(a)  There is imposed a hospital licensing fee for state fiscal year 2022 against each hospital in the state. The hospital licensing fee is equal to five and six hundred fifty-six thousandths percent (5.656%) of the net patient-services revenue of every hospital for the hospital’s first fiscal year ending on or after January 1, 2020, except that the license fee for all hospitals located in Washington County, Rhode Island shall be discounted by thirty-seven percent (37%). The discount for Washington County hospitals is subject to approval by the Secretary of the U.S. Department of Health and Human Services of a state plan amendment submitted by the executive office of health and human services for the purpose of pursuing a waiver of the uniformity requirement for the hospital license fee. This 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 on or before July 13, 2022, and payments shall be made by electronic transfer of monies to the general treasurer and deposited to the general fund. Every hospital shall, on or before June 15, 2022, make a return to the tax administrator containing the correct computation of net patient-services revenue for the hospital fiscal year ending September 30, 2020, 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.

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Terms Used In Rhode Island General Laws 23-17-38.1

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Charity: An agency, institution, or organization in existence and operating for the benefit of an indefinite number of persons and conducted for educational, religious, scientific, medical, or other beneficent purposes.
  • Contract: A legal written agreement that becomes binding when signed.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Hospital: means a person or governmental entity licensed in accordance with this chapter to establish, maintain, and operate a hospital. See Rhode Island General Laws 23-17-2

(b)  There is also imposed a hospital licensing fee for state fiscal year 2023 against each hospital in the state. The hospital licensing fee is equal to five and forty-two hundredths percent (5.42%) of the net patient-services revenue of every hospital for the hospital’s first fiscal year ending on or after January 1, 2021, except that the license fee for all hospitals located in Washington County, Rhode Island shall be discounted by thirty-seven percent (37%). The discount for Washington County hospitals is subject to approval by the Secretary of the U.S. Department of Health and Human Services of a state plan amendment submitted by the executive office of health and human services for the purpose of pursuing a waiver of the uniformity requirement for the hospital license fee. This 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 on or before June 30, 2023, and payments shall be made by electronic transfer of monies to the general treasurer and deposited to the general fund. Every hospital shall, on or before May 25, 2023, make a return to the tax administrator containing the correct computation of net patient-services revenue for the hospital fiscal year ending September 30, 2021, 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.

(c)  There is also imposed a hospital licensing fee described in subsections (d) through (g) 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.

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

(e)  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.

(f)  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.

(g)  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.

(h)  The hospital licensing fee described in subsections (c) through (g) 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).

(i)  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 30 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, 2023, make a return to the tax administrator containing the correct computation of inpatient and outpatient net patient-services revenue for the hospital fiscal year ending in 2022, 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.

(j)  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 tax administrator in consultation with the executive office of health and human services shall make and promulgate any rules, regulations, and procedures not inconsistent with state law and fiscal procedures that he or she deems necessary for the proper administration of this section and to carry out the provisions, policy, and purposes of this section.

( l )  The licensing fee imposed by subsection (a) shall apply to hospitals as defined herein that are duly licensed on July 1, 2021, 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.

(m)  The licensing fee imposed by subsection (b) shall apply to hospitals as defined herein that are duly licensed on July 1, 2022, 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.

(n)  The licensing fees imposed by subsections (c) through (g) shall apply to hospitals as defined herein that are duly licensed on July 1, 2023, 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.

History of Section.
P.L. 1994, ch. 70, art. 19, § 1; P.L. 1995, ch. 370, art. 17, § 1; P.L. 1996, ch. 100, art. 14, § 1; P.L. 1997, ch. 30, art. 8, § 1; P.L. 1998, ch. 31, art. 12, § 1; P.L. 1999, ch. 31, art. 7, § 1; P.L. 2000, ch. 55, art. 8, § 1; P.L. 2001, ch. 77, art. 8, § 1; P.L. 2002, ch. 65, art. 34, § 1; P.L. 2003, ch. 376, art. 11, § 1; P.L. 2004, ch. 595, art. 21, § 1; P.L. 2005, ch. 117, art. 26, § 1; P.L. 2006, ch. 246, art. 18, § 1; P.L. 2007, ch. 73, art. 11, § 1; P.L. 2008, ch. 100, art. 31, § 1; P.L. 2009, ch. 68, art. 16, § 2; P.L. 2010, ch. 23, art. 9, § 9; P.L. 2010, ch. 239, § 19; P.L. 2011, ch. 151, art. 19, § 11; P.L. 2012, ch. 241, art. 21, § 1; P.L. 2013, ch. 144, art. 9, § 4; P.L. 2014, ch. 145, art. 16, § 1; P.L. 2014, ch. 528, § 51; P.L. 2015, ch. 141, art. 5, § 2; P.L. 2016, ch. 142, art. 13, § 7; P.L. 2017, ch. 302, art. 8, § 7; P.L. 2017, ch. 451, § 10; P.L. 2018, ch. 47, art. 7, § 2; P.L. 2019, ch. 88, art. 5, § 3; P.L. 2021, ch. 162, art. 6, § 4, effective July 1, 2021; P.L. 2022, ch. 231, art. 6, § 1, effective June 27, 2022; P.L. 2023, ch. 79, art. 9, § 1, effective June 16, 2023.