The following words, terms and phrases, when used in this article shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

(1) DEPARTMENT. The Department of Revenue of the State of Alabama.

(2) FISCAL YEAR. An accounting period of 12 months beginning on the first day of the first month of the state fiscal year.

(3) MEDICAID PROGRAM. The medical assistance program as established in Title XIX of the Social Security Act and as administered in the State of Alabama by the Alabama Medicaid Agency pursuant to executive order and Title 560 of the Alabama Administrative Code.

(4) PHARMACEUTICAL PROVIDER. A provider of drugs, medicines, chemicals and poisons which, pursuant to a valid prescription, are offered for sale, compounded or dispensed to citizens of Alabama. This term shall include all places whose title may imply the sale, offering for sale, compounding or dispensing, of drugs, medicines, chemicals or poisons.

(5) PRESCRIPTION. Any order for drugs, biologicals or insulin syringes, written or signed or transmitted by word of mouth, telephone, telegraph, closed circuit television, or other means of communication by a legally competent practitioner, licensed by law to prescribe and administer such drugs, biologicals or insulin syringes intended to be filled, compounded or dispensed by a pharmacist.

To provide further for the availability of indigent health care, the operation of the Medicaid Program and the maintenance and expansion of medical services thereunder, there is hereby levied and shall be collected as provided in this article a privilege tax on the business activities of every provider of pharmaceutical services to the citizens of Alabama, except for a pharmacy, or portion thereof, serving hospital inpatients or pharmacies owned or operated by the State of Alabama or an agency thereof. The privilege tax imposed by this article is in addition to all other taxes of any kind now imposed by law, and shall be at the rate of 10 cents for each prescription filled or refilled for a citizen of Alabama.

(a) The taxes imposed by this article shall be due and payable to the department on or before the twentieth day of the month next succeeding the month in which the tax accrues, and shall, when collected, be paid by the department into the State Treasury. Payment by United States mail will be timely if mailed in accordance with Section 40-1-45. When paid into the State Treasury, all such taxes shall be deposited to the credit of the Alabama Health Care Trust Fund.

(b) The receipts from the tax levied in this article shall be solely available for appropriation by the Alabama Legislature to the Alabama Medicaid Agency for use by said agency in accomplishing the purposes of this article. Provided, however, for the first fiscal year in which this article is effective, to defray its expenses, including salaries and costs of operation incident to the collection of this tax, there is hereby appropriated to the department and shall be deducted as a first charge thereon, an amount not to exceed one percent of the revenues collected pursuant to this article. Such amount of money as shall be appropriated for each succeeding fiscal year by the Legislature to the department with which to pay the salaries, the cost of operation and the management of the department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to this article. Provided, however, the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating the department for each fiscal year, incident to the collection of this tax.

(a) On or before the twentieth of each month, beginning with November 1991, every pharmaceutical provider subject to this article shall file with the department a statement under penalty of perjury on forms prescribed by the department, showing the total number of prescriptions filled or refilled by said provider for the previous month, the taxes due under this article and such other reasonable and necessary information as the department, after consultation with the Alabama Medicaid Agency and adoption of appropriate rules or regulations, may require for the proper enforcement of the provisions of this article. At the time of filing such monthly statement such provider shall pay to the department the amount of taxes shown to be due.

When the total tax for which any pharmaceutical provider liable under this article does not exceed $10 for any month, a quarterly return and remittance in lieu of the monthly returns may be made on or before the twentieth day of the month next succeeding the end of the quarter for which the tax is due when specially authorized by the department and under such rules and regulations as may be prescribed.

(b) Any pharmaceutical provider that fails to pay the taxes levied by this article within the time required by this article shall pay, in addition to the tax, a penalty of 10 percent of the amount of tax due, together with interest thereon at the rate prescribed by Section 40-1-44, such penalty and interest to be assessed and collected as part of the taxes. Provided, however, the department, if a good and sufficient reason is shown, may waive or remit the penalty of 10 percent or a portion thereof. If payment is not received by the last day of the month, the department shall notify the Alabama Medicaid Agency which shall determine whether the pharmaceutical provider is a Medicaid provider, and if so, shall withhold the payment, interest and penalty due from any reimbursement due said provider under the Medicaid Program. The taxes levied by this article shall constitute a debt due the State of Alabama and may be collected by civil action in addition to the methods provided in this article. The department is empowered to assess, file tax liens and collect the taxes levied by this article, as prescribed in this title.

(a) It shall be the duty of each pharmaceutical provider subject to this article to keep and preserve such suitable books and records as may be necessary to determine the amount of taxes for which it is liable under the provisions of this article. Said books and records shall be kept and preserved for a period of not less than three years, and all such books and records shall be open for examination during business hours by the department or its duly authorized agents.

(b) All information secured pursuant to this article by the department shall be confidential, as prescribed by Section 40-2A-10, except that the department may provide such information to the Alabama Medicaid Agency as necessary for the proper administration of the Medicaid Program, or for the department's proper administration of the tax levied by this article.

(c) The department shall from time to time, as it deems desirable, promulgate such reasonable rules and regulations as necessary to provide for the orderly and efficient administration of the tax levied by this article.

(a) The Alabama Medicaid Agency shall use the revenues from the tax levied by this article in furtherance of the purposes of this article, provided that any such uses shall be limited to those for which federal financial participation under Title XIX of the Social Security Act is available.

(b) Any reimbursement due a pharmaceutical provider under the Medicaid Program shall be paid in a timely fashion. If the amount payable is not in dispute and is not paid by the Alabama Medicaid Agency within 30 days of the due date, interest on the amount due shall be charged. The interest shall be the legal amount currently charged by the state.

No revenues resulting from the tax established by this article and applied to increases in covered services or reimbursement levels or other enhancements of the Medicaid Program adopted by the Alabama Medicaid Agency as a result of revenues made available under the tax levied by this article shall be subject to reduction or elimination while said tax is in effect.

This article shall be of no effect if federal financial participation under Title XIX of the Social Security Act is not available to the Alabama Medicaid Program for the purposes of this article at the approved federal medical assistance percentage, established under Section 1905 of the Social Security Act, for the applicable fiscal year.

The following words, terms, and phrases shall have the following meanings:

(1) BED. Any bed that is licensed by the Alabama Department of Health and its successor agency to provide nursing home care which is in a nursing facility.

(2) DEPARTMENT. The Department of Revenue of the State of Alabama.

(3) FISCAL YEAR. An accounting period of 12 months beginning on the first day of the first month of the state fiscal year.

(4) MEDICAID PROGRAM. The medical assistance program as established in Title XIX of the Social Security Act and as administered in the State of Alabama by the Alabama Medicaid Agency pursuant to executive order and Title 560 of the Alabama Administrative Code.

(5) NURSING FACILITY. An institution which is licensed under the laws of the State of Alabama as a skilled nursing facility or an intermediate nursing facility.

Nursing facility shall not include any facility owned or operated by, or operating under an exclusive contract with, the State of Alabama or any agency thereof, or any nursing facility/institution for the developmentally disabled (NF/IDD).

(6) NURSING FACILITY/INSTITUTION FOR THE DEVELOPMENTALLY DISABLED. A nursing facility that provides care only to physically and mentally disabled residents who are 18 years of age or less.

To provide further for the availability of indigent health care, the operation of the Medicaid program, and the maintenance and expansion of medical services:

(a) There is levied and shall be collected a privilege tax on the business activities of every nursing facility in the State of Alabama. The privilege tax imposed is in addition to all other taxes, and shall be at the annual rate of $999.96 for each bed in the nursing facility.

(b) There is levied and shall be collected a supplemental privilege tax on the business activities of every nursing facility in the State of Alabama. The supplemental privilege tax imposed is in addition to all other taxes, including without limitation, the privilege taxes provided for under this article, and shall be at the annual rate of $900.00 for each bed in the nursing facility.

(c) The total privilege taxes paid by a nursing facility pursuant to this article shall be considered an 'allowable costs,' as that term is defined in the reimbursement methodology for nursing facilities contained in Title 560 of the Alabama Administrative Code, and, to the extent permitted under applicable federal law governing the Alabama Medicaid nursing home program, the total taxes paid must be included in the computation of the Medicaid per diem rate determined under the reimbursement methodology for nursing facilities contained in Title 560 of the Alabama Administrative Code. In the event that any portion of the privilege taxes paid by a facility cannot be included in the computation of the Medicaid per diem rate because of the effect of any cost ceiling provision of the reimbursement methodology, the cost ceiling must be adjusted to ensure continued treatment of the total privilege tax as an allowable cost.

(d) The privilege tax rate or the supplemental privilege tax rate shall be reduced by the department upon the advice of the Alabama Medicaid Agency if, but only if, such reduction is required to ensure that the total revenues to the State of Alabama produced by this privilege tax or, if the supplemental privilege tax is in effect, the aggregate of the supplemental privilege tax and the privilege tax, during any state fiscal year are less than or equal to six percent of the total revenues received by the nursing facilities in the state subject to the tax during that same fiscal year.

(a) The taxes imposed by this article shall be due and payable in monthly installments to the department on or before the tenth day of the month next succeeding the month in which the tax accrues, and shall, when collected, be paid by the department into the State Treasury. Payment by United States mail will be timely if mailed in accordance with Section 40-1-45. When so paid into the State Treasury, all such taxes shall be deposited to the credit of the Alabama Health Care Trust Fund or any successor fund administered by or on behalf of the Alabama Medicaid Agency.

(b) The receipts from the taxes levied in this article shall be solely available for appropriation by the Alabama Legislature to the Alabama Medicaid Agency for use by said agency in accomplishing the purposes of this article. Provided, however, for the first fiscal year in which this article is effective, to defray its expenses including salaries and costs of operation incident to the collection of this tax, there is hereby appropriated to the department and shall be deducted as a first charge thereon, an amount not to exceed one percent of the revenues collected pursuant to this article. Such amount of money as shall be appropriated for each succeeding fiscal year by the Legislature to the department with which to pay the salaries, the cost of operation and the management of the department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to said article. Provided, however, the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year, incident to the collection of this tax.

(a) On or before the tenth of each month, beginning October 1991, each nursing facility subject to this article shall file with the department a statement under penalty of perjury on forms prescribed by said department, showing the total number of beds as of the last day of the previous month, the taxes due under this article, and such other reasonable and necessary information as the department, after consultation with the Alabama Medicaid Agency and adoption of appropriate rules and regulations, may require for the proper enforcement of the provisions of this article. At the time of filing such statement the nursing facility shall pay to the department the amount of taxes shown to be due.

(b) The annual taxes levied by this article shall be prorated on a month by month basis for any beds added to or subtracted from the nursing facility during the fiscal year except that, for any nursing facility which adds licensed beds after July 1, 1991, and has a monthly total occupancy rate of less than 85 percent according to Medicaid program methodology, the amount due for each such month shall be determined by prorating the annual taxes due per bed on a daily basis and multiplying said amount times the total number of patient days furnished in such month by said facility. This exception shall cease as of the first month that the occupancy rate of the nursing facility equals or exceeds 85 percent.

(c) Any nursing facility that fails to pay the taxes levied by this article within the time required by this article shall pay, in addition to the taxes, a penalty of 10 percent of the amount of taxes due, together with interest thereon at the rate prescribed by Section 40-1-44, such penalty and interest to be assessed and collected as part of the taxes. Provided, however, the department, if a good and sufficient reason is shown, may waive or remit the penalty of 10 percent or a portion thereof. If payment is not received by the last day of the month, the department shall notify the Alabama Medicaid Agency, which shall withhold the payment, interest and penalty owed from any reimbursement due said nursing facility under the Medicaid program. The taxes levied by this article shall constitute a debt due the State of Alabama and may be collected by civil action in addition to the methods provided in this article. The department is empowered to assess, file tax liens and collect the taxes levied by this article, as prescribed in this title.

(a) It shall be the duty of each nursing facility subject to this article to keep and preserve such suitable books and records as may be necessary to determine the amount of taxes for which it is liable under the provisions of this article. Said books and records shall be kept and preserved for a period of not less than three years, and all such books and records shall be open for examination during business hours by the department or its duly authorized agents.

(b) All information secured pursuant to this article by the department shall be confidential, as prescribed by Section 40-2A-10, except that the department may provide such information to the Alabama Medicaid Agency as necessary for the proper administration of the Medicaid program, or for the department's proper administration of the taxes levied by this article.

(c) The department shall from time to time, as it deems desirable, and after consultation with the Alabama Medicaid Agency, promulgate such reasonable rules and regulations as necessary to provide for the orderly and efficient administration of the tax levied by this article.

(a) The Alabama Medicaid Agency shall use the revenues from the tax in furtherance of the purposes of this article, provided that any uses shall be limited to those for which federal financial participation under Title XIX of the Social Security Act is available.

(b) Any reimbursement due a nursing facility under the Medicaid program shall be paid in a timely fashion. If the amount payable is not in dispute and is not paid by the Alabama Medicaid Agency within 30 days of the due date, interest on the amount due shall be charged. The interest rate shall be the legal amount currently charged by the state.

(a) No revenues resulting from the tax established by this article and applied to increases in covered services or reimbursement levels or other enhancements of the Medicaid program shall be subject to reduction or elimination while said tax is in effect.

(b) Every nursing facility participating in the Medicaid program in the State of Alabama shall be reimbursed according to the reimbursement methodology contained in Chapter 560-X-22 of the Alabama Medicaid Agency Administrative Code (Supp. 12/31/95) on January 31, 1998, which methodology is incorporated by reference herein, except that the following shall apply:

(1) The ceiling for the operating cost center described in Title 560-X-22-.06 (2)(a) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95) shall be computed at the median plus five percent.

(2) The ceiling for the direct patient care cost center described in Title 560-X-22-.06 (2)(b) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95) shall be computed at the median plus 10 percent, and the provider's actual allowable reported cost per patient day plus 11 percent, or the established ceiling plus 11 percent, whichever is less, will be used for each provider's rate computation.

(3) The Medicaid Inflation Index described in Title 560-X-22-.07 of the Alabama Medicaid Agency Administrative Code (Supp. 12/95) shall be computed without regard to the trend factor variance described in Title 560-X-22-.07 (5) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95).

(4) In calculating the ceiling for the operating cost center, the direct patient care cost center or the indirect patient care cost center, any increase in that ceiling over such ceiling set in the year next preceding, shall not exceed an amount equal to the product of such ceiling for the previous year times the sum of the Medicaid Inflation Index, described in Title 560-X-22-.07 of the Alabama Medicaid Agency Administrative Code (Supp. 12/95), plus four percent.

(5) In determining the reimbursement in any fiscal year to a nursing facility for certain specialized medical equipment as described in Title 560-X-22-.14 (19) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95), there shall be added to the daily Medicaid per diem rate computed for that fiscal year, without regard to the cost of such specialized medical equipment, an amount equal to the actual cost of such specialized medical equipment utilized for Medicaid residents during the fiscal year next preceding and divided by the actual number of Medicaid patient days incurred during that preceding fiscal year. For the purpose of this subdivision the terms Medicaid patient days, Medicaid per diem rate, and fiscal year shall have the meanings assigned to them in Title 560-X-22 et seq. of the Alabama Medicaid Agency Administrative Code (Supp. 12/95).

(6) For the period that the federal financial participation under Title XIX of the Social Security Act for certain intergovernmental transfers is available to the Alabama Medicaid program, the Commissioner of the agency may pay an enhancement, not to exceed the upper limits for Medicare nursing facility payments, to rural hospital connected nursing facilities under governmental authority or control. Notwithstanding the foregoing, the enhancement shall not be limited by the provisions of Title 560-X-22 of the Alabama Medicaid Administrative Code.

(c) Payments by the Medicaid program to each nursing facility for nursing home services shall be sufficient to cover the costs determined by cost reporting principles incurred by each such nursing facility in providing care in an economical and efficient manner and that is adequate to permit the provision of care and services necessary to attain or maintain the highest practicable, physical, mental, and psychosocial well-being of each resident eligible for Alabama Medicaid nursing home benefits in conformity with applicable state and federal laws, rules and regulations and quality and safety standards.

This article shall be of no effect if federal financial participation under Title XIX of the Social Security Act is not available to the Alabama Medicaid program for the purposes of this article at the approved federal medical assistance percentage, established under Section 1905 of the Social Security Act, for the applicable fiscal year.

(a) For the purposes of this article the following words have the following meanings unless the context clearly indicates otherwise:

(1) DISPROPORTIONATE SHARE HOSPITAL. A hospital meeting the requirements of Section 1923 of the Social Security Act and other criteria adopted by the Alabama Medicaid Agency in its state plan for medical assistance under Title XIX of the Social Security Act.

(2) FISCAL YEAR. An accounting period of 12 months beginning on the first day of the first month of the state fiscal year.

(3) HOSPITAL. A facility, which is licensed as a hospital under the laws of the State of Alabama, provides 24-hour nursing services, and is primarily engaged in providing, by or under the supervision of doctors of medicine or osteopathy, inpatient services for the diagnosis, treatment, and care or rehabilitation of persons who are sick, injured, or disabled.

(4) PUBLICLY-OWNED HOSPITAL. A hospital created and operating under the authority of a governmental unit which has been established as a public corporation pursuant to Chapter 21 of Title 22 or Chapter 95 of Title 11, or a hospital otherwise owned and operated by a unit of local government.

Any disproportionate share payment due a hospital shall be paid in a timely fashion. If the amount payable is not in dispute and is not paid by the Alabama Medicaid Agency within 30 days of the due date, interest on the amount due shall be charged. The interest rate shall be the legal amount currently charged by the state.

In meeting its requirements under the Social Security Act that payments to hospitals will take into account the situation of disproportionate share hospitals, the agency shall, not later than the beginning of each fiscal year, promulgate regulations establishing the total amount of funds to be appropriated for each fiscal year by the agency for reimbursement, in accordance with its approved methodology, to disproportionate share hospitals other than state-owned teaching hospitals. In no event shall the total amount of funds appropriated for reimbursement to disproportionate share hospitals in accordance with and subject to the approved methodology be less than the disproportionate cap established by the Health Care Financing Administration.