2022 Session

Budget Amendments - SB30 (Committee Approved)

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Acquisition Policy for Type One Hospitals (language only)

Item 304 #32s

Item 304 #32s

Health and Human Resources
Department of Medical Assistance Services


Page 314, after line 48, insert:

"5. Effective on or after July 1, 2022, any hospitals acquired by or that become fully-owned by designated Type One hospitals shall be considered Type Two facilities for reimbursement including, but not limited to: Indirect Medical Education payments, Graduate Medical Education Payments, Direct Medical Education payments, Disproportionate Share Hospital payments, hospital rate-setting purposes, aggregated cost settlements, and physician supplemental payments. Facilities acquired prior to July 1, 2022 by Type One hospitals shall continue to be designated as Type One hospitals for reimbursement purposes."


(This amendment clarifies the Commonwealth’s policy on Type One (state teaching hospitals) status designation for Medicaid reimbursement of acquired hospitals. A Type Two hospital is a private hospital. Historically, private hospitals purchased by VCU Health or UVA Health (the only Type One hospitals) have been conveyed Type One status. Due to the Commonwealth's enhanced reimbursement polices for Type One hospitals, the extension of that designation to purchased private hospitals results in a general fund impact on the Medicaid program. Such budgetary decisions are the responsibility of the General Assembly. In addition, those private hospitals are removed from the pool of acute care hospitals that contribute to the coverage assessment that pays the state share of the costs of Medicaid Expansion. Recent acquisitions by UVA Health include Culpeper Medical Center, Haymarket Medical Center, and Prince William Medical Center. VCU Health recently purchased Riverside Tappahannock Hospital.)