SB 404 Summary

• Establishes the Hospital Sustainability Program as permanent, removing the previous December 31, 2023 repeal date and associated sunset provisions.

• Increases the hospital sustainability fee cap from 5.5% to 6% of net patient service revenue for inpatient and outpatient care services.

• Expands the definition of "private hospitals" subject to the fee by raising the threshold for charitable hospital exemption from 40% to 50% of net patient revenue.

• Requires the Department of Human Services to conduct good faith consultation and negotiations with the hospital trade association regarding fee rates and facility participation in the program.

• Provides criteria for discontinuing fee collection, including failure to secure federal approvals, reduction in reimbursement rates, misuse of funds, or loss of federal financial participation; remaining funds must be distributed to hospitals within six months of discontinuation.