HB286 Alabama 2022 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

Regular Session 2022

Title

Hospitals, private hospital assessment and Medicaid funding program extended for fiscal year 2025, 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

HB286 extends the Hospital Provider Privilege Tax and the related private hospital assessment and Medicaid funding program through fiscal year 2025.

What This Bill Does

Keeps a 6% assessment on net patient revenue for privately operated hospitals, based on Medicare Cost Reports, with annual updates and possible pro rata reductions if federal Medicaid funding changes occur. Funds go into a dedicated Hospital Assessment Account used to pay inpatient and outpatient hospital payments and reimburse for errors, while remaining separate from the General Fund and not replacing other Medicaid funding; balances can carry over and may be refunded if not needed. Publicly owned and state-owned hospitals must make intergovernmental transfers to the Medicaid Agency, subject to a total cap that aims to equal federal matching funds; hospitals receive inpatient and outpatient access payments up to the upper payment limit, with payments disbursed quarterly. The act ties hospital payments to various methods (APR-DRG, OPPS, per diems) and requires CMS/state plan alignment; if federal participation is unavailable or adverse changes occur, the agency must report and propose amendments, and the program can be halted or funds refunded. The law includes an automatic sunset on September 30, 2025 unless extended by future legislation, and it becomes effective October 1, 2022.

Who It Affects

• Privately operated hospitals: subject to the 6% assessment on net patient revenue; eligible to receive inpatient and outpatient payments funded by the Hospital Assessment Account; payments may be adjusted based on federal funding changes and performance of the Hospital Assessment Account.
• Publicly owned/state-owned hospitals: must make intergovernmental transfers to the Medicaid Agency to support hospital payments and may receive inpatient and outpatient access payments up to the upper payment limit, with transfers and payments designed to align with federal matching funds.

Key Provisions

• Extension of the Hospital Provider Privilege Tax and related assessment through fiscal year 2025, with the assessment calculated from net patient revenue using Medicare Cost Reports and reviewed annually.
• Establishment and use rules for the Hospital Assessment Account within the Health Care Trust Fund, including limitations on use, separation from the General Fund, and protections from budget cuts.
• Procedures for potential reduction of the private hospital assessment pro rata if the total DSH allotment is reduced, and for carrying over or refunding unused funds if the assessment is not needed.
• Public/State hospital intergovernmental transfers (IGTs) to Medicaid are capped and designed to maximize federal matching funds; IGTs and related funds stay within the Hospital Assessment Account for hospital payments.
• Hospital payments framework includes base, APR-DRG, and OPPS components, with conditions for when and how these payments are made and how they interact with hospital access payments (paid quarterly) and federal approvals.
• Provisions to trigger cessation or refunds if federal participation is impermissible or if expenditures fall below prior levels, and to require a state plan amendment with CMS. 7. Automatic sunset of the act on September 30, 2025 unless extended by future legislation.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Hospitals