N.Y. Mental Hygiene Law § 43.06: Assessments

§ 43.06 Assessments.

1. Providers of services, as defined in this section, are charged

assessments on their gross receipts received from all patient care

services and other operating income less personal needs allowances and

refunds on a cash basis in the percentage amounts and for the periods

specified in subdivision two of this section. Such assessments shall be

submitted by or on behalf of providers of services to the commissioner

of mental health or his or her designee.

2. (a) Providers of services, for the purposes of this section, shall

be hospitals licensed pursuant to article thirty-one of this chapter

(which shall not include wards, wings, units or other parts of a

hospital, as defined in article twenty-eight of the public health law,)

and residential treatment facilities for children and youth, as defined

in section 1.03 of this chapter.

(b)(i) For such hospitals which are providers of services, the

assessment shall be six-tenths of one percent of each provider's gross

receipts received from all patient care services and other operating

income on a cash basis beginning January first, nineteen hundred

ninety-one for hospital or mental health-related services including but

not limited to inpatient service, outpatient service and emergency

service; provided, however, that for all such gross receipts received on

or after December first, nineteen hundred ninety-eight, such assessment

shall be two-tenths of one percent, and further provided that for all

such gross receipts received on or after April first, nineteen hundred

ninety-nine, such assessment shall be one-tenth of one percent, and

further provided that such assessment shall expire and be of no further

effect for all such gross receipts received on or after January first,

two thousand.

(ii) If required pursuant to the provisions of subdivision thirteen of

this section, for such hospitals which are providers of services, an

additional assessment shall be one-tenth of one percent of each

provider's gross receipts received from all patient care services and

other operating income on a cash basis beginning April first, nineteen

hundred ninety-two for hospital or mental health-related services

including but not limited to inpatient service, outpatient service and

emergency service; provided, however, that such additional assessment

shall expire and be of no further effect for all such gross receipts

received on or after December first, nineteen hundred ninety-seven.

(c)(i) For residential treatment facilities for children and youth,

the assessment shall be six-tenths of one percent of each provider's

gross receipts received from all patient care services and other

operating income on a cash basis beginning July first, nineteen hundred

ninety-one for hospital or mental health-related service including but

not limited to inpatient service, outpatient service and emergency

service; provided, however, that for all such gross receipts received on

or after December first, nineteen hundred ninety-eight, such assessment

shall be two-tenths of one percent, and further provided that for all

such gross receipts received on or after April first, nineteen hundred

ninety-nine, such assessment shall be one-tenth of one percent, and

further provided that such assessment shall expire and be of no further

effect for all such gross receipts received on or after January first,

two thousand.

(ii) If required pursuant to the provisions of subdivision thirteen of

this section, for residential treatment facilities for children and

youth, an additional assessment, shall be one-tenth of one percent of

each provider's gross receipts received from all patient care services

and other operating income on a cash basis beginning April first,

nineteen hundred ninety-two for hospital or mental health-related

service including but not limited to inpatient service, outpatient

service and emergency service; provided, however, that such additional

assessment shall expire and be of no further effect for all such gross

receipts received on or after December first, nineteen hundred

ninety-seven.

3. For all providers of services, gross receipts from patient care

services and other operating income shall include, but not be limited

to: (a) all moneys received for or on account of inpatient service,

outpatient service, emergency service, or other hospital, mental health

or mental health related service; and (b) all moneys received for or on

account of such revenue sources as investment income, parking lots,

cafeterias, gift shops, and rental income, provided, however, that

subject to the provisions of subdivision twelve of this section income

received from grants, charitable contributions, donations and bequests

and governmental deficit financing shall not be included.

4. The commissioner is authorized to contract with the article

forty-three insurance law plans, or such other administrators as the

commissioner shall designate, to receive and distribute provider of

services assessment funds. In the event contracts with the article

forty-three insurance law plans or other commissioner's designees are

effectuated, the commissioner shall conduct annual audits of the receipt

and distribution of the assessment funds. The reasonable cost and

expenses of such administrators as approved by the commissioner, not to

exceed for personnel services on an annual basis one hundred thousand

dollars for all assessments established pursuant to this section, shall

be paid from the assessment funds.

5. Estimated payments by or on behalf of providers of services to the

commissioner or his or her designee of funds due from the assessments

pursuant to subdivision two of this section shall be made on a monthly

basis. Estimated payments shall be due on or before the fifteenth day

following the end of a calendar month to which an assessment applies.

6. (a) If an estimated payment made for a month to which an assessment

applies is less than seventy percent of an amount the commissioner

determines is due, based on evidence of prior period moneys received by

a provider of services or evidence of moneys received by such provider

of services for that month, the commissioner may estimate the amount due

from such provider of services and may collect the deficiency pursuant

to paragraph (c) of this subdivision.

(b) If an estimated payment made for a month to which an assessment

applies is less than ninety percent of an amount the commissioner

determines is due, based on evidence of prior period moneys received by

a provider of service or evidence of moneys received by such provider of

services for that month, and at least two previous estimated payments

within the preceding six months were less than ninety percent of the

amount due, based on similar evidence, the commissioner may estimate the

amount due from such provider of services and may collect the deficiency

pursuant to paragraph (c) of this subdivision.

(c) Upon receipt of notification from the commissioner of a provider

of services' deficiency under this section, the comptroller or a fiscal

intermediary designated by the director of the budget, or the

commissioner of social services, or a corporation organized and

operating in accordance with article forty-three of the insurance law,

or an organization operating in accordance with article forty-four of

the public health law shall withhold from the amount of any payment to

be made by the state or by such article forty-three corporation or

article forty-four organization to the provider of services the amount

of the deficiency determined under paragraph (a) or (b) of this

subdivision or paragraph (e) of subdivision seven of this section. Upon

withholding such amount, the comptroller or a designated fiscal

intermediary, or the commissioner of social services, or corporation

organized and operating in accordance with article forty-three of the

insurance law or organization operating in accordance with article

forty-four of the public health law shall pay the commissioner, or his

designee, such amount withheld on behalf of the provider of services.

(d) The commissioner shall provide a provider of services with notice

of any estimate of an amount due for an assessment pursuant to paragraph

(a) or (b) of this subdivision or paragraph (e) of subdivision seven of

this section at least three days prior to collection of such amount by

the commissioner. Such notice shall contain the financial basis for the

commissioner's estimate.

(e) In the event a provider of services objects to an estimate by the

commissioner pursuant to paragraph (a) or (b) of this subdivision or

paragraph (e) of subdivision seven of this section of the amount due for

an assessment, the provider of services, within sixty days of notice of

an amount due, may request a public hearing. If a hearing is requested,

the commissioner shall provide the provider of services an opportunity

to be heard and to present evidence bearing on the amount due for an

assessment within thirty days after collection of an amount due or

receipt of a request for a hearing, whichever is later. An

administrative hearing is not a prerequisite to seeking judicial relief.

(f) The commissioner may direct that a hearing be held without any

request by a provider of services.

7. (a) Every provider of services shall submit reports on a cash basis

of actual gross receipts received from all patient care services and

operating income for each month as follows:

(i) for hospitals which are providers of services, for the period

January first, nineteen hundred ninety-one through January thirty-first,

nineteen hundred ninety-one, the report shall be filed on or before

March fifteenth, nineteen hundred ninety-one; and

(ii) for the quarter year ending March thirty-first, nineteen hundred

ninety-one and for each quarter thereafter, the report shall be filed on

or before the forty-fifth day after the end of such quarter; and

(iii) for residential treatment facilities for children and youth, for

the period July first, nineteen hundred ninety-one through September

thirtieth, nineteen hundred ninety-one and each quarter thereafter, the

report shall be filed on or before the forty-fifth day after the end of

the quarter.

(b) Every provider of services shall submit a certified annual report

on a cash basis of gross receipts received in such calendar year from

all patient care services and operating income.

(c) The reports shall be in such form as may be prescribed by the

commissioner to accurately disclose information required to implement

this section.

(d) Final payments shall be due for all providers of services for the

assessments pursuant to subdivision two of this section upon the due

date for submission of the applicable quarterly report.

(e) The commissioner may recoup deficiencies in final payments

pursuant to paragraph (c) of subdivision six of this section.

8. (a) If an estimated payment made for a month to which an assessment

applies is less than ninety percent of the actual amount due for such

month, interest shall be due and payable to the commissioner on the

difference between the amount paid and the amount due from the day of

the month the estimated payment was due until the date of payment. The

rate of interest shall be twelve percent per annum or at the rate of

interest set by the commissioner of taxation and finance with respect to

underpayments of tax pursuant to subsection (e) of section one thousand

ninety-six of the tax law minus four percentage points. Interest under

this paragraph shall not be paid if the amount thereof is less than one

dollar. Interest, if not paid by the due date of the following month's

estimated payment, may be collected by the commissioner pursuant to

paragraph (c) of subdivision six of this section in the same manner as

an assessment pursuant to subdivision two of this section.

(b) If an estimated payment made for a month to which an assessment

applies is less than seventy percent of the actual amount due for such

month, a penalty shall be due and payable to the commissioner of five

percent of the difference between the amount paid and the amount due for

such month when the failure to pay is for a duration of not more than

one month after the due date of the payment with an additional five

percent for each additional month or fraction thereof during which such

failure continues, not exceeding twenty-five percent in the aggregate. A

penalty may be collected by the commissioner pursuant to paragraph (c)

of subdivision six of this section in the same manner as an assessment

pursuant to subdivision two of this section.

(c) Overpayment by a provider of services of an estimated payment

shall be applied to any other payment due from the provider of services

pursuant to this section, or, if no payment is due, at the election of

the provider of services shall be applied to future estimated payments

or refunded to the provider of services. Interest shall be paid on

overpayments from the date of overpayment to the date of crediting or

refund at the rate determined in accordance with paragraph (a) of this

subdivision if the overpayment was made at the direction of the

commissioner. Interest under this paragraph shall not be paid if the

amount thereof is less than one dollar.

9. Funds accumulated, including income from invested funds, from the

assessments specified in this section, including interest and penalties,

shall be deposited by the commissioner and credited to the general fund.

10. Notwithstanding any inconsistent provision of law or regulation to

the contrary, the assessments pursuant to this section shall not be an

allowable cost in the determination of reimbursement rates pursuant to

this article.

11. (a) (ii) The assessment shall not be collected in excess of one

million three hundred thousand dollars from providers of services

pursuant to paragraph (b) of subdivision two of this section for the

period of April first, nineteen hundred ninety-seven through March

thirty-first, nineteen hundred ninety-eight. The amount of the

assessment collected pursuant to paragraph (b) of subdivision two of

this section in excess of one million three hundred thousand dollars for

the period of April first, nineteen hundred ninety-seven through March

thirty-first, nineteen hundred ninety-eight shall be refunded to

providers of services by the commissioner of mental health based on the

ratio which a hospital's assessment for such period bears to the total

of the assessments for such period paid by such hospitals.

(iii) The additional assessment shall not be collected in excess of

three hundred thousand dollars from providers of services pursuant to

paragraph (b) of subdivision two of this section for the period of April

first, nineteen hundred ninety-seven through March thirty-first,

nineteen hundred ninety-eight. The amount of the additional assessment

collected pursuant to paragraph (b) of subdivision two of this section

in excess of three hundred thousand dollars for the period of April

first, nineteen hundred ninety-seven through March thirty-first,

nineteen hundred ninety-eight shall be refunded to providers of services

by the commissioner of mental health based on the ratio which a

hospital's additional assessment for such period bears to the total of

the additional assessments for such period paid by such hospitals.

(b) (ii) The assessment shall not be collected in excess of two

hundred thousand dollars from residential treatment facilities for

children and youth pursuant to paragraph (c) of subdivision two of this

section for the period of April first, nineteen hundred ninety-seven

through March thirty-first, nineteen hundred ninety-eight. The amount of

the assessment collected pursuant to paragraph (c) of subdivision two of

this section in excess of two hundred thousand dollars for the period of

April first, nineteen hundred ninety-seven through March thirty-first,

nineteen hundred ninety-eight shall be refunded to providers of services

by the commissioner of mental health based on the ratio which a

residential treatment facility for children and youth's assessment for

such period bears to the total of the assessments for such period paid

by such residential treatment facilities for children and youth.

(iii) The additional assessment shall not be collected in excess of

fifty thousand dollars from residential treatment facilities for

children and youth pursuant to paragraph (c) of subdivision two of this

section for the period of April first, nineteen hundred ninety-seven

through March thirty-first, nineteen hundred ninety-eight. The amount of

the additional assessment collected pursuant to paragraph (c) of

subdivision two of this section in excess of fifty thousand dollars for

the period of April first, nineteen hundred ninety-seven through March

thirty-first, nineteen hundred ninety-eight shall be refunded to

providers of services by the commissioner of mental health based on the

ratio which a residential treatment facility for children and youth's

additional assessment for such period bears to the total of the

additional assessments for such period paid by such residential

treatment facilities for children and youth.

12. Each exclusion of sources of gross receipts received from the

assessments effective on or after April first, nineteen hundred

ninety-two established pursuant to this section shall be contingent upon

either: (a) qualification of the assessments for waiver pursuant to

federal law and regulation; or (b) consistent with federal law and

regulation, not requiring a waiver by the secretary of the department of

health and human services related to such exclusion; in order for the

assessments under this section to be qualified as a broad-based health

care related tax for purposes of revenues received by the state pursuant

to the assessments not reducing the amount expended by the state as

medical assistance for purposes of federal financial participation. The

commissioner of mental health shall collect the assessments relying on

such exclusions, pending any contrary action by the secretary of the

department of health and human services. In the event the secretary of

the department of health and human services determines that the

assessments do not so qualify based on any such exclusion, then the

exclusion shall be deemed to have been null and void as of April first,

nineteen hundred ninety-two, and the commissioner of mental health shall

collect any retroactive amount due as a result, without interest or

penalty provided the provider of services pays the retroactive amount

due within ninety days of notice from the commissioner of mental health

to the provider of services that an exclusion is null and void. Interest

and penalties shall be measured from the due date of ninety days

following notice from the commissioner of mental health to the provider

of services.

13. Subparagraph (ii) of paragraph (b) of subdivision two and

subparagraph (ii) of paragraph (c) of subdivision two of this section

shall be of no force and effect upon either: (a) a waiver is granted

pursuant to federal law and regulation; or (b) consistent with federal

law and regulation, a waiver is not required by the secretary of the

department of health and human services for a difference between the

rate of assessment on hospitals and residential treatment facilities for

children and youth assessed pursuant to this section and the rate of

assessment including the additional assessment on general hospitals

assessed pursuant to section twenty-eight hundred seven-d of the public

health law; in order for the assessments pursuant to this section and

the assessments including the additional assessment on general hospitals

pursuant to section twenty-eight hundred seven-d of the public health

law to be qualified as broad-based health care related taxes for

purposes of the revenues received by the state pursuant to this section

and section twenty-eight hundred seven-d of the public health law not

reducing the amount expended by the state as medical assistance for

purposes of federal financial participation. The commissioner of mental

health shall not collect the additional assessments under this section,

pending any contrary action by the secretary of the department of health

and human services. In the event the secretary of the department of

health and human services determines that the assessments pursuant to

this section or the assessments including the additional assessment on

general hospitals pursuant to section twenty-eight hundred seven-d of

the public health law do not so qualify based on the difference between

the rate of assessment on hospitals or residential treatment facilities

for children and youth assessed pursuant to this section and the rate of

assessment including the additional assessment on general hospitals

pursuant to section twenty-eight hundred seven-d of the public health

law then the provisions of subparagraph (ii) of paragraph (b) of

subdivision two and subparagraph (ii) of paragraph (c) of subdivision

two of this section shall be deemed to have been in full force and

effect as of April first, nineteen hundred ninety-two, and the

commissioner of mental health shall collect any retroactive amount due

as a result, without interest or penalty provided the provider of

services pays the retroactive amount due within ninety days of notice

from the commissioner of mental health to the provider of services that

the exclusion is null and void. Interest and penalties shall be measured

from the due date of ninety days following notice from the commissioner

of mental health to the provider of services.