to 101 CMR 614.08, or which falsifies same, shall be subject to a civil penalty of not more than $5,000 for each day on which such violation occurs.
Who is a surcharge payer?
1. Who is responsible for paying the Health Safety Net surcharge?
Entities and individuals, including Managed Care Organizations and persons enrolled in ConnectorCare, that make payments to acute hospitals and ambulatory surgical centers (ASCs) for the purchase of health care services are subject to the surcharge.
The following payers are not subject to the surcharge:
- Medicare and Medicaid programs and their beneficiaries or recipients
- Managed Care Organizations, to the extent they make payments on behalf of MassHealth members over age 65.
- Other governmental programs of public assistance and their beneficiaries or recipients
- Worker's compensation programs (However, worker's compensation programs’ rates of payment include a separately identified contribution to the hospital's Health Safety Net assessment. Please refer to Worker’s Compensation FAQs for more information.)
2. A Third Party Administrator (TPA) makes payments for hospital and ambulatory surgical center services on behalf of its clients (self-insured plans and insurance carrier plans), using those client's plan's funds. Is the TPA the surcharge payer or is the client?
The TPA makes payments to hospitals and ambulatory surgical centers; therefore, the TPA is the surcharge payer, not its clients, although just as it does for payments for services, the TPA makes the surcharge payments on behalf of its clients using their funds. The TPA, not the client, is responsible for registering as a payer, transmitting payments, and reporting information to the HSN.
3. Does a TPA need to register separately for each of its clients?
No. The TPA only needs to register once, for itself, but the TPA should forward a list of all of its clients to the HSN so that the HSN may include them in its database as “affiliates.”
4. A self-insured plan or an insurance carrier contracts with a TPA to make its payments to hospitals and ambulatory surgical centers. Should the client plan register as a payer?
No. The client plan is not a surcharge payer, so it cannot register.
5. A self-insured plan purchases access to a preferred provider network, but pays its own claims directly to the providers in the network, including acute hospitals and ambulatory surgical centers. Is the surcharge payer the self-insured plan or the preferred provider network?
The self-insured plan is the surcharge payer because it makes payments to acute hospitals and ambulatory surgical centers.
6. When are payments made for health care services to an organization that is affiliated with an acute hospital or ASC subject to the HSN surcharge?
Payments that are made to an affiliated provider or group of providers for the purchase of health care services, of which a portion is then forwarded to an acute hospital or ASC, are subject to the surcharge. The portion forwarded is considered an indirect payment, and the surcharge applies only to that portion forwarded to the acute hospital or ASC.
7. Does the surcharge apply to secondary payers?
Yes.
Registering as a surcharge payer for 2024
1. Do registered surcharge payers need to register again for 2024?
No. The HSN will automatically register all institutional payers for 2024.
2. What is the responsibility of an institutional payer?
All institutional payers must make monthly surcharge payments to the Health Safety Net Office by following the instructions outlined in Section V (What is the process for paying the surcharge?)
3. How do I determine if my company should register as an institutional payer?
As described in 101 CMR 614.05(3)(a), certain entities that make infrequent non-exempt payments to Massachusetts acute hospitals and ambulatory surgical centers are not required to register as institutional payers. However, legitimate surcharge payments must be forwarded to the HSN regardless of a company's registration status. Unregistered payers should send payments directly to:
Health Safety Net Office
Attn: Health Safety Net Surcharge
100 Hancock Street, 6th floor
Quincy, MA 02171
What payments are subject to surcharge?
1. Which payments are exempt from the HSN surcharge?
The following payments are exempt from the surcharge:
- 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;
- Payments made on behalf of MassHealth members over age 65, Medicare beneficiaries, or persons enrolled in Medigap policies;
- Amounts under $10,000 paid out-of-pocket by an individual that are not reimbursable by an insurer or other source;
- Payments made by an acute hospital to a second hospital for services for which the first hospital billed a surcharge payer, or to an entity or individual exempt from the surcharge;
- Payments made by a group of providers, such as a provider organization, to member hospitals or ASCs for services that were billed by the provider organization to an insurer, HMO, PPO, or Blue Cross Blue Shield plan;
- Payments made on behalf of an individual covered under the Federal Employees Health Benefits Act, at 5 U.S.C. 8901 et seq.;
- Payments made on behalf of foreign embassy personnel who hold a Tax Exemption Card issued by the United States Department of State.
2. What payments to hospitals are subject to the surcharge?
- Direct and indirect non-exempt payments made by surcharge payers to Massachusetts acute hospitals for the purchase of acute hospital services are subject to the surcharge.
- Payments subject to the surcharge include payments made by national health insurance plans and payments made by an embassy on behalf of a foreign national not employed by the embassy.
3. What are "acute hospital services?"
"Acute hospital services" include all services listed on an acute hospital's license by the Department of Public Health. All services billed by acute hospitals are acute hospital services and are subject to the surcharge. For example, a hospital may bill for physician services or lab services that are provided under its license. A hospital may not bill for services that are not listed on a hospital license.
4. Does the surcharge apply to both inpatient and outpatient hospital services?
Yes.
5. Are payments to all hospitals subject to the surcharge?
No. The surcharge only applies to payments to Massachusetts acute hospitals. Payments to rehabilitation, psychiatric, substance abuse, and VA facilities are not subject to the surcharge. To receive a list of facilities whose payments are subject to the surcharge, send an email including your name, organization name, federal employer identification number, and file format in which you would like to receive it (Excel spreadsheet, dbf, comma delimited) to SurchargeHSNO@mass.gov or call 1-800-609-7232.
6. Are payments made on behalf of ConnectorCare members subject to the surcharge?
Yes. All payments made on or after December 1, 2010, by Managed Care Organizations on behalf of ConnectorCare are subject to the surcharge.
7. Are payments made on behalf of members who purchased unsubsidized Qualified Health Plans through the Health Connector subject to the surcharge?
Yes.
8. Are payments made on behalf of Senior Care Organizations subject to the surcharge?
No.
9. Are payments made on behalf of Health Reimbursement Arrangements (HRA) subject to the surcharge?
Yes.
10. What payments to ambulatory surgical centers are subject to the surcharge?
Only ambulatory surgical center facility fees are subject to the surcharge. If an ambulatory surgical center bills for physician services, payment for these services is not subject to the surcharge.
11. An individual pays his hospital or ambulatory surgical center bill out of pocket and then submits the claim to his insurance carrier for reimbursement. Is the carrier required to reimburse the patient for the surcharge?
If the individual's payment to the provider is reimbursable by his/her insurer, the individual's payment is not subject to surcharge. The insurer must pay the surcharge directly to the HSN. If a mistake was made and the individual paid the surcharge along with the payment for services, the insurance carrier should contact the HSN.
How is the surcharge applied to payments?
1. An insurer makes a payment to an acute hospital on October 7, 2023, for services provided December 20, 1997. Is the payment subject to the surcharge?
Yes. The surcharge applies to all payments made on or after January 1, 1998, regardless of when the service was provided.
2. A hospital charges $6,234 for services to a member of an HMO in FY 2024. The HMO pays the hospital $5,000 for these services. What amount of surcharge does the HMO owe?
The HMO owes $5,000 x 1.35% (FY 2024 surcharge percent) = $ 67.50.
3. An insurer pays $5,000 to an acute hospital on March 1, 2023, when the surcharge percentage in effect is 1.22%. There is an adjustment to the bill and the insurer pays an additional $350 to the hospital on October 15, 2023, when the surcharge percentage in effect is 1.35% (a) What amount of surcharge does the payer owe? (b) What if the adjustment is negative and the hospital refunded $350 to the insurer on October 15, 2023?
a. For the month of March, 2023 the insurer owes $5,000 x 1.22% = $61.00. The insurer would pay the Health Safety Net $61.00 on May 1, 2023. For the month of October, 2023 the insurer owes $350 x 1.35% = $4.72. The insurer would pay the Health Safety Net $4.72 on December 1, 2023.
b. If the hospital paid the insurer, the insurer would have a $4.72 ($350 x 1.35%) credit against the amount it owed to the Health Safety Net.
4. In February 2024, an insurer settles all claims with a hospital for the years 2020, 2021, and 2022. As a result of the settlement, the insurer pays the hospital an additional $14,500. (a) Does the insurer owe a surcharge on this payment? (b) What if the hospital refunded $14,500 to the insurer.
a. Yes. For the month of February, 2024 the insurer owes $14,500 x 1.35% = $195.75. The insurer would pay the Health Safety Net $195.75 on April 1, 2024.
b. If the hospital paid the insurer, the insurer would have a $195.75 credit against the amount it owed to the Health Safety Net.
5. A patient has an 80/20 plan with a $500 deductible. A hospital sends a bill for $20,000. The patient is responsible for paying the hospital the $500 deductible plus 20% x $19,500 = $3,900, for a total of $4,400. The insurer pays the hospital $20,000 - 4,400 = $15,600 in October 2023. What is the amount of surcharge owed by the individual and by the insurer?
The patient's payment is below the threshold for out-of-pocket payments by an individual, so it is exempt from the surcharge. The insurer owes $15,600 x 1.35% = $210.60 in surcharge.
What is the process for paying the surcharge?
1. How do surcharge payers make payments?
The HSN sends a monthly notice to all registered payers directing them to make surcharge payments by the next payment date. Each surcharge payer must:
- determine the amount of surcharge owed (the amount of the payments subject to surcharge made in the previous month, multiplied by the surcharge percentage in effect). (Example: If claims are paid in January, then the related surcharge is due by the following March 1st).
- send the payment stub and a check made payable to "Commonwealth of Massachusetts” (or “Commonwealth of MA”) for the amount of the surcharge owed to:
Executive Office of Health and Human Services
Commonwealth of MA, Health Safety Net Surcharge
P.O. Box 3441
Boston, MA 02241-3441
Unregistered surcharge payers should send payment directly to:
Health Safety Net Office
Attn: Health Safety Net Surcharge
100 Hancock Street, 6th floor
Quincy, MA 02171
Surcharge payments are due on or before the first day of each month.
2. What should payers do with the renewal notice if no surcharge is owed for a month?
All renewal notices must be returned regardless of the amount owed. Indicate $0.00 on the 'amount enclosed' line, tear the top portion and mail in the self-addressed envelope received with the renewal.
3. What will happen if a payer does not pay the surcharge?
In accordance with 101 CMR 614.05(7), if the surcharge payment is not made by the due date, the HSN shall impose a 1.5% penalty on the outstanding balance. The interest will be calculated from the due date and an additional 1.5% penalty shall accrue for each month a payment remains delinquent.
4. Can a photo copy of a renewal notice be used in place of the original?
No. There is a bar code on the original notice that identifies a payer and is not readable on a photocopied notice. Do not mail copies of the renewal notice. Instead, mail the payment directly to the HSN. To ensure that the payer's account is credited appropriately, FEINs and/or registration numbers must be noted on the check or stub.
5. How do surcharge payers make an overnight payment? Federal Express does not deliver to a post office address.
The overnight payment address is:
Bank of America Wholesale Lockbox
Attn: Commonwealth of Mass
Health Safety Net
Lockbox 3441, MA5-527-02-07
2 Morrissey Blvd
Dorchester, MA 02125
Overnight Payment Tel # 888-267-2627
6. Will an option to wire transfer payments be available to surcharge payers?
Currently, this option is not available to surcharge payers. The HSN is reviewing a wire transfer option and will notify surcharge payers if the option becomes available.
7. Will acute hospitals and ambulatory surgical centers show the surcharge on their bills?
No. Acute hospitals and ambulatory surgical centers will notify surcharge payers of their liability at the beginning of the fiscal year. If an acute hospital or ambulatory surgical center receives a payment from an unregistered payer, the provider will inform the payer of its obligation to pay the surcharge. It is the responsibility of the surcharge payer to calculate the amount of surcharge owed.
8. A payer received a notice of liability from a hospital with instructions to pay the surcharge directly to them. Is this correct?
No, surcharge payers need to register with and make surcharge payments to the HSN. Payers should not mail surcharge payments to hospitals.
9. Has the HSN updated the list of facilities subject to the surcharge?
Yes. The last revision was made in October 2023. The HSN updates the list annually and registered payers will receive a copy of each update.
10. Why does the HSN provide Federal Employer Identification Numbers (FEINs) for Massachusetts acute hospitals and ASCs?
The HSN provides a list of FEINs electronically when requested (See #15 above) to assist HSN surcharge payers in identifying payments subject to the surcharge. The HSN annually requests that providers identify and update FEINs for all Massachusetts acute hospitals, ASCs, and certain provider organizations that receive direct and indirect payments subject to the HSN surcharge. Payers should coordinate with their billing departments to verify each facility that receives payments subject to surcharge if the HSN’s FEIN list is used to calculate surcharge payments. Any discrepancies noticed in the most current FEIN list should be brought to the immediate attention of the Health Safety Net Office for further investigation.
11. Will the tax ID numbers for Massachusetts acute hospitals and ambulatory surgical centers be available on the HSN's Web site?
Registered HSN surcharge payers are forwarded an electronic copy of the updated provider list annually for reporting purposes. The FEIN list is to be used as guide. Any questions/concerns about FEINs that should be or should not be included should be brought to the attention of the HSN Office for immediate investigation.
12. Will the surcharge percentage change for 2024? What is the effective date of the new rate?
Yes, as calculated in accordance with 101 CMR 614.05(2), the Health Safety Net surcharge percentage for fiscal year 2024 is 1.35 percent. This applies to payments made to hospitals and ambulatory surgical centers for the period from October 1, 2023, through September 30, 2024.
What are the surcharge reporting requirements?
1. What are the monthly reporting requirements for surcharge payers?
Surcharge payers must report the total amount of surcharge owed for the month. The top 25 surcharge payers must also submit an electronic file each month with documentation to support their surcharge payment in the format specified by the HSN. This report includes total payment, exemptions, and net payments to hospitals and ambulatory surgical centers. The HSN will notify and mail specifications to the payers that fall in this category.
2. What is the due date of the annual report required for TPAs?
Currently, an annual report is due from TPAs by July 1st for the year.
3. Will Managed Care Organizations be required to submit a report?
Yes. The report is currently under development. Managed Care Organizations will be notified and mailed specifications of the reporting requirements before the requirements take effect.
What is the process for completing the IRS W-9 form?
1. Where should the W-9 — Request for Taxpayer Identification Number and Certification -- be mailed if I need a completed one for my files?
The W-9 should be mailed to:
Office of the Comptroller
One Ashburton Place
9th Floor
Boston, MA 02108
2. What should we do if our company changes its name?
Mail or email a brief letter describing the reason for the name change. Please include the name of the contact person, address, phone number, email address, and fax number. Send email or letters to:
E-mail: SurchargeHSNO@mass.gov
or
The Health Safety Net Office
Attn: Health Safety Net Surcharge
100 Hancock Street, 6th floor
Quincy, MA 02171
More help?
If the information you need is not available on our Web site, please contact the Health Safety Net Surcharge Help Desk:
800-609-7232 (phone)
Email: SurchargeHSNO@mass.gov