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69th Legislature 2025 HB 732
- 1 - Authorized Print Version – HB 732
ENROLLED BILL
AN ACT ESTABLISHING THE PROMPT COST REPORT REIMBURSEMENT ACT; GENERALLY REVISING
THE RETROACTIVE ADJUSTMENT PROCESS BY THE DEPARTMENT OF PUBLIC HEALTH AND HUMAN
SERVICES FOR COST REPORTS SUBMITTED BY CRITICAL ACCESS HOSPITALS; PROVIDING AN
APPROPRIATION; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE
APPLICABILITY DATE.”
WHEREAS, critical access hospitals in Montana participating in the Montana Medicaid program are
reimbursed for medical services provided to their communities based on the cost of delivering these services;
and
WHEREAS, to effectuate this reimbursement, the critical access hospital submits a cost report to the
applicable Medicare administrative contractor identifying the cost of services, which forms the basis for settling
interim payments to ensure the Medicare and Medicaid programs have paid the proper amount in
reimbursement; and
WHEREAS, the Medicare program performs an interim settlement upon the filing of a cost report with
the applicable Medicare administrative contractor; and
WHEREAS, a Medicare administrative contractor periodically performs a desk audit to review
previously filed cost reports, and Medicare will perform an additional adjustment as required based upon the
final desk audit; and
WHEREAS, the Montana Medicaid program does not perform initial settlements upon the filing of the
cost report and instead waits to settle cost reports until the Medicare administrative contractor has performed
the final desk audit; and
WHEREAS, Montana Medicaid's practice of waiting to settle cost reports until the final desk audit is
performed has resulted in multiple-year delays in settling reimbursement for participating critical access
hospitals whose cost reports are selected for a Medicare audit; and
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69th Legislature 2025 HB 732
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ENROLLED BILL
WHEREAS, aligning Montana Medicaid's practice with Medicare's practice will ensure proper fiscal
management for the Montana Medicaid program and provide timely and accurate reimbursement to Montana
critical access hospitals.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Short title. [Sections 1 through 3] may be cited as the "Prompt Cost Report
Reimbursement Act".
Section 2. Purpose. (1) The legislature finds that providers of service that participate in medicare
and Montana medicaid are required to submit information to achieve the settlement of costs relating to health
care social services rendered to beneficiaries. The submitted cost reports cover the providers' fiscal year of
operations based on the providers' accounting year.
(2) The legislature finds that to balance prompt reimbursement to providers and maintain Montana
medicaid's program integrity, the Montana medicaid program shall align cost-based reimbursement procedures
with the procedures utilized by the medicare program. This includes prompt initial settlement upon submission
of a provider's cost report and subsequent adjustment after a desk review or audit of the cost report is
performed by the applicable medicare administrative contractor.
(3) [Sections 1 through 3] apply to annual cost reports when submitted by a critical access
hospital, as defined 50-5-101.
Section 3. Retroactive adjustment and settlement of cost report. (1) (a) To reimburse a provider
as quickly as possible, the department of public health and human services shall perform a tentative retroactive
adjustment when a cost report is received by the applicable medicare administrative contractor.
(b) Costs must be accepted as reported except for obvious errors or inconsistencies, subject to
adjustment by a later audit.
(c) The department shall make an interim settlement of the report and, if applicable, payment to
the provider within 240 days after receipt of the cost report by the medicare administrative contractor or within
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69th Legislature 2025 HB 732
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ENROLLED BILL
30 days after receipt of the interim medicaid cost settlement from the medicare administrative contractor,
whichever occurs sooner.
(d) In the event of an overpayment, the provider has 60 days from the date of the initial notification
indicated by the interim cost settlement to repay the amount of the overpayment, or to have an agreed upon
repayment schedule.
(2) (a) Upon receipt of the final desk review or audit of the cost report by the applicable medicare
administrative contractor, the department shall perform a final retroactive adjustment and, if applicable, a final
settlement of the cost report.
(b) In the event of an overpayment, the provider has 60 days from the date of the initial notification
to repay the amount of the overpayment or to have an agreed upon repayment schedule. In the event of an
underpayment, the department will reimburse the provider within 90 days from the date of the initial notification
to the provider.
(3) As used in this section, "medicare administrative contractor" has the same meaning as
provided in 42 CFR 421.401 and also includes an intermediary as defined in 42 CFR 421.3.
Section 4. Transition. Notwithstanding the provisions of [section 7], the department of public health
and human services shall settle all cost reports submitted prior to [the effective date of this act] within 240 days
of [the effective date of this act].
Section 5. Appropriation. (1) There is appropriated $33,900 from the hospital medicaid
reimbursement account established in 53-6-149 and $33,900 from the federal special revenue fund to the
department of public health and human services for the fiscal year beginning July 1, 2025, for the settlement of
cost reports described in [sections 3 and 4].
(2) There is appropriated $7,500 from the hospital medicaid reimbursement account established in
53-6-149 and $7,500 from the federal special revenue fund to the department of public health and human
services for the fiscal year beginning July 1, 2026, for the settlement of cost reports described in [sections 3
and 4].
(3) The legislature intends that the appropriation of $15,000 from the hospital medicaid
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reimbursement account established in 53-6-149 and $15,000 from the federal special revenue fund for the
biennium be considered as part of the ongoing base for the next legislative session.
Section 6. Codification instruction. [Sections 1 through 3] are intended to be codified as an integral
part of Title 53, chapter 6, and the provisions of Title 53, chapter 6, apply to [sections 1 through 3].
Section 7. Effective date. [This act] is effective on passage and approval and subject to the
requirements of the centers for medicare and medicaid services.
Section 8. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109,
to cost reports submitted prior to [the effective date of this act].
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I hereby certify that the within bill,
HB 732, originated in the House.
___________________________________________
Chief Clerk of the House
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025.
HOUSE BILL NO. 732
INTRODUCED BY D. BEDEY
AN ACT ESTABLISHING THE PROMPT COST REPORT REIMBURSEMENT ACT; GENERALLY REVISING
THE RETROACTIVE ADJUSTMENT PROCESS BY THE DEPARTMENT OF PUBLIC HEALTH AND HUMAN
SERVICES FOR COST REPORTS SUBMITTED BY CRITICAL ACCESS HOSPITALS; PROVIDING AN
APPROPRIATION; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE
APPLICABILITY DATE.