A4091

An Act concerning the County Option Hospital Fee Pilot Program and amending P.L.2018, c.136.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.2018, c.136 (C.30:4D-7r) is amended to read as follows:

1. This act shall be known and may be cited as "The County Option Hospital Fee [Pilot] Program Act."

(cf: P.L.2018, c.136, s.1)

2. Section 2 of P.L.2018, c.136 (C.30:4D-7s) is amended to read as follows:

2. As used in this act:

"Commissioner" means the Commissioner of Human Services.

"Department" means the Department of Human Services.

"Fee" means the local health care-related fee authorized pursuant to this act.

"Hospital" means a hospital that is licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.) and is located within the borders of a participating county.

"Medicaid program" means the "New Jersey Medical Assistance and Health Services Program" established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

"Participating county" means a county [with] that chooses to participate in the program, has a population greater than 250,000, according to the federal decennial census immediately preceding the effective date of [this act; that] P.L.2018, c.136 (C.30:4D-7r et seq.), and contains a municipality which: (1) is classified, pursuant to N.J.S.40A:6-4, as a First or Second Class municipality, or a Fourth Class municipality whose population exceeds 20,000, and (2) has a Municipal Revitalization Index Distress score, as last calculated by the New Jersey Department of Community Affairs prior to the effective date of [this act] P.L.2018, c.136 (C.30:4D-7r et seq.), that exceeds 60[; and which chooses to participate in the pilot program]. A "participating county" also means, based on the 2019 ACS 5 Year Survey Data, (1) excluding counties with a municipality with a population greater than 125,000, and (2) excluding counties with a population less than 150,000, and (3) excluding counties with a median household income greater than $110,000, and (4) counties must have a municipality with a population greater than 30,000 whose 2020 Municipal Revitalization Index Distress score is greater than or equal to 35; and which chooses to participate in the program.

["Pilot program"] "Program" means "The County Option Hospital Fee [Pilot] Program" established pursuant to this act.

"Proposed fee and expenditure report" means a written report by a participating county that describes how the fee will be imposed in the participating county; how the funds collected from the fee will be used by the participating county, including the amount and services the participating county plans to provide with the funds; and how the plan satisfies paragraph (1) of subsection b. of section 3 of this act.

(cf: P.L.2018, c.136, s.2)

3. Section 3 of P.L.2018, c.136 (C.30:4D-7t) is amended to read as follows:

3. a. There is established "The County Option Hospital Fee [Pilot] Program" in the Department of Human Services. [The program shall commence on the 180th day after the effective date of P.L.2018, c.136 (C.30:4D-7r et seq.) and shall expire five years after each participating county has collected a local health care-related fee, authorized pursuant to subsection c. of this section.]

b. The purpose of the [pilot] program is:

(1) to increase financial resources through the Medicaid program to support local hospitals and to ensure that they continue to provide necessary services to low-income citizens; and

(2) to provide participating counties with new fiscal resources.

c. [To effectuate the purposes of this program, the commissioner shall authorize no more than seven participating counties in the State for participation in the program.] Each participating county shall be authorized by the commissioner to impose a local health care-related fee on hospitals within its borders.

d. A participating county shall submit a proposed fee and expenditure report to the commissioner to ensure that the proposed fee and expenditure plan satisfies paragraph (1) of subsection b. of this section and subsection e. of this section, and does not create a direct or indirect guarantee to hold harmless, as those terms are used in 42 C.F.R. s.433.68(f). The commissioner shall further review the proposed fee and expenditure report to determine whether it complies with relevant rules and regulations. Each participating county shall consult with affected hospitals within its jurisdiction to prepare the proposed fee and expenditure report before the report is submitted to the commissioner. The commissioner shall make the proposed fee and expenditure report available to the affected hospitals for review and the hospitals shall be permitted to provide comments to the commissioner regarding the report for a period of 21 calendar days from the date the proposed report is made available for review.

e. The board of [chosen freeholders] County commissioners of a participating county, following the approval of the participating county's proposed fee and expenditure plan by the commissioner, may adopt an ordinance providing for the imposition of a fee on hospitals located within its borders and for appropriate administrative provisions, including, but not limited to, provisions for the collection of interest and penalties.

The fee shall be implemented in accordance with the provisions of 42 U.S.C. s.1396b(w)(3)(A), and shall be subject to the maximum aggregate amount that may be assessed pursuant to 42 C.F.R. s.433.68(f)(3), or any subsequent maximum amount as may be established by federal law, and shall be subject to a cap as determined by the commissioner. The participating county may exempt a hospital within its jurisdiction from the fee, provided that the exemption complies with the requirements of 42 C.F.R. s.433.68.

The fee authorized pursuant to this act may be collected only to the extent[, and for the period,] that the commissioner determines that the revenues generated qualify as the State share of Medicaid program expenditures eligible for federal financial participation pursuant to 42 C.F.R. s.433.68.

f. Any subsequent alterations to the fee are subject to the approval of the commissioner prior to implementation. Upon approval, the commissioner shall apply for such State plan amendments or waivers as may be necessary to implement the changes and to secure federal financial participation for State Medicaid expenditures under the federal Medicaid program.

g. Neither the State nor a participating county shall be liable for any amount of a local health care-related fee imposed on a hospital pursuant to this act that the hospital fails to pay or does not pay in a timely manner to the assessing county.

(cf: P.L.2021, c.41, s.1)

4. Section 4 of P.L.2018, c.136 (C.30:4D-7u) is amended to read as follows:

4. a. A participating county may transfer funds collected from the fee imposed pursuant to subsection c. of section 3 of this act to the commissioner. The commissioner shall use funds transferred from a participating county, and any matching amount of federal Medicaid funds or other federal funds generated therefrom, for the following purposes: to increase Medicaid payments to hospitals in the jurisdiction from which the funds are received; for payments to managed care organizations that have contracted with Medicaid serving the jurisdiction from which the funds are received for increased hospital or hospital-related payments; and for direct costs related to administrative purposes to implement the [pilot] program.

The commissioner shall seek to minimize the length of time between the collection of the fee by the participating county and the distribution of payments pursuant to this subsection.

Notwithstanding any other law to the contrary, the commissioner and a participating county are authorized to enter into an intergovernmental transfer agreement as may be necessary to transfer funds under this subsection or to otherwise satisfy the requirements of this act.

b. A participating county may retain the funds collected from the imposition of the fee, in which case the participating county shall generate the same level of funding, in addition to the funds collected from the imposition of the fee, that would be generated by the department through any matching amount of federal Medicaid funds or other federal funds, and use the total funding amount to satisfy paragraph (1) of subsection b. of section 3 of this act.

c. At least 90 percent of the funds collected from imposition of the fee shall be used by a participating county or the department for the benefit of local hospitals within the participating county's borders to ensure that the hospitals continue to provide necessary services to low-income citizens. The participating counties shall transfer at least one percent of funds collected from the imposition of the fee to the department for administration of the program.

(cf: P.L.2018, c.136, s.4)

5. Section 5 of P.L.2018, c.136 (C.30:4D-7v) is amended to read as follows:

5. a. The fee imposed pursuant to subsection c. of section 3 of this act shall be imposed in relation to health care items or services provided only during the effective period of this act, and shall not be collected until the commissioner notifies the appropriate governmental entities that any State plan amendment or waivers submitted pursuant to section 6 of this act have been approved.

b. No hospital subject to the fee shall pass on the cost of the fee to any patient, insurer, self-insured employer program, or other responsible party, nor list it separately on any invoice or statement sent to a patient, insurer, self-insured employer program, or other responsible party.

c. Unless otherwise prohibited by the federal government, no managed care organization operating in the State that has contracted with Medicaid shall retain any funds generated by the fee, other than to offset any increased administrative costs incurred as a result of the [pilot] program.

d. Funds generated by the fee shall not supplant or offset any current or future State funds allocated to a county participating in the [pilot] program.

e. Payments distributed to hospitals pursuant to this act shall not supplant or offset any current or future funds paid to hospitals through other State or federal funding mechanisms or pools.

(cf: P.L.2018, c.136, s.5)

6. Section 8 of P.L.2018, c.136 is amended to read as follows:

8. This act shall take effect on the 180th day after the date of enactment[, and shall expire five years after each participating county has collected a local health care-related fee, authorized pursuant to subsection c. of section 3 of P.L.2018, c.136 (C. 30:4D-7t)]. All proposed fee and expenditure plans are subject to both approval of the commissioner and such actions by the federal government as are necessary to effectuate the purposes of this act.

(cf: P.L.2021, c.41, s.2)

7. This act shall take effect immediately.

STATEMENT

This bill makes the County Option Hospital Fee Pilot Program permanent and expands the definition of “participating county” under the program. The County Option Hospital Fee Program was established in November 2018 to support local hospitals in designated high-need areas to ensure continued access to critical healthcare services for vulnerable populations. To effectuate this goal, the program authorizes participating counties, and hospitals within those counties, to partner with the State through a provider assessment mechanism that enhances financial support through the Medicaid program.

Under existing law, the program is to be pilot program, expiring five years after each participating county has collected a local health care-related fee, or Fall of 2026. Under the bill, the program becomes permanent.

The bill, while maintaining the existing statutory definition of "participating county," also expands the definition of "participating county" to mean, based on the 2019 ACS 5 Year Survey Data, (1) excluding counties with a municipality with a population greater than 125,000, and (2) excluding counties with a population less than 150,000, and (3) excluding counties with a median income greater than $110,000, and (4) counties must have a municipality with a population greater than 30,000 whose 2020 Municipal Revitalization Index Distress score is greater than or equal to 35; and which chooses to participate in the program. Currently the following counties participate in the program: Atlantic, Camden, Essex, Hudson, Mercer, Middlesex, and Passaic. Existing law limits the program to seven counties, a provision that is removed under this bill.