Okla. Stat. tit. 63, § 63-3241.4

A. There is hereby created in the State Treasury a revolving

fund to be designated the "Supplemental Hospital Offset Payment

Program Fund".

B. The fund shall be a continuing fund, not subject to fiscal

year limitations, be interest bearing and consisting of:

1. All monies received by the Oklahoma Health Care Authority

from eligible hospitals pursuant to the Supplemental Hospital Offset

Payment Program Act and otherwise specified or authorized by law;

2. Any interest or penalties levied and collected in

conjunction with the administration of this section; and

3. All interest attributable to investment of money in the

fund.

C. The Oklahoma Health Care Authority is authorized to transfer

each fiscal quarter from the Supplemental Hospital Offset Payment

Program Fund to the Authority's Medical Payments Cash Management

Improvement Act Programs Disbursing Fund all funds remaining after

accounting for the provisions of subparagraphs a and b of paragraph

1 of subsection C of Section 3241.3 of this title.

D. Notice of Assessment.

1. The Authority shall send an annual notice of assessment to

each eligible hospital informing the hospital of the assessment

rate, the net hospital patient revenue calculation, and the

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assessment amount owed by the eligible hospital for the applicable

year.

2. The annual notice of assessment shall be sent to each

eligible hospital at least thirty (30) days before the due date for

the first quarterly assessment payment of each year.

3. The first notice of assessment shall be sent within forty-

five (45) days after receipt by the Authority of notification from

the federal Centers for Medicare and Medicaid Services that the

assessments and payments required under the Supplemental Hospital

Offset Payment Program Act and, if necessary, the waiver granted

under 42 C.F.R., Section 433.68 have been approved.

4. An eligible hospital shall have thirty (30) days from the

date of its receipt of an annual notice of assessment to notify the

Authority of any error in the notice.

5. An eligible hospital that has not been previously licensed

as a hospital in Oklahoma and that commences hospital operations

during a year shall pay the required assessment computed under

subsection E of Section 3241.3 of this title and shall be eligible

for hospital access payments under subsection E of this section on

the date specified in rules promulgated by the Oklahoma Health Care

Authority Board after consideration of input and recommendations of

the Hospital Advisory Committee.

E. Quarterly Notice and Collection.

1. The annual assessment imposed under subsections A and C of

Section 3241.3 of this title shall be due and payable on a quarterly

basis. However, the first quarterly payment of an annual assessment

shall not be due and payable until:

a. the Authority issues written notice stating that the

annual assessment and payment methodologies required

under the Supplemental Hospital Offset Payment Program

Act have been approved by the federal Centers for

Medicare and Medicaid Services and, if necessary, the

waiver under 42 C.F.R., Section 433.68 has been

granted by the federal Centers for Medicare and

Medicaid Services,

b. the thirty-day verification period required by

paragraph 4 of subsection D of this section has

expired, and

c. the Authority issues a notice of assessment giving a

due date for the first quarterly payment.

2. After the first quarterly payment of an annual assessment

has been paid under this section, each subsequent quarterly payment

shall be due and payable by the fifteenth day of the first month of

the applicable quarter.

3. If an eligible hospital fails to pay a quarterly payment

timely and in full, the eligible hospital shall pay the Authority:

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a. a penalty fee equal to five percent (5%) of the
paid under this section, each subsequent quarterly payment

shall be due and payable by the fifteenth day of the first month of

the applicable quarter.

3. If an eligible hospital fails to pay a quarterly payment

timely and in full, the eligible hospital shall pay the Authority:

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a. a penalty fee equal to five percent (5%) of the

eligible hospital's unpaid quarterly payment, and

b. if the quarterly payment and penalty fee are not paid

in full by the end of the quarter, an additional

penalty fee of five percent (5%) of the eligible

hospital's unpaid quarterly payment.

4. The quarterly payment including applicable penalty fees must

be paid regardless of any administrative review requested by the

eligible hospital. If an eligible hospital fails to pay the

Authority the assessment within the time frames noted on the invoice

to the eligible hospital, the assessment, applicable penalty fees,

and interest will be deducted from the facility's payment. Any

change in payment amount resulting from an appeals decision will be

adjusted in future payments.

F. Medicaid Hospital Access Payments.

1. To preserve the quality and improve access to hospital

inpatient and outpatient services, the Authority shall make hospital

access payments to eligible hospitals and critical access hospitals

to supplement reimbursements for inpatient and outpatient services

that are provided through Medicaid on both a fee-for-service and

managed care basis.

2. On an annual basis prior to the start of each calendar year,

the Authority shall determine:

a. the upper payment limit gap for inpatient services

payable on a Medicaid fee-for-service basis for all

hospitals,

b. the upper payment limit gap for outpatient services

payable on a Medicaid fee-for-service basis for all

hospitals,

c. the managed care gap for inpatient services payable

through Medicaid managed care for all hospitals, and

d. the managed care gap for outpatient services payable

through Medicaid managed care for all hospitals.

3. In accordance with subsection C of Section 3241.3 of this

title, the Authority shall use assessment fees for the purposes of

accessing federal matching funds to make hospital access payments to

eligible hospitals and the critical access hospitals described in

paragraph 5 of subsection B of Section 3241.3 of this title.

Hospital access payments shall be made through supplemental payment

arrangements for services provided on a Medicaid fee-for-service

basis and through directed payment arrangements for services

provided on a Medicaid managed care basis, as approved by the

federal Centers for Medicare and Medicaid Services.

4. Hospital access payments shall be determined annually and

paid quarterly from the following funding pools:

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a. a hospital inpatient fee-for-service payment pool

established from funds derived from the upper payment

limit gap for inpatient services,

b. a hospital inpatient managed care payment pool

established from funds derived from the managed care

gap for inpatient services,

c. a hospital outpatient fee-for-service payment pool

established from funds derived from the upper payment

limit gap for outpatient services,

d. a hospital outpatient managed care payment pool

established from funds derived from the managed care

gap for outpatient services, and

e. (1) A critical access hospital payment pool

established from funds transferred from each pool

established in subparagraphs a through d of this

paragraph.

(2) Prior to the start of each calendar year, the

Authority shall determine an estimated amount

that each critical access hospital may be

entitled to receive for providing Medicaid

services, not to exceed that critical access

hospital's billed charges.
access hospital payment pool

established from funds transferred from each pool

established in subparagraphs a through d of this

paragraph.

(2) Prior to the start of each calendar year, the

Authority shall determine an estimated amount

that each critical access hospital may be

entitled to receive for providing Medicaid

services, not to exceed that critical access

hospital's billed charges.

(3) The Authority shall fund the critical access

hospital payment pool in an amount equal to the

total estimated amount that all critical access

hospitals may be entitled to receive for

providing Medicaid services, as calculated in

division 2 of this subparagraph.

(4) The Authority shall consult with the Committee

regarding the calculations in divisions 2 and 3

of this subparagraph.

(5) The Authority shall fully fund the critical

access hospital payment pool prior to issuing any

payment from the pools established in

subparagraphs a through d of this paragraph.

5. In addition to any other funds paid to eligible hospitals

for inpatient hospital services to Medicaid patients, each eligible

hospital shall receive hospital access payments each quarter from

the hospital inpatient fee-for-service payment pool and the hospital

inpatient managed care payment pool in accordance with the following

methodologies:

a. the amount an eligible hospital shall receive from the

hospital inpatient fee-for-service payment pool shall

be the eligible hospital's pro rata share of the

hospital inpatient fee-for-service payment pool

calculated as the eligible hospital's total fee-for-

service Medicaid payments for inpatient services

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divided by the total Medicaid fee-for-service payments

for inpatient services of all eligible hospitals.

Each quarterly payment from the hospital inpatient

fee-for-service payment pool shall be paid to the

eligible hospital through a supplemental payment.

Prior to the start of a calendar year, the Authority

shall consult with the Committee to minimize potential

payment disparities to protect access to rural and

independent hospitals, and

b. an eligible hospital shall receive from the hospital

inpatient managed care payment pool a per-discharge

uniform add-on amount to be applied to each eligible

hospital's Medicaid managed care discharges for that

calendar year. The per-discharge uniform add-on

amount shall be calculated by dividing the managed

care gap by total managed care inpatient discharges at

eligible hospitals contained in the data used to

calculate the managed care gap. To assure timely

payment, the Authority may make the calculation in

this subparagraph using good-faith reasonable

estimates if complete data does not exist or is not

available. Each quarterly payment from the hospital

inpatient managed care payment pool shall be paid to

the eligible hospital through a directed payment.

6. In addition to any other funds paid to eligible hospitals

for outpatient hospital services to Medicaid patients, each eligible

hospital shall receive hospital access payments each quarter from

the hospital outpatient fee-for-service payment pool and the

hospital outpatient managed care payment pool in accordance with the

following methodologies:

a. the amount an eligible hospital shall receive from the

hospital outpatient fee-for-service payment pool shall

be the eligible hospital's pro rata share of the

hospital's outpatient fee-for-service payment pool

calculated as the eligible hospital's total fee-for-

service Medicaid payments for outpatient services

divided by the total Medicaid fee-for-service payments

for outpatient services of all eligible hospitals.

Each quarterly payment from the hospital outpatient

fee-for-service payment pool shall be paid to the

eligible hospital through a supplemental payment, and

b. an eligible hospital shall receive from the hospital
hospital's total fee-for-

service Medicaid payments for outpatient services

divided by the total Medicaid fee-for-service payments

for outpatient services of all eligible hospitals.

Each quarterly payment from the hospital outpatient

fee-for-service payment pool shall be paid to the

eligible hospital through a supplemental payment, and

b. an eligible hospital shall receive from the hospital

outpatient managed care payment pool a uniform

percentage add-on amount to be applied to the base

rate claims payments for hospital outpatient Medicaid

managed care encounters at eligible hospitals for that

calendar year. The uniform percentage add-on amount

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shall be calculated by dividing the managed care gap

by total managed care base rate claims payments for

eligible hospitals within the data used to calculate

the managed care gap. To assure timely payment, the

Authority may make the calculation in this

subparagraph using good-faith reasonable estimates if

complete data does not exist or is not available.

Each quarterly payment from the hospital outpatient

managed care payment pool shall be paid to the

eligible hospital through a directed payment.

7. In addition to any other funds paid to critical access

hospitals for inpatient and outpatient hospital services to Medicaid

patients, each critical access hospital physically located in this

state shall receive hospital access payments each quarter from the

critical access hospital payment pool as follows:

a. each calendar year, a critical access hospital shall

receive from the critical hospital payment pool

quarterly amounts that shall total the estimated

amount the Authority calculated, not to exceed billed

charges, for that critical access hospital in

accordance with paragraph 4 of this subsection,

b. the quarterly hospital access payments made to each

critical access hospital shall be through supplemental

payments and directed payments in such proportions as

necessary for the Authority to make the total hospital

access payments to each critical access hospital in

accordance with subparagraph a of this paragraph, and

c. in the event Medicaid managed care is not implemented

on a statewide basis, the Authority shall make

supplemental payments to critical access hospitals to

achieve one hundred one percent (101%) of Medicare's

critical access hospitals' costs and a directed

payment shall not be made.

8. The Authority shall pay each quarterly hospital access

payment referenced in paragraph 4 of this subsection within fourteen

(14) calendar days of the date on which each quarterly payment of an

annual assessment is due as required in subsection E of this

section.

9. In processing directed payments through contracted entities,

the following requirements shall apply:

a. the Authority shall provide each contracted entity

with a listing of the hospital access payments to be

paid by each contracted entity to each eligible

hospital and critical access hospital in accordance

with this subsection,

b. a contracted entity shall pay hospital access payments

to eligible hospitals and critical access hospitals

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within five (5) business days of receiving a

supplemental capitation payment from the Authority,

c. a contracted entity is prohibited from withholding or

delaying the payment of a hospital access payment for

any reason, and

d. the Authority shall utilize administrative discretion

regarding the mechanisms of payment that may be

necessary to assure that each eligible hospital and

critical access hospital receives full payment of all

hospital access payments to which it is entitled

pursuant to this subsection.

10. A hospital access payment shall not be used to offset any

other payment for hospital inpatient or outpatient services to

Medicaid beneficiaries including without limitation any fee-for-
payment that may be

necessary to assure that each eligible hospital and

critical access hospital receives full payment of all

hospital access payments to which it is entitled

pursuant to this subsection.

10. A hospital access payment shall not be used to offset any

other payment for hospital inpatient or outpatient services to

Medicaid beneficiaries including without limitation any fee-for-

service, managed care, per diem, private hospital inpatient

adjustment, or cost-settlement payment.

11. Notwithstanding any other provision of law to the contrary:

a. the supplemental payment programs in this section

shall not be implemented if federal financial

participation is not available or if the provider

assessment waiver is not approved,

b. an eligible hospital's obligation to pay the portion

of the assessment attributable to the nonfederal share

of the upper payment limit gap and the nonfederal

share of the managed care gap as required by Section

3241.3 of this title and this section shall be reduced

in the event the federal Centers for Medicare and

Medicaid Services determines that federal financial

participation is not available to make hospital access

payments in accordance with this section. The

assessment on eligible hospitals shall be reduced to a

percentage that permits the Authority to obtain from

eligible hospitals an amount of nonfederal matching

funds for which federal financial participation is

available to implement any portion of hospital access

payments that the federal Centers for Medicare and

Medicaid Services approves, and

c. any assessments received by the Authority that cannot

be matched with federal funds shall be returned pro

rata to the eligible hospitals that paid the

assessments.

12. If the federal Centers for Medicare and Medicaid Services

disallows any hospital access payments made pursuant to this section

on the basis that such payments exceed the maximum allowable under

federal law, each hospital receiving such disallowed payments shall

refund to the Authority an amount equal to that hospital's pro rata

share of the recouped federal funds that is proportionate to the

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hospital's positive contribution to the disallowed payment. The

refund shall be required only if the disallowance is considered

final and all appeals have been exhausted.

G. All monies accruing to the credit of the Supplemental

Hospital Offset Payment Program Fund are hereby appropriated and

shall be budgeted and expended by the Authority after consideration

of the input and recommendation of the Hospital Advisory Committee.

1. Monies in the Supplemental Hospital Offset Payment Program

Fund shall be used for:

a. transfers to the Medical Payments Cash Management

Improvement Act Programs Disbursing Fund for the state

share of supplemental or directed payments or both for

Medicaid and SCHIP inpatient and outpatient services

to hospitals that participate in the assessment,

b. transfers to the Medical Payments Cash Management

Improvement Act Programs Disbursing Fund for the state

share of supplemental or directed payments or both for

critical access hospitals,

c. transfers to the Administrative Revolving Fund for the

state share of payment of administrative expenses

incurred by the Authority or its agents and employees

in performing the activities authorized by the

Supplemental Hospital Offset Payment Program Act but

not more than Two Hundred Thousand Dollars

($200,000.00) each year,

d. transfers to the Medical Payments Cash Management

Improvement Act Programs Disbursing Fund each fiscal

quarter in accordance with subsection C of Section

3241.3 of this title, and

e. the reimbursement of monies collected by the Authority

from hospitals through error or mistake in performing

the activities authorized under the Supplemental

Hospital Offset Payment Program Act.
each year,

d. transfers to the Medical Payments Cash Management

Improvement Act Programs Disbursing Fund each fiscal

quarter in accordance with subsection C of Section

3241.3 of this title, and

e. the reimbursement of monies collected by the Authority

from hospitals through error or mistake in performing

the activities authorized under the Supplemental

Hospital Offset Payment Program Act.

2. The Authority shall pay from the Supplemental Hospital

Offset Payment Program Fund quarterly installment payments to

hospitals as set forth in this section.

3. Monies in the Supplemental Hospital Offset Payment Program

Fund shall not be used to replace other general revenues

appropriated and funded by the Legislature or other revenues used to

support Medicaid.

4. The Supplemental Hospital Offset Payment Program Fund and

the program specified in the Supplemental Hospital Offset Payment

Program Act are exempt from budgetary reductions or eliminations

caused by the lack of general revenue funds or other funds

designated for or appropriated to the Authority.

5. No hospital shall be guaranteed, expressly or otherwise,

that any additional costs reimbursed to the facility will equal or

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exceed the amount of the supplemental hospital offset payment

program fee paid by the hospital.

H. After considering input and recommendations from the

Hospital Advisory Committee, the Oklahoma Health Care Authority

Board shall promulgate rules that:

1. Allow for an appeal of the annual assessment of the

Supplemental Hospital Offset Payment Program payable under the

Supplemental Hospital Offset Payment Program Act; and

2. Allow for an appeal of an assessment of any fees or

penalties determined.