Connecticut Administrative Code › Title 19a - Public Health and Well-being › 643 - Administrative Regulations and Rules of Practice Description of Organization › Article 3 - PETITIONS AND APPLICATIONS › Part 5 - Rate Regulation and Budget Review › Hospital Financial Review › Section 19a-643-201 - Definitions

Current through July 10, 2024
(a) The definitions provided by section
					 19a-630,
					 of the Connecticut General Statutes and sections
					 19a-643-10 and
					 19a-643-11 of the
					 Regulations of Connecticut State Agencies, except as otherwise noted, shall
					 govern the interpretation and application of sections
					 19a-643-200 to
					 19a-643-206,
					 inclusive.
(b) The following
					 definitions shall apply to the review by the office of all matters concerning
					 hospital financial information or statistical data reporting requirements, as
					 applicable:
(1) "Affiliate" means a person,
					 entity or organization controlling, controlled by, or under common control with
					 another person, entity or organization, including but not limited to parent
					 corporations, holding companies, related entities, joint ventures and
					 partnerships. Factors to be considered include: common ownership of fifty or
					 more percent; shared boards of directors; purpose; and whether an entity
					 operates for the benefit of others. Control exists where an individual or
					 organization has the power, directly or indirectly, to direct the actions or
					 policy of an organization or entity. A person, entity or organization may be an
					 affiliate for purposes of a particular project;
(2) "Ambulatory payment classification" or
					 "APC" means the system of classifying outpatient department (OPD) services
					 reimbursed under the Medicare program prospective payment system for hospital
					 outpatient services as set forth in 42 USC 1833(t) as from time to time
					 amended;
(3) "Bad debts" means the
					 year-end adjustment to a hospital's allowance for doubtful accounts due to the
					 non-reimbursement of services rendered to patients from whom reimbursement was
					 expected, resulting in the recording of bad debt expense. Bad debts exclude any
					 financial activity not associated with patient accounts receivable;
(4) "Base year" means "base year" as defined
					 in section
					 19a-659
					 of the Connecticut General Statutes;
(5) "Board-designated funds" means the
					 unrestricted funds available for specific purposes or projects;
(6) "Budget year" means the twelve month
					 fiscal period subsequent to the current year or base year beginning October
					 1st and ending the following September
					 30th. If John Dempsey Hospital of the University of
					 Connecticut Health Center elects to operate and report on a state fiscal year
					 basis, the budget year for that hospital shall be the twelve month period
					 subsequent to the current year or base year beginning July
					 1st and ending the following June
					 30th;
(7) "By" means budget year;
(8) "Capital expenditures" means the
					 expenditures for items which, at the time of acquisition have an estimated
					 useful life of at least two years and a purchase price of at least $5,000. In
					 addition, capital expenditures shall include expenditures of at least $10,000
					 for groups of related items with an expected life of more than two years, which
					 are capitalized under generally accepted accounting principles. Such items
					 shall include, but not be limited to, the following:
(A) Land, buildings, fixed equipment, major
					 movable equipment and any attendant improvements thereto;
(B) The total cost of all studies, surveys,
					 designs, plans, working drawings, specifications, and other activities
					 essential to the acquisition, improvement, expansion or replacement of plant or
					 equipment or any combination thereof;
(C) Leased assets. The purchase price for
					 leased assets shall be the fair market value of the leased assets at the time
					 of lease as determined by the office;
(D) Maintenance expenditures capitalized in
					 accordance with generally accepted accounting principles or provided for as
					 part of any lease, lease purchase agreement, purchase contract, or similar or
					 related agreement; and
(E) Donated
					 Assets. Donations of property and equipment, which under generally accepted
					 accounting principles are or would normally be capitalized at fair market value
					 at the date of contribution if purchased rather than donated;
(9) "Case mix" means the average
					 of inpatient cases, as differentiated by DRG, treated by a specific hospital
					 during a given fiscal year;
(10)
					 "Case mix index" means "case mix index" as defined in section
					 19a-659
					 of the Connecticut General Statutes;
(11) "Champus or Tricare" means "Champus or
					 Tricare" as defined in section
					 19a-659
					 of the Connecticut General Statutes;
(12) "Charity care" means free or discounted
					 health care services rendered by a hospital to persons who cannot afford to
					 pay, including but not limited to, care to the uninsured patient or patients
					 who are not expected to pay all or part of a hospital bill based on income
					 guidelines and other financial criteria set forth in statute or in a hospital's
					 charity care policies on file at the office. Bad debts, courtesy discounts,
					 contractual allowances, self pay discounts, and charges for health care
					 services provided to employees are not included under the definition of charity
					 care;
(13) "Contractual allowances"
					 means the difference between hospital published charges and payments generated
					 by negotiated agreements for a different or discounted rate or method of
					 payment. Charity care and bad debts are not included under the definition of
					 contractual allowances;
(14) "Cost
					 center" means an expense classification, which identifies the salary,
					 non-salary and depreciation expenses of a specific department or function. In
					 addition, cost centers may be established to identify specific categories of
					 expense such as interest, malpractice, leases, building and building equipment
					 depreciation;
(15) "Current year"
					 means the fiscal year consisting of a twelve month period, which is presently
					 underway and which precedes the budget year. Also referred to as the base
					 year;
(16) "CY" means current
					 year;
(17) "Discharge" means any
					 patient who was discharged on a date subsequent to the date admitted to the
					 hospital for treatment as an inpatient; except that it shall also mean such
					 patient was admitted and discharged on the same day where such patient:
(A) Died; or
(B) Left against medical advice; or
(C) Was formally released from the hospital.
For purposes of this definition, patients transferred
						between an exempt unit and any non-exempt inpatient unit shall be considered
						discharged and readmitted;
(18) "DRG" means Diagnosis Related
					 Group;
(19) "Endowment funds" means
					 funds in which a donor has stipulated, as a condition of his or her gift, that
					 the principal amount of the fund is to be maintained inviolate and in
					 perpetuity, and that only income from investments of the fund may be
					 expended;
(20) "Equivalent
					 discharges" means the result of multiplying inpatient discharges times the
					 ratio of total gross revenue to inpatient gross revenue;
(21) "Exempt inpatient" means a psychiatric
					 inpatient or a rehabilitation inpatient treated in a unit meeting the criteria
					 set forth in
					 42 CFR
					 412.22(e), as from time to
					 time amended;
(22) "Exempt
					 Psychiatric Unit or Exempt Rehabilitation Unit" means respectively, an
					 inpatient psychiatric unit or an inpatient rehabilitation unit of a general
					 hospital that has been determined by Medicare as meeting the criteria set forth
					 in
					 42 CFR
					 412.22(e), as from time to
					 time amended;
(23) "Fiscal year"
					 means:
(A) For each acute care general and
					 children's hospital, the fiscal year consisting of a twelve month period
					 commencing on October 1st and ending the following September 30th; or
(B) For John Dempsey Hospital of the
					 University of Connecticut Health Center, the hospital may elect to report on
					 the basis of the hospital fiscal year defined in subparagraph (a), or may elect
					 to operate and report to the office based on the state fiscal year consisting
					 of a twelve month period commencing July 1st and ending the following June
					 30th. If John Dempsey Hospital chooses to operate and report to the office on a
					 state fiscal year basis, the hospital shall comply with the provisions of
					 section
					 19a-643-206
					 of the Regulations of Connecticut State Agencies as a continuing condition for
					 qualifying to select or maintain the option of operating and reporting on a
					 state fiscal year basis;
(24) "Funded depreciation" means funds
					 specifically set aside for the replacement of capital assets;
(25) "FY" means fiscal year;
(26) "Government discharges" means discharges
					 for which the principal payer is Medicare including Medicare sponsored managed
					 care organizations, medical assistance including Medicaid and medical
					 assistance sponsored managed care organizations, and Champus or Tricare. A
					 discharge will be classified as a government discharge, if Medicare, medical
					 assistance including medicaid, Champus or Tricare is responsible for a majority
					 of the cost of service rendered to the patient;
(27) "Gross inpatient revenue" means the
					 total gross patient charges for hospital inpatient services consistent with
					 medicare principles of reimbursement;
(28) "Gross outpatient revenue" means the
					 total gross patient charges for hospital outpatient services consistent with
					 medicare principles of reimbursement;
(29) "Gross revenue" means "Gross revenue" as
					 defined in section
					 19a-659
					 of the Connecticut General Statutes;
(30) "Health Insurance Portability and
					 Accountability Act of 1996" or "HIPAA" means
					 Pub.
					 L. 104-191 that, among other things, provides each
					 person protections for maintaining health insurance when changing employment,
					 coverage for preexisting conditions, and confidentiality of patient medical
					 records;
(31) "Hospital" means a
					 health care facility or institution licensed by the Department of Public Health
					 to provide both inpatient and outpatient services as one of the following:
(A) A general hospital licensed by the
					 Department of Public Health, including John Dempsey Hospital of the University
					 of Connecticut Health Center, as a short-term, acute care general or children's
					 hospital; or
(B) a specialty
					 hospital licensed by the Department of Public Health as a chronic disease
					 hospital that provides inpatient psychiatric, rehabilitation or hospice
					 services;
(32)
					 "Inpatient non-exempt" means inpatients who are not patients in an exempt
					 psychiatric unit or exempt rehabilitation unit;
(33) "Managed care organization" means a
					 "managed care organization" as defined in section
					 38a-1040 of the
					 Connecticut General Statutes, or an eligible organization as defined by
					 Medicare in
					 42
					 USC 1395mm(b) as from time
					 to time amended, and which can also include health maintenance organizations
					 (HMOs) and preferred provider organizations (PPOs);
(34) "Medicaid" means the federal and state
					 health insurance program established under Title XIX of the Social Security Act
					 to provide medical assistance on behalf of families with dependent children and
					 for aged, blind, or disabled individuals, whose income and resources are
					 insufficient to meet the costs of necessary medical services, and which is
					 administered by the Department of Social Services pursuant to Chapter 319v of
					 the Connecticut General Statutes;
(35) "Medical assistance" means "medical
					 assistance" as defined in section
					 19a-659
					 of the Connecticut General Statutes;
(36) "Medical assistance underpayment" means
					 "Medical assistance underpayment" as defined in section
					 19a-659
					 of the Connecticut General Statutes;
(37) "Medicare" means the federal health
					 insurance program provided for the aged and disabled in
					 42 USC
					 1395 through 42 USC 1995 ccc, inclusive, as
					 from time to time amended;
(38)
					 "Medicare Cost Report" means Form 2552, the provider reimbursement report, any
					 successor form and all supplemental schedules and attachments required to be
					 filed annually pursuant to
					 42 CFR
					 413.20(b) as from time to
					 time amended;
(39) "Medicare
					 principles of reimbursement" means the reimbursement principles provided in 42
					 CFR 413, and unless cited as of a specific date, shall incorporate any
					 subsequent amendments;
(40) "Net
					 revenue" means "net revenue" as defined in section
					 19a-659
					 of the Connecticut General Statutes;
(41) "Nongovernmental" means any commercial
					 or private payer and includes, but is not limited, to managed care
					 organizations, health maintenance organizations (HMOs) and preferred provider
					 organizations (PPOs);
(42)
					 "Non-operating revenue" means unrestricted revenue not directly derived from
					 patient care, related patient services, or the sale of related goods and
					 services. Non-operating revenue is further classified as revenue derived from
					 either philanthropic or non-philanthropic sources;
(43) "Non-recurring items" means items from a
					 base year or budget year that are not expected to occur again in the next
					 fiscal year;
(44) "Office" means
					 the Office of Health Care Access;
(45) "Operating expense" means the expenses
					 necessary to maintain the functions of the hospital including, but not limited
					 to, any collection agency or debt collection expense;
(46) "Other operating revenue" means revenue
					 from non-patient goods and services. Such revenue should be normal to the
					 operation of a hospital but should be accounted for separately from patient
					 revenues and includes, but is not limited to, the following: revenue from
					 gifts, grants, parking fees, recovery of silver from x-ray film, fees from
					 educational programs, rental of health care facility space, sales from hospital
					 gift shops, cafeteria meals, subsidies specified by the donor for research,
					 educational or other programs, revenues restricted by the donor or grantor for
					 operating purposes, and net assets released from restrictions. Bad debt
					 recoveries shall not be considered to be other operating revenue;
(47) "Outlier" means a medicare case for
					 which a federal intermediary has issued an additional payment beyond the
					 applicable federal prospective payment rate as prescribed by the medicare
					 program;
(48) "Outlier revenue"
					 means the total revenue received by a hospital during a reporting period for
					 all types of Medicare outliers;
(49) "Parent corporation" means a corporate
					 holding company or a hospital health system that controls through its governing
					 body a hospital and the hospital's affiliates;
(50) "Payer classifications" means payers in
					 the following categories:
(A) Nongovernmental:
					 includes commercial and private payers;
(B) Champus or Tricare;
(C) Medicaid: includes medicaid contracted
					 through medicaid managed care organizations;
(D) Medicare: includes medicare administered
					 through designated fiscal intermediaries and carriers and medicare contracted
					 through managed care organizations;
(E) Total medical assistance: includes
					 medicaid and the state administered general assistance program contracted
					 through general assistance managed care organizations;
(F) Other government payments: includes
					 payments identified in
					 42 USC
					 701 through 42 USC 710, inclusive, as from
					 time to time amended;
(G)
					 Uninsured: includes individuals with no insurance; and
(H) Other;
(51) "Payer mix" means the proportionate
					 share of itemized charges attributable to patients assignable to a specific
					 payer classification to total itemized charges for all patients;
(52) "Plant replacement and expansion funds"
					 means funds donated for renewal, expansion or replacement of existing plant or
					 a portion of existing plant;
(53)
					 "Preferred provider organization (PPO)" means a managed care organization,
					 which provides health care coverage through leasing of contracts made with
					 health care providers to insurers and employers for a fee, and which performs
					 utilization review services;
(54)
					 "Related corporation" means a corporation that is related to a hospital where
					 the corporation is an affiliate or where the hospital has an ownership interest
					 of ten per cent or more in the corporation or where the corporation has an
					 ownership interest in the hospital of ten per cent or more;
(55) "Restricted funds" means funds
					 temporarily or permanently restricted by donors for specific purposes. The term
					 refers to specific purpose funds and endowment funds;
(56) "Retained earnings" means the portion of
					 stockholders' equity that accounts for the increase or decrease in contributed
					 or paid-in capital due to net income, net losses and dividends paid;
(57) "Self-pay discount" means the amount
					 discounted by a hospital from its published charges for, including but not
					 limited to, an uninsured or underinsured patient from whom reimbursement is
					 expected, as determined by the patient not having met the income guidelines and
					 other financial criteria from the hospital's charity care policies on file at
					 the office;
(58) "Specific purpose
					 funds" means funds restricted externally by a donor, or otherwise, for a
					 specific purpose or project. Board-designated funds do not constitute specific
					 purpose funds;
(59) "Stockholders'
					 equity" means the claims of ownership equity in an entity also known as
					 contributed or paid-in capital, and retained earnings;
(60) "Temporarily restricted funds" means
					 donated funds which by the terms of the gift become available either for any
					 purpose designated by the governing board or for a specific purpose designated
					 by the donor upon the happening of an event or upon the passage of a stated
					 period of time;
(61) "Third party
					 payer" means a governmental agency, or, private nongovernmental entity that is
					 liable by virtue of state or federal law or regulation or a contract to pay for
					 all or a part of the cost of a patient's hospitalization or ambulatory
					 services;
(62) "Uncompensated care"
					 means "Uncompensated care"as defined in section
					 19a-659
					 of the Connecticut General Statutes;
(63) "Uninsured patient" means a patient who
					 is without health insurance for whom the payer responsible for payment of the
					 bill for hospital services rendered is the patient, the patient's parent or
					 guardian or another responsible person, who is not a third party payer and who
					 is not subsequently reimbursed by another payer for the cost of any of the
					 services rendered to the patient. A patient shall not be classified as an
					 uninsured patient, if such subsequent reimbursement takes place;
(64) "Unrestricted funds" means funds which
					 bear no external restrictions as to use or purpose and which can be used for
					 any purpose, as distinguished from funds restricted externally for specific
					 operating purposes, for plant replacement and expansion, or designated as
					 endowment funds;
(65) "Volume"
					 means the quantity of specified inpatient or outpatient utilization statistics;
					 and
(66) "Working capital" means
					 current assets excluding funds committed for the retirement of long term debt,
					 minus current liabilities excluding the current portion of long term debt. All
					 amounts due to or from other funds, affiliates or related organizations may be
					 considered as current assets or current liabilities. The current portion of
					 long term debt is excluded from this definition because it is treated
					 separately in reviewing financial requirements.