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The Oregon Administrative Rules contain OARs filed through September 15, 2014
 
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OREGON HEALTH AUTHORITY, DIVISION OF MEDICAL ASSISTANCE PROGRAMS

 

DIVISION 50

TAX RULES

410-050-0401 [Renumbered to 411-069-0000]

410-050-0411 [Renumbered to 411-069-0010]

410-050-0421 [Renumbered to 411-069-0020]

410-050-0431 [Renumbered to 411-069-0030]

410-050-0451 [Renumbered to 411-069-0040]

410-050-0461 [Renumbered to 411-069-0050]

410-050-0471 [Renumbered to 411-069-0060]

410-050-0481 [Renumbered to 411-069-0070]

410-050-0491 [Renumbered to 411-069-0080]

410-050-0501 [Renumbered to 411-069-0090]

410-050-0511 [Renumbered to 411-069-0100]

410-050-0521 [Renumbered to 411-069-0110]

410-050-0531 [Renumbered to 411-069-0120]

410-050-0541 [Renumbered to 411-069-0130]

410-050-0551 [Renumbered to 411-069-0140]

410-050-0561 [Renumbered to 411-069-0150]

410-050-0591 [Renumbered to 411-069-0160]

410-050-0601 [Renumbered to 411-069-0170]

Hospital Tax

410-050-0700

Definitions

The following definitions apply to OAR 410-050-0700 to 410-050-0870:

(1) "Bad Debt" means the current period charge for actual or expected uncollectible accounts resulting from the extension of credit on inpatient and outpatient hospital services. Bad debt charges would be offset by any recoveries received on accounts receivable during that current period, subject to final tax reporting and reconciliation processes required in these rules.

(2) "Charges for Inpatient Care" means gross inpatient charges generated from room, board, general nursing, and ancillary services provided to patients, who are expected to remain in the hospital at least overnight, and occupy a bed (as distinguished from categories of health care items or services identified in 42 CFR 433.56(a)(2)-(19) that are not charges for inpatient hospital services). Charges for inpatient care include all payors, and are not limited to Medicaid patients.

(3) "Charges for Outpatient Care" means gross outpatient charges, generated from services provided by the hospital to a patient who is not confined overnight. These services include all ancillary and clinic facility charges (as distinguished from categories of health care items or services identified in 42 CFR 433.56(a)(1) and (3)-(19) that are not charges for outpatient hospital services). Charges of outpatient care include all payors and are not limited to Medicaid charges.

(4) "Charity Care" means costs for providing inpatient or outpatient care services free of charge or at a reduced charge because of the indigence or lack of health insurance of the patient receiving the care services. Charity care results from a hospital's policy as reflected in its official financial statements to provide inpatient or outpatient hospital care services free of charge or at a reduced charge to individuals who meet financial criteria. Charity care does not include any amounts above the payments by the Department that constitute payment in full under ORS 414.065(3), or above the payment rate established by contract with a prepaid managed care health services organization or health insurance entity for inpatient or outpatient care provided pursuant to such contract, or above the payment rate established under ORS 414.743 for inpatient or outpatient care reimbursed under that statute.

(5) "Contractual Adjustments" means the difference between the amounts charged based on the hospital's full, established charges and the amount received or due from the payor.

(6) "Declared Fiscal Year" means the fiscal year declared to the Internal Revenue Service (IRS).

(7) "Deficiency" means the amount by which the tax, as correctly computed, exceeds the tax, if any, reported and paid by the hospital. If, after the original deficiency has been assessed, subsequent information shows the correct amount of tax to be greater than previously determined, an additional deficiency arises.

(8) "Delinquency" means the hospital failed to file a report when due as required under these rules or failed to pay the tax as correctly computed when the tax was due.

(9) "Department" means the Department of Human Services.

(10) "Director" means the Director of the Department of Human Services.

(11) "Hospital" means a hospital with an organized medical staff, with permanent facilities that include inpatient beds, and with medical services, including physician services and continuous nursing services under the supervision of registered nurses, to provide diagnosis and medical or surgical treatment primarily for, but not limited to, acutely ill patients and accident victims, or to provide treatment for the mentally ill. Hospital, as used in this section, does not include special inpatient care facilities as that term is defined in ORS 442.015(32). For purposes of these rules, the hospital will be identified by using the federal taxpayer identification number for the hospital.

(12) "Net Revenue" means the total amount of charges for inpatient or outpatient care provided by the hospital to patients, less charity care, bad debts, and contractual adjustments. Net revenue does not include revenue derived from sources other than inpatient or outpatient operations, including but not limited to, interest and guest meals and any revenue that is taken into account in computing a long term care assessment under the long term facility tax.

(13) "Waivered Hospital" means a Type A or Type B hospital as described in ORS 442.470, or a hospital that provides only psychiatric care.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 413.042, 410.070 & 411.060
Stats. Implemented: ORS 409.750, OL 2003 & Ch. 736 Sec. 1
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08; DMAP 33-2009, f. & cert. ef. 10-1-09

410-050-0710

General Administration

(1) The purpose of these rules is to implement the tax imposed on hospitals in Oregon.

(2) The Department will administer, enforce, and collect the hospital tax. The Department may assign employees, auditors, and other agents as designated by the Director to assist in the administration, enforcement, and collection of the taxes.

(3) The Department may adopt forms and reporting requirements, and change the forms and reporting requirements, as necessary, to administer, enforce, and collect the taxes.

(4) The Department may not use moneys from the Hospital Quality Assurance Fund to supplant, directly or indirectly, other moneys made available to fund services described in Section 9, Chapter 736, Oregon Laws 2003 as amended by Section 2, Chapter 757, Oregon Laws 2005.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 9
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0720

Disclosure of Information

(1) Except as otherwise provided by law, the Department must not publicly divulge or disclose the amount of income, expense, or other particulars set forth or disclosed in any report or return required in the administration of the taxes. Particulars include but are not limited to social security numbers, employer numbers, or other hospital identification numbers, and any business records required to be submitted to or inspected by the Department or its designee to allow it to determine the amounts of any assessments, delinquencies, deficiencies, penalties, or interest payable or paid, or otherwise administer, enforce, or collect a health care assessment to the extent that such information would be exempt from disclosure under ORS 192.501(5) or other basis for exemption under Oregon's public records law.

(2) The Department may:

(a) Furnish any hospital, or its authorized representative, upon request of the hospital or representative, with a copy of the hospital's report filed with the Department for any quarter, or with a copy of any report filed by the hospital in connection with the report, or with a copy of any other information the Department considers necessary.

(b) Publish information or statistics so classified as to prevent the identification of income or any particulars contained in any report or return.

(c) Disclose and give access to an officer or employee of the Department or its designee, or to the authorized representatives of the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, the Controller General of the United States, the Oregon Secretary of State, the Oregon Department of Justice, the Oregon Department of Justice Medicaid Fraud Control Unit, and other employees of the state or federal government to the extent the Department deems disclosure or access necessary or appropriate for the performance of official duties in the Department's administration, enforcement, or collection of the taxes.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 1
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0730

Entities Subject to the Hospital Tax

Each hospital in Oregon is subject to the hospital tax except:

(1) Hospitals operated by the United States Department of Veterans Affairs;

(2) Pediatric specialty hospitals providing care to children at no charge; and

(3) Waivered hospitals, as that term is defined in OAR 410-050-0700.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 1 & 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0740

The Hospital Tax: Calculation, Report, Due Date

(1) The amount the tax equals the tax rate multiplied by the net revenue of the hospital, consistent with OAR 410-050-0750, 410-050-0860, and 410-050-0861. The tax will be imposed on net revenues earned by the hospital on or after January 1, 2004, based on calendar quarters. The first calendar quarter begins on January 1; the second calendar quarter begins on April 1; the third calendar quarter begins on July 1; and the fourth calendar quarter begins on October 1.

(2) The rate of the assessment will be determined in accordance with OAR 410-050-0860 and 410-050-0861.

(3) The hospital must file the quarterly report on a form approved by the Department on or before the 75th day following the end of the calendar quarter for which a tax is due. The quarterly payment is due and must be paid at the same time required for filing the quarterly report. The hospital must provide all information required on the quarterly report when due. Failure to file or pay when due will be a delinquency.

(4) The tax becomes operative on July 1, 2004. The first due date for a quarterly tax and report will be 75 days from September 30, which is December 13, 2004.

(5) The fiscal year reconciliation report, including the financial statement and reconciliation statement, is due and must be submitted to the Department no later than the final day of the sixth calendar month after the hospital's declared fiscal year end. The fiscal year reconciliation tax payment is due and must be paid at the same time required for filing the fiscal year reconciliation report. The hospital must provide all information required on the fiscal year reconciliation report when due. Failure to file or pay when due will be a delinquency.

(6) Any report, statement, or other document required to be filed under any provision of these rules must be certified by the chief financial officer of the hospital or an individual with delegated authority to sign for the hospital's chief financial officer. The certification must attest, based on best knowledge, information, and belief, to the accuracy, completeness, and truthfulness of the document.

(7) Payments may be made electronically or by paper check. If the hospital pays electronically, the accompanying report may either be faxed to the Department at the fax number provided on the report form or mailed to the Department at the address provided on the report form. If the hospital pays by paper check, the accompanying report must be mailed with the check to the address provided on the report form.

(8) The Department may charge the hospital a fee of $100 if, for any reason, the check, draft, order, or electronic funds transfer request is dishonored. This charge is in addition to any penalty for nonpayment of the taxes that may also be due.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0750

Reporting Total Net Revenue, Use of Estimated Revenue for Quarterly Reports

(1) A hospital must submit quarterly reports and quarterly payments for the calendar quarters for which a tax is due consistent with sections (2) and (5) of this rule, and must submit a fiscal year reconciliation report that includes a reconciliation statement, audited financial statement, and any fiscal year reconciliation tax payment based on the hospital's declared fiscal year end consistent with sections (3) and (5) of this rule.

(2) The quarterly reports and quarterly tax payments must be based on estimated net revenue, which will be referred to as estimated tax. Estimated tax is the amount of tax the hospital expects to owe for the current taxable calendar quarter. The hospital must calculate the estimated tax based on net revenues using the hospital's interim financial results for the quarter for which the tax is due. An estimated quarterly report is due for each calendar quarter for which a tax is due, based on the rate of tax applicable to that quarter. The quarterly payment is due and must be paid at the same time required for filing the quarterly report.

(3) The fiscal year reconciliation report and fiscal year reconciliation tax payment must be based on the amount of tax the hospital actually owes based on annual net revenue for all calendar quarters for which an estimated tax payment is due during the hospital's declared fiscal year. The hospital must calculate the annual net revenue for the hospital's declared fiscal year. The fiscal year reconciliation tax payment due to the Department will be the calculated tax (using the tax rate applicable to the appropriate quarter, described in subsection (c) below for fiscal year reconciliation tax calculation purposes) on the annual net revenue reduced by the estimated tax payments made for each taxable quarter of the hospital's declared fiscal year. The hospital must provide all information required in the fiscal year reconciliation report when due, even if no fiscal year reconciliation tax payment is owed.

(a) When the fiscal year reconciliation report is submitted, it must be accompanied by the hospital's declared fiscal year end audited financial statement for the declared fiscal year on which the fiscal year reconciliation report and fiscal year reconciliation tax payments are based.

(b) The fiscal year reconciliation report must include a reconciliation statement describing the relationship between the audited financial statement and annual net revenues subject to the tax. The reconciliation statement may be descriptive in form and should be consistent with the accounting principles used in the audited financial statement.

(c) The tax rate applicable to the final tax shall be calculated as follows:

(A) If all taxable quarters were subject to the same tax rate established in OAR 410-050-0160 and 410-050-0861, then the tax rate applicable to the final reconciliation is the tax rate applicable to all such quarters. For example, if the hospital's declared fiscal year is July 1, 2004 to June 30, 2005, then the tax rate is .93 percent of annual net revenue.

(B) If different tax rates apply to calendar quarters in the hospital's declared fiscal year, the hospital shall apply a blended rate to the total annual net revenue to determine the fiscal year reconciliation tax due. A blended rate is the average of the rates applicable to all taxable quarters. The Department will notify the hospital of the amount of the applicable blended rate. For example, if the hospital's declared fiscal year overlaps two quarters taxed at a rate of .93 percent and two quarters taxed at .50 percent, then the blended rate for purposes of the annual reconciliation is .715 percent. For purposes of calculating the fiscal year reconciliation tax due, the hospital will multiply the annual net revenue by the blended rate.

(d) If the total estimated tax payments already paid by the hospital for the declared fiscal year exceed the amount of the fiscal year reconciliation tax actually due, the fiscal year reconciliation report should identify such difference and the hospital should adjust the fiscal year reconciliation tax due amount accordingly in the fiscal year reconciliation report for that tax year.

(e) The fiscal year reconciliation report, audited financial statement, and reconciliation statement will be due and will be submitted to the Department no later than the final day of the sixth calendar month after the hospital's declared fiscal year end. The fiscal year reconciliation tax payment (if owed) is due and must be paid at the same time required for filing the fiscal year reconciliation report. Failure to file or pay when due will be a delinquency.

(f) If the declared fiscal year end audited financial statement for the hospital is not available within the time required in section (e), a fiscal year reconciliation tax payment (if owed) and fiscal year reconciliation report are still required to be submitted within the time period specified under section (e). The hospital may use interim financial statements to determine the amount of the fiscal year reconciliation tax due and may submit a justification statement with the fiscal year reconciliation report due no later than the date specified in section (e) signed by the chief financial officer of the hospital informing the Department when the audited financial statement is due and certifying that an amended fiscal year reconciliation report, including the reconciliation statement, must be provided to the Department within 30 days of the hospital's receipt of the audited financial statement. Reports and payments made after the time period required in section (e) must be submitted in compliance with OAR 401-050-0760.

(g) In the event the hospital does not receive audited financial statements, internal financial statements signed by the hospital's chief financial officer must be submitted where these rules otherwise require audited financial statements.

(h) If the effective date of the tax is not at the start of the hospital's declared fiscal year, then the annual net revenue for the first fiscal year reconciliation report will be calculated based on the number of quarters subject to the tax versus the total number of quarters in the hospital's declared fiscal year. For example, if the tax is effective on July 1, 2004 for a hospital with a declared fiscal year ending December 31, 2004, the annual net revenues would be calculated as follows: total net revenues for the declared fiscal year divided by two (two of four quarters subject to the tax).

(4) The Department will not find a payment deficiency for estimated quarterly taxes as long as the hospital paid the estimated taxes and submitted the quarterly report no later than the quarterly due date and such estimated tax amount was not less than the equivalent of the tax payment that would have been determined based on the hospital's annual net revenue for its most recent prior declared fiscal year divided by four and multiplied times the tax rate for the quarter in which the actual estimated tax is due. Annual net revenue for purposes of section (4) of this rule means the twelve month period in which the hospital's most recent prior declared fiscal year occurred, regardless of whether the prior quarters were subject to a tax. For example, if the annual net revenue for the most recent prior declared fiscal year was $4 million; divide that total by 4 ($1 million) and multiply the product times the current tax rate for the taxable quarter (.93 percent). In this example, the estimated quarterly tax payment may not be less than $9,300 in order to receive the benefit of section (4) of this rule.

(a) If the hospital seeks to use the process in section (4) of this rule, no later than the date on which the first quarterly estimated tax and report is due (for example, December 13, 2004, for the first taxable quarter), the hospital must provide the Department with a copy of the hospital's audited financial statement for the hospital's most recent prior declared fiscal year and identify the hospital's annual net revenue amount for that declared fiscal year, regardless of whether any taxes were due for that year.

(b) In the event the hospital does not receive audited financial statements, internal financial statements from the hospital's most recent prior declared fiscal year signed by the chief financial officer may be used for this purpose.

(5) All of the due dates for filing reports or paying taxes are established in OAR 410-050-0740, unless the Department permits a later payment date. If a hospital requests an extension, the Department, in its sole discretion, will determine whether to grant an extension. There will be a delinquency for each quarter the hospital fails to pay the estimated tax or file the quarterly report when due. There will be a delinquency if the hospital fails to pay the fiscal year reconciliation tax or file the fiscal year reconciliation report, including financial statements and reconciliation statement, when due.

(6) A hospital must declare the date of the hospital's declared fiscal year end for purposes of establishing final tax reporting requirements under this rule. The declaration must be filed with the Department no later than December 13, 2004, or the first date that an estimated quarterly report and tax is due. The hospital must notify the Department within 30 days of a change to the hospital's declared fiscal year end. Such a change in declared fiscal year end will be applied to the hospital's next future declared fiscal year for purposes of calculating the final tax and filing the final report.

Stat. Auth.: ORS 413.042, 410.070 & 411.060
Stats. Implemented: ORS 409.750 & OL 2003 Ch. 736 Sec. 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08; DMAP 13-2008(Temp), f. & cert. ef. 6-12-08 thru 12-8-08; DMAP 29-2008, f. 8-29-08, cert. ef. 9-1-08

410-050-0760

Filing an Amended Report

(1) A hospital that submits a fiscal year reconciliation report without an audited financial statement in accordance with OAR 410-050-0750(3)(f) must submit, within 180 days after the due date of the fiscal year reconciliation report in accordance with OAR 410-050-0750(e), an amended fiscal year reconciliation report, an audited financial statement, and such additional fiscal year reconciliation payment (if owed) for taxes and deficiencies.

(2) Claim for Refund.

(a) If the amount of the tax imposed by these rules in the amended fiscal year reconciliation report is less than the amount paid by the hospital, such overpayment may be refunded by the Department to the hospital. In no event will a refund exceed the tax amount actually paid by the hospital.

(b) The hospital must provide all information required on the report. No refunds will be made prior to the Department receiving the hospital's audited financial statement for the declared fiscal year. The Department may audit the hospital, request additional information, or request an informal conference prior to granting a refund or as part of its review.

(c) If there is an amount due from the hospital to the Department for any past due taxes or penalties, any refund otherwise allowable will first be applied to the unpaid taxes and penalties, and the hospital so notified.

(d) A hospital may not deduct from current, prospective, or future tax payments an amount to which it claims to be entitled as a refund for a prior period. The claim for refund must be made to the Department consistent with this rule.

(3) Payment of Delinquency.

(a) If the amount of the annual tax imposed by these rules is more than the amount paid by the hospital, the hospital must file an amended fiscal year reconciliation report and pay the additional fiscal year reconciliation tax and deficiency. The penalty under OAR 410-050-0800 will stop accruing after the Department receives the amended fiscal year reconciliation report, the annual audited financial statement, and payment of the total fiscal year reconciliation tax and deficiency for year; except to the extent provided in OAR 410-050-0750(4)(a).

(b) No refunds will be made prior to the Department receiving the hospital audited financial statement for the declared fiscal year. The Department may audit the hospital, request additional information, or request an informal conference prior to granting a refund or as part of its review.

(c) If there is an error in the determination of the tax due, the hospital may describe the circumstances of the late additional payment with the filing of the amended report. The Department, in its sole discretion, may determine that such a late additional payment does not constitute a failure to file a report or pay an assessment giving rise to the imposition of a penalty. In making this determination, the Department will consider the circumstances, including but not limited to: nature and extent of the error; hospital explanation of the circumstances related to the error; evidence of prior errors; and evidence of prior penalties (including evidence of informal dispositions or settlement agreements). This provision only applies if the hospital has filed a timely original report and paid the assessment identified in the report.

(4) If the Department discovers or identifies information in the administration of these tax rules that it determines could give rise to the issuance of a notice of proposed action, the Department will issue notification pursuant to OAR 410-050-0810.

Stat. Auth.: ORS 413.042, 410.070 & 411.060
Stats. Implemented: ORS 409.750 &OL 2003, Ch. 736 § 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0770

Determining the Date Filed

(1) For the purposes of these rules, any reports, requests, appeals, payments, or other response by the hospital must be received by the Department either:

(a) Before the close of business on the date due; or

(b) If mailed, postmarked before midnight of the due date.

(2) When the due date falls on a Saturday, Sunday, or a legal holiday, the return is due on the next business day following the Saturday, Sunday, or legal holiday.

Stat. Auth.: ORS 443.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0780

Departmental Authority to Audit Records

(1) The hospital must maintain financial records necessary and adequate to determine the net revenue for any calendar period for which a tax may be due.

(2) The Department or its designee may audit the hospital's records at any time for a period of five years following the date the tax is due to verify or determine the hospital's net revenue.

(3) The Department may issue a notice of deficiency or issue a refund based upon its findings during the audit.

(4) Any audit, finding, or position may be reopened if there is evidence of fraud, malfeasance, concealment, misrepresentation of material fact, omission of income, or collusion either by the hospital or by the hospital and a representative of the Department.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0790

Assessing Tax on Failure to File

(1) The law places an affirmative duty on the hospital to file a timely and correct report.

(2) In the case of a failure by the hospital to file a report or to maintain necessary and adequate records, the Department will determine the tax liability of the hospital according to the best of its information and belief. Best of its information and belief means the Department will use evidence available to the Department at the time of the determination on which a reasonable person would rely in determining the tax. The Department's determination of tax liability will be the basis for the assessment due in any notice of proposed action.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0800

Financial Penalty for Failure to File a Report or Failure to Pay Tax When Due

(1) A hospital that fails to file a quarterly report or pay a quarterly tax when due shall be subject to a penalty of up to $500 per day of delinquency. The Department, in its sole discretion, shall determine the penalty for failure to pay the tax or file a report. In making this determination, the Department shall consider evidence such as prior late payments, prior penalties, and circumstances related to delinquency. The penalty accrues from the date of delinquency, notwithstanding the date of any notice under these rules.

(2) A hospital that fails to file a fiscal year reconciliation report when due under OAR 410-050-0740 or 410-050-0750 is subject to a penalty of up to $500 per day of delinquency. The Department, in its sole discretion, shall determine the penalty for failure to pay the tax or file a report. In making this determination, the Department shall consider evidence such as prior late payments, prior penalties, and circumstances related to delinquency. The penalty accrues from the date of delinquency, notwithstanding the date of any notice under these rules.

(3) A hospital that files a fiscal year reconciliation report, but fails to pay a fiscal year reconciliation tax payment when due under OAR 410-050-0740 is subject to a penalty of up to $500 per day of delinquency up to a maximum of five percent of the amount due. The Department, in its sole discretion, shall determine the penalty for failure to pay the reconciliation tax payment or file a fiscal year reconciliation report. In making this determination, the Department shall consider evidence such as prior late payments, prior penalties, and circumstances related to delinquency. The penalty accrues from the date of delinquency, notwithstanding the date of any notice under these rules.

(4) The total amount of penalty imposed under this section for each reporting period may not exceed five percent of the assessment for the reporting period for which penalty is being imposed.

(5) The Department shall collect any penalties imposed under this section and deposit the funds in the Department's account established under ORS 409.060.

(6) Penalties paid under this section are in addition to the hospital's tax liability.

(7) If the Department determines that a hospital is subject to a penalty under this section, the Department shall issue a notice of proposed action as described in OAR 410-050-0810.

(8) If a hospital requests a contested case hearing pursuant to OAR 410-050-0830, the Director, at the Director's sole discretion, may waive or reduce the amount of penalty assessed.

Stat. Auth.: ORS 413.042, 410.070 & 411.060
Stats. Implemented: ORS 409.750 & OL 2003, Ch. 736 Sec. 5, 2009 HB 2116
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08; DMAP 33-2009, f. & cert. ef. 10-1-09

410-050-0810

Notice of Proposed Action

(1) Prior to issuing a notice of proposed action, the Department will notify the hospital of the potential deficiency or failure to report that could give rise to the imposition of a penalty. The Department shall issue a 30 day notification letter within 30 calendar days of the report or payment due date. The hospital shall have 30 calendar days from the date of the notice to respond to the notification. The Department may consider the response, if any, and any amended final report under OAR 410-050-0760 in its notice of proposed action. In all cases that the Department has determined that a hospital has a tax deficiency or failure to report, the Department shall issue a notice of proposed action. The Department will not issue a notice of proposed action if the issue is resolved satisfactorily within 59 days from the date of mailing the 30 day notification letter.

(2) The Department shall issue a notice of proposed action within 60 calendar days from the date of mailing the 30 day notification letter.

(3) Contents of the notice of proposed action must include:

(a) The applicable reporting period;

(b) The basis for determining the corrected amount of tax;

(c) The corrected tax due as determined by the Department;

(d) The amount of tax paid by the hospital;

(e) The resulting deficiency, which is the difference between the amount received by the Department and the corrected amount due as determined by the Department;

(f) Statutory basis for the penalty;

(g) Amount of penalty per day of delinquency;

(h) Date upon which the penalty began to accrue;

(i) Date the penalty stopped accruing or circumstances under which the penalty will stop accruing;

(j) The total penalty accrued up to the date of the notice;

(k) Instructions for responding to the notice; and

(l) A statement of the hospital's right to a hearing.

Stat. Auth.: ORS 413.042, 410.070 & 411.060
Stats. Implemented: ORS 409.750 & OL 2003 Ch. 736 Sec. 2
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08; DMAP 29-2008, f. 8-29-08, cert. ef. 9-1-08

410-050-0820

Required Notice

(1) Any notice required to be sent under these rules will be sent to the hospital's main address, to the attention of the hospital administrator, as listed by the Department's Health Care Licensure and Certification Unit's "Acute Care Provider List."

(2) Any notice required to be sent to the Department under these rules will be sent to the point of contact identified on the communication from the Department to the hospital.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 6
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0830

Hearing Process

(1) Any hospital that receives a notice of proposed action may request a contested case hearing under ORS 183.

(2) The hospital may request a hearing by submitting a written request within 20 days of the date of the notice of proposed action.

(3) Prior to the hearing, the hospital shall meet with the Department for an informal conference.

(a) The informal conference may be used to negotiate a written settlement agreement.

(b) If the settlement agreement includes a reduction or waiver of penalties, the agreement must be approved and signed by the Director.

(4) Except as provided in section (5) of this rule, if the case proceeds to a hearing, the administrative law judge will issue a proposed order with respect to the notice of proposed action. The Department will issue a final order.

(5) Nothing in this section will preclude the Department and the hospital from agreeing to informal disposition of the contested case at any time, consistent with ORS 183.415(5).

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 6
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0840

Final Order of Payment

A final order of payment is a final Department action, expressed in writing, based on a notice of proposed action where a payment amount is due to the Department. The Department will issue a final order of payment for deficiencies or penalties when:

(1) The hospital did not make a timely request for a hearing;

(2) Any part of the deficiency and penalty was upheld after a hearing; or

(3) Upon the agreement of the hospital and the Department.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 6
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0850

Remedies Available after Final Order of Payment

Any amounts due and owing under the final order of payment and any interest thereon may be recovered by Oregon as a debt to the state, using any available legal and equitable remedies. These remedies include, but are not limited to:

(1) Collection activities including but not limited to deducting the amount of the final deficiency or penalty from any sum then or later owed to the hospital by the Department; and

(2) Every payment obligation owed by the hospital to the Department under a final order of payment will bear interest at the statutory rate of interest in ORS 82.010 accruing from the date of the final order of payment and continuing until the payment obligation, including interest, has been discharged.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 6
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0860

Director Determines Rate of Tax

(1) The tax rate is determined by the Director.

(2) The tax rate for the period beginning January 1, 2004 through June 30, 2004 is 0 percent. The tax rate for the period beginning July 1, 2004 through December 31, 2004 is .95 percent.

(3) The Director may reduce the rate of assessment to the maximum rate allowed under federal law if the reduction is required to comply with federal law. If the rate is reduced pursuant to this section, the Director will notify the hospitals as to the effective date of the rate reduction.

(4) A hospital is not guaranteed that any additional moneys paid to the hospital in the form of payments for services will equal or exceed the amount of the assessment paid by the hospital.

Stat. Auth.: ORS 413.042, 410.070, 411.060
Stats. Implemented: ORS 409.750, OL 2003, Ch. 736 § 6
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 91-2004(Temp), f. & cert. ef. 12-3-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; OMAP 28-2005(Temp), f. & cert. ef. 5-10-05 thru 11-5-05; OMAP 34-2005, f. 7-8-05, cert. ef. 7-11-05; DMAP 3-2008, f. & cert. ef. 1-25-08

410-050-0861

Tax Rate

(1) The tax rate for the period beginning January 1, 2005 and ending June 30, 2006 is .68 percent.

(2) The tax rate for the period beginning July 1, 2006 and ending December 31, 2007 is .82 percent.

(3) The tax rate for the period beginning January 1, 2008 and ending June 30, 2009 is .63 percent.

(4) The tax rate for the period of January 1, 2008 through June 30, 2009 does not apply to the period beginning July 1, 2009.

(5) The tax rate for the period beginning July 1, 2009 and ending September 30, 2009 is .15 percent.

(6) The tax rate for the period beginning October 1, 2009 and ending June 30, 2010 is 2.8 percent.

(7) The tax rate for the period beginning July 1, 2010 and ending June 30, 2011 is 2.32 percent.

(8) The tax rate for the period beginning July 1, 2011 and ending September 30, 2011 is 5.25 percent.

(9) The tax rate for the period beginning October 1, 2011 and ending December 31, 2011 is 5.08 percent.

(10) The tax rate for the period beginning January 1, 2012 and ending March 31, 2013 is 4.32 percent.

(11) The tax rate for the period beginning April 1, 2013 is 5.30 percent.

Stat. Auth.: ORS 413.042
Stats. Implemented: 2009 OL Ch. 867 ¦ 17, 2007 OL Ch. 780 ¦ 1 & 2003 OL Ch. 736 ¦ 2 & 3
Hist.: OMAP 28-2005(Temp), f. & cert. ef. 5-10-05 thru 11-5-05; OMAP 34-2005, f. 7-8-05, cert. ef. 7-11-05; OMAP 14-2006, f. 6-1-06, cert. ef. 7-1-06; DMAP 29-2007, f. 12-31-07, cert. ef. 1-1-08; DMAP 3-2008, f. & cert. ef. 1-25-08; DMAP 24-2009, f. & cert. ef. 7-1-09; DMAP 25-2009(Temp), f. & cert. ef. 7-15-09 thru 1-10-10; DMAP 27-2009, f. & cert. ef. 9-1-09; DMAP 33-2009, f. & cert. ef. 10-1-09; DMAP 21-2010, f. 6-30-10, cert. ef. 7-1-10; DMAP 16-2011(Temp), f. & cert. ef. 7-1-11 thru 11-1-11; DMAP 26- 2011(Temp), f. 9-29-11, cert. ef. 10-1-11 thru 11-1-11; DMAP 31-2011, f. 10-28-11, cert. ef. 11-1-11; DMAP 50-2011(Temp), f. 12-30-11, cert. ef. 1-1-12 thru 4-30-12; DMAP 8-2012, f. 2-27-12, cert. ef. 3-1-12; DMAP 15-2013(Temp), f. & cert. ef. 4-1-13 thru 9-27-13; DMAP 41-2013, f. & cert. ef. 8-1-13

410-050-0870

Sunset Provisions

The hospital tax applies to net revenue received by hospitals on or after January 1, 2004 and before October 1, 2015

Stat. Auth.: ORS 413.042, 410.070 & 411.060
Stats. Implemented: ORS 409.750; OL 2003, Ch. 736, Sec. 2 as amended by OL 2007, Ch. 780, Sec. 1; OL 2009, Ch. 828, Sec. 51; OL 2009, Ch. 867, Sec. 17 & 2013 HB 2216
Hist.: OMAP 86-2004(Temp), f. & cert. ef. 11-9-04 thru 5-7-05; OMAP 25-2005, f. 4-15-05, cert. ef. 5-7-05; DMAP 3-2008, f. & cert. ef. 1-25-08; DMAP 33-2009, f. & cert. ef. 10-1-09; DMAP 53-2013(Temp), f. & cert. ef. 10-1-13 thru 3-29-14; DAMP 17-2014, f. & cert. ef. 3-25-14

The official copy of an Oregon Administrative Rule is contained in the Administrative Order filed at the Archives Division, 800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the published version are satisfied in favor of the Administrative Order. The Oregon Administrative Rules and the Oregon Bulletin are copyrighted by the Oregon Secretary of State. Terms and Conditions of Use

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