KRS 205.637: Enhanced Medicaid payments to county -owned or operated hospitals --

Payments to other hospitals.

(1) (a) A county -owned or operated hospital shall receive an enhanced Medicaid

payment in an amount, calculated from the most recent cost report filed by

that hospital with the department as of June 30 of each year, equal to the

difference between the amount of total payments made to the hospital by the

department or a managed care entity for covered services provided to

Medicaid beneficiaries, including se rvices attributable to recipients in

Medicaid managed care programs, during the state fiscal year and the

hospital's cost for the services determined by the department under Medicare

payment principles. Reimbursement under this section shall be made in a

single payment. From July 1 through August 1 of each year, the Department

for Medicaid Services shall calculate the payment due to be made to each

county-owned or operated hospital and shall make the payment to each

hospital no later than August 15 of each state fiscal year. The department shall

make an enhanced payment to each county-owned or operated hospital in state

fiscal year 1998 using cost reports filed with the department on or before June

30, 1998, for the hospitals' latest fiscal year.

(b) A payment described in this section is not due to a county -owned or operated

hospital unless an intergovernmental transfer is made. A county -owned or

operated hospital may make an intergovernmental transfer, or an

intergovernmental transfer may be made on behalf of the hospital by a county,

budget unit of a county governmental agency, or lending institution if it is not

prohibited by state or federal law.

(c) An intergovernmental transfer shall be made to the enhanced Medicaid

payment fund by August 2 of each stat e fiscal year in an amount equal to

eighty percent (80%) of the amount determined under paragraph (a) of this

subsection and shall be matched with federal funds.

(d) An enhanced Medicaid payment shall be made to each county -owned or

operated hospital participating in the intergovernmental transfer program in an

amount equal to one hundred percent (100%) of the hospital's Medicaid

shortfall as determined under paragraph (a) of this subsection.

(e) The department shall determine the Medicaid shortfall for all other hospitals

that are not county -owned or operated or are not state -university-owned or

operated hospitals, which shall be equal to the difference between total

payments made by the department or a managed care entity for covered

services provided to M edicaid beneficiaries, including those enrolled in

managed care, during the state fiscal year and the hospital's costs for the

services as determined by the department under Medicare payment principles.

Funds remaining from the enhanced Medicaid program sh all be distributed to

each hospital which is not county-owned or operated or is not state-university-

owned or operated on a pro rata basis. If funds remain in the enhanced

Medicaid payment fund after making enhanced Medicaid payments required

by this subse ction, the remaining funds shall be available for use by the

department for funding the regular Medicaid program.

(2) The enhanced Medicaid payment authorized under subsection (1) of this section

shall not be implemented as part of the disproportionate share hospital program or if

federal financial participation is not available.

(3) The Cabinet for Health and Family Services shall promulgate administrative

regulations to implement the provisions of this section.