75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 921
House Bill 2116
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Creates Health System Fund to fund medical assistance and pay
refunds of hospital assessment. Modifies hospital assessment.
Repeals sunset on hospital assessment. Directs hospital
assessment to be paid into Health System Fund after October 1,
2009.
Creates assessment on insurance premiums to be administered by
Department of Consumer and Business Services. Directs assessments
minus specified amounts to be paid into Health System Fund.
Creates assessment on capitation payments to Medicaid managed
care plans to be administered by Department of Human Services.
Directs assessments to be deposited in Health System Fund.
Imposes penalties for failure to timely pay assessments.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to health care assessment; creating new provisions;
amending ORS 731.292 and 731.840 and sections 1, 2, 5, 8, 10,
14 and 51, chapter 736, Oregon Laws 2003; repealing sections 4,
9, 12 and 13, chapter 736, Oregon Laws 2003; appropriating
money; prescribing an effective date; and providing for revenue
raising that requires approval by a three-fifths majority.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + (1) The Health System Fund is established in
the State Treasury, separate and distinct from the General
Fund. Interest earned by the Health System Fund shall be credited
to the fund.
(2) Amounts in the Health System Fund are continuously
appropriated to the Department of Human Services for the purpose
of paying refunds due under sections 6 and 41, chapter 736,
Oregon Laws 2003, and funding medical assistance as defined in
ORS 414.025, which may include but is not limited to:
(a) Increasing reimbursement rates for providers of health
services under ORS 414.705 to 414.750 above the rates that were
in effect for those services on February 29, 2004;
(b) Expanding, continuing or modifying health services for
persons described in ORS 414.706 (5); and
(c) Paying administrative costs incurred by the department to
administer the assessments imposed under section 2, chapter 736,
Oregon Laws 2003. + }
SECTION 2. { + Sections 3 to 5 of this 2009 Act are added to
and made a part of the Insurance Code. + }
SECTION 3. { + As used in this section and sections 4 and 5 of
this 2009 Act:
(1) 'Gross amount of premiums' has the meaning given that term
in ORS 731.808.
(2) 'Health benefit plan' has the meaning given that term in
ORS 743.730.
(3) 'Insurer' means an authorized insurer that issues or renews
a health benefit plan in this state. + }
SECTION 4. { + (1) No later than 45 days following the end of
a calendar quarter, an insurer shall pay an assessment at the
rate of ___ percent of the gross amount of premiums that were
derived from health benefit plans covering direct domestic risks
during that calendar quarter.
(2) The assessment shall be paid to the Department of Consumer
and Business Services and shall be accompanied by a verified
report, on a form prescribed by the department, of:
(a) All health benefit plans issued or renewed by the insurer
during the calendar quarter for which the assessment is paid; and
(b) The gross amount of premiums by line of insurance, derived
by the insurer from all health benefit plans issued or renewed by
the insurer during the calendar quarter for which the assessment
is paid.
(3) The assessment imposed under this section is in addition to
and not in lieu of any tax, surcharge or other assessment imposed
on an insurer.
(4) An insurer may not offset the assessment under this section
against corporate excise taxes imposed under ORS chapter 317.
(5) Assessments under this section may not be considered in the
gross amount of premiums for any purpose.
(6) If the department determines that the assessment paid by
the insurer under this section is incorrect, the department shall
charge or credit to the insurer the difference between the
correct amount of the assessment and the amount paid by the
insurer. + }
SECTION 5. { + (1) An insurer that fails to timely + } { +
file a verified report or to pay an assessment under section 4 of
this 2009 Act shall be subject to a penalty of up to $500 per day
of delinquency. The total amount of penalties imposed under this
section for a calendar quarter may not exceed five percent of the
assessment due for that calendar quarter.
(2) Any penalty imposed under this section is in addition to
and not in lieu of the assessment imposed under section 4 of this
2009 Act. + }
SECTION 6. { + Sections 4 and 5 of this 2009 Act apply to
premiums received by an insurer on or after the calendar quarter
ending December 31, 2009. + }
SECTION 7. { + (1) As used in this section, 'Medicaid managed
care plan' includes a prepaid capitated health service contractor
described in ORS 414.630 and a prepaid managed care health
services organization described in ORS 414.725.
(2) No later than 45 days following the end of a calendar
quarter, a Medicaid managed care plan shall pay an assessment at
a rate of ___ percent of the gross amount of capitation payments
received by the Medicaid managed care plan during that calendar
quarter for providing coverage of health services under ORS
414.705 to 414.750.
(3) The assessment shall be paid to the Department of Human
Services in a manner and form prescribed by the department.
(4) Assessments received by the department under this section
shall be deposited in the Health System Fund established in
section 1 of this 2009 Act. + }
SECTION 8. { + (1) A Medicaid managed care plan that fails to
timely pay an assessment under section 7 of this 2009 Act shall
be subject to a penalty of up to $500 per day of delinquency. The
total amount of penalties imposed under this section for a
calendar quarter may not exceed five percent of the assessment
due for that calendar quarter.
(2) Any penalty imposed under this section is in addition to
and not in lieu of the assessment imposed under section 7 of this
2009 Act. + }
SECTION 9. { + Section 7 of this 2009 Act applies to
capitation payments received by a Medicaid managed care plan on
or after October 1, 2009. + }
SECTION 10. ORS 731.292 is amended to read:
731.292. (1) Except as provided in subsections (2) { + , + }
{ - and - } (3) { + and (4) + } of this section, all fees,
charges and other moneys received by the Department of Consumer
and Business Services or the Director of the Department of
Consumer and Business Services under the Insurance Code shall be
deposited in the fund created by ORS 705.145 and are continuously
appropriated to the department for the payment of the expenses of
the department in carrying out the Insurance Code.
(2) All taxes, fines and penalties paid pursuant to the
Insurance Code shall be paid to the director and after deductions
of refunds shall be paid by the director to the State Treasurer,
at the end of every calendar month or more often in the
director's discretion, for deposit in the General Fund to become
available for general governmental expenses.
(3) All premium taxes received by the director pursuant to ORS
731.820 shall be paid by the director to the State Treasurer for
deposit in the State Fire Marshal Fund.
{ + (4) Assessments received by the department under section
4 of this 2009 Act shall be paid into the State Treasury and
credited to the Health System Fund established in section 1 of
this 2009 Act, after deducting the following amounts:
(a) Amounts needed to reimburse the department for expenses in
administering sections 4 and 5 of this 2009 Act; and
(b) Amounts needed to reimburse the General Fund for reductions
in revenue caused by the effect of section 4 of this 2009 Act on
the retaliatory tax imposed under ORS 731.854 and 731.859. + }
SECTION 11. Section 1, chapter 736, Oregon Laws 2003, is
amended to read:
{ + Sec. 1. + } As used in sections 1 to 9 { + , chapter 736,
Oregon Laws 2003 + } { - of this 2003 Act - } :
(1) 'Charity care' { - means costs for providing inpatient or
outpatient care services free of charge or at a reduced charge
because of the indigence or lack of health insurance of the
patient receiving the care services. - } { + has the meaning
given that term in ORS 442.200. + }
(2) 'Contractual adjustments' means the difference between the
amounts charged based on the hospital's full established charges
and the amount received or due from the payor.
(3) 'Hospital' { - has the meaning given that term in ORS
442.015 but does not include special inpatient care
facilities. - } { + means:
(a) A hospital as defined in ORS 442.015; or
(b) An ambulatory surgical center as defined in ORS
442.015. + }
(4) 'Net revenue':
(a) Means the total amount of charges for inpatient or
outpatient care provided by the hospital to patients, less
{ + the cost to the hospital of + } charity care { - , bad
debts - } and contractual adjustments;
(b) Does not include revenue derived from sources other than
inpatient or outpatient operations, including but not limited to
interest and guest meals; and
(c) Does not include any revenue that is taken into account in
computing a long term care facility assessment under sections 15
to 22 { + , chapter 736, Oregon Laws 2003 + } { - of this 2003
Act - } .
(5) 'Waivered hospital' means a type A or type B hospital, as
described in ORS 442.470, a hospital that provides only
psychiatric care or a hospital { - identified by the Department
of Human Services as appropriate for inclusion in the application
described in section 4 of this 2003 Act - } { + that meets
criteria prescribed by the Department of Human Services by
rule + }.
SECTION 12. Section 2, chapter 736, Oregon Laws 2003, as
amended by section 1, chapter 780, Oregon Laws 2007, is amended
to read:
{ + Sec. 2. + } (1) An assessment is imposed on the net
revenue of each hospital in this state that is not a waivered
hospital. The assessment shall be imposed at { + the rate of ___
percent. + } { - a rate determined by the Director of Human
Services by rule that is the director's best estimate of the rate
needed to fund the services and costs identified in section 9,
chapter 736, Oregon Laws 2003. The rate of assessment shall be
imposed on the net revenue of each hospital subject to
assessment. The director shall consult with representatives of
hospitals before setting the assessment. - }
{ - (2) Notwithstanding subsection (1) of this section, the
rate of assessment may not exceed 1.5 percent. - }
{ - (3) - } { + (2) + } The assessment shall be reported on
a form prescribed by the Department of Human Services and shall
contain the information required to be reported by the
department. The assessment form shall be filed with the
department on or before the 75th day following the end of the
calendar quarter for which the assessment is being reported.
Except as provided in subsection
{ - (7) - } { + (5) + } of this section, the hospital shall
pay the assessment at the time the hospital files the assessment
report. The payment shall accompany the report.
{ - (4) To the extent permitted by federal law, aggregate
taxes levied under this section may not exceed payments under
section 9 (2), chapter 736, Oregon Laws 2003. - }
{ - (5) - } { + (3) + } { - Notwithstanding subsection
(4) of this section, - } A hospital is not guaranteed that any
additional moneys paid to the hospital in the form of payments
for services shall equal or exceed the amount of the assessment
paid by the hospital.
{ - (6) - } { + (4) + } Hospitals operated by the United
States Department of Veterans Affairs and pediatric specialty
hospitals providing care to children at no charge are exempt from
the assessment imposed under this section.
{ - (7)(a) The Department of Human Services shall develop a
schedule for collection of the assessment for the calendar
quarter ending September 30, 2009, that will result in the
collection occurring between December 15, 2009, and the time all
Medicaid cost settlements are finalized for that calendar
quarter. - }
{ - (b) - } { + (5) + } The Department of Human Services
shall prescribe by rule criteria for late payment of assessments.
SECTION 13. Section 5, chapter 736, Oregon Laws 2003, is
amended to read:
{ + Sec. 5. + } (1) A hospital that fails to file a report or
pay an assessment under section 2 { + , chapter 736, Oregon Laws
2003, + } { - of this 2003 Act - } by the date the report or
payment is due shall be subject to a penalty of { + up to + }
$500 per day of delinquency. The total amount of penalties
imposed under this section for each reporting period may not
exceed five percent of the assessment for the reporting period
for which penalties are being imposed.
(2) Penalties imposed under this section shall be collected by
the Department of Human Services and deposited in the Department
of Human Services Account established under ORS 409.060.
(3) Penalties paid under this section are in addition to and
not in lieu of the assessment imposed under section 2 { + ,
chapter 736, Oregon Laws 2003 + } { - of this 2003 Act - } .
SECTION 14. Section 8, chapter 736, Oregon Laws 2003, as
amended by section 1, chapter 757, Oregon Laws 2005, is amended
to read:
{ + Sec. 8. + } Amounts collected by the Department of Human
Services from the assessments imposed under section 2, chapter
736, Oregon Laws 2003, shall be deposited in the { - Hospital
Quality Assurance Fund established under section 9, chapter 736,
Oregon Laws 2003. - } { + Health System Fund established in
section 1 of this 2009 Act. + }
SECTION 15. Section 10, chapter 736, Oregon Laws 2003, as
amended by section 3, chapter 780, Oregon Laws 2007, is amended
to read:
{ + Sec. 10. + } Sections 1 to 9, chapter 736, Oregon Laws
2003, apply to net revenues earned by hospitals on or after
{ - January 1, 2004, and before the earlier of October 1, 2009,
or when the assessment described in sections 37 to 44, chapter
736, Oregon Laws 2003, no longer qualifies for federal matching
funds under Title XIX of the Social Security Act. - } { +
October 1, 2009. + }
SECTION 16. Section 14, chapter 736, Oregon Laws 2003, as
amended by section 6, chapter 780, Oregon Laws 2007, is amended
to read:
{ + Sec. 14. + } Any moneys remaining in the Hospital Quality
Assurance Fund on { - December 31, 2013 - } { + October 1,
2009 + }, are transferred to the { - General Fund. - } { +
Health System Fund established in section 1 of this 2009 Act. + }
SECTION 17. Section 51, chapter 736, Oregon Laws 2003, as
amended by section 20, chapter 780, Oregon Laws 2007, is amended
to read:
{ + Sec. 51. + } Any moneys { - remaining - } { +
deposited + } in the Medical Care Quality Assurance Fund { - on
December 31, 2011, are - } { + shall be + } transferred to the
{ - General Fund - } { + Health System Fund established in
section 1 of this 2009 Act + }.
SECTION 18. ORS 731.840 is amended to read:
731.840. (1) The retaliatory tax imposed upon a foreign or
alien insurer under ORS 731.854 and 731.859, or the corporate
excise tax imposed upon a foreign or alien insurer under ORS
chapter 317, is in lieu of all other state taxes upon premiums,
taxes upon income, franchise or other taxes measured by income
that might otherwise be imposed upon the foreign or alien insurer
except the fire insurance premiums tax imposed under ORS
731.820 { + , + }
{ - and - } the tax imposed upon wet marine and transportation
insurers under ORS 731.824 and 731.828 { + , and the assessment
imposed under section 4 of this 2009 Act + }. However, all real
and personal property, if any, of the insurer shall be listed,
assessed and taxed the same as real and personal property of like
character of noninsurers. Nothing in this subsection shall be
construed to preclude the imposition of the assessments imposed
under ORS 656.612 upon a foreign or alien insurer.
(2) Subsection (1) of this section applies to a reciprocal
insurer and its attorney in its capacity as such.
(3) Subsection (1) of this section applies to foreign or alien
title insurers and to foreign or alien wet marine and
transportation insurers issuing policies and subject to taxes
referred to in ORS 731.824 and 731.828.
(4) The State of Oregon hereby preempts the field of regulating
or of imposing excise, privilege, franchise, income, license,
permit, registration, and similar taxes, licenses and fees upon
insurers and their insurance producers and other representatives
as such, and:
(a) No county, city, district, or other political subdivision
or agency in this state shall so regulate, or shall levy upon
insurers, or upon their insurance producers and representatives
as such, any such tax, license or fee; except that whenever a
county, city, district or other political subdivision levies or
imposes generally on a nondiscriminatory basis throughout the
jurisdiction of the taxing authority a payroll, excise or income
tax, as otherwise provided by law, such tax may be levied or
imposed upon domestic insurers; and
(b) No county, city, district, political subdivision or agency
in this state shall require of any insurer, insurance producer or
representative, duly authorized or licensed as such under the
Insurance Code, any additional authorization, license, or permit
of any kind for conducting therein transactions otherwise lawful
under the authority or license granted under this code.
SECTION 19. { + (1) Section 4, chapter 736, Oregon Laws 2003,
is repealed.
(2) Section 9, chapter 736, Oregon Laws 2003, as amended by
section 2, chapter 757, Oregon Laws 2005, and section 2, chapter
780, Oregon Laws 2007, is repealed.
(3) Section 12, chapter 736, Oregon Laws 2003, as amended by
section 4, chapter 780, Oregon Laws 2007, is repealed.
(4) Section 13, chapter 736, Oregon Laws 2003, as amended by
section 5, chapter 780, Oregon Laws 2007, is repealed. + }
SECTION 20. { + Sections 1 to 9 of this 2009 Act, the
amendments to ORS 731.292 and 731.840 and sections 1, 2, 5, 8,
10, 14 and 51, chapter 736, Oregon Laws 2003, by sections 10 to
18 of this 2009 Act and the repeal of sections 4, 9, 12 and 13,
chapter 736, Oregon Laws 2003, by section 19 of this 2009 Act
become operative on October 1, 2009. + }
SECTION 21. Section 1 of this 2009 Act is amended to read:
{ + Sec. 1. + } (1) The Health System Fund is established in
the State Treasury, separate and distinct from the General Fund.
Interest earned by the Health System Fund shall be credited to
the fund.
(2) Amounts in the Health System Fund are continuously
appropriated to the Department of Human Services for the purpose
of paying refunds due under { - sections 6 and 41 - } { +
section 6 + }, chapter 736, Oregon Laws 2003, and funding medical
assistance as defined in ORS 414.025, which may include but is
not limited to:
(a) Increasing reimbursement rates for providers of health
services under ORS 414.705 to 414.750 above the rates that were
in effect for those services on February 29, 2004;
(b) Expanding, continuing or modifying health services for
persons described in ORS 414.706 (5); and
(c) Paying administrative costs incurred by the department to
administer the assessments imposed under section 2, chapter 736,
Oregon Laws 2003.
SECTION 22. { + The amendments to section 1 of this 2009 Act
by section 21 of this 2009 Act become operative on January 1,
2012. + }
SECTION 23. { + This 2009 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fifth
Legislative Assembly adjourns sine die. + }
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