Provides for a hospital stabilization formula

HCR 3 establishes a hospital stabilization formula under Article VII, Section 10.13 of the Louisiana Constitution by authorizing the Louisiana Department of Health to levy and collect assessments on hospitals contingent upon Centers for Medicare and Medicaid Services approval of a directed payment arrangement. The bill specifies tiered assessment rates based on hospital classification and revenue levels, calculated from Medicare cost report data ending in federal fiscal year 2023. Long-term acute care, psychiatric, and rehabilitation hospitals face a 1.38% assessment on both inpatient and outpatient net patient revenue. Hospital Service Districts not classified as rural hospitals are assessed at 4.99% on the first $125 million of inpatient and outpatient revenue and 2.36% on revenue exceeding that threshold. All other acute care hospitals face 6.49% on inpatient revenue and 6.74% on outpatient revenue up to $125 million, with 2.36% on excess revenue. Assessments must be collected quarterly and only during quarters when directed payments are actually made to hospitals.

The legislation impacts multiple categories of healthcare providers differently. Assessed hospitals must remit quarterly payments calculated from their reported Medicare cost data, creating a financial obligation tied to their revenue streams. Rural hospitals, small urban private acute hospitals with forty or fewer licensed beds, and freestanding psychiatric Medicaid disproportionate share hospitals are entirely exempted from assessment. The assessment revenue funds reimbursement enhancements through directed payment arrangements for inpatient and outpatient services, implementation of Medicaid expansion, and maintenance of hospital reimbursement rates at levels no less favorable than those effective January 1, 2026. Hospitals receiving directed payments gain enhanced reimbursement through these mechanisms. The Department of Health must submit state plan amendments within 120 days and publish quarterly reports detailing Medicaid claims paid by individual hospital provider numbers, directed payments received, and supplemental payments.

The statutory framework operates within Article VII, Section 10.13 of the Louisiana Constitution, which governs healthcare-related assessments. The bill references existing law regarding rural hospital definitions found in R.S. 40:1189.1 et seq. and implements federal Medicaid requirements under 42 C.F.R. 438.6 concerning directed payments and 42 U.S.C. 1396d(y) governing expansion of the Louisiana medical assistance program under Title XIX of the Social Security Act. The measure requires CMS approval of any directed payment arrangement before assessments may be levied, making federal regulatory approval a prerequisite to implementation. The Department of Health retains authority to develop alternative assessments and payment arrangements if CMS rejects the proposed formula, subject to approval by the Joint Legislative Committee on the Budget. The resolution permits the Department to promulgate implementing rules and regulations without requiring final adoption before implementation, allowing administrative flexibility to operationalize the assessment collection and payment enhancement mechanisms.