ARTICLE 8 AS AMENDED

(a) There is imposed a hospital licensing fee described in subsections (c) through (f) for

state fiscal years 2024 and 2025 against net patient-services revenue of every non-government

owned hospital as defined herein for the hospital's first fiscal year ending on or after January 1,

2022. The hospital licensing fee shall have three (3) tiers with differing fees based on inpatient and

outpatient net patient-services revenue. The executive office of health and human services, in

consultation with the tax administrator, shall identify the hospitals in each tier, subject to the

definitions in this section, by July 15, 2023, and shall notify each hospital of its tier by August 1,

2023.

(b) There is also imposed a hospital licensing fee described in subsections (c) through (f)

for state fiscal year years 2026 and 2027 against net patient-services revenue of every non-

government owned hospital as defined herein for the hospital's first fiscal year ending on or after

16 January 1, 2023. The hospital licensing fee shall have three (3) tiers with differing fees based on

inpatient and outpatient net patient-services revenue. The executive office of health and human

services, in consultation with the tax administrator, shall identify the hospitals in each tier, subject

to the definitions in this section, annually by July 15 , 2025, and shall notify each hospital of its

assigned tier by August 1 , 2025 .

(c) Tier 1 is composed of hospitals that do not meet the description of either Tier 2 or Tier

22 3.

(1) The inpatient hospital licensing fee for Tier 1 is equal to thirteen and twelve hundredths

percent (13.12%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 1 hospital.

(2) The outpatient hospital licensing fee for Tier 1 is equal to thirteen and thirty hundredths

percent (13.30%) of the net patient-services revenue derived from outpatient net patient-services

revenue of every Tier 1 hospital.

(d) Tier 2 is composed of high Medicaid/uninsured cost hospitals and independent

hospitals.

(1) The inpatient hospital licensing fee for Tier 2 is equal to two and sixty-three hundredths

percent (2.63%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 2 hospital.

(2) The outpatient hospital licensing fee for Tier 2 is equal to two and sixty-six hundredths

percent (2.66%) of the outpatient net patient-services revenue derived from outpatient net patient-

services revenue of every Tier 2 hospital.

(e) Tier 3 is composed of hospitals that are Medicare-designated low-volume hospitals and

rehabilitative hospitals.

(1) The inpatient hospital licensing fee for Tier 3 is equal to one and thirty-one hundredths

percent (1.31%) of the inpatient net patient-services revenue derived from inpatient net patient-

services revenue of every Tier 3 hospital.

(2) The outpatient hospital licensing fee for Tier 3 is equal to one and thirty-three

hundredths percent (1.33%) of the outpatient net patient-services revenue derived from outpatient

net patient-services revenue of every Tier 3 hospital.

(f) There is also imposed a hospital licensing fee for state fiscal year 2024 against state-

government owned and operated hospitals in the state as defined herein. The hospital licensing fee

is equal to five and twenty-five hundredths percent (5.25%) of the net patient-services revenue of

every hospital for the hospital's first fiscal year ending on or after January 1, 2022. There is also

imposed a hospital licensing fee for state fiscal years 2025 , and 2026 , and 2027 against state-

government owned and operated hospitals in the state as defined herein equal to five and twenty-

five hundredths percent (5.25%) of the net patient-services revenue of every hospital for the

hospital's first fiscal year ending on or after January 1, 2023.

(g) The hospital licensing fee described in subsections (b) through (f) is subject to U.S.

Department of Health and Human Services approval of a request to waive the requirement that

healthcare-related taxes be imposed uniformly as contained in 42 C.F.R. § 433.68(d).

(h) This hospital licensing fee shall be administered and collected by the tax administrator,

division of taxation within the department of revenue, and all the administration, collection, and

other provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to

the tax administrator before June 25 of each fiscal year, and payments shall be made by electronic

transfer of monies to the tax administrator and deposited to the general fund. Every hospital shall,

on or before August 1 of each fiscal year, make a return to the tax administrator containing the

correct computation of inpatient and outpatient net patient-services revenue for the hospital data

referenced in subsection (a) and/or (b) this section , and the licensing fee due upon that amount. All

returns shall be signed by the hospital's authorized representative, subject to the pains and penalties

of perjury.

(i) For purposes of this section the following words and phrases have the following

meanings:

(1) "Gross patient-services revenue" means the gross revenue related to patient care

services.

(2) "High Medicaid/uninsured cost hospital" means a hospital for which the hospital's total

uncompensated care, as calculated pursuant to § 40-8.3-2(4), divided by the hospital's total net

patient-services revenues, is equal to six percent (6.0%) or greater.

(3) "Hospital" means the actual facilities and buildings in existence in Rhode Island,

licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on

that license, regardless of changes in licensure status pursuant to chapter 17.14 of this title (hospital

conversions) and § 23-17-6(b) (change in effective control), that provides short-term acute inpatient

and/or outpatient care to persons who require definitive diagnosis and treatment for injury, illness,

disabilities, or pregnancy. Notwithstanding the preceding language, the negotiated Medicaid

managed care payment rates for a court-approved purchaser that acquires a hospital through

receivership, special mastership, or other similar state insolvency proceedings (which court-

approved purchaser is issued a hospital license after January 1, 2013) shall be based upon the newly

negotiated rates between the court-approved purchaser and the health plan, and such rates shall be

effective as of the date that the court-approved purchaser and the health plan execute the initial

agreement containing the newly negotiated rate. The rate-setting methodology for inpatient hospital

payments and outpatient hospital payments set forth in §§ 40-8-13.4(b) and 40-8-13.4(b)(2),

respectively, shall thereafter apply to negotiated increases for each annual twelve-month (12)

period as of July 1 following the completion of the first full year of the court-approved purchaser's

initial Medicaid managed care contract.

(4) "Independent hospitals" means a hospital not part of a multi-hospital system.

(5) "Inpatient net patient-services revenue" means the charges related to inpatient care

services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

(6) "Medicare-designated low-volume hospital" means a hospital that qualifies under 42

C.F.R. 412.101(b)(2) for additional Medicare payments to qualifying hospitals for the higher

incremental costs associated with a low volume of discharges.

(7) "Net patient-services revenue" means the charges related to patient care services less

(i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual allowances.

(8) "Non-government owned hospitals" means a hospital not owned and operated by the

state of Rhode Island.

(9) "Outpatient net patient-services revenue" means the charges related to outpatient care

services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

(10) "Rehabilitative hospital" means Rehabilitation Hospital Center licensed by the Rhode

Island department of health.

(11) "State-government owned and operated hospitals" means a hospital facility licensed

by the Rhode Island department of health, owned and operated by the state of Rhode Island.

(k) The licensing fee imposed by subsections (a) through (f) shall apply to hospitals as

defined herein that are duly licensed on July 1, 2024, and shall be in addition to the inspection fee

imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with this

section.

SECTION 2. Section 40-8-3 of the General Laws in Chapter 40-8 entitled "Medical

Assistance" is hereby amended to read as follows: