Sec. 7.7. (a) As used in this section, “CMS” refers to the federal Centers for Medicare and Medicaid Services.

     (b) As used in this section, “default plan” refers to a plan for distributing Medicaid disproportionate share payments for the state fiscal year beginning July 1, 2020, and, at the discretion of the hospital assessment fee committee, for any state fiscal year beginning after July 1, 2020, and meets the requirements set forth in subsection (i).

     (c) As used in this section, “disproportionate share payment plan” refers to a plan for distributing disproportionate share payments for the state fiscal year beginning July 1, 2020, and at the discretion of the hospital assessment fee committee, for any state fiscal year beginning after July 1, 2020, and that meets the requirements set forth in subsection (h).

     (d) As used in this section, “federal DSH allotment” refers to the allotment of federal disproportionate share funds calculated for the state under 42 U.S.C. §§ 1396r-4.

     (e) As used in this section, “hospital assessment fee committee” refers to the committee established by IC 16-21-10-7.

     (f) As used in this section, “reduced federal DSH allotment” refers to a federal DSH allotment for the state for the federal fiscal year beginning October 1, 2020, that, by operation of 42 U.S.C. §§ 1396r-4(f)(7), is less than the federal DSH allotment for the state for the federal fiscal year beginning October 1, 2018.

     (g) As used in this section, “terminating event” refers to federal legislation (including an amendment to 42 U.S.C. §§ 1396r-4), a regulation or sub-regulatory policy or directive issued by CMS, or a judicial ruling, that is enacted or issued on or before March 30, 2021, that:

(1) cancels, or postpones to a subsequent federal fiscal year, a reduced federal DSH allotment; and

(2) does not cause the state to incur a reduced federal DSH allotment.

     (h) Subject to subsection (i), the hospital assessment fee committee shall develop a disproportionate share payment plan and submit the disproportionate share payment plan to the office. The following apply to the disproportionate share payment plan developed under this subsection:

(1) The disproportionate share payment plan must:

(A) specify the amount or amounts of disproportionate share payment adjustments to be paid to acute care hospitals licensed under IC 16-21-2 and private mental health institutions licensed under IC 12-25 for the state fiscal year beginning on or after July 1, 2020; or

(B) specify the formula to be used by the office for purposes of determining the amount or amounts of disproportionate share payment adjustments to be paid to acute care hospitals licensed under IC 16-21-2 and private mental health institutions licensed under IC 12-25 for the state fiscal year beginning on or after July 1, 2020.

(2) In developing the disproportionate share payment plan, the hospital assessment fee committee is not required to:

(A) follow paragraphs 1 through 7 of Subsection A of Section III of Attachment 4.19-A of the Indiana Medicaid state plan in effect on January 1, 2019;

(B) provide for disproportionate share payment adjustments to be paid to acute care hospitals licensed under IC 16-21-2 or private mental health institutions licensed under IC 12-25 that, for purposes of the state fiscal year beginning on or after July 1, 2020, do not meet the definition of a “disproportionate share hospital” as set forth in Section II(E) of Attachment 4.19-A of the Indiana Medicaid state plan in effect on January 1, 2019; or

(C) follow the provisions set forth in section 7.5 of this chapter.

(3) In developing the disproportionate share payment plan, the hospital assessment fee committee shall take into consideration the percentage of a hospital’s patients whose health care coverage is provided by a governmental health care program.

     (i) If the hospital assessment fee committee is unable to develop a disproportionate share payment plan, the hospital assessment fee committee shall submit the default plan to the office. The following apply to the default plan:

(1) The disproportionate share payments that would otherwise be paid to an acute care hospital under Step Two, Step Three, or Step Four of Subsection A of Section III of Attachment 4.19-A of the Indiana Medicaid state plan in effect on January 1, 2019, without the reduction provided for in section 7.5 of this chapter, shall be reduced by a single percentage that is applied uniformly to all hospitals described in this subdivision.

(2) The percentage of the reduction in disproportionate share payments under subdivision (1) shall be the percentage determined by the hospital assessment fee committee to cause the total disproportionate share payments made to maximize the expenditure of, without exceeding, the reduced federal DSH allotment.

If agreed to by the hospital assessment fee committee, the default plan may also include other terms and conditions that the committee determines to be necessary for the proper implementation and administration of the default plan.

     (j) After the office submits the state plan amendment described in section 7.5 of this chapter, but before October 1, 2020, the office shall file with CMS and, if approved by CMS, the office shall implement, a proposed Medicaid state plan amendment that is based upon either the disproportionate share payment plan developed by the hospital assessment fee committee or the default plan submitted by the hospital assessment fee committee, subject to the following:

(1) The proposed Medicaid state plan amendment referred to in this subsection shall include language that, in the event a terminating event occurs after the Medicaid state plan amendment is approved by the CMS but before March 30, 2021, would operate to cause the state plan amendment to be immediately and automatically void and without effect, and to cause Subsection A of Section III of Attachment 4.19-A of the state’s Medicaid state plan, in effect on January 1, 2019, to be immediately and automatically reinstated and effective.

(2) Subdivision (1) does not prevent the office from submitting a subsequent Medicaid state plan amendment for approval by CMS after CMS’s approval of the state plan amendment referenced in subdivision (1) and that applies to a state fiscal year beginning on or after July 1, 2021, and that amends or replaces the state plan amendment described in this subsection.

     (k) Before filing the proposed Medicaid state plan amendment with CMS, the proposed Medicaid state plan amendment referenced in subsection (j) shall be submitted by the office to the hospital assessment fee committee for the committee’s approval.

     (l) The hospital assessment fee committee shall coordinate with the office so that the disproportionate share payment plan, or the default plan, if applicable, is prepared and submitted to the office under subsection (h) or (i), if applicable, and the committee’s approval of the proposed state plan amendment under subsection (k), is obtained in sufficient time so as to enable the office to file the proposed Medicaid state plan amendment with CMS before October 1, 2020.

     (m) The office shall regularly update the hospital assessment fee committee regarding the status of the proposed Medicaid state plan amendment. All questions, proposals, directives, requirements, and other communications received by the office from CMS concerning the proposed Medicaid state plan amendment shall be provided to the committee within a reasonable time after receipt by the office. Upon request by the hospital assessment fee committee or the office, the office and the hospital assessment fee committee shall meet to confer concerning the proposed state plan amendment.

     (n) If:

(1) a terminating event occurs before the office submits the proposed Medicaid state plan amendment to CMS under subsection (j), the hospital assessment fee committee and the office shall cease their work on the disproportionate share payment plan, or the default plan if applicable, and the proposed Medicaid state plan amendment, and the office shall not submit the proposed state plan amendment to CMS; or

(2) a terminating event occurs after the office submits the proposed Medicaid state plan amendment to CMS under subsection (h), but before CMS approves a state plan amendment that implements the disproportionate share payment plan, or the default plan if applicable, the office shall immediately notify CMS of the office’s intent to withdraw the proposed Medicaid state plan amendment and otherwise act so as to accomplish the immediate withdrawal of the proposed Medicaid state plan amendment.

     (o) In the event a provision of this section conflicts with another provision of this article, the provisions of this section shall control.

As added by P.L.108-2019, SEC.197. Amended by P.L.156-2020, SEC.55.