HB176 Alabama 2019 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

Regular Session 2019

Title

Hospitals, private hospital assessment and Medicaid funding program extended for fiscal year 2019, Secs. 40-26B-71, 40-26B-73, 40-26B-77.1, 40-26B-79, 40-26B-80, 40-26B-81, 40-26B-82, 40-26B-84, 40-26B-88 am'd.

Summary

HB176 extends Alabama's private hospital assessment and Medicaid funding program through state fiscal years 2019–2022, continuing a dedicated funding mechanism to support hospital payments.

What This Bill Does

It imposes a private hospital assessment of 5.75%–6.00% of net patient revenue (based on 2016–2017 data) for 2019–2022, with funds going into a Hospital Assessment Account to pay hospital and Medicaid costs. It also requires publicly and state-owned hospitals to make intergovernmental transfers to Medicaid to support payments, with a cap and alignment to federal rules. The bill sets base payment methods (APR-DRG for inpatient and an OPS/fee-for-service approach for outpatient) and establishes hospital access payments to eligible hospitals until funds run out, while providing refund or suspension options if federal participation is not available or expenditures fall short; the program automatically ends in 2022 unless extended.

Who It Affects

• Privately operated hospitals — face a new annual assessment based on net patient revenue, which funds hospital and Medicaid payments and can be reduced pro rata if disproportionate share funding is cut; they are eligible for hospital payments funded by the Hospital Assessment Account.
• Publicly owned/state-owned hospitals and the Alabama Medicaid Agency — must make intergovernmental transfers to support Medicaid hospital payments and will receive inpatient and outpatient hospital access payments up to the applicable upper payment limits, subject to federal rules and funding availability.

Key Provisions

• Private hospital assessment set at 5.75%–6.00% of net patient revenue (based on 2016–2017 data) for state fiscal years 2019–2022, with annual review and potential pro rata reductions if DSH funding changes.
• Creation of the Hospital Assessment Account, separate from the General Fund, to fund inpatient/outpatient payments and reimbursements; funds may be rolled over and partially refunded if not needed or if the program ends.
• Public/private hospital intergovernmental transfers (IGTs) from publicly/state-owned hospitals to Medicaid, capped at a total not exceeding $333,434,048 (subject to federal adjustments) and adjusted if Medicaid begins payments earlier or later.
• Medicaid payment structure depends on timing: if Medicaid begins payments by 9/30/2019, inpatient payments use base APR-DRG rates; outpatient payments use base or OPPS; if Medicaid does not begin paying by that date, payments are based on historical data adjusted for patient days.
• Hospital access payments (inpatient and outpatient) are provided to all eligible hospitals up to the upper payment limit for their category until the Hospital Assessment Account is exhausted; payments are issued quarterly and cannot offset other Medicaid payments.
• If federal participation is impermissible or federal funding is unavailable, the assessment may be suspended and funds refunded to hospitals in proportion to amounts paid.
• The act remains in effect only through 9/30/2022 unless extended by future legislation and requires an approved CMS state plan amendment; funds used for hospital payments cannot replace other general revenues.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Hospitals