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2026 Regular Session
HOUSE CONCURRENT RESOLUTION NO. 3
BY REPRESENTATIVE MCFARLAND
A CONCURRENT RESOLUTION
To provide for a hospital stabilization formula pursuant to Article VII, Section 10.13 of the
Constitution of Louisiana; to establish the level and basis of hospital assessments;
to establish certain reimbursement enhancements for inpatient and outpatient hospital
services; to establish certain criteria for the implementation of the formula; and to
provide for related matters.
WHEREAS, through the adoption of this Resolution, the Legislature of Louisiana
hereby seeks to:
(1) Preserve and enhance the availability of inpatient and outpatient hospital services
for the citizens of Louisiana.
(2) Preserve and protect rural hospitals as provided in the Rural Hospital
Preservation Act, pursuant to R.S. 40:1189.1 et seq.
(3) Enhance the stability of hospital funding by utilizing a fiscally prudent healthcare
driven solution that does not rely on the use of state general funds and provides a reliable
and recurring source of funding for healthcare services.
(4) Minimize the effects of shifting the cost of caring for those Louisiana residents
who are uninsured to those who are able to obtain health insurance.
(5) Create flexibility to design a plan to provide for more efficient and effective
ways to maximize the state's use of monies currently expended for the provision of
healthcare services to the state's low income and uninsured residents.
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(6) Enhance the financial sustainability of the Medicaid hospital program by
pursuing a hospital directed payment model that is in conformance with the rules and
regulations promulgated by the Centers for Medicaid and Medicare Services.
THEREFORE, BE IT RESOLVED that the Legislature of Louisiana does hereby
enact the annual hospital stabilization formula pursuant to Article VII, Section 10.13 of the
Constitution of Louisiana:
I. Hospital Stabilization Assessment.
A.(1) Upon approval by the Centers for Medicare and Medicaid Services of
a directed payment arrangement for inpatient and outpatient hospital services
pursuant to 42 C.F.R. 438.6, the Louisiana Department of Health shall be authorized
to levy and collect an assessment upon those hospitals subject to the approved
directed payment arrangement that is in accordance with the provisions of this
Subsection.
(2) Prior to the levy of any assessment, pursuant to the provisions of this
Resolution, the Louisiana Department of Health shall submit a Medicaid assessment
report to the Joint Legislative Committee on the Budget. The Medicaid assessment
report shall include a description of the proposed assessment, the basis for the
calculation of the assessment, and a listing of each hospital included in the proposed
assessment.
B.(1) The hospital assessment for state Fiscal Year 2026-2027 shall be
calculated as the product of the rates set forth as follows and the respective hospitals'
inpatient net patient revenue and outpatient net patient revenue as reported in the
Medicare cost report ending in federal fiscal year 2023:
(a) Long-term acute care, psychiatric, and rehabilitation hospitals: 1.38% of
inpatient net patient revenue and 1.38% of outpatient net patient revenue.
(b) Hospital Service Districts not included in R.S. 40:1189.1 et seq.: 4.99%
of inpatient net patient revenue up to one hundred twenty-five million dollars and
4.99% of outpatient net patient revenue up to one hundred twenty-five million
dollars.
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(c) All other acute care hospitals: 6.49% of inpatient net patient revenue up
to one hundred twenty-five million dollars and 6.74% of outpatient net patient
revenue up to one hundred twenty-five million dollars.
(d) Hospital Service Districts not included in R.S. 40:1189.1 et seq. and all
other acute care hospitals: 2.36% of inpatient net patient revenue exceeding one
hundred twenty-five million dollars and 2.36% of outpatient net patient revenue
exceeding one hundred twenty-five million dollars.
(2) Non-rural, small urban private acute hospitals with forty licensed beds or
less, either as reported in the Medicare cost report ending in federal fiscal year 2023
or as licensed by the Louisiana Department of Health; freestanding psychiatric
Medicaid disproportionate share hospitals; and rural hospitals as defined in
R.S.40:1189.1 et seq. shall be exempt and excluded from the levy of any assessment
implemented pursuant to this Subsection.
C. In the event the Centers for Medicare and Medicaid Services does not
approve an assessment consistent with the provisions set forth in this Resolution, the
Louisiana Department of Health shall be authorized to develop a new assessment that
shall be approved by the Joint Legislative Committee on the Budget prior to the levy
of the assessment.
D. An assessment levied pursuant to this Resolution shall be levied only for
payments made to hospitals pursuant to Section II of this Resolution.
II. Reimbursement Enhancements.
A. Upon the implementation of an assessment pursuant to Subsection A of
Section I of this Resolution, the Louisiana Department of Health shall provide for
reimbursement enhancements as follows:
(1)(a) Implementation of directed payment arrangement for inpatient and
outpatient hospital services pursuant to 42 C.F.R. 438.6.
(i) For acute care hospitals, the methodology shall be implemented in the
manner set forth in the directed payment arrangement submitted to the Centers for
Medicaid and Medicare Services for state fiscal year 2026-2027.
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(ii) For post-acute care hospitals, the methodology shall be implemented in
the manner set forth in the directed payment arrangement submitted to the Centers
for Medicaid and Medicare Services for state fiscal year 2026-2027.
(b) In the event the Centers for Medicare and Medicaid Services does not
approve the directed payment arrangement for inpatient and outpatient hospital
services submitted to the Centers for Medicaid and Medicare Services, the Louisiana
Department of Health shall be authorized to develop and submit to the Centers for
Medicare and Medicaid Services a new directed payment arrangement for inpatient
and outpatient hospital services and a new assessment. The Louisiana Department
of Health shall obtain the approval of the Joint Legislative Committee on the Budget
prior to implementing either a directed payment arrangement or levying an
assessment pursuant to the provisions of this Paragraph.
(2) Payment for healthcare services through the implementation of a health
coverage expansion of the Louisiana medical assistance program that meets all the
requirements necessary for the state to maximize federal matching funds as set forth
in 42 U.S.C. 1396d(y) of Title XIX of the Social Security Act.
(3) For any hospital subject to the assessment levied pursuant to this
Resolution, the payment of hospital reimbursement rates in an amount no less than
the reimbursement rates in effect for dates of service on or after January 1, 2026.
B. The Louisiana Department of Health shall publish, on a publicly
accessible website of the department, the approved Centers for Medicare and
Medicaid Services directed payment arrangements within ten days of receiving
approval.
C. The Louisiana Department of Health shall publish on a quarterly basis, no
later than thirty days after the end of each quarter, a report containing data directly
related to the reimbursement enhancements provided for in this Resolution. The
report shall include the following:
(1) The total amount of inpatient and outpatient Medicaid claims paid to
hospitals delineated by each individual hospital Medicaid provider number.
(2) The amount of directed payments received by each hospital.
(3) Other supplemental payments received by each hospital.
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III. Administration.
The Louisiana Department of Health shall submit any necessary state plan
amendment that may be required in order to implement the provisions of this
Resolution to the Centers for Medicare and Medicaid Services no later than one
hundred and twenty days from the date this Resolution is adopted. In addition, the
Louisiana Department of Health may promulgate any rules and regulations that are
necessary and proper to implement the provisions of this Resolution; however, the
final adoption thereof shall not be required in order to implement and carry out the
provisions of this Resolution.
SPEAKER OF THE HOUSE OF REPRESENTATIVES
PRESIDENT OF THE SENATE
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