HB 1642-FN – AS AMENDED BY THE HOUSE
21Mar2012… 1261h
2012 SESSION
01/05
HOUSE BILL 1642-FN
AN ACT relative to destination specialty hospitals.
SPONSORS: Rep. Garcia, Rock 4; Rep. Reagan, Rock 1; Rep. Stepanek, Hills 6; Rep. Azarian, Rock 4; Rep. Keane, Merr 13; Rep. O'Brien, Hills 4; Rep. Bettencourt, Rock 4; Rep. Katsakiores, Rock 5; Rep. Infantine, Hills 13
COMMITTEE: Health, Human Services and Elderly Affairs
This bill exempts destination specialty hospitals from the certificate of need process. This bill also requires the commissioner of the department of health and human services to submit a waiver pursuant to 42 C.F.R. section 433.68 for the purpose of waiving the Medicaid enhancement tax for such hospitals.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
21Mar2012… 1261h
12-2789
01/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT relative to destination specialty hospitals.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Statement of Purpose. The general court, in an effort to improve the quality of health care and while identifying new economic growth opportunities for New Hampshire, makes the following findings:
I. In our current economic environment, the state needs to identify new ways to encourage job growth and economic expansion. This requires New Hampshire to find areas in which the state can become more competitive.
II. Health care is among the fastest growing industries both in New Hampshire and nationally and, with the changing demographics of both the state and the nation, will continue to expand greatly in the next decade.
III. New Hampshire is uniquely positioned to capture a significant share of this economic growth by becoming a destination for high quality specialty care.
IV. Having high end specialty care facilities in New Hampshire will benefit our residents, should they need this level of care.
V. The certificate of need process was designed to restrain the overbuilding of health care facilities for local usage, not to slow economic growth by limiting destination specialty care facilities.
2 New Paragraph; Certificate of Need; Definition Added. Amend RSA 151-C:2 by inserting after paragraph XV-a the following new paragraph:
XV-b. “Destination specialty hospital” means a for-profit institution with a licensed bed capacity of 50 or fewer which provides diagnostic, therapeutic, treatment, and rehabilitative care services to inpatients and outpatients by or under the supervision of physicians, and whose proposed annual patient base is composed of a minimum of 65 percent of patients who reside outside of the state of New Hampshire.
3 Certificate of Need; Exemption Added. Amend RSA 151-C:13, I(h) and (i) to read as follows:
(h) Notwithstanding any other provision of this chapter, a skilled nursing facility distinct part unit established by Androscoggin Valley Hospital or Franklin Regional Hospital in order to qualify as a critical access hospital under 42 U.S.C. Section 1395i-4 and 42 C.F.R. Part 485, Subpart F; provided, that the number of beds in the skilled nursing facility distinct part unit shall not exceed the hospital’s existing skilled nursing patient capacity. For purposes of this subparagraph, the term “existing skilled nursing patient capacity” means with respect to each month, the number of skilled nursing patient days for such month divided by the number of days in such month, and shall be the highest such number from the 12-month period ending immediately prior to the filing of the federal request for approval of the distinct part unit; provided, however, that the number determined under this subparagraph shall not exceed 10 beds; [and]
(i) Acute care centers established, operated, or designated by the department pursuant to RSA 141-C:26; and
(j) Destination specialty hospitals as defined in RSA 151-C:2, XV-b.
4 New Paragraph; Uncompensated Care Fund; Duties of Commissioner. Amend RSA 167:65 by inserting after paragraph II the following new paragraph:
II-a. Submit a waiver pursuant to the process outlined in 42 C.F.R. section 433.68 for the purpose of waiving RSA 84-A, Medicaid enhancement tax liability for destination specialty hospitals as defined in RSA 151-C:2, XV-b.
5 Effective Date. This act shall take effect 60 days after its passage.
LBAO
12-2789
Amended 05/22/12
HB 1642 FISCAL NOTE
AN ACT relative to destination specialty hospitals.
FISCAL IMPACT:
The Departments of Revenue Administration and Health and Human Services state this bill, as amended by the House (Amendment #2012-1261h),will have an indeterminable fiscal impact on state, county, and local revenue and expenditures in FY 2013 and each year thereafter.
METHODOLOGY:
The Department of Revenue Administration states the bill requires the Commissioner of the Department of Health and Human Services to submit a waiver request to the Center for Medicare and Medicaid Services (CMS) to exempt destination specialty hospitals from paying New Hampshire’s Medicaid Enhancement Tax. The Department assumed such facilities may include existing facilities which qualify as destination specialty hospitals or new facilities established as a result of this legislation. The Department is not able to determine how many, if any, existing facilities would qualify or how many new facilities might be established meeting the definition of destination specialty hospitals and therefore cannot determine the fiscal impact. In addition, the Department suggested that the disparate treatment of hospitals may be unconstitutional. The Department states it could administer the provisions of the bill without additional resources.
The Department of Health and Human Services states that, in considering waiver requests, the CMS uses a specific test to measure the redistributive quality of a tax plan and this test relies on revenues generated by existing facilities. Since these entities may not yet exist, it is not possible to predict the outcome of a waiver request. In addition, the Department states this bill would exempt destination specialty hospitals from the certificate of need process and the associated administrative fee. The Department assumes these hospitals would be licensed by the State of New Hampshire but exempt from the certificate of need process. The Department further states there could be a detrimental impact on acute care hospitals that currently operate specialty centers. Such impact would be due to a loss of patients and competition for specialized staff. If these factors resulted in increased costs to hospitals, the additional costs would be passed on as an increase in healthcare costs to payers including county and local governments.