SAFE Hospitals Act of 2021

II 117TH CONGRESS 1ST SESSION S. 2021 To amend title XIX of the Social Security Act to establish a methodology for determining State allotments for Medicaid disproportionate share hospital payments that is based on State poverty levels, to require States to prioritize disproportionate share hospital payments on the basis of Medicaid inpatient utilization and low-income utilization rates, and for other purposes. IN THE SENATE OF THE UNITED STATES JUNE 10, 2021 Mr. RUBIO introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XIX of the Social Security Act to establish a methodology for determining State allotments for Med- icaid disproportionate share hospital payments that is based on State poverty levels, to require States to prioritize disproportionate share hospital payments on the basis of Medicaid inpatient utilization and low-income utilization rates, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 2 •S 2021 IS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘State Accountability, 2 Flexibility, and Equity for Hospitals Act of 2021’’ or the 3 ‘‘SAFE Hospitals Act of 2021’’. 4 SEC. 2. DETERMINATION OF STATE DSH ALLOTMENTS 5 BASED ON STATE POVERTY LEVELS. 6 Section 1923(f) of the Social Security Act (42 U.S.C. 7 1396r–4(f)) is amended— 8 (1) in paragraph (3)— 9 (A) in the paragraph heading, by striking 10 ‘‘YEAR 2003 AND THEREAFTER’’ and inserting 11 ‘‘YEARS 2003 THROUGH 2023’’; 12 (B) in subparagraph (A)— 13 (i) by striking ‘‘, (7), and (8)’’ and in- 14 serting ‘‘and (7)’’; and 15 (ii) by inserting ‘‘through fiscal year 16 2023’’ after ‘‘each succeeding fiscal year’’; 17 (C) in subparagraph (C)(ii), by inserting 18 ‘‘through fiscal year 2023’’ after ‘‘each suc- 19 ceeding fiscal year’’; and 20 (D) in subparagraph (E)(i)(III), by insert- 21 ing ‘‘or paragraph (7), as applicable,’’ after 22 ‘‘this paragraph’’; 23 (2) in paragraph (4)(C), by inserting ‘‘or para- 24 graph (7), as applicable,’’ after ‘‘paragraph (3)’’; 25 (3) in paragraph (5)(B)— 26 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 3 •S 2021 IS (A) in the subparagraph heading, by strik- 1 ing ‘‘AND SUBSEQUENT FISCAL YEARS’’ and in- 2 serting ‘‘THROUGH FISCAL YEAR 2023’’; and 3 (B) in clause (iii), by inserting ‘‘through 4 fiscal year 2023’’ after ‘‘any subsequent fiscal 5 year’’; 6 (4) in paragraph (6)— 7 (A) in clause (vi) of subparagraph (A)— 8 (i) in the clause heading, by striking 9 ‘‘2025’’ and inserting ‘‘2023’’; and 10 (ii) by striking ‘‘fiscal year 2025’’ and 11 inserting ‘‘fiscal year 2023’’; and 12 (B) in clause (iii) of subparagraph (B)— 13 (i) in the clause heading, by inserting 14 ‘‘THROUGH FISCAL YEAR 2023’’ after ‘‘SUC- 15 CEEDING FISCAL YEARS’’; and 16 (ii) in subclause (II)— 17 (I) in the subclause heading, by 18 inserting ‘‘THROUGH FISCAL YEAR 19 2023’’ after ‘‘SUCCEEDING FISCAL 20 YEARS’’; and 21 (II) by inserting ‘‘through fiscal 22 year 2023’’ after ‘‘each fiscal year 23 thereafter’’; 24 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 4 •S 2021 IS (5) by striking paragraphs (7) and (8) and in- 1 serting the following: 2 ‘‘(7) STATE DSH ALLOTMENTS FOR FISCAL 3 YEARS AFTER FISCAL YEAR 2023.— 4 ‘‘(A) IN GENERAL.—Subject to subpara- 5 graphs (B), (C), and (D), beginning with fiscal 6 year 2024, the DSH allotment for a State and 7 fiscal year shall be the amount equal to the 8 product of— 9 ‘‘(i) the State poverty ratio (as deter- 10 mined under subparagraph (E)(ii)) for the 11 State and fiscal year; and 12 ‘‘(ii) the DSH allotment cap (as de- 13 termined under subparagraph (E)(i)) for 14 the fiscal year. 15 ‘‘(B) PHASE-IN OF POVERTY-BASED FOR- 16 MULA.— 17 ‘‘(i) IN GENERAL.—During the period 18 of fiscal years described in clause (ii), the 19 Secretary shall phase in the application of 20 the determination of DSH allotments 21 under subparagraph (A) in a manner that 22 ensures that— 23 ‘‘(I) in no case is the DSH allot- 24 ment for a State for a fiscal year dur- 25 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 5 •S 2021 IS ing such period less than 90 percent 1 of the DSH allotment for the State 2 for the previous fiscal year (without 3 regard to whether the State used the 4 full amount of the DSH allotment for 5 the previous fiscal year); and 6 ‘‘(II) the total amount of DSH 7 allotments made to all States for any 8 fiscal year during such period does 9 not exceed the DSH allotment cap de- 10 termined for the fiscal year under 11 subparagraph (E)(i). 12 ‘‘(ii) PHASE-IN PERIOD.—The period 13 of fiscal years described in this clause is 14 the period that begins with fiscal year 15 2024 and ends with— 16 ‘‘(I) fiscal year 2033; or 17 ‘‘(II) at the Secretary’s discre- 18 tion, any of fiscal years 2034 through 19 2038. 20 ‘‘(iii) DEVELOPMENT OF METHOD- 21 OLOGY.—The Secretary shall promulgate 22 final regulations that establish the method- 23 ology for determining State DSH allot- 24 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 6 •S 2021 IS ments under clause (i) not later than Jan- 1 uary 1, 2023. 2 ‘‘(C) STATE ALLOTMENT FLEXIBILITY OP- 3 TION.— 4 ‘‘(i) IN GENERAL.—A State may elect 5 to increase or reduce the amount of the 6 DSH allotment for the State and a fiscal 7 year (as otherwise determined under this 8 paragraph) for the purpose of providing 9 certainty or more consistent DSH funding 10 in subsequent fiscal years in accordance 11 with this subparagraph. 12 ‘‘(ii) STATE OPTION TO RESERVE AL- 13 LOTMENT AMOUNTS.—For any fiscal year 14 after fiscal year 2023, a State may request 15 that the DSH allotment for the State and 16 fiscal year (as otherwise determined under 17 this paragraph) be reduced by an amount 18 that shall not exceed 10 percent of the 19 amount of the allotment as so determined. 20 ‘‘(iii) STATE OPTION TO INCREASE 21 DSH ALLOTMENT FROM ALLOTMENT RE- 22 SERVE.—For any fiscal year after fiscal 23 year 2024, a State may request that the 24 DSH allotment for the State and fiscal 25 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 7 •S 2021 IS year (as otherwise determined under this 1 paragraph) be increased by an amount 2 that shall not exceed the DSH reserve 3 amount for the State and fiscal year. 4 ‘‘(iv) DSH RESERVE AMOUNT.— 5 ‘‘(I) IN GENERAL.—Subject to 6 subclause (II), the DSH reserve 7 amount for a State and fiscal year 8 shall be equal to the sum of the 9 amounts, if any, of any reductions to 10 the State’s DSH allotment (as other- 11 wise determined under this para- 12 graph) made in each of the preceding 13 5 fiscal years pursuant to a request 14 under clause (ii). 15 ‘‘(II) SUBTRACTION OF IN- 16 CREASES FROM DSH RESERVE 17 AMOUNT.—The amount of any in- 18 crease to a State’s DSH allotment for 19 a fiscal year made pursuant to a re- 20 quest under clause (iii) shall be sub- 21 tracted from the State’s DSH reserve 22 amount for such year and shall not be 23 available to the State in subsequent 24 fiscal years. 25 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 8 •S 2021 IS ‘‘(III) RULE OF APPLICATION.— 1 In the case of an increase to a State’s 2 DSH allotment for a fiscal year that 3 is less than the State’s DSH reserve 4 amount for such year, the Secretary 5 shall apply subclause (II) in a manner 6 that maximizes the DSH reserve 7 amount that will remain available to 8 the State in subsequent fiscal years. 9 ‘‘(v) DISREGARD OF ADJUSTMENTS.— 10 Any increase or reduction under this sub- 11 paragraph to the DSH allotment of a 12 State for a fiscal year shall be disregarded 13 when otherwise determining State DSH al- 14 lotments under this paragraph. 15 ‘‘(D) TREATMENT OF WAIVERS.— 16 ‘‘(i) IN GENERAL.—Subject to clause 17 (ii), with respect to a State and a fiscal 18 year, if the State has in effect on the date 19 of enactment of the SAFE Hospitals Act 20 of 2021 a statewide waiver of requirements 21 of this title under section 1115 or other 22 law and any part of the fiscal year occurs 23 during the period of the waiver (as ap- 24 proved as of such date), the DSH allot- 25 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 9 •S 2021 IS ment determined under this paragraph for 1 such State and fiscal year shall not be less 2 than the DSH allotment that would have 3 been determined for such State and fiscal 4 year under this section as in effect on the 5 day before the date of enactment of the 6 SAFE Hospitals Act of 2021, reduced, in 7 the case of each of fiscal years 2024 8 through 2027, by the amount of the 9 State’s share of the reductions which 10 would have been applicable for the fiscal 11 year under paragraph (7) of this sub- 12 section (as so in effect), as estimated by 13 the Secretary. 14 ‘‘(ii) TOTAL ALLOTMENTS NOT TO EX- 15 CEED DSH ALLOTMENT CAP.—The Sec- 16 retary shall apply this subparagraph in 17 such a manner that the total amount of 18 DSH allotments determined for all States 19 for a fiscal year under this paragraph does 20 not exceed DSH allotment cap determined 21 for the fiscal year under subparagraph 22 (E)(i). 23 ‘‘(iii) NONAPPLICATION.—Clause (i) 24 shall not apply— 25 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 10 •S 2021 IS ‘‘(I) with respect to a State that 1 has in effect a waiver described in 2 such clause if the State elects, 3 through a revision of such waiver, 4 that such clause will not apply; or 5 ‘‘(II) with respect to any part of 6 a fiscal year that occurs after the ex- 7 piration (determined without regard 8 to any extension approved after the 9 date of the enactment of the State Ac- 10 countability, Flexibility, and Equity 11 for Hospitals Act of 2021) of such a 12 waiver. 13 ‘‘(iv) NO EFFECT ON WAIVER AU- 14 THORITY.—Nothing in this subsection shall 15 be construed as preventing the Secretary 16 from approving a waiver under section 17 1115 or other law with respect to require- 18 ments under this title related to a State’s 19 use of its DSH allotment for a fiscal year. 20 ‘‘(E) DEFINITIONS.—In this paragraph: 21 ‘‘(i) DSH ALLOTMENT CAP.—The 22 term ‘DSH allotment cap’ means, with re- 23 spect to a fiscal year, the amount equal to 24 the total amount of the DSH allotments 25 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 11 •S 2021 IS that would have been determined for all 1 States for the fiscal year under this section 2 as in effect on the day before the date of 3 enactment of the SAFE Hospitals Act of 4 2021, reduced, in the case of fiscal years 5 2024 through 2027, by the aggregate 6 amount of the reductions which would have 7 been applicable for the fiscal year under 8 paragraph (7) of this subsection (as so in 9 effect). 10 ‘‘(ii) STATE POVERTY RATIO.—The 11 term ‘State poverty ratio’ means, with re- 12 spect to a State and fiscal year, the ratio 13 of— 14 ‘‘(I) the number of individuals in 15 the State in the most recent fiscal 16 year for which census data are avail- 17 able whose income (as determined 18 under section 1902(e)(14) (relating to 19 modified adjusted gross income) and 20 without regard to whether an individ- 21 ual’s income eligibility for medical as- 22 sistance is determined under such sec- 23 tion) was less than 100 percent of the 24 poverty line (as defined in section 25 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 12 •S 2021 IS 2110(c)(5)) applicable to a family of 1 the size involved; to 2 ‘‘(II) the number of individuals 3 in all States in the most recent fiscal 4 year for which census data are avail- 5 able whose income (as so determined) 6 was less than 100 percent of the pov- 7 erty line (as so defined) applicable to 8 the family of the size involved.’’; and 9 (6) by redesignating paragraph (9) as para- 10 graph (8). 11 SEC. 3. PRIORITIZING DISPROPORTIONATE SHARE HOS- 12 PITAL PAYMENTS BASED ON MEDICAID INPA- 13 TIENT UTILIZATION AND LOW-INCOME UTILI- 14 ZATION RATES. 15 (a) IN GENERAL.—Section 1923 of the Social Secu- 16 rity Act (42 U.S.C. 1396r–4) is amended— 17 (1) in subsection (a)(2)(D), by inserting 18 ‘‘(which, as of October 1, 2023, shall meet the re- 19 quirements of subsection (k))’’ after ‘‘methodology’’; 20 (2) in subsection (c), by striking ‘‘and (g)’’ and 21 inserting ‘‘, (g), and, beginning on October 1, 2021, 22 (k)’’; 23 (3) in subsection (d)(2)(A)— 24 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 13 •S 2021 IS (A) in clause (i), by striking ‘‘; or’’ and in- 1 serting a semicolon; 2 (B) in clause (ii), by striking the period at 3 the end and inserting ‘‘; or’’; and 4 (C) by adding at the end the following new 5 clause: 6 ‘‘(iii) that is an institution for mental 7 diseases.’’; and 8 (4) by adding at the end the following new sub- 9 section: 10 ‘‘(k) STATE METHODOLOGY REQUIREMENTS.— 11 ‘‘(1) IN GENERAL.—Subject to paragraph (4), a 12 State methodology for identifying and making pay- 13 ments to disproportionate share hospitals meets the 14 requirements of this subsection if— 15 ‘‘(A) the methodology is uniformly applied 16 statewide; 17 ‘‘(B) the methodology identifies each hos- 18 pital in the State that is described in a dis- 19 proportionate share hospital tier (as defined in 20 paragraph (2)); and 21 ‘‘(C) in making payments to dispropor- 22 tionate share hospitals, the methodology meets 23 the requirements of paragraph (3). 24 VerDate Sep 11 2014 07:00 Jun 23, 2021 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S2021.IS S2021 kjohnson on DSK79L0C42PROD with BILLS 14 •S 2021 IS ‘‘(2) DISPROPORTIONATE S [Text truncated for display. 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