2023 Oklahoma Statutes › Title 63. Public Health and Safety › §63-3241.4. Supplemental Hospital Offset Payment Program Fund.

A. There is hereby created in the State Treasury a revolving fund to be designated the "Supplemental Hospital Offset Payment Program Fund".
B. The fund shall be a continuing fund, not subject to fiscal year limitations, be interest bearing and consisting of:
1. All monies received by the Oklahoma Health Care Authority from eligible hospitals pursuant to the Supplemental Hospital Offset Payment Program Act and otherwise specified or authorized by law;
2. Any interest or penalties levied and collected in conjunction with the administration of this section; and
3. All interest attributable to investment of money in the fund.
C. The Oklahoma Health Care Authority is authorized to transfer each fiscal quarter from the Supplemental Hospital Offset Payment Program Fund to the Authority's Medical Payments Cash Management Improvement Act Programs Disbursing Fund all funds remaining after accounting for the provisions of subparagraphs a and b of paragraph 1 of subsection C of Section 3241.3 of this title.
D. Notice of Assessment.
1. The Authority shall send an annual notice of assessment to each eligible hospital informing the hospital of the assessment rate, the net hospital patient revenue calculation, and the assessment amount owed by the eligible hospital for the applicable year.
2. The annual notice of assessment shall be sent to each eligible hospital at least thirty (30) days before the due date for the first quarterly assessment payment of each year.
3. The first notice of assessment shall be sent within forty-five (45) days after receipt by the Authority of notification from the federal Centers for Medicare and Medicaid Services that the assessments and payments required under the Supplemental Hospital Offset Payment Program Act and, if necessary, the waiver granted under 42 C.F.R., Section 433.68 have been approved.
4. An eligible hospital shall have thirty (30) days from the date of its receipt of an annual notice of assessment to notify the Authority of any error in the notice.
5. An eligible hospital that has not been previously licensed as a hospital in Oklahoma and that commences hospital operations during a year shall pay the required assessment computed under subsection E of Section 3241.3 of this title and shall be eligible for hospital access payments under subsection E of this section on the date specified in rules promulgated by the Oklahoma Health Care Authority Board after consideration of input and recommendations of the Hospital Advisory Committee.
E. Quarterly Notice and Collection.
1. The annual assessment imposed under subsections A and C of Section 3241.3 of this title shall be due and payable on a quarterly basis. However, the first quarterly payment of an annual assessment shall not be due and payable until:
a.
the Authority issues written notice stating that the annual assessment and payment methodologies required under the Supplemental Hospital Offset Payment Program Act have been approved by the federal Centers for Medicare and Medicaid Services and, if necessary, the waiver under 42 C.F.R., Section 433.68 has been granted by the federal Centers for Medicare and Medicaid Services,
b.
the thirty-day verification period required by paragraph 4 of subsection D of this section has expired, and
c.
the Authority issues a notice of assessment giving a due date for the first quarterly payment.
2. After the first quarterly payment of an annual assessment has been paid under this section, each subsequent quarterly payment shall be due and payable by the fifteenth day of the first month of the applicable quarter.
3. If an eligible hospital fails to pay a quarterly payment timely and in full, the eligible hospital shall pay the Authority:
a.
a penalty fee equal to five percent (5%) of the eligible hospital's unpaid quarterly payment, and
b.
if the quarterly payment and penalty fee are not paid in full by the end of the quarter, an additional penalty fee of five percent (5%) of the eligible hospital's unpaid quarterly payment.
4. The quarterly payment including applicable penalty fees must be paid regardless of any administrative review requested by the eligible hospital. If an eligible hospital fails to pay the Authority the assessment within the time frames noted on the invoice to the eligible hospital, the assessment, applicable penalty fees, and interest will be deducted from the facility's payment. Any change in payment amount resulting from an appeals decision will be adjusted in future payments.
F. Medicaid Hospital Access Payments.
1. To preserve the quality and improve access to hospital inpatient and outpatient services, the Authority shall make hospital access payments to eligible hospitals and critical access hospitals to supplement reimbursements for inpatient and outpatient services that are provided through Medicaid on both a fee-for-service and managed care basis.
2. On an annual basis prior to the start of each calendar year, the Authority shall determine:
a.
the upper payment limit gap for inpatient services payable on a Medicaid fee-for-service basis for all hospitals,
b.
the upper payment limit gap for outpatient services payable on a Medicaid fee-for-service basis for all hospitals,
c.
the managed care gap for inpatient services payable through Medicaid managed care for all hospitals, and
d.
the managed care gap for outpatient services payable through Medicaid managed care for all hospitals.
3. In accordance with subsection C of Section 3241.3 of this title, the Authority shall use assessment fees for the purposes of accessing federal matching funds to make hospital access payments to eligible hospitals and the critical access hospitals described in paragraph 5 of subsection B of Section 3241.3 of this title. Hospital access payments shall be made through supplemental payment arrangements for services provided on a Medicaid fee-for-service basis and through directed payment arrangements for services provided on a Medicaid managed care basis, as approved by the federal Centers for Medicare and Medicaid Services.
4. Hospital access payments shall be determined annually and paid quarterly from the following funding pools:
a.
a hospital inpatient fee-for-service payment pool established from funds derived from the upper payment limit gap for inpatient services,
b.
a hospital inpatient managed care payment pool established from funds derived from the managed care gap for inpatient services,
c.
a hospital outpatient fee-for-service payment pool established from funds derived from the upper payment limit gap for outpatient services,
d.
a hospital outpatient managed care payment pool established from funds derived from the managed care gap for outpatient services, and
e.
(1)
A critical access hospital payment pool established from funds transferred from each pool established in subparagraphs a through d of this paragraph.
(2)
Prior to the start of each calendar year, the Authority shall determine an estimated amount that each critical access hospital may be entitled to receive for providing Medicaid services, not to exceed that critical access hospital's billed charges.
(3)
The Authority shall fund the critical access hospital payment pool in an amount equal to the total estimated amount that all critical access hospitals may be entitled to receive for providing Medicaid services, as calculated in division 2 of this subparagraph.
(4)
The Authority shall consult with the Committee regarding the calculations in divisions 2 and 3 of this subparagraph.
(5)
The Authority shall fully fund the critical access hospital payment pool prior to issuing any payment from the pools established in subparagraphs a through d of this paragraph.
5. In addition to any other funds paid to eligible hospitals for inpatient hospital services to Medicaid patients, each eligible hospital shall receive hospital access payments each quarter from the hospital inpatient fee-for-service payment pool and the hospital inpatient managed care payment pool in accordance with the following methodologies:
a.
the amount an eligible hospital shall receive from the hospital inpatient fee-for-service payment pool shall be the eligible hospital's pro rata share of the hospital inpatient fee-for-service payment pool calculated as the eligible hospital's total fee-for-service Medicaid payments for inpatient services divided by the total Medicaid fee-for-service payments for inpatient services of all eligible hospitals. Each quarterly payment from the hospital inpatient fee-for-service payment pool shall be paid to the eligible hospital through a supplemental payment. Prior to the start of a calendar year, the Authority shall consult with the Committee to minimize potential payment disparities to protect access to rural and independent hospitals, and
b.
an eligible hospital shall receive from the hospital inpatient managed care payment pool a per-discharge uniform add-on amount to be applied to each eligible hospital's Medicaid managed care discharges for that calendar year. The per-discharge uniform add-on amount shall be calculated by dividing the managed care gap by total managed care inpatient discharges at eligible hospitals contained in the data used to calculate the managed care gap. To assure timely payment, the Authority may make the calculation in this subparagraph using good-faith reasonable estimates if complete data does not exist or is not available. Each quarterly payment from the hospital inpatient managed care payment pool shall be paid to the eligible hospital through a directed payment.
6. In addition to any other funds paid to eligible hospitals for outpatient hospital services to Medicaid patients, each eligible hospital shall receive hospital access payments each quarter from the hospital outpatient fee-for-service payment pool and the hospital outpatient managed care payment pool in accordance with the following methodologies:
a.
the amount an eligible hospital shall receive from the hospital outpatient fee-for-service payment pool shall be the eligible hospital's pro rata share of the hospital's outpatient fee-for-service payment pool calculated as the eligible hospital's total fee-for-service Medicaid payments for outpatient services divided by the total Medicaid fee-for-service payments for outpatient services of all eligible hospitals. Each quarterly payment from the hospital outpatient fee-for-service payment pool shall be paid to the eligible hospital through a supplemental payment, and
b.
an eligible hospital shall receive from the hospital outpatient managed care payment pool a uniform percentage add-on amount to be applied to the base rate claims payments for hospital outpatient Medicaid managed care encounters at eligible hospitals for that calendar year. The uniform percentage add-on amount shall be calculated by dividing the managed care gap by total managed care base rate claims payments for eligible hospitals within the data used to calculate the managed care gap. To assure timely payment, the Authority may make the calculation in this subparagraph using good-faith reasonable estimates if complete data does not exist or is not available. Each quarterly payment from the hospital outpatient managed care payment pool shall be paid to the eligible hospital through a directed payment.
7. In addition to any other funds paid to critical access hospitals for inpatient and outpatient hospital services to Medicaid patients, each critical access hospital physically located in this state shall receive hospital access payments each quarter from the critical access hospital payment pool as follows:
a.
each calendar year, a critical access hospital shall receive from the critical hospital payment pool quarterly amounts that shall total the estimated amount the Authority calculated, not to exceed billed charges, for that critical access hospital in accordance with paragraph 4 of this subsection,
b.
the quarterly hospital access payments made to each critical access hospital shall be through supplemental payments and directed payments in such proportions as necessary for the Authority to make the total hospital access payments to each critical access hospital in accordance with subparagraph a of this paragraph, and
c.
in the event Medicaid managed care is not implemented on a statewide basis, the Authority shall make supplemental payments to critical access hospitals to achieve one hundred one percent (101%) of Medicare's critical access hospitals' costs and a directed payment shall not be made.
8. The Authority shall pay each quarterly hospital access payment referenced in paragraph 4 of this subsection within fourteen (14) calendar days of the date on which each quarterly payment of an annual assessment is due as required in subsection E of this section.
9. In processing directed payments through contracted entities, the following requirements shall apply:
a.
the Authority shall provide each contracted entity with a listing of the hospital access payments to be paid by each contracted entity to each eligible hospital and critical access hospital in accordance with this subsection,
b.
a contracted entity shall pay hospital access payments to eligible hospitals and critical access hospitals within five (5) business days of receiving a supplemental capitation payment from the Authority,
c.
a contracted entity is prohibited from withholding or delaying the payment of a hospital access payment for any reason, and
d.
the Authority shall utilize administrative discretion regarding the mechanisms of payment that may be necessary to assure that each eligible hospital and critical access hospital receives full payment of all hospital access payments to which it is entitled pursuant to this subsection.
10. A hospital access payment shall not be used to offset any other payment for hospital inpatient or outpatient services to Medicaid beneficiaries including without limitation any fee-for-service, managed care, per diem, private hospital inpatient adjustment, or cost-settlement payment.
11. Notwithstanding any other provision of law to the contrary:
a.
the supplemental payment programs in this section shall not be implemented if federal financial participation is not available or if the provider assessment waiver is not approved,
b.
an eligible hospital's obligation to pay the portion of the assessment attributable to the nonfederal share of the upper payment limit gap and the nonfederal share of the managed care gap as required by Section 3241.3 of this title and this section shall be reduced in the event the federal Centers for Medicare and Medicaid Services determines that federal financial participation is not available to make hospital access payments in accordance with this section. The assessment on eligible hospitals shall be reduced to a percentage that permits the Authority to obtain from eligible hospitals an amount of nonfederal matching funds for which federal financial participation is available to implement any portion of hospital access payments that the federal Centers for Medicare and Medicaid Services approves, and
c.
any assessments received by the Authority that cannot be matched with federal funds shall be returned pro rata to the eligible hospitals that paid the assessments.
12. If the federal Centers for Medicare and Medicaid Services disallows any hospital access payments made pursuant to this section on the basis that such payments exceed the maximum allowable under federal law, each hospital receiving such disallowed payments shall refund to the Authority an amount equal to that hospital's pro rata share of the recouped federal funds that is proportionate to the hospital's positive contribution to the disallowed payment. The refund shall be required only if the disallowance is considered final and all appeals have been exhausted.
G. All monies accruing to the credit of the Supplemental Hospital Offset Payment Program Fund are hereby appropriated and shall be budgeted and expended by the Authority after consideration of the input and recommendation of the Hospital Advisory Committee.
1. Monies in the Supplemental Hospital Offset Payment Program Fund shall be used for:
a.
transfers to the Medical Payments Cash Management Improvement Act Programs Disbursing Fund for the state share of supplemental or directed payments or both for Medicaid and SCHIP inpatient and outpatient services to hospitals that participate in the assessment,
b.
transfers to the Medical Payments Cash Management Improvement Act Programs Disbursing Fund for the state share of supplemental or directed payments or both for critical access hospitals,
c.
transfers to the Administrative Revolving Fund for the state share of payment of administrative expenses incurred by the Authority or its agents and employees in performing the activities authorized by the Supplemental Hospital Offset Payment Program Act but not more than Two Hundred Thousand Dollars ($200,000.00) each year,
d.
transfers to the Medical Payments Cash Management Improvement Act Programs Disbursing Fund each fiscal quarter in accordance with subsection C of Section 3241.3 of this title, and
e.
the reimbursement of monies collected by the Authority from hospitals through error or mistake in performing the activities authorized under the Supplemental Hospital Offset Payment Program Act.
2. The Authority shall pay from the Supplemental Hospital Offset Payment Program Fund quarterly installment payments to hospitals as set forth in this section.
3. Monies in the Supplemental Hospital Offset Payment Program Fund shall not be used to replace other general revenues appropriated and funded by the Legislature or other revenues used to support Medicaid.
4. The Supplemental Hospital Offset Payment Program Fund and the program specified in the Supplemental Hospital Offset Payment Program Act are exempt from budgetary reductions or eliminations caused by the lack of general revenue funds or other funds designated for or appropriated to the Authority.
5. No hospital shall be guaranteed, expressly or otherwise, that any additional costs reimbursed to the facility will equal or exceed the amount of the supplemental hospital offset payment program fee paid by the hospital.
H. After considering input and recommendations from the Hospital Advisory Committee, the Oklahoma Health Care Authority Board shall promulgate rules that:
1. Allow for an appeal of the annual assessment of the Supplemental Hospital Offset Payment Program payable under the Supplemental Hospital Offset Payment Program Act; and
2. Allow for an appeal of an assessment of any fees or penalties determined.
Added by Laws 2011, c. 228, § 4. Amended by Laws 2013, c. 132, § 3, eff. Nov. 1, 2013; Laws 2016, c. 345, § 3, eff. Nov. 1, 2016; Laws 2021, c. 518, § 3; Laws 2022, c. 398, § 3, eff. July 1, 2022.