Determination of Assessment Liability and Payment

(A) The Department shall collect an assessment on certain payments to hospitals and ambulatory surgical centers. The assessment amount equals the product of (1) payments subject to the assessment as defined in 105 CMR 223.100(C); and (2) the assessment percentage as defined in 105 CMR 223.100(D). (B) (1) Payers are subject to the assessment if: (a) the payer is a surcharge payer; and (b) the payer's payments subject to surcharge were $1,000,000 or more during the previous state fiscal year or the most recent state fiscal year for which data is available. (2) The same entity that pays the hospital or ambulatory surgical center for services must pay the assessment. (3) A payer that pays for hospital or ambulatory surgical center services on behalf of a client plan must pay the assessment on those services. A payer that administers payments for health care services on behalf of a client plan in exchange for an administrative fee will be deemed to use the client plan's funds to pay for health care services whether the payer pays providers with funds from the client plan, with funds advanced by the payer subject to reimbursement by the client plan, or with funds deposited with the payer by the client plan. (C) Payments subject to the assessment include direct and indirect payments made by payers in a time period as determined by the Department and released annually, to hospitals for the purchase of hospital services; and to ambulatory surgical centers for the purchase of ambulatory surgical center services. (D) The Department will determine the assessment percentage as follows: (1) The Department will determine the total amount to be collected to cover the costs of purchasing and distributing childhood vaccines. The Department may adjust the amount to reflect over or under collections from the prior year's assessment. (2) The Department will determine projected aggregate payments subject to the assessment based on payers' historical data related to the surcharge, adjusted as the Department deems necessary to create an accurate projection. (3) The assessment percentage is determined by dividing the total amount to be collected determined under 105 CMR 223.100(D)(1) by total projected payments determined under 105 CMR 223.100(D)(2). (4) The Department may establish the assessment percentage by Administrative Bulletin. The Department may adjust the assessment percentage by Administrative Bulletin if an adjustment is necessary to collect the revenue required to be collected. (E) Each payer shall determine its assessment liability in accordance with guidance issued by the Department in administrative bulletins. The assessment liability is the product of the payer's payments subject to the assessment, as defined in 105 CMR 223.100(C) and the assessment percentage as defined in 105 CMR 223.100(D). (F) Payers that pay a global fee or capitation for services that include hospital or ambulatory surgical center services, as well as other services not subject to the assessment, must develop a reasonable method for allocating the portion of the payment intended to be used for services provided by hospitals or ambulatory surgical centers. Such payers must file this allocation with st the Department by February 1 of each year. If there is a significant change in the global fee or capitation payment arrangement that necessitates a change in the allocation method, the payer must notify the Department and file a new allocation method at least 45 days before the new payment arrangement takes effect. Payers may not change the allocation method later in the year unless there is a significant change in the payment arrangement. (1) The Department will review allocation plans within 90 days of receipt. During this review period, the Department may require a payer to submit supporting documentation or to make changes in this allocation method if it finds that the method does not reasonably allocate the portion of the global payment or capitation intended to be used for services provided by hospitals or ambulatory surgical centers. (2) A payer must include the portion of the global payment or capitation intended to be used for services provided by hospitals or ambulatory surgical centers, as determined by this allocation method, in its determination of payments subject to the assessment. (G) A payer must include all payments made as a result of settlements, judgments or audits in its determination of payments subject to the assessment. A payer may include payments made by Massachusetts hospitals or ambulatory surgical centers to the payer as a result of settlements, judgments or audits as a credit in its determination of payments subject to the assessment. (H) Each payer shall pay its assessment liability in accordance with a schedule developed and released by the Department through administrative bulletin.