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A bill for an act
relating to health; establishing a hospital charity care payment program administered
by the commissioner of health; depositing money collected from the hospital
surcharge in a charity care account in the special revenue fund; appropriating
money; amending Minnesota Statutes 2024, sections 256.9656; 256.9657,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 144.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[144.601] HOSPITAL CHARITY CARE PAYMENT PROGRAM.
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Subdivision 1.
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Definitions.
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(a) For purposes of this section, the following terms have
the meanings given.
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(b) "Charity care adjustments" has the meaning given in Minnesota Rules, part 4650.0102,
subpart 9.
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(c) "Commissioner" means the commissioner of health.
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(d) "Cost-to-charge ratio" means the following as reported to the commissioner under
Minnesota Rules, chapter 4650: a hospital's total operating expenses, not including bad
debt, divided by the sum of the hospital's total charges for patient care and the hospital's
operating revenue.
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(e) "Eligible hospital" means a hospital that:
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(1) is licensed under sections 144.50 to 144.56;
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(2) is located within the state;
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(3) has filed a Medicare cost report with the Healthcare Cost Report Information System;
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(4) is nonprofit; and
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(5) is not excluded from eligibility under subdivision 4.
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Subd. 2.
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Charity care account created; appropriations.
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A charity care account is
created in the special revenue fund. Money in the account is appropriated to the commissioner
of health each fiscal year:
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(1) to make payments to eligible hospitals under the hospital charity care payment
program established in this section; and
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(2) for program administration, in an amount up to $....... each fiscal year.
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Subd. 3.
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Hospital charity care payment program established.
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The commissioner of
health must establish and administer a hospital charity care payment program, in which the
commissioner makes payments to each eligible hospital that applies for a payment, for the
charity care adjustments provided by the eligible hospital.
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Subd. 4.
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Hospitals excluded from eligibility.
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The following hospitals are not eligible
for payments under this section:
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(1) state-owned or state-operated regional treatment centers and all state-operated services;
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(2) federal Veterans Administration Medical Centers; and
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(3) long-term acute care hospitals.
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Subd. 5.
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Application.
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Each eligible hospital seeking a payment or payments under this
section in a fiscal year must apply to the commissioner in a form and manner specified by
the commissioner.
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Subd. 6.
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Calculations.
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(a) The commissioner must calculate each eligible hospital's
payment amount according to paragraph (b) or (c). In calculating payments under this
subdivision, each eligible hospital's charity care adjustments must be adjusted to cost basis
by multiplying the eligible hospital's charity care adjustments by the eligible hospital's
cost-to-charge ratio.
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(b) If the amount in the charity care account available to make payments to eligible
hospitals in a fiscal year is equal to or greater than the total amount of charity care
adjustments provided by all eligible hospitals for the most recent year for which data is
available, the payment amount for each eligible hospital is equal to the amount of charity
care adjustments provided by the eligible hospital for the most recent year for which data
is available.
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(c) If the amount in the charity care account available to make payments to eligible
hospitals in a fiscal year is less than the total amount of charity care adjustments provided
by all eligible hospitals for the most recent year for which data is available, the commissioner
must determine, for the most recent year for which data is available, the percentage of charity
care adjustments provided by each eligible hospital out of the total amount of charity care
adjustments provided by all eligible hospitals. The payment amount for each eligible hospital
is equal to the percentage of charity care adjustments provided by the eligible hospital
multiplied by the amount in the charity care account available for payments to eligible
hospitals in that fiscal year.
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Subd. 7.
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Payments.
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The commissioner must make payments to eligible hospitals at least
once per fiscal year and may make payments more frequently on a schedule determined by
the commissioner.
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Subd. 8.
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Reporting requirements.
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An eligible hospital receiving one or more payments
under this section must report to the commissioner, in a form and manner specified by the
commissioner, information needed for the commissioner to evaluate the program.
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EFFECTIVE DATE.
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This section is effective July 1, 2026.
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Sec. 2.
Minnesota Statutes 2024, section 256.9656, is amended to read:
256.9656 DEPOSITS INTO THE GENERAL FUND.
All money collected under section
256.9657
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, subdivisions 1, 2a to 3a, and 7,
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shall be
deposited in the general fund. Deposits do not cancel and are available until expended.
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EFFECTIVE DATE.
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This section is effective July 1, 2026, and applies to surcharges
and civil penalties collected on or after that date.
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Sec. 3.
Minnesota Statutes 2024, section 256.9657, subdivision 2, is amended to read:
Subd. 2.
Hospital surcharge.
(a)
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Effective October 1, 1992,
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Each Minnesota hospital
except facilities of the federal Indian Health Service and regional treatment centers shall
pay to the
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medical assistance
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charity care
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account
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in the special revenue fund
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a surcharge
equal to 1.4 percent of net patient revenues excluding net Medicare revenues reported by
that provider to the health care cost information system according to the schedule in
subdivision 4.
(b) Effective July 1, 1994, the surcharge under paragraph (a) is increased to 1.56 percent.
(c) Notwithstanding the Medicare cost finding and allowable cost principles, the hospital
surcharge is not an allowable cost for purposes of rate setting under sections
256.9685
to
256.9695
.
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EFFECTIVE DATE.
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This section is effective July 1, 2026, and applies to surcharges
collected on or after that date.
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