1. (a) This section does not apply to the use of the incremental fee described in section 13.3 of this chapter. Subject to subsection (b), the office shall develop the following programs designed to increase, to the extent allowable under federal law, Medicaid reimbursement for inpatient and outpatient hospital services provided by a hospital to Medicaid recipients:

   1. (1) A program concerning reimbursement for the Medicaid fee-for-service program that, in the aggregate, will result in payments equivalent to the level of payment that would be paid under federal Medicare payment principles.
   2. (2) A program concerning reimbursement for the Medicaid risk based managed care program that, in the aggregate, will result in payments equivalent to the level of payment that would be paid under federal Medicare payment principles.

2. (b) The office shall not submit to the United States Department of Health and Human Services any Medicaid state plan amendments, waiver requests, or revisions to any Medicaid state plan amendments or waiver requests, to implement or continue the implementation of this chapter until the committee has reviewed and approved the amendments, waivers, or revisions described in this subsection and has submitted a written report to the budget committee concerning the amendments, waivers, or revisions described in this subsection, including the following:

   1. (1) The methodology to be used by the office in calculating the increased Medicaid reimbursement under the programs described in subsection (a).
   2. (2) The methodology to be used by the office in calculating, imposing, or collecting the fee, or any other matter relating to the fee.
   3. (3) The determination of Medicaid disproportionate share allotments under section 11 of this chapter that are to be funded by the fee, including the formula for distributing the Medicaid disproportionate share allotments.
   4. (4) The distribution to private psychiatric institutions under section 13 of this chapter.

3. (c) This subsection applies to the programs described in subsection (a). The state share dollars for the programs must consist of the following:

   1. (1) Fees paid under this chapter.
   2. (2) The hospital care for the indigent funds allocated under section 10 of this chapter.

   3. (3) Other sources of state share dollars available to the office, excluding intergovernmental transfers of funds made by or on behalf of a hospital.

      The money described in subdivisions (1) and (2) may be used only to fund the part of the payments that exceed the Medicaid reimbursement rates in effect on June 30, 2011.

4. (d) This subsection applies to the programs described in subsection (a). If the state is unable to maintain the funding under subsection (c)(3) for the payments at Medicaid reimbursement levels in effect on June 30, 2011, because of budgetary constraints, the office shall reduce inpatient and outpatient hospital Medicaid reimbursement rates under subsection (a)(1) or (a)(2) or request approval from the committee and the United States Department of Health and Human Services to increase the fee to prevent a decrease in Medicaid reimbursement for hospital services. If:

   1. (1) the committee:

      1. (A) does not approve a reimbursement reduction; or
      2. (B) does not approve an increase in the fee; or

   2. (2) the United States Department of Health and Human Services does not approve an increase in the fee;

      the office shall cease to collect the fee and the programs described in subsection (a) are terminated.

As added by P.L.205-2013, SEC.214. Amended by P.L.213-2015, SEC.143.