N.Y. Public Health Law § 2807-a: General hospital nineteen hundred eighty-six and nineteen hundred eighty-seven inpatient rates and charges

§ 2807-a. General hospital nineteen hundred eighty-six and nineteen

hundred eighty-seven inpatient rates and charges.

1. For the rate period from January first, nineteen hundred eighty-six

through December thirty-first, nineteen hundred eighty-six and for the

rate period from January first, nineteen hundred eighty-seven through

December thirty-first, nineteen hundred eighty-seven, the rates of

payment to general hospitals for services provided to persons eligible

for payments made by state governmental agencies and subscribers to

article forty-three insurance law corporations and subscribers of

organizations organized under article forty-four of this chapter (unless

application is made to the commissioner under subdivision three of this

section) shall be based on the reimbursable operating costs used in

determining payments for services provided during the rate period from

January first, nineteen hundred eighty-five through December

thirty-first, nineteen hundred eighty-five. Such operating costs shall

include the annualized cost impact of rate revisions or adjustments made

with respect to such services. In addition to the reimbursable operating

costs identified in accordance with this subdivision, payment rates by

governmental agencies and article forty-three insurance law corporations

shall be adjusted each year to reflect:

(a) capital related expenses determined in accordance with subdivision

seven of this section;

(b) additional financial needs or revenue requirements in accordance

with subdivision eight of this section; and

(c) projection of reimbursable costs identified in accordance with

this subdivision by a trend factor established by the panel of

economists as set forth in subdivision fourteen of this section.

2. For the rate period from January first, nineteen hundred

eighty-six through December thirty-first, nineteen hundred eighty-six

and for the rate period from January first, nineteen hundred

eighty-seven through December thirty-first, nineteen hundred

eighty-seven, rates of payment pursuant to the provisions of the

workers' compensation law, the volunteer firefighters' benefit law and

the comprehensive motor vehicle insurance reparations act shall be

established on the basis of one hundred twelve percent of the trended

nineteen hundred eighty-one average operating reimbursable per diem

inpatient cost of the hospital, plus the additions specified in

subdivisions seven and eight of this section and such revisions that may

be made pursuant to subdivisions eleven and fourteen of this section.

3. Nothing in this section shall prohibit the negotiation by health

maintenance organizations operating in accordance with the provisions of

article forty-three of the insurance law or article forty-four of this

chapter, of agreements with general hospitals for rates of payment other

than those provided herein. Such contracts shall require approval by the

commissioner and must include provision for special benefit packages or

arrangements for providing inpatient services to encourage patient

management behavior that will minimize the length of patient stay, such

as special admission arrangements, bed leasing or other inpatient

capitation arrangements.

4. Hospital inpatient services reimbursement provided to patients who

are not beneficiaries or subscribers of corporations organized and

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

eligible for payments made by state governmental agencies, eligible for

payments as beneficiaries of subchapter XVIII of the federal social

security act, enrolled in organizations operating in accordance with the

provisions of article forty-four of this chapter, enrolled in a

self-insured and self-administered group covered under the provisions of

paragraph (b) of subdivision twelve of this section, or eligible for

payments pursuant to the provisions of the workers' compensation law,

the volunteer firefighters' benefit law or the comprehensive motor

vehicle insurance reparations act shall be at charges established by the

hospital in accordance with subdivision twelve of this section.

5. Specialty hospitals shall receive reimbursement for general

hospital inpatient services in accordance with the provisions of this

section unless other reimbursement methodologies are adopted by the

council and approved by the commissioner. In such event the allowances

provided in subdivision eight of this section shall be included in

certified and approved inpatient rates.

6. The establishment of separate rates of payment for patients who

require different levels or types of care shall require a reallocation

of costs to insure that costs are equitably allocated to service areas

and appropriate rate adjustments are made.

7. Capital related expenses. Capital related inpatient expenses,

including but not limited to straight line depreciation on buildings and

non-movable equipment, accelerated depreciation on movable equipment if

requested by the hospital, rentals and interest on capital debt (or for

hospitals financed pursuant to article twenty-eight-b of this chapter,

such expenses, including amortization in lieu of depreciation, as

determined pursuant to the reimbursement regulations promulgated

pursuant to that article and article twenty-eight of this chapter),

shall be included in rates established on a budget basis and

subsequently reconciled to actual expenses through appropriate audit

procedures. General hospitals shall submit to the commissioner, at least

one hundred twenty days prior to the commencement of each year, a

schedule of capital related inpatient expenses for the forthcoming year.

Any capital related inpatient expense generated by a capital expenditure

which requires or required approval pursuant to this article, must have

received such approval for the capital related expense to be included in

the rates established. The submitted budget may include the capital

related inpatient expenses for all existing capital assets as well as

estimates of capital related inpatient expenses for capital assets to be

acquired or placed in use prior to the commencement of the rate year or

during the rate year provided all required approvals have been obtained.

The basis for determining capital related inpatient expenses shall be

the lesser of actual cost or the final amount specifically approved for

the construction of the capital asset. The council shall adopt, with the

approval of the commissioner, regulations to:

(a) identify by type the eligible capital related inpatient expenses;

(b) safeguard the future financial viability of voluntary, non-profit

general hospitals by requiring funding of inpatient depreciation on

building and fixed and movable equipment;

(c) provide authorization to adjust inpatient rates by advancing

payment of depreciation as needed, in instances of capital debt related

financial distress of a voluntary, non-profit general hospital; and

(d) provide a methodology for the reimbursement treatment of sales.

8. Allowances. All rates established for the two years commencing on

January first, nineteen hundred eighty-six in accordance with

subdivisions one, two, three, four, five and six of this section shall

include the allowances specified in paragraphs (a), (b), (c), (e) and

(f) of this subdivision. The allowances shall be computed on the basis

of the general hospitals' reimbursable inpatient costs after application

of the trend factor. For the purposes of this subdivision and

subdivisions sixteen and twenty-four of this section, major public

general hospitals are defined as all state operated general hospitals,

all general hospitals operated by the New York city health and hospitals

corporation as established by chapter one thousand sixteen of the laws

of nineteen hundred sixty-nine as amended and all other public general

hospitals having annual inpatient operating costs in excess of

twenty-five million dollars.

(a) An allowance of one percent of the general hospitals' reimbursable

inpatient costs computed in accordance with this section to be used at

the discretion of hospital governing boards.

(b) For public general hospitals an additional allowance of up to two

percent subject to the provisions of paragraph (d) of this subdivision.

(c) For voluntary non-profit and private proprietary general hospitals

an additional allowance up to one percent subject to the provisions of

paragraph (d) of this subdivision.

(d) The additional allowances in paragraphs (b) and (c) of this

subdivision shall be available to general hospitals receiving approval

from the commissioner as to the acceptable use of the allowance which

uses shall include but not be limited to retirement of short term

non-capital debt, meeting costs related to bad debts and charity care

not met by the distributions as specified in subdivisions sixteen and

twenty-four of this section, offsetting reductions in anticipated

revenue resulting from charge limits below those applicable to the

particular hospital immediately prior to the enactment of subdivision

twelve of this section, and needed improvement of current ratio.

Allowances authorized by paragraphs (b) and (c) of this subdivision are

not to be considered as a substitute for operational funds that are

otherwise reimbursable or subject to appeal.

(e) A percentage to reflect the needs for the financing of losses

resulting from bad debts and the costs of charity care of general

hospitals within article forty-three insurance law regions, or such

other regions as adopted pursuant to subdivision fifteen of this

section, and within a statewide determination of financial resources to

be committed for this purpose. Regional needs shall be equal to the

total of inpatient losses from bad debts reduced to cost and the

inpatient costs of charity care increased by any deficit of such

hospitals from providing ambulatory services, excluding any portion of

such deficit resulting from governmental payments below average visit

costs, and revenues and expenses related to the provision of referred

ambulatory services. The regional amounts to be included in rates

approved for the rate year commencing January first, nineteen hundred

eighty-six and for the rate year commencing January first, nineteen

hundred eighty-seven will be equal to the result of the application of

the percentage of statewide need for voluntary non-profit, private

proprietary and public general hospitals, other than major public

general hospitals, that can be met from available resources in regional

pools, created in accordance with subdivision fifteen of this section

computed without consideration of inpatient uncollectible amounts, to

the regional need for voluntary non-profit, private proprietary and

public general hospitals, other than major public general hospitals,

expressed in dollars plus the dollar amount resulting from the

application of the ratio of major public general hospitals inpatient

reimbursable costs within the region to total statewide general

inpatient reimbursable cost (as computed on the basis of nineteen

hundred eighty-four financial and statistical reports and excluding

costs related to services to beneficiaries of subchapter XVIII of the

federal social security act) to the statewide resources committed for

this purpose to regional pools computed without consideration of

inpatient uncollectible amounts and the ratio of these total dollars to

the total regional reimbursable inpatient costs, excluding inpatient

costs related to services provided to beneficiaries of subchapter XVIII

of the federal social security act, after application of the trend

factor. For each year of the two year period commencing on January

first, nineteen hundred eighty-six the statewide amount to be available

in regional pools for this purpose will equal four and one-half percent

of the total hospital reimbursable inpatient cost, excluding inpatient

costs related to services provided to beneficiaries of subchapter XVIII

of the federal social security act and inpatient uncollectible amounts,

after application of the trend factor. The allocations of resources made

available under this paragraph, as specified in subdivision sixteen of

this section may be changed only as follows: An annual review shall be

conducted pursuant to rules and regulations adopted by the council and

approved by the commissioner with respect to bad debt and charity care

need within each article forty-three insurance law region or such other

regions as are adopted pursuant to subdivision fifteen of this section.

If within such a region there is a definitive finding as a result of

such review that there has been a change in the proportional amounts of

bad debts and charity care provided by (i) major public general

hospitals and (ii) voluntary non-profit, private proprietary and public

general hospitals, other than major public general hospitals, the

allocation of resources made available under this paragraph shall be

adjusted pursuant to the rules and regulations adopted pursuant to this

paragraph so as to reflect this change.

(f) An additional allowance of fifty-eight hundredths of one percent

shall be included in each rate established for each voluntary non-profit

and private proprietary general hospital to be returned to a regional

pool and distributed in accordance with paragraph (b) of subdivision

sixteen of this section.

10. Special provisions for payments by governmental agencies. In the

event that the allowances specified in subdivision eight of this section

are not approved by the federal government for federal financial

participation in payments made for beneficiaries eligible for medical

assistance under subchapter XIX of the federal social security act,

rates of payment by governmental agencies for the operating cost

component of general hospital inpatient services shall be based on the

reimbursable operating costs used in determining payments for services

provided during the rate period from January first, nineteen hundred

eighty-five through December thirty-first, nineteen hundred eighty-five,

including the annualized cost impact of rate revisions or adjustments

made with respect to such services, projected by a trend factor

determined in accordance with subdivision fourteen of this section, and

adjusted by a base period adjustment factor to reflect the difference

between the actual regional increase in inpatient general hospital

operating cost for those regions as established pursuant to subdivision

fifteen of this section between cost reporting periods for nineteen

hundred eighty-one and nineteen hundred eighty-four and the trend

factors developed to project costs for such period, provided, however,

such base period adjustment factor shall not exceed an amount equal to

the percentage allowances calculated in accordance with paragraphs (a),

(b), (c), (e) and (f) of subdivision eight of this section. The

commissioner shall assess all general hospitals within a region an

amount equal to the regional allowance percentage as determined in

accordance with paragraph (e) of subdivision eight of this section

applied to actual inpatient revenues received from providing inpatient

services to persons eligible for payments from state governmental

agencies excluding inpatient revenues related to services provided to

beneficiaries of subchapter XVIII of the federal social security act.

The commissioner shall also assess an additional fifty-eight hundredths

of one percent of actual inpatient revenues received by voluntary

non-profit and private proprietary general hospitals for services

provided to persons eligible for payments made by state governmental

agencies excluding inpatient revenues related to services provided to

beneficiaries of subchapter XVIII of the federal social security act.

Such assessments shall be returned to regional pools in accordance with

the methodology contained in subdivision fifteen of this section and

distributed in accordance with the provisions of subdivision sixteen of

this section.

11. Adjustments. (a) For the period from January first, nineteen

hundred eighty-six through December thirty-first, nineteen hundred

eighty-seven, the commissioner shall on his own initiative, or on the

basis of a request from a general hospital, adjust an established rate

to reflect:

(i) the reduction of costs related to the elimination of a general

hospital inpatient service in instances where the costs of such service

were included in the rate established; and

(ii) the correction of errors or omissions of data or in computation.

(b) General hospitals may request and the commissioner shall consider

an adjustment to an established rate to reflect increased expenses or

reconsideration of disallowed expenses based on:

(i) justification of all or a portion of expenses not included in the

rate resulting from the cost analysis process contained in subparagraph

(i) of paragraph (a) of this subdivision;

(ii) additional operational expenses related to approved construction

or service changes;

(iii) the addition of costs related to a state requirement for

additional services to be provided or additional costs to be incurred in

meeting state and federal requirements;

(iv) additional expenses to permit a more efficient and economical

method of delivering a service; and

(v) increased costs for compensation of employees.

(c) In determining the reasonableness or justification of an

adjustment to an established rate related to subparagraph (v) of

paragraph (b) of this subdivision, the commissioner shall consider:

(i) the fiscal capability of the general hospital to finance such

increases from its own resources;

(ii) the past history of the general hospital with respect to

compensation increases and allowed compensation trend factors; and

(iii) the economy in the area in which the general hospital is

located.

(d) The commissioner shall adjust a prospectively established

inpatient rate on the basis of subsequent data that demonstrates a

significant cost influencing change in patient mix or volume of service.

Such adjustments shall be based on rules and regulations adopted by the

council and approved by the commissioner. Such rules and regulations for

a volume adjustment shall take into consideration only volume changes to

other than beneficiaries of subchapter XVIII of the federal social

security act.

(e) All appeals shall be submitted to the commissioner, who may submit

a copy of the appeal to interested parties for the purpose of providing

an opportunity for comment within a specified time period.

(f) The commissioner shall act upon all properly documented appeals

for adjustments concerning base year costs by November first of the

calendar year for which the rate is effective provided that all

information necessary to determine whether an adjustment is justified is

submitted by the facility prior to May first of such year. In the event

such an appeal is filed by May first, but information necessary to

determine whether an adjustment is justified is submitted after such

date, the commissioner shall act on the appeal within six months after

receiving the necessary information.

(g) The commissioner shall consider an adjustment to a hospital's

reported base year costs in instances where it is demonstrated that

recurring costs resulting from multi-year commitments beginning late in

a base year should be calculated on an annual basis in establishing a

rate in order to avoid a significant inequity. In making such an

adjustment the commissioner shall consider the offset of non-recurring

base year costs.

12. Hospital charge schedules. (a) Effective for the year commencing

January first, nineteen hundred eighty-six and thereafter each general

hospital shall establish a charge schedule for available and authorized

services in accordance with a gross charge determination formula

provided by the commissioner which shall establish gross inpatient

charges such that the payment rate to be made on behalf of subscribers

of article forty-three insurance law plans, adjusted for uncovered

services shall be at a discount which shall not exceed twelve percent of

the gross charge rate billed to or on behalf of charge paying patients.

For general hospitals subject to the provisions of paragraphs (a) and

(b) of subdivision twenty-one of this section, the costs (including all

allowances specified in subdivision eight of this section) of services

provided to charge paying patients shall not exceed a twelve percent

discount from the gross charge rate billed to or on behalf of charge

paying patients. In the event that a hospital's gross inpatient charges

exceed the maximum inpatient charges computed in accordance with the

gross charge determination formula prescribed by the commissioner,

direct repayment or adjustment of subsequent charges for inpatient

services shall be effectuated in accordance with regulations adopted by

the council and approved by the commissioner.

(b) For the period January first, nineteen hundred eighty-six through

December thirty-first, nineteen hundred eighty-seven, negotiated payment

rate determination systems between self-insured and self-administered

groups and hospitals which were in effect on May first, nineteen hundred

eighty-five may continue.

13. Working capital. General hospitals may include as a financing or

working capital charge an addition of two percent of any valid claim not

paid within thirty days of submission or determination of payor

liability, whichever is later, and one percent per month thereafter.

Revenues received from such financing or working capital charges shall

not be considered as a cost offset or as part of the hospital's gross

inpatient charges. Financing or working capital charges shall not be

applied to hospital billings to third party payors participating in a

periodic interim payment system.

14. Trend factors. (a) The commissioner in accordance with the

methodology developed by the consultants pursuant to paragraph (b) of

this subdivision shall establish trend factors to project for the

effects of inflation. The factors shall be applied to the appropriate

portion of reimbursable costs as defined in subdivision one of this

section, or, if effective, subdivision ten of this section. The

methodology for developing the trend factor shall include the

appropriate external price indicators and shall also include the data

from major collective bargaining agreements as reported quarterly by the

federal department of labor, bureau of labor statistics, for

non-supervisory employees.

(b) The methodology shall be developed by four independent consultants

with expertise in health economics appointed by the commissioner. Not

later than September first of each year, the consultants shall provide

to the commissioner and the council, the methodology to be used to

determine the trend factors for the subsequent twelve month period

commencing January first. The commissioner shall monitor the actual

price movement during this twelve month period of the external price

indicators used in the methodology, shall report the results of the

monitoring to the consultants, and shall implement, semi-annually, the

recommendations of the consultants for adjustments to the trend factor,

provided, however, that adjustments, except for the final adjustment of

the trend factor, shall not be required unless such adjustment would

result in the weighted average of the operating cost component of the

rates differing by more than one-half of one percent from that which was

previously determined.

15. Regional and statewide pools, general. Funds will be made

available in regional pools for regional distributions through the

submissions by general hospitals of the allowances included in rates and

charges in accordance with paragraphs (e) and (f) of subdivision eight

of this section and, if effective, the amount of the assessment in

accordance with subdivision ten of this section. Funds will be made

available for distribution from a statewide pool in accordance with the

assessments authorized in subdivision twenty-three of this section. The

regions are established as the article forty-three insurance plan

regions, with the exception that the southern sixteen counties shall be

divided into three regions for the purposes of subdivisions eight and

sixteen of this section with separate regions consisting of Richmond,

Manhattan, Bronx, Queens and Kings counties; Nassau and Suffolk

counties, and Delaware, Columbia, Ulster, Sullivan, Orange, Dutchess,

Putnam, Rockland and Westchester counties. Such regions shall be the

same regions established and in effect January first, nineteen hundred

eighty-five. The council with the approval of the commissioner may

combine regions, with the exception of the above specified regions for

the southern sixteen counties, upon application of the article

forty-three insurance law plans involved and a demonstration that

significant inequities would not occur. The commissioner is authorized

to contract with the article forty-three insurance law plans to receive

funds for the pools and distribute such funds. In the event contracts

with the article forty-three insurance law plans are effectuated, the

commissioner shall conduct annual audits of the receipt and distribution

of the pooled funds. In order for general hospitals to participate in

the distribution of funds from the pools the general hospital must

implement collection policies and procedures approved by the

commissioner.

16. Regional pools. Funds accumulated in regional pools, including

income from invested funds, shall be distributed in accordance with the

following methodology and sequence:

(a) Funds accumulated in regional pools, including income from

invested funds, from the allowance specified in paragraph (e) of

subdivision eight of this section and, if effective, the assessment

against all general hospitals as authorized in subdivision ten of this

section shall be distributed as follows:

(i) Each eligible major public general hospital as defined in

subdivision eight of this section shall receive a portion of its bad

debt and charity care need equal to the result of the application of

its percentage of statewide inpatient reimbursable costs excluding costs

related to services to beneficiaries of subchapter XVIII of the federal

social security act, developed on the basis of nineteen hundred

eighty-four financial and statistical reports to the total of all

regional pools.

(ii) Funds remaining in the regional pools after distribution in

accordance with subparagraph (i) of this paragraph shall be distributed

proportionately to voluntary non-profit, private proprietary and public

general hospitals, other than major public general hospitals, on the

basis of need within the region as defined in paragraph (e) of

subdivision eight of this section.

(b) Funds accumulated in regional pools, including income from

invested funds, created by the allowance specified in paragraph (f) of

subdivision eight of this section and, if effective, the fifty-eight

hundredths of one percent assessment against voluntary non-profit and

private proprietary general hospitals as authorized by subdivision ten

of this section, shall be available for distribution by the commissioner

in accordance with rules adopted by the council to assist in offsetting

losses resulting from bad debts and the costs of charity care of

voluntary non-profit and private proprietary general hospitals

experiencing severe fiscal hardship because of insufficient resources to

finance such losses and costs. Such losses and costs may include losses

and costs incurred prior to the year used in determining hospital need

pursuant to paragraph (e) of subdivision eight of this section. Amounts

to be distributed shall be determined after consideration of amounts to

be distributed from regional pools in accordance with paragraph (a) of

this subdivision and from the statewide pool in accordance with

subparagraph (iii) of paragraph (a) of subdivision twenty-four of this

section.

(c) Any balance in the portion of regional pools created by the

allowance in paragraph (f) of subdivision eight of this section, and if

effective, the fifty-eight hundredths of one percent assessment as

authorized by subdivision ten of this section, including income from

invested funds, after distribution in accordance with paragraph (b) of

this subdivision shall be distributed to voluntary non-profit and

private proprietary general hospitals within the region on a basis

related to specific hospital need as defined in paragraph (e) of

subdivision eight of this section.

20. Unit of service. For the rate period from January first, nineteen

hundred eighty-six through December thirty-first, nineteen hundred

eighty-six and for the rate period from January first, nineteen hundred

eighty-seven through December thirty-first, nineteen hundred

eighty-seven the unit of service on which payment is made to general

hospitals for inpatient services shall be the unit of service in effect

during the rate period from January first, nineteen hundred eighty-five

through December thirty-first, nineteen hundred eighty-five unless

specifically provided otherwise in this section or modified pursuant to

a subsequent chapter.

21. Provisions for article forty-three insurance law corporations and

article forty-four of this chapter organizations. Except as provided in

paragraphs (a) and (b) of this subdivision, general hospital charges for

inpatient and outpatient services to subscribers or beneficiaries of

contracts entered into pursuant to the provisions of article forty-three

of the insurance law or to members of a comprehensive health services

plan operating pursuant to the provisions of article forty-four of this

chapter for patient services rendered shall not exceed the rates of

payment approved by the superintendent of financial services or approved

or certified by the commissioner, whichever is applicable and required

by this section, for payments by such article forty-three insurance law

corporations or article forty-four of this chapter organizations. No

general hospital may demand or request any charge for such covered

services in addition to the charges or rates authorized by this article.

(a) Any general hospital which terminated its contract with an article

forty-three insurance law corporation or a comprehensive health services

plan after October first, nineteen hundred seventy-six and prior to May

first, nineteen hundred seventy-eight, may not charge subscribers or

beneficiaries of contracts entered into pursuant to the provisions of

article forty-three of the insurance law, or members of a comprehensive

health services plan operating pursuant to the provisions of article

forty-four of this chapter, amounts in excess of the schedule of charges

established by such hospital for patient services in accordance with the

provisions of subdivision twelve of this section.

(b) Any general hospital which has notified in writing an article

forty-three insurance law corporation or a comprehensive health services

plan prior to June first, nineteen hundred seventy-eight of its

intention to terminate its contract with such corporation or plan in

accordance with the terms of such contract, except a general hospital

subject to the provisions of paragraph (a) of this subdivision may not

charge a subscriber or beneficiary of a contract entered into pursuant

to the provisions of article forty-three of the insurance law, or a

member of a comprehensive health services plan operating pursuant to the

provisions of article forty-four of this chapter, after the effective

date of termination of such contract, amounts in excess of the schedule

of charges established by such hospital for patient services in

accordance with the provisions of subdivision twelve of this section.

(c) No general hospital shall refuse to provide patient services to

such subscribers or beneficiaries solely on the grounds of such

subscription or membership.

22. Restitution authorization. In enforcing the provisions of

subdivisions twelve and twenty-one of this section, the commissioner

may, in addition to the penalties and injunctions set forth in section

twelve of this chapter, order that any general hospital provide

restitution for any overpayments made by any party. Any hospital may

request a formal hearing pursuant to the provisions of section twelve-a

of this chapter in the event the hospital does not consent to any order

of the commissioner hereunder. The commissioner may direct that such a

hearing be held without any request by a hospital.

23. Bad debt and charity care assessments. The commissioner shall

create a bad debt and charity care statewide pool through assessments

which shall be charged to general hospitals to reflect the needs for the

financing of losses resulting from bad debts and the costs of charity

care. Such assessments will be submitted to a statewide pool as

designated by the commissioner and distributed on a monthly basis in

accordance with subdivision twenty-four of this section. The bad debt

and charity care assessments shall be:

(a) Three and eight-tenths percent aggregate assessment of each

general hospital's gross revenue received for inpatient hospital service

provided during the period July first, nineteen hundred eighty-six

through December thirty-first nineteen hundred eighty-six composed of

the following: (i) an assessment of three and eight hundredths percent

to be allocated to a statewide bad debt and charity care account in the

statewide pool and distributed in accordance with paragraph (a) of

subdivision twenty-four of this section, (ii) an assessment of

thirty-eight hundredths of one percent to be allocated to a statewide

financially distressed hospital account in the statewide pool and

distributed in accordance with paragraph (b) of subdivision twenty-four

of this section, and (iii) an assessment of thirty-four hundredths of

one percent to be allocated to a statewide transition account in the

statewide pool and distributed in accordance with paragraph (c) of

subdivision twenty-four of this section;

(b) One and nine-tenths percent aggregate assessment of each general

hospital's gross revenue received for inpatient hospital service

provided during the period January first, nineteen hundred eighty-seven

through December thirty-first, nineteen hundred eighty-seven composed of

the following: (i) an assessment of one and fifty-four hundredths

percent to be allocated to a statewide bad debt and charity care account

in the statewide pool and distributed in accordance with paragraph (a)

of subdivision twenty-four of this section, (ii) an assessment of

nineteen hundredths of one percent to be allocated to a statewide

financially distressed hospital account in the statewide pool and

distributed in accordance with paragraph (b) of subdivision twenty-four

of this section, and (iii) an assessment of seventeen hundredths of one

percent to be allocated to a statewide transition account in the

statewide pool and distributed in accordance with paragraph (c) of

subdivision twenty-four of this section;

(c) Provided, however, there shall be no assessment against those

voluntary non-profit and private proprietary general hospitals which

qualify for distributions made in accordance with paragraph (b) of

subdivision sixteen of this section and paragraph (b) of subdivision

twenty-four of this section.

(d) For the purposes of this subdivision and subdivision twenty-four

of this section, gross revenue received is defined as all monies

received for or on account of inpatient hospital service, provided,

however, that gross revenue received shall not include distributions

from regional and statewide pools established in accordance with this

section and shall not include the component of rates of payment related

to the allowances provided in accordance with subdivision eight or, if

effective, the base period adjustment factor provided in accordance with

subdivision ten of this section.

24. Statewide pool distribution. (a) Funds accumulated in the

statewide bad debt and charity care account in the statewide pool,

including income from invested funds, shall be distributed in accordance

with the following methodology:

(i) There shall be set aside within such account, from accumulated

funds, from the total allocation to the statewide bad debt and charity

care account of the assessment of three and eight hundredths percent of

gross revenue received in accordance with subparagraph (i) of paragraph

(a) of subdivision twenty-three of this section an amount equal to

eighty-six hundredths of one percent of gross revenue received, as

defined in paragraph (d) of subdivision twenty-three of this section,

and from the total allocation to the statewide bad debt and charity care

account of the assessment of one and fifty-four hundredths percent of

gross revenue received in accordance with subparagraph (i) of paragraph

(b) of subdivision twenty-three of this section an amount equal to

forty-three hundredths of one percent of gross revenue received, as

defined in paragraph (d) of subdivision twenty-three of this section.

Each eligible major public general hospital, as defined in subdivision

eight of this section, shall receive from such funds a portion of its

bad debt and charity care need equal to the result of the application of

its percentage of statewide major public general hospital gross revenue

received to such funds.

(ii) Any funds within the statewide bad debt and charity care account

set aside for major public general hospitals and not distributed in

accordance with subparagraph (i) of this paragraph shall be distributed

in accordance with subparagraph (iii) of this paragraph.

(iii) Funds remaining in the statewide bad debt and charity care

account, after allocation in accordance with subparagraph (i) of this

paragraph, including funds available pursuant to subparagraph (ii) of

this paragraph, and including income from invested funds, shall be

distributed proportionately on a statewide basis to voluntary

non-profit, private proprietary and public general hospitals, other than

major public general hospitals, on the basis of need as defined in

paragraph (e) of subdivision eight of this section. Amounts to be

distributed shall be determined after consideration of amounts to be

distributed from regional pools in accordance with paragraph (a) of

subdivision sixteen of this section.

(b) Funds accumulated in the statewide financially distressed general

hospital account in the statewide pool, including income from invested

funds, shall be distributed or retained in accordance with the following

methodology:

(i) Funds in the statewide financially distressed general hospital

account, including income from invested funds, shall be made available

on a statewide basis for distribution by the commissioner in accordance

with rules and regulations adopted by the council and approved by the

commissioner to assist voluntary non-profit and private proprietary

general hospitals experiencing severe fiscal hardship because of

insufficient resources to finance losses resulting from bad debts and

the costs of charity care, and to meet reasonable and necessary costs

related to securing financing of capital improvement projects for such

general hospitals. Such losses and costs may include losses and costs

incurred prior to the year used in determining hospital need pursuant to

paragraph (e) of subdivision eight of this section. Amounts to be

distributed shall be determined after consideration of amounts to be

distributed from regional pools in accordance with subdivision sixteen

of this section and from the statewide bad debt and charity care account

in accordance with subparagraph (iii) of paragraph (a) of this

subdivision. The commissioner, in accordance with rules and regulations

adopted by the council and approved by the commissioner, may allocate a

portion of the accumulated funds for the purpose of securing financing

of capital improvement projects for such general hospitals.

(ii) Any balance remaining in the statewide financially distressed

general hospital account, including income from invested funds, not

including that portion of accumulated funds allocated for the purpose of

securing financing of capital improvement projects, after distribution

in accordance with subparagraph (i) of this paragraph shall be

distributed to voluntary non-profit, private proprietary and public

general hospitals, other than major public general hospitals, on a basis

related to need as defined in paragraph (e) of subdivision eight of this

section.

(c) (i) Funds accumulated in the statewide transition account in the

statewide pool, including income from invested funds, shall be

distributed to voluntary non-profit, private proprietary and public

general hospitals that have high percentages of gross revenue received

from payors whose rates and maximum charges are determined in accordance

with this section compared to total gross revenue received. For purposes

of this subparagraph, major public general hospitals operated by the New

York city health and hospitals corporation as established by chapter one

thousand sixteen of the laws of nineteen hundred sixty-nine as amended

shall be considered on a consolidated basis. Rules for such distribution

will be those adopted by the state hospital review and planning council

and approved by the commissioner.

(ii) Any balance remaining in the statewide transition account,

including income from invested funds, after distribution in accordance

with subparagraph (i) of this paragraph shall be distributed to

voluntary non-profit, private proprietary and public general hospitals,

other than major public general hospitals, on a basis related to need as

defined in paragraph (e) of subdivision eight of this section.

25. Maximum distributions. No general hospital may receive in total

from the distributions made in accordance with paragraphs (a) and (c) of

subdivision sixteen of this section and paragraph (a), subparagraph (ii)

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

twenty-four of this section an amount which exceeds its need for

financing losses related to bad debts and the costs of charity care as

defined in paragraph (e) of subdivision eight of this section.

26. Undistributed funds. Any funds, including income from invested

funds, remaining in the statewide pool after distributions in accordance

with paragraphs (a), (b) and (c) of subdivision twenty-four of this

section shall be distributed proportionately to voluntary non-profit,

private proprietary and public general hospitals, excluding major public

general hospitals, on the basis of hospital specific assessments

submitted to the pool.

27. Payment of assessments. Payments by or on behalf of general

hospitals of funds due for the bad debt and charity care assessments

pursuant to subdivision twenty-three of this section shall be made on a

time schedule established by the council, subject to the approval of the

commissioner, by regulation. Upon receipt of notification from the

commissioner, the comptroller or a fiscal intermediary designated by the

director of the budget shall withhold from the amount of any payment to

be made by the state to a general hospital the amount of any arrearage

resulting from such general hospital's failure to make a timely payment

of the bad debt and charity care assessments. Upon withholding such

amount, the comptroller or a designated fiscal intermediary shall pay

the commissioner, or his designee, such amount withheld. Any general

hospital in arrears resulting from failure to make a timely payment

shall not be eligible for a distribution from the statewide pool in

accordance with subdivision twenty-four of this section until such

arrearage is satisfied.

28. Reimbursement rates. The assessments pursuant to subdivision

twenty-three of this section shall not be an allowable cost in the

determination of general hospital inpatient reimbursement rates in

accordance with this section and section twenty-eight hundred seven of

this chapter.