N.Y. Public Health Law § 2807-c: General hospital inpatient reimbursement for annual rate periods beginning on or after January first, nineteen hundred eighty-eight

§ 2807-c. General hospital inpatient reimbursement for annual rate

periods beginning on or after January first, nineteen hundred

eighty-eight. 1. Payor payments. Payments to general hospitals for

inpatient hospital services provided to persons who are not eligible for

payments as beneficiaries of title XVIII of the federal social security

act (medicare) shall be determined pursuant to this section. Payor

payments shall be as follows unless an alternative reimbursement

methodology is authorized in accordance with paragraph (e), (f), (g),

(h) or (i) of subdivision four of this section.

* (a) Payments to general hospitals for reimbursement of inpatient

hospital services provided to patients eligible for payments made by

state governmental agencies for patients discharged prior to January

first, two thousand and on and after January first, two thousand; or for

patients discharged prior to January first, nineteen hundred

ninety-seven provided in accordance with policies written by

corporations organized and operating in accordance with article

forty-three of the insurance law, or payment by such a corporation on

behalf of subscribers of a foreign corporation as described in paragraph

(d) of subdivision twelve of this section, which provide for

reimbursement on an expense incurred basis; or for patients discharged

prior to January first, nineteen hundred ninety-seven provided to

subscribers of organizations operating in accordance with the provisions

of article forty-four of this chapter, shall be case based payments per

discharge, for each diagnosis-related group established in accordance

with paragraph (a) of subdivision three of this section, and shall

include:

(i) a reimbursable inpatient operating cost component determined in

accordance with subdivision five of this section;

(ii) capital related inpatient expenses determined in accordance with

subdivision eight of this section;

(iii) for patients discharged prior to January first, nineteen hundred

ninety-seven (A) a bad debt and charity care allowance determined in

accordance with subdivision fourteen of this section, (B) a general

health care services allowance determined in accordance with subdivision

fourteen-b of this section, and (C) a bad debt and charity care

allowance for financially distressed hospitals determined in accordance

with subdivision fourteen-c of this section;

(iv) a projection of reimbursable inpatient operating costs to the

rate year by the trend factor determined in accordance with subdivision

ten of this section; and

(v) adjustments for any modifications to the case payments determined

in accordance with paragraph (a), (b), (c) or (d) of subdivision four of

this section.

* NB Effective until December 31, 2029

* (a) Payments to general hospitals for reimbursement of inpatient

hospital services provided to patients eligible for payments made by

state governmental agencies; or provided in accordance with policies

written by corporations organized and operating in accordance with

article forty-three of the insurance law, or payment by such a

corporation on behalf of subscribers of a foreign corporation as

described in paragraph (d) of subdivision twelve of this section, which

provide for reimbursement on an expense incurred basis; or provided to

subscribers of organizations operating in accordance with the provisions

of article forty-four of this chapter, shall be case based payments per

discharge, for each diagnosis-related group established in accordance

with paragraph (a) of subdivision three of this section, and shall

include:

(i) a reimbursable inpatient operating cost component determined in

accordance with subdivision five of this section;

(ii) capital related inpatient expenses determined in accordance with

subdivision eight of this section;

(iii) (A) a bad debt and charity care allowance determined in

accordance with subdivision fourteen of this section, (B) a general

health care services allowance determined in accordance with subdivision

fourteen-b of this section, and (C) a bad debt and charity care

allowance for financially distressed hospitals determined in accordance

with subdivision fourteen-c of this section;

(iv) a projection of reimbursable inpatient operating costs to the

rate year by the trend factor determined in accordance with subdivision

ten of this section; and

(v) adjustments for any modifications to the case payments determined

in accordance with paragraph (a), (b), (c) or (d) of subdivision four of

this section.

* NB Effective December 31, 2029

* (a-1) Payments made by local governmental agencies to general

hospitals for reimbursement of inpatient hospital services provided to

incarcerated individuals of local correctional facilities as defined in

subdivision sixteen of section two of the correction law shall be at the

rates of payment determined pursuant to this section for state

governmental agencies, excluding adjustments pursuant to subdivision

fourteen-f of this section.

* NB Effective until December 31, 2029

* (a-1) Payments made by local governmental agencies to general

hospitals for reimbursement of inpatient hospital services provided to

incarcerated individuals of local correctional facilities as defined in

subdivision sixteen of section two of the correction law shall be at the

rates of payment determined pursuant to this section for state

governmental agencies.

* NB Effective December 31, 2029

* (a-2) (i) With the exception of those enrollees covered under a

payment rate methodology agreement negotiated with a general hospital,

payments for inpatient hospital services provided to patients eligible

for medical assistance pursuant to title eleven of article five of the

social services law made by organizations operating in accordance with

the provisions of article forty-four of this chapter or by health

maintenance organizations organized and operating in accordance with

article forty-three of the insurance law shall be the rates of payment

that would be paid for such patients under the medical assistance

program, (i) determined pursuant to this section, excluding adjustments

pursuant to subdivision fourteen-f of this section, and (ii) excluding

medical education costs that are reimbursed directly to the general

hospital in accordance with paragraph (a-3) of this subdivision.

(ii) Effective July first, two thousand seven, with the exception of

those enrollees covered under a payment rate methodology agreement

negotiated with a general hospital, payment for inpatient hospital

services provided to patients enrolled in the child health insurance

program pursuant to title one-A of article twenty-five of this chapter

made by organizations operating in accordance with the provisions of

article forty-four of this chapter or by health maintenance

organizations organized and operating in accordance with article

forty-three of the insurance law shall be the rates of payment that

would be paid under the medical assistance program determined pursuant

to this section, excluding adjustments pursuant to subdivision

fourteen-f of this section.

* NB Expires December 31, 2029

* (a-3) Notwithstanding any inconsistent provision of law:

(i) the commissioner shall establish, subject to the approval of the

director of the budget, discrete rates of payment for general hospitals

for the period July first, nineteen hundred ninety-six through December

thirty-first, nineteen hundred ninety-nine and periods on and after

January first, two thousand for payments under the medical assistance

program pursuant to title eleven of article five of the social services

law for persons eligible for medical assistance who are enrolled in

health maintenance organizations and for payments under the family

health plus program for persons enrolled in approved organizations

pursuant to title eleven-D of article five of the social services law

based on the components of rates of payment established pursuant to this

section for persons eligible for medical assistance who are not enrolled

in health maintenance organizations for a general hospital for such rate

period that reflect the estimated reimbursable costs of direct medical

education expenses and indirect medical education expenses in the

determination of:

(A) the hospital-specific average reimbursable inpatient operating

cost per discharge pursuant to subdivision six of this section, and

(B) group category average inpatient reimbursable operating cost per

discharge pursuant to subdivision seven of this section, and

(C) the operating cost component of rates of payment pursuant to

paragraphs (f) and (k) of subdivision four of this section, and

(D) the operating cost component of rates of payment in accordance

with paragraphs (e), (g) and (i) of subdivision four of this section for

general hospitals or distinct units of general hospitals not reimbursed

on the basis of case based payments per discharge; and

(E) notwithstanding clauses (A) through (D) of this subparagraph, for

periods on and after December first, two thousand nine, the operating

cost component of rates of payment subject to subdivision thirty-five of

this section, and

(F) notwithstanding clauses (A) through (D) of this subparagraph, for

periods on and after December first, two thousand nine, the operating

cost component of rates of payment subject to paragraphs (e-1), (e-2)

and (1) of subdivision four of this section for general hospitals or

distinct units of general hospitals not reimbursed on the basis of case

based payments per discharge; and

(ii) such rates of payment may be established by the commissioner on

any appropriate payment basis, including a case mix adjusted per

discharge basis.

* NB Expires December 31, 2029

* (b) For patients discharged prior to January first, nineteen hundred

ninety-seven, payments to general hospitals for reimbursement of

inpatient hospital services provided to patients eligible for payments

pursuant to the comprehensive motor vehicle insurance reparations act;

or enrolled in a self-insured fund which provides for reimbursement

directly to general hospitals on an expense incurred basis, with the

exception of those enrollees covered under a payment rate methodology

agreement in accordance with the provisions of paragraph (a) of

subdivision two of this section; or insured under a commercial insurer

licensed to do business in this state and authorized to write accident

and health insurance and whose policy provides inpatient hospital

coverage on an expense incurred basis; or receiving inpatient hospital

services pursuant to an out-of-plan benefits system authorized pursuant

to section four thousand four hundred six of this chapter, except where

such out-of-plan, inpatient hospital services are offered by an

organization organized pursuant to the not-for-profit corporation law or

which meets the qualifications of section 501(c) of the internal revenue

code, shall be case based payments per discharge, for each

diagnosis-related group established in accordance with paragraph (a) of

subdivision three of this section, and equal to the case payments to

general hospitals provided in accordance with paragraph (a) of this

subdivision for services provided to subscribers of corporations

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

insurance law, adjusted for uncovered services, and increased by

thirteen percent or, for payments pursuant to the workers' compensation

law, the volunteer firefighters' benefit law and the volunteer ambulance

workers' benefit law, increased by five percent. Funds received by a

general hospital based on the payment differential applied pursuant to

this paragraph shall be hospital funds for patient care purposes.

Without due cause general hospitals shall not refuse to accept direct

payments from a payor who would otherwise be eligible to reimburse

hospitals for inpatient services on a case based payment per discharge

in accordance with this subdivision.

(b-1) (i) For patients discharged on and after January first, nineteen

hundred ninety-seven and prior to January first, two thousand and on and

after January first, two thousand, payments to general hospitals for

reimbursement of inpatient hospital services provided to patients

eligible for payments pursuant to the workers' compensation law, the

volunteer firefighters' benefit law, the volunteer ambulance workers'

benefit law, and the comprehensive motor vehicle insurance reparations

act shall be at the rates of payment determined pursuant to this section

for state governmental agencies, excluding adjustments pursuant to

subdivision fourteen-f of this section and subdivision thirty-three of

this section, excluding such further reductions to such payments as are

enacted as part of the state budget for the state fiscal year commencing

April first, two thousand ten and excluding such further reductions to

such payments as are enacted as part of the state budget for state

fiscal years commencing on and after April first, two thousand eleven.

(ii) The provisions of paragraph (d) of subdivision eleven of this

section shall continue to apply to such payors for payments determined

pursuant to this paragraph.

(b-2) A payor included in the payor categories specified in paragraph

(a) or (b-1) of this subdivision shall not be provided the option of

payment to a general hospital for inpatient services based on the lower

of hospital charges or the case based payment per discharge determined

in accordance with this section for a patient or apportioning the

appropriate case based payment per discharge for a patient by excluding

payment for a preexisting condition or acquired condition which has to

be treated along with the reason for the admission or, except as may

affect qualification for payments in accordance with paragraph (b) or

(d) of subdivision four of this section, for days within the inlier stay

determined to be medically unnecessary.

* NB Effective until December 31, 2029

* (b) Payments to general hospitals for reimbursement of inpatient

hospital services provided to patients eligible for payments pursuant to

the comprehensive motor vehicle insurance reparations act; or enrolled

in a self-insured fund which provides for reimbursement directly to

general hospitals on an expense incurred basis, with the exception of

those enrollees covered under a payment rate methodology agreement in

accordance with the provisions of paragraph (a) of subdivision two of

this section; or insured under a commercial insurer licensed to do

business in this state and authorized to write accident and health

insurance and whose policy provides inpatient hospital coverage on an

expense incurred basis; or receiving inpatient hospital services

pursuant to an out-of-plan benefits system authorized pursuant to

section four thousand four hundred six of this chapter, except where

such out-of-plan, inpatient hospital services are offered by an

organization organized pursuant to the not-for-profit corporation law or

which meets the qualifications of section 501 (c) of the internal

revenue code, shall be case based payments per discharge, for each

diagnosis-related group established in accordance with paragraph (a) of

subdivision three of this section, and equal to the case payments to

general hospitals provided in accordance with paragraph (a) of this

subdivision for services provided to subscribers of corporations

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

insurance law, adjusted for uncovered services, and increased by

thirteen percent or, for payments pursuant to the workers' compensation

law, the volunteer firefighters' benefit law and the volunteer ambulance

workers' benefit law, increased by five percent. Funds received by a

general hospital based on the payment differential applied pursuant to

this paragraph shall be hospital funds for patient care purposes.

Without due cause general hospitals shall not refuse to accept direct

payments from a payor who would otherwise be eligible to reimburse

hospitals for inpatient services on a case based payment per discharge

in accordance with this subdivision. A payor included in the payor

categories specified in this paragraph or in paragraph (a) of this

subdivision shall not be provided the option of payment to a general

hospital for inpatient services based on the lower of hospital charges

or the case based payment per discharge determined in accordance with

this section for a patient or apportioning the appropriate case based

payment per discharge for a patient by excluding payment for a

preexisting condition or acquired condition which has to be treated

along with the reason for the admission or, except as may affect

qualification for payments in accordance with paragraph (b) or (d) of

subdivision four of this section, for days within the inlier stay

determined to be medically unnecessary.

* NB Effective December 31, 2029

* (c) Charge based payments. For patients discharged prior to January

first, nineteen hundred ninety-seven, payments to general hospitals for

reimbursement of inpatient hospital services provided to those for whom

a case based payment per discharge system is not authorized by paragraph

(a) or (b) of this subdivision, or who are not covered under the

provisions of paragraph (a) of subdivision two of this section, shall be

on the basis of the hospital's charges; provided, however, for these

patients the definition of a short stay patient pursuant to paragraph

(d) of subdivision four of this section shall apply, and reimbursement

to hospitals for such patients shall be at payments developed in

accordance with paragraph (d) of subdivision four of this section,

increased by thirteen percent. The maximum amount to be charged to any

charge paying patient for a case shall be one hundred twenty percent of

the case based payment per discharge as determined under paragraph (b)

of this subdivision for the diagnosis-related group with which the

patient is identified. Each general hospital shall establish a charge

schedule and inpatient charges from this schedule shall be applied

uniformly for all inpatient charge based payments made in accordance

with this section.

* NB Effective until December 31, 2029

* (c) Charge based payments. Payments to general hospitals for

reimbursement of inpatient hospital services provided to those for whom

a case based payment per discharge system is not authorized by paragraph

(a) or (b) of this subdivision, or who are not covered under the

provisions of paragraph (a) of subdivision two of this section, shall be

on the basis of the hospital's charges; provided, however, for these

patients the definition of a short stay patient pursuant to paragraph

(d) of subdivision four of this section shall apply, and reimbursement

to hospitals for such patients shall be at payments developed in

accordance with paragraph (d) of subdivision four of this section,

increased by thirteen percent. The maximum amount to be charged to any

charge paying patient for a case shall be one hundred twenty percent of

the case based payment per discharge as determined under paragraph (b)

of this subdivision for the diagnosis-related group with which the

patient is identified. Each general hospital shall establish a charge

schedule and inpatient charges from this schedule shall be applied

uniformly for all inpatient charge based payments made in accordance

with this section.

* NB Effective December 31, 2029

(d) The components of rates of payment calculated in accordance with

this section related to inpatient operating costs shall be based on

general hospital reimbursable inpatient operating costs used in

determining payments for services pursuant to section twenty-eight

hundred seven-a of this article during the rate period January first,

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

hundred eighty-seven (or for a distinct unit of a general hospital

excluded from case based payments pursuant to paragraph (e) or (g) of

subdivision four of this section such distinct unit reimbursable

inpatient operating costs), excluding inpatient operating costs related

to services provided to beneficiaries of title XVIII of the federal

social security act (medicare) in accordance with paragraph (g) of

subdivision eleven of this section and adjusted to reflect the

annualized cost impact of rate revisions or adjustments, including the

volume adjustment and case mix adjustment for the nineteen hundred

eighty-seven rate period, made with respect to such services, which

shall be defined as a general hospital's or distinct unit's reimbursable

inpatient operating cost base; a projection to the nineteen hundred

eighty-eight rate period by the trend factor determined in accordance

with subdivision ten of this section; and an increase to reflect special

additional inpatient operating costs determined and allocated in

accordance with paragraph (e) of this subdivision.

(e) General hospital special additional inpatient operating costs

shall be determined and allocated among general hospitals in accordance

with subparagraphs (i), (iii) and (iv) of this paragraph. For purposes

of computing group category average inpatient reimbursable operating

costs in accordance with paragraph (a) of subdivision seven of this

section and an equivalent cost component for general hospitals that are

excluded from the case based payment per diagnosis-related group system

in accordance with paragraph (e) or (g) of subdivision four of this

section special additional inpatient operating costs shall include an

additional increase determined and allocated among general hospitals in

accordance with subparagraph (ii) of this paragraph.

(i) The total cost increases pursuant to this subparagraph for all

general hospitals shall in the aggregate be one hundred thirty million

dollars for the nineteen hundred eighty-eight rate period to reflect

nineteen hundred eighty-five costs incurred in excess of the trend

factor between nineteen hundred eighty-one and nineteen hundred

eighty-five, such cost increases to be projected from nineteen hundred

eighty-eight to subsequent annual rate periods by the applicable trend

factor, and shall be allocated among general hospitals in accordance

with the following methodology:

Five hundred dollars per bed shall be allocated to costs of each

general hospital based on the total number of inpatient beds for which

the hospital is certified pursuant to the operating certificate issued

for such general hospital in accordance with section twenty-eight

hundred five of this article in effect on January first, nineteen

hundred eighty-eight.

A factor of one quarter of one percent of a general hospital's

reimbursable inpatient operating cost base as defined in paragraph (d)

of this subdivision, trended through nineteen hundred eighty-eight,

shall be allocated to costs of general hospitals for technology advances

and a further one quarter of one percent of such costs shall be

allocated to costs of general hospitals for increased activities related

to quality assurance and patient discharge planning.

The balance of one hundred thirty million dollars after deducting the

dollar value of the per bed cost enhancement and the dollar value of the

percentage cost enhancements shall be allocated to costs of general

hospitals based on the ratio of each general hospital's nineteen hundred

eighty-five cost incurred in excess of the trend factor between nineteen

hundred eighty-one and nineteen hundred eighty-five in the following

discrete areas, summed, to the total sum of such cost over trend of all

general hospitals applied to such balance: malpractice insurance costs,

infectious and other waste disposal costs, water charges, direct medical

education expenses, working capital interest costs of hospitals that

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

subdivision sixteen of section twenty-eight hundred seven-a of this

article, costs of distinct psychiatric units excluded from case based

payments per diagnosis-related group, and ambulance costs. For purposes

of this subparagraph, nineteen hundred eighty-five cost incurred in

excess of the trend factor between nineteen hundred eighty-one and

nineteen hundred eighty-five shall be calculated for each such discrete

area based on a general hospital's inpatient operating costs for the

fiscal year ending in nineteen hundred eighty-five, after excluding

inpatient operating costs related to services provided to beneficiaries

of title XVIII of the federal social security act (medicare), for such

discrete area in excess of the hospital's comparable component of

reimbursable inpatient operating costs for its fiscal year ending in

nineteen hundred eighty-one, after excluding inpatient operating costs

related to services provided to beneficiaries of title XVIII of the

federal social security act (medicare), trended through nineteen hundred

eighty-five by the appropriate component of the trend factors and

adjusted to reflect approved decreases or increases in inpatient

operating costs resulting from all rate adjustments.

(ii) The total additional cost increases pursuant to this subparagraph

for all general hospitals shall in the aggregate be forty million

dollars for the nineteen hundred eighty-eight rate period, such

additional cost increases to be projected from nineteen hundred

eighty-eight to the rate period by the applicable trend factor, to be

allocated among general hospitals in accordance with the following

methodology:

The additional increase of forty million dollars shall be allocated to

costs of general hospitals that are included in group categories

established pursuant to paragraph (b) of subdivision seven of this

section based on the ratio of the nineteen hundred eighty-eight

intermediate group operating costs of each such general hospital, and to

costs of general hospitals that are excluded from the case based payment

per diagnosis-related group system in accordance with paragraph (e) or

(g) of subdivision four of this section based on the ratio of the

nineteen hundred eighty-eight intermediate operating costs of each such

general hospital, to the total sum of such intermediate group operating

costs and intermediate operating costs applied to the forty million

dollars. For purposes of this subparagraph, intermediate group operating

costs of a general hospital shall be calculated in accordance with rules

and regulations adopted by the council and approved by the commissioner

based on the reimbursable inpatient operating cost base determined in

accordance with paragraph (d) of this subdivision of such general

hospital; adjusted to exclude operating costs related to specialized

hospital services for which an alternative reimbursement methodology is

adopted pursuant to paragraph (e) or (g) or, if effective, (i) of

subdivision four of this section; and trended to the nineteen hundred

eighty-eight rate period by the trend factor determined in accordance

with subdivision ten of this section; and increased to reflect special

additional inpatient operating costs determined and allocated in

accordance with subparagraph (i) of this paragraph; and adjusted to

exclude a factor for operating costs of patients who required an

alternate level of care in accordance with paragraph (h) of subdivision

four of this section; and adjusted to exclude the components of the

trended reimbursable inpatient operating cost base related to education,

physician, ambulance services and organ acquisition costs determined in

accordance with subparagraphs (i), (iii) and (iv) of paragraph (c) of

subdivision seven of this section and malpractice insurance costs, and

the components of special additional inpatient operating costs

determined and allocated in accordance with subparagraph (i) of this

paragraph associated with cost increases in such costs. For purposes of

this subparagraph, intermediate operating costs of a general hospital

excluded from the case based payment per diagnosis-related group system

shall be calculated in accordance with rules and regulations adopted by

the council and approved by the commissioner based on the reimbursable

inpatient operating cost base determined in accordance with paragraph

(d) of this subdivision of such general hospital; trended to the

nineteen hundred eighty-eight rate period by the trend factor determined

in accordance with subdivision ten of this section; and increased to

reflect special additional inpatient operating costs determined and

allocated in accordance with subparagraph (i) of this paragraph; and

adjusted to exclude a factor for operating costs of patients who

required an alternate level of care developed consistent with the

provisions of paragraph (h) of subdivision four of this section; and

adjusted to exclude the components of the trended reimbursable inpatient

operating cost base related to education, physician, ambulance services

and organ acquisition costs determined consistent with the provisions of

subparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven

of this section and malpractice insurance costs, and the components of

special additional inpatient operating costs determined and allocated in

accordance with subparagraph (i) of this paragraph associated with cost

increases in such costs.

(iii) Cost increases pursuant to this subparagraph shall be made for

the nineteen hundred ninety-one rate period to reflect cost increases

incurred in excess of the trend factor and not included in the costs

used in determining payments in accordance with paragraph (d) of this

subdivision and subparagraphs (i) and (ii) of this paragraph. Such costs

shall in the aggregate be three hundred twenty-nine million dollars

exclusive of costs related to services provided to beneficiaries of

title XVIII of the federal social security act (medicare). Such costs

increases shall be projected from nineteen hundred ninety-one to

subsequent annual rate periods by the applicable trend factor, and shall

be allocated among general hospitals, except those general hospitals

whose base year for determining payments for services in such facilities

is nineteen hundred eighty-seven, in accordance with the following

methodology:

(A) Up to two hundred twenty-two million dollars shall be allocated

for labor adjustments. If the total of the adjustments is less than two

hundred twenty-two million dollars, then the adjustments shall be fully

funded. If the total of the adjustments is more than two hundred

twenty-two million dollars, then the adjustment specified in accordance

with item (II) of this clause shall be funded at the lower of twenty

percent of the total amount allocated for labor adjustments or its

proportional share of the labor adjustments unless the labor adjustment

specified in item (I) of this clause is less than eighty percent of the

total amount allocated for labor adjustments in which case the

adjustment specified in item (II) of this clause shall be equal to the

difference between two hundred twenty-two million dollars and the total

amount of the adjustment specified in item (I) of this clause.

(I) A portion of the amount allocated for labor adjustments shall be

for labor cost increases related to registered nurses' salaries and

fringes (twenty percent of salaries) and an add-on for the ripple effect

on other health care professionals of at least thirty-five percent. Such

adjustment shall cover both inpatient and outpatient cost incurred,

based on costs reported in a survey conducted by the department for the

period January first, nineteen hundred ninety through June thirtieth,

nineteen hundred ninety on forms specified by the commissioner and

received by the department no later than November first, nineteen

hundred ninety, annualized, in excess of nineteen hundred eighty-five

labor costs related to registered nurses' salaries and fringes trended

to nineteen hundred ninety and the nineteen hundred eighty-eight

statewide nurse salary adjustment trended to nineteen hundred ninety by

the appropriate components of the trend factors adjusted to reflect the

effect of the annualization of nineteen hundred ninety data and the

result trended to nineteen hundred ninety-one and shall be based

exclusively on regional experience. Such regional adjustment shall not

be less than zero. Each individual hospital within a region shall

receive a portion of the regional adjustment equal to its share of the

total inpatient and outpatient reimbursable operating costs for the

region excluding costs related to services provided to beneficiaries of

title XVIII of the federal social security act (medicare) and excluding

direct medical education costs.

(II) A portion of the amount allocated for labor adjustments shall be

for personnel costs other than those related to registered nurses'

salaries and fringes and the ripple effect on other health care

professionals. Such adjustment shall cover both inpatient and outpatient

costs incurred, based on costs reported in a survey conducted by the

department for the period January first, nineteen hundred ninety through

June thirtieth, nineteen hundred ninety on forms specified by the

commissioner and received by the department no later than November

first, nineteen hundred ninety, annualized, in excess of nineteen

hundred eighty-five personnel costs covered by this adjustment trended

to nineteen hundred ninety and the annualized rate adjustments approved

in nineteen hundred eighty-nine for personnel costs covered by this

adjustment for increased hospital costs to meet additional state

requirements that became effective July first, nineteen hundred

eighty-nine trended to nineteen hundred ninety by the appropriate

components of the trend factors adjusted to reflect the effect of the

annualization of nineteen hundred ninety data and the result trended to

nineteen hundred ninety-one and shall be based exclusively on regional

data.

(III) In the event that federal financial participation in payments

made for beneficiaries eligible for medical assistance under title XIX

of the federal social security act based upon the allocation and

adjustment specified in items (I) and (II) of this clause related to

outpatient costs as a component of such payments is not approved by the

federal government then such outpatient costs shall not be considered in

calculating such adjustment.

(C) Thirty-three million dollars shall be allocated for technology

advances and changes in medical practice. A fixed amount per bed shall

be allocated to the costs of each general hospital based on the total

number of inpatient beds for which the general hospital is certified

pursuant to the operating certificate issued for such general hospital

in accordance with section twenty-eight hundred five of this article in

effect on June thirtieth, nineteen hundred ninety.

(D) Thirty-four million dollars shall be allocated to those general

hospitals providing comprehensive health care to the communities they

serve as determined by the commissioner pursuant to regulations approved

by the council. Comprehensive health care includes providing and/or

accommodating patients' health care needs at the appropriate levels and

settings of care, and reaches outside of traditional inpatient services

to outpatient and other services. Factors to be considered in deciding

which general hospitals are providing comprehensive health care and the

size of the adjustment shall include but not be limited to: clinic and

emergency room volume compared to inpatient volume (measured using total

volume and/or volume related to medicaid and medically indigent

patients); number and type of clinic services offered; availability of

services; whether the general hospital is an AIDS designated center,

prenatal care assistance program provider, home health care provider,

trauma center, burn center; whether the general hospital offers neonatal

intensive care services, dialysis services, birthing center backup

agreements, AIDS outpatient programs, specific mental health, drug and

alcohol programs including outpatient and emergency services and those

designated pursuant to section 9.39 of the mental hygiene law; and

whether the general hospital's emergency room is designated as a 911

receiving hospital. In the event that federal financial participation in

payments made for beneficiaries eligible for medical assistance under

title XIX of the federal social security act based upon the adjustment

specified in this clause as a component of such payments is not approved

by the federal government because of the inclusion of outpatient

services then such outpatient services shall not be considered in

calculating such adjustment. If such exclusion results in the allocation

for this adjustment not being spent, then any unspent portion shall be

reallocated to further fund the adjustments specified in clauses (D) and

(E) of this subparagraph in the same proportion as their original

funding.

(E)(I) Twenty-six million dollars shall be allocated to the costs of

general hospitals based on the ratio of each general hospital's nineteen

hundred eighty-nine cost incurred in excess of the trend factor between

nineteen hundred eighty-five and nineteen hundred eighty-nine in the

certain discrete areas, summed, to the total sum of such cost over trend

of all general hospitals applied to the total funds under this

allocation. Such discrete cost areas shall include but not be limited

to: infectious and other waste disposal costs, universal precautions,

working capital interest costs, costs for asbestos removal, costs of low

osmolality contrast media, malpractice costs, water and sewer charges,

ambulance costs and costs related to designation as a trauma center. For

purposes of this clause, nineteen hundred eighty-nine cost incurred in

excess of the trend factor between nineteen hundred eighty-five and

nineteen hundred eighty-nine shall be calculated for each such discrete

area based on a general hospital's inpatient operating costs for the

fiscal year ending in nineteen hundred eighty-nine, after excluding

inpatient operating costs related to services provided to beneficiaries

of title XVIII of the federal social security act (medicare), for such

discrete area in excess of the hospital's comparable component of

reimbursable inpatient operating costs for its fiscal year ending in

nineteen hundred eighty-five, after excluding inpatient operating costs

related to services provided to beneficiaries of title XVIII of the

federal social security act (medicare), trended through nineteen hundred

eighty-nine by the appropriate component of the trend factors and

adjusted to reflect approved decreases or increases in inpatient

operating costs resulting from all rate adjustments.

(II) Any funds allocated under this clause and not distributed

pursuant to item (I) of this clause shall be allocated for the

following: to reimburse for a portion of the cost increases incurred

above the trend factor between nineteen hundred eighty-one and nineteen

hundred eighty-five for those discrete cost areas specified in the last

paragraph of subparagraph (i) of paragraph (e) of this subdivision as

added by chapter two of the laws of nineteen hundred eighty-eight and

not reimbursed in accordance with such paragraph. Such funds shall be

allocated to general hospitals in the same manner as specified in such

paragraph.

(F) Seven million two hundred thousand dollars shall be allocated to

account for the increase in the number of patients admitted through the

emergency room and the high costs of treating such patients which has

resulted in an increase in severity within diagnosis related groups.

Such funds shall be allocated to general hospitals based on the nineteen

hundred eighty-nine hospital-specific data on increased admissions

through the emergency room since nineteen hundred eighty-one, excluding

those admissions related to providing services to beneficiaries of title

XVIII of the federal social security act (medicare).

(G) Two hundred fifty dollars per bed shall be allocated to the costs

of each general hospital having two hundred or less certified acute care

beds and classified as a rural hospital for purposes of determining

payment for inpatient acute care services provided to beneficiaries of

title XVIII of the federal social security act (medicare) or under state

regulations, for recruiting and retaining health care personnel, based

on the total number of inpatient acute care beds for which such general

hospital is certified pursuant to the operating certificate issued for

such general hospital in accordance with section twenty-eight hundred

five of this article in effect on June thirtieth, nineteen hundred

ninety.

(H) One million dollars shall be allocated to assist general hospitals

involved in a merger, acquisition, or consolidation in meeting the costs

associated with such merger, acquisition, or consolidation on or after

January first, nineteen hundred ninety-one. The commissioner shall make

rate adjustments for such allocations.

(I) Five hundred thousand dollars shall be allocated for a

practitioner placement program to assist general hospitals in the

placement of physicians and other health care practitioners to practice

primary health care and/or dentistry in underserved areas, to serve the

medically needy, and including services with affiliated community based

providers. The commissioner shall make rate adjustments for such

allocations. Notwithstanding any inconsistent provision of this

subdivision, this clause shall not apply in rate periods commencing on

or after January first, nineteen hundred ninety-four.

(iv) Cost increases pursuant to this subparagraph shall be made for

the nineteen hundred ninety-four rate period to reflect cost increases

incurred in excess of the trend factor and not included in the costs

used in determining payments in accordance with paragraph (d) of this

subdivision and subparagraphs (i), (ii) and (iii) of this paragraph.

Such costs shall in the aggregate be one hundred seventy-three million

dollars exclusive of costs related to services provided to beneficiaries

of title XVIII of the federal social security act (medicare). Such cost

increases shall be projected from nineteen hundred ninety-four to

subsequent annual rate periods by the applicable trend factor, and shall

be allocated among general hospitals in accordance with the following

methodology:

(A) Forty-six million dollars shall be allocated to the costs of

general hospitals for treating tuberculosis patients. Each general

hospital shall receive a portion of this total equal to its share of the

statewide total of inpatient tuberculosis discharges based on the most

recent twelve month period for which data is available.

(B) Sixty-three million dollars shall be allocated for labor

adjustments in accordance with the following methodology:

(I) Fifty-five million dollars shall be for labor cost increases

incurred prior to June thirtieth, nineteen hundred ninety-three. Each

general hospital shall receive a portion of this total equal to its

share of the statewide total of inpatient and outpatient reimbursable

operating costs based on nineteen hundred ninety data excluding costs

related to services provided to beneficiaries of title XVIII of the

federal social security act (medicare) and excluding direct medical

education costs.

(II) Eight million dollars of the amount to be allocated for labor

adjustments pursuant to this clause shall be distributed to general

hospitals located in the counties of Ulster, Sullivan, Orange, Dutchess,

Putnam, Rockland, Columbia, Delaware and Westchester, to account for

prior disproportionate increases in unreimbursed labor costs. Each

individual hospital shall receive a portion of the eight million dollars

equal to its share of the total inpatient and outpatient reimbursable

operating costs based on nineteen hundred ninety data for all hospitals

located in the above-referenced counties excluding costs related to

services provided to beneficiaries of title XVIII of the federal social

security act (medicare) and excluding direct medical education costs.

(C) Fifty-five million dollars shall be allocated to the costs of

increased activities related to regulatory compliance, universal

precautions and infection control related to AIDS, tuberculosis, and

other infectious diseases, including the training of employees with

regard to infection control, and for infectious and other waste disposal

costs. A fixed amount per bed shall be allocated to the costs of each

general hospital based on the total number of inpatient beds for which

the general hospital is certified pursuant to the operating certificate

issued for each general hospital in accordance with section twenty-eight

hundred five of this article in effect on August twenty-fourth, nineteen

hundred ninety-three.

(D) Three million dollars shall be allocated as follows:

(I) Two hundred fifty dollars per bed shall be allocated to the costs

of each general hospital having two hundred or less certified acute care

beds and classified as a rural hospital for purposes of determining

payment for inpatient services provided to beneficiaries of title XVIII

of the federal social security act (medicare) or under state

regulations, in recognition of the unique costs incurred by these

facilities in complying with state regulations, based on the total

number of inpatient acute care beds for which such general hospital is

certified pursuant to the operating certificate issued for such general

hospital in accordance with section twenty-eight hundred five of this

article in effect on August twenty-fourth, nineteen hundred

ninety-three.

(II) The remainder shall be allocated on a proportional basis to the

costs of each general hospital classified as a rural hospital for

purposes of determining payment for inpatient services provided to

beneficiaries of title XVIII of the federal social security act

(medicare) or under state regulations, in recognition of the unique

costs incurred by these facilities to provide hospital services in

remote or sparsely populated areas, according to the following

methodology:

(1) the net income, or the net loss expressed as a negative, as a

proportion of the net patient revenue, of each such hospital, based on

operating results for the nineteen hundred ninety and nineteen hundred

ninety-one rate years, shall be computed and averaged, and expressed as

a percentage;

(2) each such resulting percentage average shall be multiplied by each

such hospital's number of inpatient beds for which such hospital is

certified pursuant to the operating certificate issued for such hospital

in accordance with section two thousand eight hundred five of this

article in effect on June thirtieth, nineteen hundred ninety, and such

resulting products for all such hospitals shall be summed, and such sum

shall be divided by the total of all such beds for all such hospitals,

and the resulting quotient shall be the weighted average rural operating

margin expressed as a percentage; and

(3) one percentage point shall be subtracted from each such hospital's

average net operating margin, and the resulting difference shall be

divided by the weighted average rural operating margin; and

(4) (a) if the quotient resulting from the computation in subitem

three above is less than zero, then the absolute value of such quotient

shall be multiplied by each such hospital's number of inpatient beds for

which such hospital is certified pursuant to the operating certificate

issued for such hospital in accordance with section two thousand eight

hundred five of this chapter in effect on June thirtieth, nineteen

hundred ninety, such product shall be multiplied by one hundred fifty

dollars, and such resulting amount shall be such hospital's adjustment

pursuant to this clause;

(b) if the quotient resulting from the computation in subitem three

above is zero or greater, such hospital's adjustment pursuant to this

clause shall be zero; and

(c) provided, however, that if the total of all such adjustments so

computed exceeds the amount to be allocated in accordance with this

item, each such hospital's adjustment shall be proportionately reduced.

(E) Three million dollars shall be allocated to assist general

hospitals involved in a merger, acquisition, or consolidation in meeting

the costs associated with such merger, acquisition, or consolidation on

or after January first, nineteen hundred ninety-four. The commissioner

shall make rate adjustments for such allocations.

(F) (I) One million five hundred thousand dollars shall be allocated

for enhanced rates for general hospitals participating within a rural

health network as defined in subdivision two of section twenty-nine

hundred fifty-one of this chapter. Such rate enhancements shall be

established only for inpatient services provided by such hospitals

through the written rural health network agreement, where such services

have been approved for enhanced rates by the commissioner.

Notwithstanding any inconsistent provision of law, such enhanced rates

shall be subject to the availability of federal financial participation

pursuant to title XIX of the federal social security act in expenditures

made for eligible patients, including pooling arrangements and volume

adjustments, provided, however that such enhanced rates shall not affect

the calculation for any other general hospital of the group price

component calculated pursuant to subparagraph (i) of paragraph (a) of

subdivision seven of this section.

(II) One million five hundred thousand dollars shall be allocated for

enhanced rates for general hospitals participating within a central

services facility rural health network as defined in subdivision three

of section twenty-nine hundred fifty-one of this chapter. Such rate

enhancements shall be established only for inpatient services provided

by such hospitals through the network operational plan, where such

services have been approved for enhanced rates by the commissioner.

Notwithstanding any inconsistent provision of law, such enhanced rates

shall be subject to the availability of federal financial participation

pursuant to title XIX of the federal social security act in expenditures

made for eligible patients, including pooling arrangements and volume

adjustments, provided, however that such enhanced rates shall not affect

the calculation for any other general hospital of the group price

component calculated pursuant to subparagraph (i) of paragraph (a) of

subdivision seven of this section.

(f) The commissioner and the state director of the budget shall

consider providing a supplementary increase to general hospital

reimbursable inpatient operating costs for purposes of computing rates

of payment for annual rate periods beginning on or after January first,

nineteen hundred eighty-nine in accordance with this section for

reasonable and necessary supplementary cost increases in general

hospital operating costs for such rate period or periods based on

increased minimum standards and procedures relating to general hospital

operating certificates adopted by the council and approved by the

commissioner or state initiatives related to recruitment or maintenance

of an appropriate level of personnel providing professional services to

patients. Any such supplementary increase shall be allocated to costs of

general hospitals in accordance with rules and regulations adopted by

the council and approved by the commissioner.

(g) Hospital discharges for purposes of computing case based payments

per discharge pursuant to this section shall be based on the number of

patient discharges during the rate period from January first, nineteen

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

eighty-seven excluding discharges of beneficiaries of title XVIII of the

federal social security act (medicare) and adjusted as provided in

specific provisions of this section, or the number of such patient

discharges during a recent twelve month period prior thereto established

by regulation for which data are available subsequently reconciled by an

adjustment to reflect nineteen hundred eighty-seven discharge data.

* (h) Notwithstanding any inconsistent provision of this section,

commencing April first, nineteen hundred ninety-five:

(i) rates of payment for patients eligible for payments made by state

governmental agencies shall be reduced by the commissioner to reflect an

exclusion from reimbursable inpatient operating costs commencing April

first, nineteen hundred ninety-five of the special additional inpatient

operating costs determined and allocated among general hospitals in

accordance with clause (C) of subparagraph (iii) and clause (C) of

subparagraph (iv) of paragraph (e) of this subdivision and the factor of

one quarter of one percent of general hospitals' reimbursable inpatient

operating cost base allocated to costs of general hospitals for

technology advances in accordance with subparagraph (i) of paragraph (e)

of this subdivision; and

(ii) general hospitals may not request and the commissioner shall not

consider any pending or further appeals for an adjustment to rates of

payment based on costs associated with technology advances and changes

in medical practice and such adjustments to reimbursable inpatient

operating costs pursuant to clause (C) of subparagraph (iv) of paragraph

(e) of this subdivision.

(iii) Notwithstanding the foregoing, or any other provision of this

section, the commissioner may establish pass through payments, or other

appropriate methodologies, for the period ending December thirty-first,

two thousand three for innovative medical device advances for which the

federal centers for medicare and medicaid services adopts new codes to

the hospital inpatient prospective payment system prior to the federal

food and drug administration's approval of such medical device.

* NB Expired March 31, 2011

(i) For the rate period July first, two thousand seven through March

thirty-first, two thousand eight and for rates applicable to the state

fiscal year commencing April first, two thousand eight, and each state

fiscal year thereafter through March thirty-first, two thousand nine,

and for the period April first, two thousand nine through November

thirtieth, two thousand nine, provided, however, that for the period

April first, two thousand nine through November thirtieth, two thousand

nine the aggregate rate adjustments calculated pursuant to subparagraph

(ii) of this paragraph shall not exceed four million dollars, and

contingent upon the availability of federal financial participation:

(i) The commissioner shall adjust inpatient medical assistance rates

of payment calculated pursuant to this section for public hospitals

other than non-state public hospitals located in a city with a

population of more than one million persons, that meet the targeted

medicaid discharge percentage in accordance with the methodology set

forth in subparagraph (ii) of this paragraph. For purposes of this

paragraph, "targeted medicaid discharge percentage" shall mean that at

least seventeen and one-half percent of a public hospital's total

discharges were patients eligible for payments under the medical

assistance program pursuant to title eleven of article five of the

social services law, including those enrolled in health maintenance

organizations, and patients eligible for payments under the family

health plus program pursuant to title eleven-D of article five of the

social services law, based on data reported in such hospital's

institutional cost report submitted for the two thousand four period and

filed with the department by November first, two thousand six. Any

hospital that meets the filing deadline shall have until June first, two

thousand seven to submit revised and corrected data schedules in such

institutional cost report which established eligibility for such

adjusted rate.

(ii) The aggregate amount of rate adjustments calculated pursuant to

this paragraph shall not exceed six million dollars for each rate

period. Such amount shall be allocated proportionally based on the

relative numbers of medicaid discharges among those public hospitals

eligible for rate adjustments in accordance with subparagraph (i) of

this paragraph based on each such hospital's reported medical assistance

data specified in subparagraph (i) of this paragraph. Such amounts shall

be included as an add-on to medical assistance inpatient rates of

payment, excluding exempt unit rates, and shall not be reconciled to

reflect changes in medical assistance utilization between two thousand

four and the current rate year.

(j) For the rate period July first, two thousand seven through March

thirty-first, two thousand eight and for rates applicable to the state

fiscal year commencing April first, two thousand eight, and each state

fiscal year thereafter through March thirty-first, two thousand nine and

for the period April first, two thousand nine through November

thirtieth, two thousand nine, provided, however, that for the period

April first, two thousand nine through November thirtieth, two thousand

nine the aggregate rate adjustments calculated pursuant to subparagraph

(ii) of this paragraph shall not exceed twenty-eight million dollars,

and contingent upon the availability of federal financial participation:

(i) The commissioner shall adjust inpatient medical assistance rates

of payment calculated pursuant to this section for voluntary hospitals

other than voluntary hospitals located in a city with a population of

more than one million persons that meet the targeted medicaid discharge

percentage in accordance with the methodology set forth in subparagraph

(ii) of this paragraph. For purposes of this paragraph, "targeted

Medicaid discharge percentage" shall mean between seventeen and one-half

percent and thirty-five percent of a voluntary hospital's total

discharges were patients eligible for payments under the medical

assistance program pursuant to title eleven of article five of the

social services law, including those enrolled in health maintenance

organizations, and patients eligible for payments under the family

health plus program pursuant to title eleven-D of article five of the

social services law, based on data reported in such hospital's

institutional cost report submitted for the two thousand four period and

filed with the department by November first, two thousand six. Any

hospital that meets the filing deadline shall have until June first, two

thousand seven to submit revised and corrected data schedules in such

institutional cost report which established eligibility for such

adjusted rate.

(ii) The aggregate amount of rate adjustments calculated pursuant to

this paragraph shall not exceed forty-two million dollars for each rate

period. Such amount shall be allocated proportionally based on relative

numbers of medicaid discharges among those voluntary hospitals eligible

for rate adjustments in accordance with subparagraph (i) of this

paragraph based on each such hospital's reported medical assistance data

specified in subparagraph (i) of this paragraph. Such amounts shall be

included as an add-on to medical assistance inpatient rates of payment,

excluding exempt unit rates, and shall not be reconciled to reflect

changes in medical assistance utilization between two thousand four and

the rate year.

(k) Subject to the availability of federal financial participation,

the commissioner shall adjust inpatient rates of payment for non-public

general hospitals located in a city with a population of more than one

million persons for the following periods and in the following amounts

in order to ensure meaningful access to the hospital's services and

reasonable accommodation for all medicaid patients who require language

assistance:

(i) for the period July first, two thousand seven through December

thirty-first, two thousand seven, thirty-eight million dollars shall be

allocated proportionally to such hospitals based on fifty percent of

each such hospital's reported general clinic medicaid visits and fifty

percent on each such hospital's reported medicaid inpatient discharges,

as reported in each hospital's two thousand four institutional cost

report, as submitted to the department prior to November first, two

thousand six, to the total of all such general clinic visits reported by

all such hospitals.

(ii) for the period April first, two thousand eight through March

thirty-first, two thousand nine, and each state fiscal year thereafter

through November thirtieth, two thousand nine, thirty-eight million

dollars shall be allocated on an annualized basis for such purpose to

such hospitals in accordance with the methodology set forth in

subparagraph (i) of this paragraph, provided, however, that thirty

percent of such funds shall be allocated proportionally, based on the

number of foreign languages utilized by one or more percent of the

residents in each hospital total service area population, provided,

however, that for the period April first, two thousand nine through

November thirtieth, two thousand nine, such allocation shall be reduced

to twenty-five million three hundred thirty-three thousand dollars.

(l) Effective for periods on and after July first, two thousand seven

through November thirtieth, two thousand nine:

(i) Subject to the availability of federal financial participation,

the commissioner shall adjust inpatient medical assistance rates of

payment calculated pursuant to this section for general hospitals

located in the counties of Nassau and Suffolk in accordance with the

methodology set forth in subparagraph (ii) of this paragraph. For

purposes of this paragraph, "medicaid inpatient discharges" shall mean

the total number of such general hospital's discharges where the

patients were eligible for payments under the medical assistance program

pursuant to title eleven of article five of the social services law,

including those enrolled in health maintenance organizations, and

patients eligible for payments under the family health plus program

pursuant to title eleven-D of article five of the social services law,

based on data reported in such hospital's institutional cost report

submitted for the two thousand four period and filed with the department

by November first, two thousand six.

(ii) The amount of rate adjustments calculated pursuant to this

paragraph shall not exceed five million dollars in the aggregate

annually. Such amount shall be allocated proportionally based on the

relative numbers of medicaid discharges among those general hospitals

eligible for rate adjustments in accordance with subparagraph (i) of

this paragraph based on each such hospital's reported medical assistance

data specified in subparagraph (i) of this paragraph. Such amounts shall

be included as an add-on to medical assistance inpatient rates of

payment, excluding exempt unit rates, and shall not be reconciled to

reflect changes in medical assistance utilization between two thousand

four and the current rate year.

2. Special payment rate methodology agreements, negotiated rates. (a)

Any payment rate methodology agreement negotiated between a self-insured

and self-administered fund and a specific general hospital or its

successor which was in effect on May first, nineteen hundred eighty-five

shall be permitted to continue with such fund, or a self-insured and

self-administered fund related in interest to such fund through merger,

consolidation or corporate reorganization subsequent to May first,

nineteen hundred eighty-five, as long as any revision to such

methodology does not provide more of an economic advantage to the fund

than the previous agreement. A general hospital which has any such

agreement shall file with the commissioner information regarding each

such agreement, as may be required by regulations adopted by the council

and approved by the commissioner.

(b)(i) Nothing in this section shall prohibit the establishment of

special payment rate methodologies in arrangements between general

hospitals and health maintenance organizations operating in accordance

with the provisions of article forty-three of the insurance law or

article forty-four of this chapter, provided the commissioner has been

notified of the proposed arrangement, has reviewed such proposed

arrangement and has issued his written approval of the arrangement. The

commissioner shall not approve such an arrangement if it would result in

payments to a general hospital for inpatient services provided to

subscribers of health maintenance organizations which in the aggregate

are less than what otherwise would have been paid under the provisions

of this section, unless the health maintenance organization demonstrates

that such lower payments are justified because the arrangement will

result in lower costs to the general hospital, and the payments

approximate costs. Such arrangements may be approved by the commissioner

to: integrate the medical delivery functions of the health maintenance

organization with the medical delivery functions of the hospital,

including but not limited to joint staffing arrangements or

pre-admission testing arrangements; or integrate the method of payment

and financial incentives to the hospital with the method of payment and

financial incentives to physicians or other providers in the health

maintenance organization; or integrate the method of payment and

financial incentives to the hospital with the health maintenance

organization, including, but not limited to, bed leasing or capitation

payments. Notwithstanding any inconsistent provision of this section,

for periods beginning on or after January first, nineteen hundred

ninety-four, negotiated agreements between health maintenance

organizations and general hospitals which were approved by the

commissioner and which were in effect on December thirty-first, nineteen

hundred ninety-three, may continue.

(ii) Notwithstanding any inconsistent provisions of this section,

health maintenance organizations operating in accordance with the

provisions of article forty-three of the insurance law or article

forty-four of this chapter, having enrollees eligible for inpatient

general hospital payments as beneficiaries of title XVIII of the federal

social security act (medicare) shall reimburse general hospitals for

inpatient services for these enrollees in accordance with the provisions

contained in title XVIII of the federal social security act (medicare).

(c) Special payment rate methodology agreements other than those

permitted in accordance with the provisions of paragraphs (a) and (b) of

this subdivision shall not be authorized, and no other arrangements with

a general hospital for inpatient rates of payment other than those

established in accordance with this section shall be negotiated.

* (d) Notwithstanding any inconsistent provision of law, the

provisions of paragraphs (a), (b) and (c) of this subdivision shall not

apply to payments for patients discharged on or after January first,

nineteen hundred ninety-seven.

* NB Expires December 31, 2029

3. Diagnosis-related groups and weights. (a) The commissioner shall

establish as a basis for case classification for case based rates of

payment the same system of diagnosis-related groups for classification

of hospital discharges as established for purposes of reimbursement of

inpatient hospital service pursuant to title XVIII of the federal social

security act (medicare) in effect on the first day of July in the year

preceding the rate period. However, the council may adopt rules and

regulations, subject to the approval of the commissioner, to adjust such

diagnosis-related groups or establish additional diagnosis-related

groups to reflect subsequent revisions applicable to reimbursement for

discharges of beneficiaries of title XVIII of the federal social

security act (medicare) effective subsequent to the first day of July in

the year preceding the rate period, or to identify medically appropriate

patterns of health resource use efficiently and economically provided.

No such regulations, however, except those to reflect subsequent

revisions applicable to reimbursement for discharges of beneficiaries of

title XVIII of the federal social security act (medicare) or for changes

made to diagnosis-related groups for neonatal services and services to

acquired immune deficiency syndrome (AIDS) patients shall apply to the

rate period beginning January first, nineteen hundred eighty-eight. For

subsequent rate periods regulations other than those to reflect

subsequent revisions applicable to reimbursement for discharges of

beneficiaries of title XVIII of the federal social security act

(medicare) may in addition apply to changes to the diagnosis-related

groups for other services, including but not limited to, pediatric

services; provided, however, that psychiatric and rehabilitation

services shall not be included.

Notwithstanding section one hundred twelve or one hundred seventy-four

of the state finance law or any other law, rule or regulation to the

contrary, the commissioner may contract with a vendor for nominal

consideration to develop the specifications for the adjusted or

additional diagnosis-related groups if the commissioner certifies to the

comptroller that such contract is in the best interest of the health of

the people of the state. Notwithstanding that such specifications shall

be available pursuant to article six of the public officers law, such

contract may provide that the specifications for such adjusted or

additional diagnosis-related groups provided by the vendor shall be

subject to copyright protection pursuant to federal copyright law.

(b) The methodology for assignment of patient discharges within

diagnosis-related groups applicable for purposes of determining payments

for discharges of beneficiaries of title XVIII of the federal social

security act (medicare) in effect on the first day of July in the year

preceding the rate period, revised to reflect such adjustments as may be

made to the diagnosis-related group classification system pursuant to

paragraph (a) of this subdivision, shall be applied to assign specific

patient discharges within the diagnosis-related groups established

pursuant to paragraph (a) of this subdivision. The council may adopt

rules and regulations, subject to the approval of the commissioner, to

revise the methodology for the assignment of specific patient discharges

within the diagnosis-related groups to reflect revisions to the

methodology applicable for purposes of determining payments for

discharges of beneficiaries of title XVIII of the federal social

security act (medicare) effective subsequent to the first day of July in

the year preceding the rate period.

* (c) (i) The commissioner shall determine an appropriate weighting

factor for each diagnosis-related group which reflects the relative

general hospital resources used by all patients, other than

beneficiaries of title XVIII of the federal social security act

(medicare), with respect to discharges classified within that

diagnosis-related group compared to discharges classified within other

diagnosis-related groups. For rate periods during the period January

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

nineteen hundred ninety, the appropriate weighting factor for each

diagnosis-related group shall be determined using nineteen hundred

eighty-five costs and statistics for a representative sample of general

hospitals. For rate periods during the period January first, nineteen

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

ninety-three, the appropriate weighting factor for each

diagnosis-related group shall be determined using nineteen hundred

eighty-nine costs and statistics for a representative sample of general

hospitals. For rate periods during the period January first, nineteen

hundred ninety-four through December thirty-first, nineteen hundred

ninety-nine and on and after January first, two thousand through

December thirty-first, two thousand seven, the appropriate weighting

factor for each diagnosis-related group shall be determined using

nineteen hundred ninety-two costs and statistics for a representative

sample of general hospitals. For rate periods on and after January

first, two thousand eight, the appropriate weighting factor for each

diagnosis-related group shall be determined using two thousand four

costs and statistics for a representative sample of general hospitals,

and, further, the computation of the group average arithmetic inlier

length-of-stays for each diagnostic related group, as otherwise

determined in accordance with applicable regulations, shall utilize two

thousand four data as reported to the department, and, be based on a

representative sample of general hospitals, and further, the short-stay

and long-stay length-of-stay trimpoints, as otherwise determined in

accordance with applicable regulations, shall be computed utilizing two

thousand four data as reported to the department and based on a

representative sample of general hospitals. Provided however, that if

the department does not release updated data and documentation described

in subparagraph (iii) of this paragraph, the effective rate period shall

be April 1, 2008. Discharges and costs related to the exceptions to case

payment provided in accordance with paragraphs (e), (g) and (i) of

subdivision four of this section shall be eliminated from the costs and

statistics used in determining the appropriate weighting factors, while

the cost factor related to the exception provided in paragraph (h) of

subdivision four of this section shall be eliminated. The costs and

statistics for the case payment modifications calculated pursuant to

paragraphs (a), (b), (c) and (d) of subdivision four of this section

shall be eliminated in accordance with paragraph (c) of subdivision six

of this section. Costs related to education, physician, ambulance

services and organ acquisition identified consistent with the provisions

of paragraph (c) of subdivision seven of this section and costs related

to malpractice insurance shall also be eliminated. The council may adopt

rules and regulations, subject to the approval of the commissioner, to

prospectively adjust weighting factors determined in accordance with

this paragraph to reflect changes in medical technology. After the

commissioner issues rate certifications pursuant to subdivision four of

section twenty-eight hundred seven of this article the commissioner

shall expeditiously make available for inspection by general hospitals

and payors the data, consistent with appropriate department procedures

for the release and protection of confidential data, and the methodology

utilized to determine the appropriate weighting factors.

(ii) Notwithstanding any contrary provision of law, the case mix

adjustment to the operating component of per diem rates of payment paid

to general hospitals or units of general hospitals that are exempt from

case based payments, as determined in accordance with subdivision four

of this section and as otherwise computed in accordance with applicable

regulations, shall, for periods on and after January first, two thousand

eight, be computed utilizing the diagnosis-related group classification

system in effect for the rate year for inpatient case based medicaid

rates of payment and the related per day cost weights calculated using

two thousand four data as reported to the department and based on a

representative sample of general hospitals. For rate periods on and

after the two thousand eleven rate period, such case mix adjustment

shall utilize the same base period data as determined in accordance with

paragraph (e) of this subdivision.

(iii) The department shall, by no later than June first, two thousand

seven, make available to hospital industry representatives relevant

updated data and documentation that the department will utilize, in

accordance with this paragraph, in developing appropriate service

intensity weights for each diagnosis-related group for the two thousand

eight rate period. The department will thereafter consult with hospital

industry representatives in developing regulations to implement the

utilization of such updated service intensity weight data applicable to

rate periods on and after two thousand eight. If it is deemed

appropriate by the commissioner, in consultation with hospital industry

representatives, such regulations may provide for the phase-in over a

period of time of the application of such updated data in determining

Medicaid rates on and after two thousand eight, provided, however, that

the application of such updated data shall be fully reflected in such

rates by no later than January first, two thousand ten.

(iv) By no later than December first, two thousand seven, the

commissioner shall issue a report to the governor and the legislature

describing the updated data utilization applicable, in accordance with

the provisions of this paragraph, to periods on and after two thousand

eight and setting forth the factors considered in developing it.

* NB Effective until December 31, 2029

* (c) The commissioner shall determine an appropriate weighting factor

for each diagnosis-related group which reflects the relative general

hospital resources used by all patients, other than beneficiaries of

title XVIII of the federal social security act (medicare), with respect

to discharges classified within that diagnosis-related group compared to

discharges classified within other diagnosis-related groups. For rate

periods during the period January first, nineteen hundred eighty-eight

through December thirty-first, nineteen hundred ninety, the appropriate

weighting factor for each diagnosis-related group shall be determined

using nineteen hundred eighty-five costs and statistics for a

representative sample of general hospitals. For rate periods during the

period January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three, the appropriate weighting

factor for each diagnosis-related group shall be determined using

nineteen hundred eighty-nine costs and statistics for a representative

sample of general hospitals. For rate periods during the period January

first, nineteen hundred ninety-four through June thirtieth, nineteen

hundred ninety-six, the appropriate weighting factor for each

diagnosis-related group shall be determined using nineteen hundred

ninety-two costs and statistics for a representative sample of general

hospitals. Discharges and costs related to the exceptions to case

payment provided in accordance with paragraphs (e), (g) and (i) of

subdivision four of this section shall be eliminated from the costs and

statistics used in determining the appropriate weighting factors, while

the cost factor related to the exception provided in paragraph (h) of

subdivision four of this section shall be eliminated. The costs and

statistics for the case payment modifications calculated pursuant to

paragraphs (a), (b), (c) and (d) of subdivision four of this section

shall be eliminated in accordance with paragraph (c) of subdivision six

of this section. Costs related to education, physician, ambulance

services and organ acquisition identified consistent with the provisions

of paragraph (c) of subdivision seven of this section and costs related

to malpractice insurance shall also be eliminated. The council may adopt

rules and regulations, subject to the approval of the commissioner, to

prospectively adjust weighting factors determined in accordance with

this paragraph to reflect changes in medical technology. After the

commissioner issues rate certifications pursuant to subdivision four of

section twenty-eight hundred seven of this chapter the commissioner

shall expeditiously make available for inspection by general hospitals

and payors the data, consistent with appropriate department procedures

for the release and protection of confidential data, and the methodology

utilized to determine the appropriate weighting factors.

* NB Effective December 31, 2029

(d) The commissioner shall consult with technical advisory groups as

necessary in establishing diagnosis-related groups and weights in

accordance with paragraphs (a), (b) and (c) of this subdivision and in

making adjustments in accordance with paragraphs (b) and (c) of

subdivision six of this section.

(e) The appropriate weighting factor for each diagnosis-related group,

the group average arithmetic inlier length-of-stays for each

diagnosis-related group, and the short-stay and long-stay length-of-stay

trimpoints shall, by no later than the two thousand eleven rate period,

be based on reported costs and statistics from a representative sample

of general hospitals from a base period no earlier than two thousand

seven. Thereafter, the base period reported costs and statistics

utilized for such purposes shall be updated no less frequently than

every four years and the new base periods utilized shall be no more than

four years prior to the applicable rate period.

3-a. Dispute resolution system. (a) * The commissioner shall

establish, in accordance with rules and regulations adopted by the

council and approved by the commissioner, a payment dispute resolution

system to resolve disputes between payors of inpatient hospital services

and general hospitals for patients discharged on or after January first,

nineteen hundred ninety-one and prior to January first, nineteen hundred

ninety-seven. The commissioner shall designate the use of a uniform set

of guidelines for determining the application of particular

diagnosis-related group categories to particular patients which may

include guidelines published by associations, universities or other

organizations. The dispute resolution process shall apply to all payors

of hospital services described in paragraphs (a), (b) and (c) of

subdivision one of this section, including patients or payors which pay

hospitals' charges or coinsurance, provided, however, such process shall

not include payments made for persons eligible for payments as

beneficiaries of title XVIII of the federal social security act

(medicare) as a patients' primary payor or payments made pursuant to

title eleven of article five of the social services law, provided that

this exception shall not include payments for medical assistance

participants in health maintenance organizations or prepaid health

services plans. A payor of hospital services included in paragraph (a)

of subdivision one of this section may serve as, or designate, the

review agent for their subscribers, beneficiaries or enrolled members

for an initial review and a reconsideration review but the final step in

such dispute resolution process shall be an independent party unrelated

to the payor which party shall be approved by the commissioner pursuant

to this section.

* NB Effective until December 31, 2029

* The commissioner shall establish, in accordance with rules and

regulations adopted by the council and approved by the commissioner, a

payment dispute resolution system to resolve disputes between payors of

inpatient hospital services and general hospitals for patients

discharged on or after January first, nineteen hundred ninety-one. The

commissioner shall designate the use of a uniform set of guidelines for

determining the application of particular diagnosis-related group

categories to particular patients which may include guidelines published

by associations, universities or other organizations. The dispute

resolution process shall apply to all payors of hospital services

described in paragraphs (a), (b) and (c) of subdivision one of this

section, including patients or payors which pay hospitals' charges or

coinsurance, provided, however, such process shall not include payments

made for persons eligible for payments as beneficiaries of title XVIII

of the federal social security act (medicare) as a patients' primary

payor or payments made pursuant to title eleven of article five of the

social services law, provided that this exception shall not include

payments for medical assistance participants in health maintenance

organizations or prepaid health services plans. A payor of hospital

services included in paragraph (a) of subdivision one of this section

may serve as, or designate, the review agent for their subscribers,

beneficiaries or enrolled members for an initial review and a

reconsideration review but the final step in such dispute resolution

process shall be an independent party unrelated to the payor which party

shall be approved by the commissioner pursuant to this section.

* NB Effective December 31, 2029

In the event a third party payor or patient desires to challenge the

appropriateness of a bill for hospital services rendered by a general

hospital for a particular patient, or in the event a general hospital

desires to challenge the appropriateness of a payment by a third party

payor on behalf of a particular patient, then either the hospital or the

payor may submit the question to the dispute resolution process

established pursuant to this subdivision. The disputes submitted for

resolution may include the appropriateness of the application of a

particular diagnosis-related group category, as described in subdivision

three of this section, to a particular patient; the appropriate

classification and payment of an inpatient stay as a modification of a

case payment pursuant to paragraph (a), (b), (c), or (d) of subdivision

four of this section, including whether payment for services should be,

based on medical necessity or other reasons, made as a case payment or

payment as a modification of a case payment; whether payment should

appropriately be made pursuant to an alternative reimbursement

methodology authorized in accordance with paragraph (e) or (h) of

subdivision four of this section and the payment for such services;

whether payment for services rendered by a general hospital should be

appropriately, based on medical necessity or other reasons, made as

payment for inpatient care or payment for outpatient care and the

payment for such services; or whether the hospital stay should be

classified as a readmission as defined in accordance with regulations

adopted pursuant to paragraph (l) of subdivision eleven of this section

and the payment for such stay.

The dispute resolution system established shall provide for an initial

review and a reconsideration review. The council shall adopt necessary

rules and regulations, subject to the approval of the commissioner,

including but not limited to those for determining the parties to a

dispute resolution review and any reconsideration review; the procedures

and time limits to initiate a dispute resolution review or any

reconsideration review; the procedures for notification of all parties

involved in the dispute upon initiation of a dispute resolution review

or any reconsideration review; time limits for resolving disputes; the

establishment of dispute resolution and reconsideration fees; and

required documents to be submitted including the hospital bill in

dispute, a copy of the patient medical record, or so much thereof as may

be required, and a statement of issues including the basis for the

dispute. During a dispute resolution review or any reconsideration

review, a party may present documentation or evidence in support of its

position regarding the appropriate diagnosis-related group to which the

patient discharge should be assigned or the proper payment for the case.

The commissioner shall approve a statewide utilization review

organization or regional utilization review organization to conduct and

determine such dispute resolution reviews including any reconsideration

reviews in accordance with paragraph (b) of this subdivision. Every

general hospital bill issued for a patient discharged on or after

January first, nineteen hundred ninety-one other than for discharges of

patients eligible for medical assistance pursuant to title eleven of

article five of the social services law subject to case based payments

determined pursuant to this section based on diagnosis-related group

assigned or maximum hospital charges for a case determined pursuant to

this section based on diagnosis-related group assigned shall include or

be accompanied by a notice of the payment dispute resolution system;

provided, however, that a general hospital issuing bills to a payor for

twenty-five or more patients per year may send such notice to such payor

on an annual basis. The form and content of such notice shall be

determined in accordance with rules and regulations adopted by the

council and approved by the commissioner.

(b) The commissioner shall approve a statewide utilization review

organization or regional utilization review organizations to conduct and

determine dispute resolution reviews, including reconsideration reviews,

pursuant to this subdivision. To be approved as a utilization review

organization in accordance with this subdivision such organization must

meet the following criteria: the organization shall employ or otherwise

secure the services of adequate personnel, including medical personnel,

qualified to review such disputes, the organization shall demonstrate

the ability to render decisions in a timely manner, the organization

shall agree to provide ready access by the commissioner to all data,

records and information it collects and maintains concerning its review

activities under this subdivision, the organization shall agree to

provide to the commissioner such data, information and reports as the

commissioner determines necessary to evaluate the review process

provided pursuant to this subdivision, the organization shall provide

assurances that review personnel shall not have a conflict of interest

in conducting a review based on payor, hospital or professional

affiliation, and the organization meets such other performance and

efficiency criteria regarding the conduct of reviews pursuant to this

subdivision established by the commissioner. The commissioner may

withdraw approval of a utilization review organization where such

organization fails to continue to meet approval criteria established

pursuant to this paragraph. A utilization review organization approved

pursuant to this paragraph shall be authorized to receive and review

patient medical records and shall develop and implement appropriate

procedures to maintain confidentiality of such patient medical records.

(c) Upon resolution of a payment dispute in accordance with this

paragraph, the parties involved in the dispute shall be notified of the

reason for the decision and the hospital bill in dispute shall be

adjusted to reflect such resolution.

(d) The party initiating a payment dispute resolution review or any

reconsideration review must submit to the utilization review

organization a dispute resolution fee established to recover the costs

related to the conduct of the initial dispute resolution reviews or a

reconsideration review fee established to recover the costs related to

the conduct of such reconsideration reviews, except that for payors in

paragraph (a) of subdivision one of this section which serve as or

designate the review agent for their subscribers, beneficiaries, or

enrolled members a fee shall be charged only for the final step in the

dispute resolution process. Upon resolution of a payment dispute in

accordance with this subdivision in favor of the payor, the amount due

to the hospital by a payor based upon the hospital bill shall be reduced

by the amount of any fee paid pursuant to this paragraph by such payor.

Upon resolution of a payment dispute in accordance with this subdivision

in favor of the general hospital, the amount due to the hospital based

upon the hospital bill shall be increased by the amount of any fee paid

pursuant to this paragraph by such general hospital.

(e) Nothing herein shall relieve the responsibilities of the payors as

set forth in paragraphs (a), (b) and (c) of subdivision one of this

section.

(f)(i) Whenever the amount of payment made by a payor to a general

hospital is less than the amount of payment due determined by a

utilization review organization in accordance with this subdivision,

general hospitals in accordance with paragraph (d) of subdivision eleven

of this section may include financing or working capital charges on such

balance owed to the general hospital by a payor.

(ii) Whenever the amount of payment made by a payor to a general

hospital is in excess of the amount of payment due determined by a

utilization review organization in accordance with this subdivision,

interest shall be due on such excess owed by the general hospital to a

payor of two percent for the first thirty days and one percent per month

thereafter from the date of payment of such excess amount. Interest

shall not be applied to excess amounts owed to third party payors

participating in an advance payment system.

(g) For payment amounts eligible for payment dispute resolution

pursuant to this subdivision, a general hospital shall not bill a

patient or pursue collection efforts against a patient for the

difference between a hospital bill and the payment made on such bill by

a payor within the payor categories specified in paragraph (a), (b) or

(c) of subdivision one of this section, except for uncovered services by

a payor, deductibles and coinsurance based on maximum hospital charges

calculated based on the undisputed amount of the hospital bill, until

final decision of the utilization review organization. Nothing in this

subdivision shall be construed to prohibit a general hospital from

issuing an informational bill to a patient regarding such difference

between the hospital bill and the payment made on such bill to advise

the patient of the amount in dispute.

(h) The formal written decision of a utilization review organization

approved by the commissioner to conduct and determine dispute resolution

reviews in accordance with paragraph (b) of this subdivision upon a

reconsideration review, or if there is no reconsideration review upon an

initial review, or for a payor of hospital services included in

paragraph (a) of subdivision one of this section which serves as or

designates the review agent for their subscribers, beneficiaries or

enrolled members upon the final step in the dispute resolution process

as to the questions of the appropriateness of a bill for hospital

services or the calculation of the proper payment for such hospital

services shall be admissible in evidence at any subsequent trial upon

the request of any party to the action. The decision shall not be

binding upon the jury or, in a case tried without a jury, upon the trial

court, but shall be considered prima facie evidence to establish the

facts resolved by the utilization review organization.

4. Modifications and exceptions to case payment rates. Case based

rates of payment shall be modified and per diem or other unit of service

payments shall be provided, or exceptions shall be made to case

payments, in accordance with rules and regulations adopted by the

council and approved by the commissioner, in the following

circumstances:

(a) where a case that is eligible for payment under the case based

payment system is transferred between general hospitals, the receiving

hospital shall be reimbursed its total case payment amount for the

diagnosis-related group (including any payments made in accordance with

this subdivision), and the transferring hospital shall receive

reimbursement on a basis consistent with the methodology developed for

the elimination of transfer patient costs in accordance with

subparagraph (i) of paragraph (c) of subdivision six of this section

plus additions contained in subparagraph (ii) of paragraph (a) of

subdivision one of this section on a per diem basis. The payment to a

transferring general hospital shall not exceed the case payment amount

for the diagnosis-related group computed in accordance with this

section;

(b) where the cost per case for a patient that does not qualify for

payment pursuant to paragraph (a) or (d) of this subdivision is in

excess of the basic case payment rate for the diagnosis-related group

multiplied by two and the overall hospital-specific average cost per

case multiplied by six, the payment to the general hospital in addition

to the basic case payment rate will be one hundred percent, or such

percentage as computed in accordance with subparagraph (ii) of paragraph

(c) of subdivision six of this section, multiplied by the difference

between the general hospital's cost for the case and the greater of the

basic case payment rate for the diagnosis-related group multiplied by

two or the overall hospital-specific cost per case multiplied by six. In

determining whether a case qualifies for payment under this paragraph,

prospective rate adjustments made in accordance with paragraph (c) of

subdivision eleven of this section to reflect the retroactive impact of

an adjustment on prior rates, shall be excluded. Where a case qualifies

for payment pursuant to both this paragraph and paragraph (c) of this

subdivision then payment shall be made in accordance with this paragraph

if such payment exceeds that which would be made in accordance with

paragraph (c) of this subdivision. The general hospital's costs per case

shall be computed by adjusting the general hospital's actual charges for

the case by the general hospital's inpatient cost to charge ratio;

(c) where a patient is identified as a long stay patient, payment to

the general hospital in addition to the basic case payment rate shall be

on a basis consistent with the methodology developed for the elimination

of long stay patient costs in accordance with subparagraph (iii) of

paragraph (c) of subdivision six of this section. Where a case qualifies

for payment pursuant to both this paragraph and paragraph (b) of this

subdivision then payment shall be made in accordance with paragraph (b)

of this subdivision if such payment exceeds that which would be made in

accordance with this paragraph. A long stay patient is defined as an

inpatient whose hospital stay exceeds the long stay outlier threshold

for the diagnosis-related group;

(d) where a patient is identified as a short stay patient, payment to

the general hospital shall be on a basis consistent with the methodology

developed for the elimination of short stay patient costs in accordance

with subparagraph (iv) of paragraph (c) of subdivision six of this

section plus additions contained in subparagraph (ii) of paragraph (a)

of subdivision one of this section on a per diem basis. A short stay

patient is defined as an inpatient discharged from the hospital on the

same day of admission, or the day after admission except for those stays

where the statewide mean length of stay for the diagnosis-related group

is less than three days, or whose hospital stay is not greater than

twenty percent of the statewide mean length of stay for the

diagnosis-related group with which the patient is identified, excluding

normal newborn cases and normal deliveries;

(e) in cases where a general hospital or distinct unit of a general

hospital is not or would not have been reimbursed on a case based

payment per diagnosis-related group for inpatient services provided on

or before December thirty-first, two thousand one, to beneficiaries of

title XVIII of the federal social security act (medicare), reimbursement

shall be on a per diem basis computed for excluded general hospitals

based on the hospital's reimbursable inpatient operating cost base, or

for excluded distinct units of general hospitals based on the distinct

unit's reimbursable inpatient operating cost base, determined in

accordance with paragraph (d) of subdivision one of this section,

projected to the applicable rate period by the trend factor determined

in accordance with subdivision ten of this section, and increased in

accordance with subparagraphs (i), (iii) and (iv) of paragraph (e) of

subdivision one of this section to reflect special additional inpatient

operating costs, and adjusted to exclude a factor for operating costs of

patients who required an alternate level of care developed consistent

with the provisions of paragraph (h) of this subdivision, and increased

for excluded general hospitals to reflect the product of the group

category percentage amount applicable for purposes of determining group

category average inpatient reimbursable operating cost per discharge

(price) in the rate period pursuant to paragraph (b) of subdivision five

of this section for general hospitals reimbursed on a case based payment

per diagnosis-related group applied to such excluded general hospital's

additional cost increases determined in accordance with subparagraph

(ii) of paragraph (e) of subdivision one of this section, and adjusted

on a payor category basis to reflect allocation of malpractice insurance

costs in accordance with the methodology developed pursuant to

subparagraph (ii) of paragraph (h) of subdivision eleven of this

section, for those patients included in the payor categories pursuant to

the provisions of paragraph (a) or (b) of subdivision one of this

section; provided, however, for those patients included in the payor

categories pursuant to the provisions of paragraph (b) of subdivision

one of this section payment shall be at the per diem payment to the

hospital or distinct unit of the hospital for services provided to

subscribers of corporations organized and operating in accordance with

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

services, and increased by thirteen percent or by five percent, as the

case may be; provided further, however, for those general hospitals that

are not reimbursed on a case-based payment per diagnosis-related group

for inpatient services provided to beneficiaries of title XVIII of the

federal social security act (medicare) as a result of their designation

by the secretary of health and human services as a comprehensive cancer

hospital or as a result of their status as an acute care exempt

children's hospital, the base year for determining payments for services

in such facilities shall be nineteen hundred eighty-seven, provided,

however, such hospitals shall be allowed adjustments in rates of payment

to reflect costs incurred subsequent to nineteen hundred eighty-seven

but not reflected in such base. Funds received by a general hospital

based on the payment differential in accordance with paragraph (b) of

subdivision one of this section applied pursuant to this paragraph shall

be hospital funds for patient care purposes. For those patients not

covered under the provisions of paragraph (a) or (b) of subdivision one

of this section, or who are not covered under the provisions of

paragraph (a) of subdivision two of this section, payment shall be on

the basis of the hospital's charge schedule, limited to one hundred

twenty percent of the total per diem payment that would have been made

if the patient were included in the payor categories pursuant to the

provisions of paragraph (b) of subdivision one of this section. Rates of

payment for excluded general hospitals and excluded distinct units of

general hospitals for a rate period shall be increased on a per diem

basis by additions and allowances specified in subparagraphs (ii) and

(iii) of paragraph (a) of subdivision one of this section. In adopting

regulations for purposes of determining rates of payment for psychiatric

services pursuant to this paragraph, the council and the commissioner

shall consider the advice of the commissioner of mental health and may

include case mix and other adjustments for such rates of payment. The

commissioner of mental health shall study and report on alternative

procedures for the development of rates of payment for inpatient

psychiatric care. Such report shall be submitted to the governor, the

legislature and the commissioner of health by January first, nineteen

hundred ninety-three. Recommendations for alternative financing shall

take into consideration methods to improve access to inpatient care for

seriously mentally ill persons.

(e-1) Notwithstanding any inconsistent provision of paragraph (e) of

this subdivision or any other contrary provision of law and subject to

the availability of federal financial participation, per diem rates of

payment by governmental agencies for a general hospital or a distinct

unit of a general hospital for inpatient psychiatric services that would

otherwise be subject to the provisions of paragraph (e) of this

subdivision shall, with regard to days of service associated with

admissions occurring on and after April first, two thousand ten, be in

accordance with the following:

(i) For rate periods on or after April first, two thousand ten, the

commissioner, in consultation with the commissioner of the office of

mental health, shall promulgate regulations, and may promulgate

emergency regulations, establishing methodologies for determining the

operating cost components of rates of payments for services described in

this paragraph. The commissioner may make such adjustments to the

methodology for computing such rates as is necessary to achieve no

aggregate, net growth in overall Medicaid expenditures related to such

rates, as compared to such aggregate expenditures from the prior year.

In determining the updated base year to be utilized pursuant to this

subparagraph, the commissioner shall take into account the base year

determined in accordance with paragraph (c) of subdivision thirty-five

of this section.

Furthermore, the commissioner shall establish such rates in

consultation with industry representatives to achieve an appropriate

base year update to the operating cost components of rates of payment

for services described in this paragraph and that takes into account

facility cost, mix of services, and patient specific conditions.

(ii) Rates of payment established pursuant to subparagraph (i) of this

paragraph shall reflect an aggregate net statewide increase in

reimbursement for such services of up to twenty-five million dollars on

an annual basis.

(iii) Capital cost reimbursement for general hospitals otherwise

subject to the provisions of this paragraph shall remain subject to the

provisions of subdivision eight of this section.

(e-2) Notwithstanding any inconsistent provision of paragraph (e) of

this subdivision or any other contrary provision of law and subject to

the availability of federal financial participation, per diem rates of

payment by governmental agencies for inpatient services provided by a

general hospital or a distinct unit of a general hospital for services,

as described below, that would otherwise be subject to the provisions of

paragraph (e) of this subdivision, shall, with regard to days of service

occurring on and after December first, two thousand nine, be in accord

with the following:

(i) For physical medical rehabilitation services and for chemical

dependency rehabilitation services, the operating cost component of such

rates shall reflect the use of two thousand five operating costs for

each respective category of services as reported by each facility to the

department prior to July first, two thousand nine and as adjusted for

inflation pursuant to paragraph (c) of subdivision ten of this section,

as otherwise modified by any applicable statute, provided, however, that

such two thousand five reported operating costs, but not including

reported direct medical education cost, shall, for rate-setting

purposes, be held to a ceiling of one hundred ten percent of the average

of such reported costs in the region in which the facility is located,

as determined pursuant to clause (E) of subparagraph (iv) of paragraph

(1) of this subdivision; and provided, further, that for physical

medical rehabilitation services, the commissioner is authorized to make

adjustments to such rates for the purposes of reimbursing pediatric

ventilator services.

(ii) For services provided by rural hospitals designated as critical

access hospitals in accordance with title XVIII of the federal social

security act, the operating cost component of such rates shall reflect

the use of two thousand five operating costs as reported by each

facility to the department prior to July first, two thousand nine and as

adjusted for inflation pursuant to paragraph (c) of subdivision ten of

this section, as otherwise modified by any applicable statutes,

provided, however, that such two thousand five reported operating costs

shall, for rate-setting purposes, be held to a ceiling of one hundred

ten percent of the average of such reported costs for all such

designated hospitals statewide.

(iii) For inpatient services provided by specialty long term acute

care hospitals and for inpatient services provided by cancer hospitals

as so designated as of December thirty-first, two thousand eight, the

operating cost component of such rates shall reflect the use of two

thousand five operating costs for each respective category of facility

as reported by each facility to the department prior to July first, two

thousand nine and as adjusted for inflation pursuant to paragraph (c) of

subdivision ten of this section, as otherwise modified by any applicable

statutes.

(iv) For facilities designated by the federal department of health and

human services as exempt acute care children's hospitals as of December

thirty-first, two thousand eight, for which a discrete institutional

cost report was filed for the two thousand seven calendar year, and

which has reported Medicaid discharges greater than fifty percent of

total discharges in such cost report, shall be determined in accordance

with the following:

(A) The operating cost component of such rates shall reflect the use

of two thousand seven operating costs as reported by each facility to

the department prior to July first, two thousand nine and as adjusted

for the inflation pursuant to paragraph (c) of subdivision ten of this

section, as otherwise modified by any applicable statutes, and as

further adjusted as the commissioner deems appropriate, including

transition adjustments. Such rates shall be determined on a per case

basis or per diem basis, as set forth in regulations promulgated by the

commissioner.

(B) The operating component of outpatient specialty rates of hospitals

subject to this subparagraph shall reflect the use of two thousand seven

operating costs as reported to the department prior to December first,

two thousand eight, and shall include such adjustments as the

commissioner deems appropriate.

(C) The base period reported operating costs used to establish

inpatient and outpatient rates determined pursuant to this subparagraph

shall be updated no less frequently than every two years and each such

hospital shall submit such additional data as the commissioner may

require to assist in the development of ambulatory patient groups (APGs)

rates for such hospitals' outpatient specialty services.

(D) Notwithstanding any other provisions of law to the contrary and

subject to the availability of federal financial participation, for all

rate periods on and after April first, two thousand fourteen, the

operating component of outpatient specialty rates of hospitals subject

to this subparagraph shall be determined by the commissioner pursuant to

regulations, including emergency regulations, and in consultation with

such specialty outpatient facilities, provided however, that for the

period beginning October first, two thousand thirteen through September

thirtieth, two thousand fourteen, services provided to patients enrolled

in medicaid managed care shall be paid by the medicaid managed care

plans at no less than the otherwise applicable medicaid fee-for-service

rates, as computed in accordance with clause (B) of this subparagraph

for the period beginning October first, two thousand thirteen through

March thirty-first, two thousand fourteen and as computed in accordance

with this clause for the period beginning April first, two thousand

fourteen through September thirtieth, two thousand fourteen.

(E) For facilities subject to the provisions of this subparagraph, the

department shall examine the feasibility of reimbursing such facilities

for services provided to children eligible for medical assistance on a

non-fee-for-service basis. For purposes of this clause,

"non-fee-for-service" shall be defined as an alternative payment method

to bundle certain services rendered by such facility, including

inpatient, outpatient, specialty outpatient and physician services, in

amounts determined by the commissioner. The department shall examine:

(a) what services could be provided pursuant to the

non-fee-for-service basis;

(b) how to ensure, for children enrolled in Medicaid managed care,

that their health plans can continue to assist in the coordination of

their care, particularly upon discharge from inpatient, outpatient or

specialty outpatient services; and

(c) whether incentives should be incorporated for meeting quality

benchmarks or achieving efficiencies in the delivery and coordination of

care or whether other means should be considered to achieve these

objectives.

The department shall provide a report of its findings and

recommendations to the governor and legislature no later than March

first, two thousand fifteen.

(v) Rates established pursuant to this paragraph shall be deemed as

excluding reimbursement for physician services for inpatient services

and claims for Medicaid fee payments for such physician services for

such inpatient care may be submitted separately from the rate in

accordance with otherwise applicable law.

(vi) Capital cost reimbursement for general hospitals otherwise

subject to the provisions of this paragraph shall remain subject to the

provisions of subdivision eight of this section.

(vii) The commissioner may promulgate regulations, including emergency

regulations, implementing the provisions of this paragraph, and,

further, such regulations may provide for an update of the base year

costs and statistics used to compute such rates, provided, however, that

such base year update shall take effect no earlier than April first, two

thousand fifteen, and provided further, however, that the commissioner

may make such adjustments to such utilization and to the methodology for

computing such rates as is necessary to achieve no aggregate, net growth

in overall Medicaid expenditures related to such rates, as compared to

such aggregate expenditures from the prior year. In determining the

updated base year to be utilized pursuant to this subparagraph, the

commissioner shall take into account the base year determined in

accordance with paragraph (c) of subdivision thirty-five of this

section.

(viii) The operating cost component of rates of payment pursuant to

this paragraph for a general hospital or distinct unit of a general

hospital without adequate cost experience shall be based on the lower of

the facility's or unit's inpatient budgeted operating costs per day,

adjusted to actual, or the applicable regional ceiling, if any.

(ix) The operating cost component of inpatient medicaid rates subject

to subparagraphs (i), (ii) and (iii) of this paragraph shall, with

regard to alternative level of care (ALC) days of care be subject to

computation pursuant to paragraph (h) of this subdivision.

* (f) where a general hospital having two hundred or less certified

acute care beds, based on the total number of inpatient acute care beds

for which such general hospital is certified pursuant to the operating

certificate issued for such general hospital in accordance with section

twenty-eight hundred five of this article in effect on June thirtieth,

nineteen hundred ninety, is classified as a rural hospital for purposes

of determining payment for inpatient services provided to beneficiaries

of title XVIII of the federal social security act (medicare) or under

state regulations, such general hospital may at its option have its

reimbursable inpatient operating cost component of case based rates of

payment per diagnosis-related group based one hundred percent on the

general hospital's hospital-specific average reimbursable inpatient

operating cost per discharge determined in accordance with subdivision

six of this section; provided however, commencing April first, nineteen

hundred ninety-six the reimbursable inpatient operating cost component

of case based rates of payment per diagnosis-related group for patients

eligible for payments made by state governmental agencies shall be

reduced by five percent to encourage improved productivity and

efficiency. Such election shall not alter the calculation of the group

price component calculated pursuant to subparagraph (i) of paragraph (a)

of subdivision seven of this section;

* NB There are 2 par. (f)'s

* (f) where a general hospital having two hundred or less certified

acute care beds, based on the total number of inpatient acute care beds

for which such general hospital is certified pursuant to the operating

certificate issued for such general hospital in accordance with section

twenty-eight hundred five of this article in effect on June thirtieth,

nineteen hundred ninety, is classified as a rural hospital for purposes

of determining payment for inpatient services provided to beneficiaries

of title XVIII of the federal social security act (medicare) or under

state regulations, such general hospital may at its option have its

reimbursable inpatient operating cost component of case based rates of

payment per diagnosis-related group based one hundred percent on the

general hospital's hospital-specific average reimbursable inpatient

operating cost per discharge determined in accordance with subdivision

six of this section; provided however,

(i) commencing April first, nineteen hundred ninety-six through July

thirty-first, nineteen hundred ninety-six, the reimbursable inpatient

operating cost component of case based rates of payment per

diagnosis-related group, excluding any operating cost components related

to direct and indirect expenses of graduate medical education, for

patients eligible for payments made by state governmental agencies shall

be reduced by five percent; and

(ii) commencing August first, nineteen hundred ninety-six through

March thirty-first, nineteen hundred ninety-seven, the reimbursable

inpatient operating cost component of case based rates of payment per

diagnosis-related group, excluding any operating cost components related

to direct and indirect expenses of graduate medical education, for

patients eligible for payments made by state governmental agencies shall

be reduced by two and five-tenths percent; and

(iii) commencing April first, nineteen hundred ninety-seven through

March thirty-first, nineteen hundred ninety-nine and commencing July

first, nineteen hundred ninety-nine through March thirty-first, two

thousand and April first, two thousand through March thirty-first, two

thousand five and for periods commencing April first, two thousand five

through March thirty-first, two thousand six and for periods commencing

on and after April first, two thousand six through March thirty-first,

two thousand seven, and for periods commencing on and after April first,

two thousand seven through March thirty-first, two thousand nine, and

for periods commencing on and after April first, two thousand nine

through March thirty-first, two thousand eleven, the reimbursable

inpatient operating cost component of case based rates of payment per

diagnosis-related group, excluding any operating cost components related

to direct and indirect expenses of graduate medical education, for

patients eligible for payments made by state governmental agencies shall

be reduced by three and thirty-three hundredths percent to encourage

improved productivity and efficiency. Such election shall not alter the

calculation of the group price component calculated pursuant to

subparagraph (i) of paragraph (a) of subdivision seven of this section;

* NB Effective until December 31, 2029

* (f) where a general hospital having two hundred or less certified

acute care beds, based on the total number of inpatient acute care beds

for which such general hospital is certified pursuant to the operating

certificate issued for such general hospital in accordance with section

twenty-eight hundred five of this article in effect on June thirtieth,

nineteen hundred ninety, is classified as a rural hospital for purposes

of determining payment for inpatient services provided to beneficiaries

of title XVIII of the federal social security act (medicare) or under

state regulations, such general hospital may at its option have its

reimbursable inpatient operating cost component of case based rates of

payment per diagnosis-related group based one hundred percent on the

general hospital's hospital-specific average reimbursable inpatient

operating cost per discharge determined in accordance with subdivision

six of this section; provided however,

(i) commencing April first, nineteen hundred ninety-six through July

thirty-first, nineteen hundred ninety-six, the reimbursable inpatient

operating cost component of case based rates of payment per

diagnosis-related group, excluding any operating cost components related

to direct and indirect expenses of graduate medical education, for

patients eligible for payments made by state governmental agencies shall

be reduced by five percent; and

(ii) commencing August first, nineteen hundred ninety-six through

March thirty-first, nineteen hundred ninety-seven, the reimbursable

inpatient operating cost component of case based rates of payment per

diagnosis-related group, excluding any operating cost components related

to direct and indirect expenses of graduate medical education, for

patients eligible for payments made by state governmental agencies shall

be reduced by two and five-tenths percent; and

(iii) commencing April first, nineteen hundred ninety-seven through

March thirty-first, nineteen hundred ninety-nine and commencing July

first, nineteen hundred ninety-nine through March thirty-first, two

thousand, the reimbursable inpatient operating cost component of case

based rates of payment per diagnosis-related group, excluding any

operating cost components related to direct and indirect expenses of

graduate medical education, for patients eligible for payments made by

state governmental agencies shall be reduced by three and thirty-three

hundredths percent to encourage improved productivity and efficiency.

Such election shall not alter the calculation of the group price

component calculated pursuant to subparagraph (i) of paragraph (a) of

subdivision seven of this section;

* NB Effective and expires December 31, 2029

* (f) where a general hospital having two hundred or less certified

acute care beds, based on the total number of inpatient acute care beds

for which such general hospital is certified pursuant to the operating

certificate issued for such general hospital in accordance with section

twenty-eight hundred five of this article in effect on June thirtieth,

nineteen hundred ninety, is classified as a rural hospital for purposes

of determining payment for inpatient services provided to beneficiaries

of title XVIII of the federal social security act (medicare) or under

state regulations, such general hospital may at its option have its

reimbursable inpatient operating cost component of case based rates of

payment per diagnosis-related group based one hundred percent on the

general hospital's hospital-specific average reimbursable inpatient

operating cost per discharge determined in accordance with subdivision

six of this section. Such election shall not alter the calculation of

the group price component calculated pursuant to subparagraph (i) of

paragraph (a) of subdivision seven of this section;

* NB Effective December 31, 2029

* NB There are 2 par (f)'s

(g) in cases where general hospitals or distinct units of general

hospitals, other than those specified in paragraphs (e) and (f) of this

subdivision, may be excluded from case based payments or receive an

adjustment to case based payment rates. An exclusion or adjustment shall

be provided only where the council, subject to the approval of the

commissioner, determines that the case based rates of payment determined

in accordance with this section would not reflect medically appropriate

patterns of health resource use for such general hospital services

efficiently and economically provided. If an exclusion is provided, then

the reimbursement provisions contained in paragraph (e) of this

subdivision shall apply. The commissioner shall provide to the council

an analysis of the effect of case based payments on rural general

hospitals and the council, subject to the above criteria and the

approval of the commissioner, may exclude for any of the annual rate

periods beginning on or after January first, nineteen hundred

eighty-eight any of these general hospitals from case based payments or

provide an adjustment to the case based payments in addition to that

authorized in accordance with paragraph (f) of this subdivision;

(h) where alternate level of care (ALC) days are provided, a factor as

determined in subparagraph (i) of this paragraph for the costs of these

patients in a general hospital shall not be included in computations

relating to the determination of general hospital case based rates of

payment pursuant to this section. Alternate level of care days shall be

days of care provided by a general hospital to a patient for whom it has

been determined that inpatient hospital services are not medically

necessary, but that post-hospital extended care services are medically

necessary and are being provided by the general hospital. Separate rates

of payment shall be established for such patients based on the level of

care required and shall reflect: (i) operating costs based on the

nineteen hundred eighty-seven regional average operating cost component

of rates of payment for hospital based residential health care

facilities determined in accordance with section twenty-eight hundred

eight of this article and trended to the rate period, and (ii) additions

contained in subparagraph (iii) of paragraph (a) of subdivision one of

this section. In the event that federal financial participation in

payments made for beneficiaries eligible for medical assistance under

title XIX of the federal social security act based upon the rates

calculated in accordance with this paragraph is not approved by the

federal government, the council subject to the approval of the

commissioner shall adopt regulations for such payments;

(i) if diagnosis-related groups are not adjusted or established in

accordance with paragraph (a) of subdivision three of this section for

services to acquired immune deficiency syndrome (AIDS) patients, then

general hospitals shall receive separate payments for these patients

based on regulations adopted by the council and approved by the

commissioner;

(j) where general hospitals or distinct units of general hospitals are

excluded from or receive an adjustment to case based payments per

diagnosis-related group in accordance with paragraph (e), (f) or (g) of

this subdivision, reimbursement shall continue to be calculated in

accordance with such paragraph until the beginning of the rate period

immediately following the date when the general hospital or the distinct

unit of the general hospital is no longer excluded from or no longer

receives an adjustment to case based payments per diagnosis-related

group for inpatient services provided to beneficiaries of title XVIII of

the federal social security act (medicare), or until appropriate

diagnosis-related groups have been developed for the specialized service

provided by the general hospital or distinct unit of the general

hospital, pursuant to paragraph (a) of subdivision three of this

section; and

* (k) for facilities designated by the federal department of health

and human services as an exempt acute care children's hospital, payment

effective January first, nineteen hundred ninety-four will be based upon

a hospital specific case payment amount inclusive of high cost and high

length of stay outlier costs. The nineteen hundred eighty-seven base

year cost, trended, volume adjusted and case mix adjusted where

applicable to nineteen hundred ninety-two, trended will be utilized to

determine the rate of payment effective January first, nineteen hundred

ninety-four. Commencing April first, nineteen hundred ninety-six, the

operating cost component of rates of payment for patients eligible for

payments made by a state governmental agency shall be reduced by five

percent to encourage improved productivity and efficiency. The facility

will be eligible to receive the financial incentives for the physician

specialty weighting incentive towards primary care pursuant to

subparagraph (ii) of paragraph (a) of subdivision twenty-five of this

section.

* NB There are 2 par (k)'s

* (k) for facilities designated by the federal department of health

and human services as an exempt acute care children's hospital, payment

effective January first, nineteen hundred ninety-four will be based upon

a hospital specific case payment amount inclusive of high cost and high

length of stay outlier costs. The nineteen hundred eighty-seven base

year cost, trended, volume adjusted and case mix adjusted where

applicable to nineteen hundred ninety-two, trended will be utilized to

determine the rate of payment effective January first, nineteen hundred

ninety-four.

(i) Commencing April first, nineteen hundred ninety-six through July

thirty-first, nineteen hundred ninety-six, the operating cost component

of rates of payment, excluding any operating cost components related to

direct and indirect expenses of graduate medical education, for patients

eligible for payments made by a state governmental agency shall be

reduced by five percent; and

(ii) commencing August first, nineteen hundred ninety-six through

March thirty-first, nineteen hundred ninety-seven the operating cost

component of rates of payment, excluding any operating cost components

related to direct and indirect expenses of graduate medical education,

for patients eligible for payments made by a state governmental agency

shall be reduced by two and five-tenths percent; and

(iii) commencing April first, nineteen hundred ninety-seven through

March thirty-first, nineteen hundred ninety-nine and commencing July

first, nineteen hundred ninety-nine through March thirty-first, two

thousand and April first, two thousand through March thirty-first, two

thousand five and commencing April first, two thousand five through

March thirty-first, two thousand six, and for periods commencing on and

after April first, two thousand six through March thirty-first, two

thousand seven, and for periods commencing on and after April first, two

thousand seven through March thirty-first, two thousand nine, and for

periods commencing on and after April first, two thousand nine through

March thirty-first, two thousand eleven, the operating cost component of

rates of payment, excluding any operating cost components related to

direct and indirect expenses of graduate medical education, for patients

eligible for payments made by a state governmental agency shall be

reduced by three and thirty-three hundredths percent to encourage

improved productivity and efficiency. The facility will be eligible to

receive the financial incentives for the physician specialty weighting

incentive towards primary care pursuant to subparagraph (ii) of

paragraph (a) of subdivision twenty-five of this section.

* NB Effective until December 31, 2029

* (k) for facilities designated by the federal department of health

and human services as an exempt acute care children's hospital, payment

effective January first, nineteen hundred ninety-four will be based upon

a hospital specific case payment amount inclusive of high cost and high

length of stay outlier costs. The nineteen hundred eighty-seven base

year cost, trended, volume adjusted and case mix adjusted where

applicable to nineteen hundred ninety-two, trended will be utilized to

determine the rate of payment effective January first, nineteen hundred

ninety-four.

(i) Commencing April first, nineteen hundred ninety-six through July

thirty-first, nineteen hundred ninety-six, the operating cost component

of rates of payment, excluding any operating cost components related to

direct and indirect expenses of graduate medical education for patients

eligible for payments made by a state governmental agency shall be

reduced by five percent; and

(ii) commencing August first, nineteen hundred ninety-six through

March thirty-first, nineteen hundred ninety-seven the operating cost

component of rates of payment, excluding any operating cost components

related to direct and indirect expenses of graduate medical education,

for patients eligible for payments made by a state governmental agency

shall be reduced by two and five-tenths percent; and

(iii) commencing April first, nineteen hundred ninety-seven through

March thirty-first, nineteen hundred ninety-nine and commencing July

first, nineteen hundred ninety-nine through March thirty-first, two

thousand, the operating cost component of rates of payment, excluding

any operating cost components related to direct and indirect expenses of

graduate medical education, for patients eligible for payments made by a

state governmental agency shall be reduced by three and thirty-three

hundredths percent to encourage improved productivity and efficiency.

The facility will be eligible to receive the financial incentives for

the physician specialty weighting incentive towards primary care

pursuant to subparagraph (ii) of paragraph (a) of subdivision

twenty-five of this section.

* NB Effective and expires December 31, 2029

* (k) for facilities designated by the federal department of health

and human services as an exempt acute care children's hospital, payment

effective January first, nineteen hundred ninety-four will be based upon

a hospital specific case payment amount inclusive of high cost and high

length of stay outlier costs. The nineteen hundred eighty-seven base

year cost, trended, volume adjusted and case mix adjusted where

applicable to nineteen hundred ninety-two, trended will be utilized to

determine the rate of payment effective January first, nineteen hundred

ninety-four. The facility will be eligible to receive the financial

incentives for the physician specialty weighting incentive towards

primary care pursuant to subparagraph (ii) of paragraph (a) of

subdivision twenty-five of this section.

* NB Effective December 31, 2029

* NB There are 2 par (k)'s

(l) Notwithstanding any inconsistent provision of this section and

subject to the availability of federal financial participation, rates of

payment by governmental agencies for general hospitals which are

certified by the office of alcoholism and substance abuse services to

provide inpatient detoxification and withdrawal services and, with

regard to inpatient services provided to patients discharged on and

after December first, two thousand eight and who are determined to be in

diagnosis-related groups as defined by the commissioner and published on

the New York state department of health website, shall be made on a per

diem basis in accordance with the following:

(i) for the period December first, two thousand eight through March

thirty-first, two thousand nine, seventy-five percent of the operating

cost component of such rates of payments shall reflect the operating

cost component of rates of payment effective for December thirty-first,

two thousand seven, as adjusted for inflation pursuant to paragraph (c)

of subdivision ten of this section, as otherwise modified by any

applicable statutes, and twenty-five percent of such rates shall reflect

the use of two thousand six operating costs as reported by each facility

to the department prior to two thousand eight and as computed in

accordance with the provisions of subparagraph (iv) of this paragraph;

(ii) for the period April first, two thousand nine through March

thirty-first, two thousand ten, thirty-seven and five tenths percent of

the operating cost component of such rates of payment shall reflect the

operating cost component of rates of payment effective December

thirty-first, two thousand seven, as adjusted for inflation pursuant to

paragraph (c) of subdivision ten of this section, as otherwise modified

by any applicable statutes, and sixty-two and five tenths percent of

such rates of payment shall reflect the use of two thousand six

operating costs as reported by each facility to the department prior to

two thousand eight and as computed in accordance with the provisions of

subparagraph (iv) of this paragraph;

(iii) for periods on and after April first, two thousand ten, one

hundred percent of the operating cost component of such rates of payment

shall reflect the use of two thousand six operating costs as reported to

the department prior to two thousand eight and as computed in accordance

with the provisions of subparagraph (iv) of this paragraph.

(iv) rates of payment computed in accordance with this paragraph and

reflecting the use of two thousand six base year operating costs shall

be in accord with the following, provided, however that the commissioner

may establish criteria under which reimbursement may be provided at

higher percentages and for longer periods.

(A) For each of the regions within the state as described in clause

(E) of this subparagraph the commissioner shall determine the average

per diem cost incurred by general hospitals in that region subject to

the provisions of this paragraph with regard to inpatients requiring

medically managed detoxification services, as defined by applicable

regulations promulgated by the office of alcoholism and substance abuse

services. In determining such costs the commissioner shall utilize two

thousand six costs and statistics as reported by such hospitals to the

department prior to two thousand eight.

(B) Per diem payments for inpatients requiring medically managed

inpatient detoxification services shall reflect one hundred percent of

the per diem amounts computed pursuant to clause (A) of this

subparagraph for the applicable region in which the facility is located

and as trended forward to adjust for inflation, provided however, that

such payments shall be reduced by fifty percent for any such services

provided on or after the sixth day of services through the tenth day of

services, and further provided that no payments shall be made for any

services provided on or after the eleventh day.

(C) Per diem payments for inpatients requiring medically supervised

withdrawal services, as defined by applicable regulations promulgated by

the office of alcoholism and substance abuse services, shall reflect one

hundred percent of the per diem amounts computed pursuant to clause (A)

of this subparagraph for the applicable region in which the facility is

located for the period January first, two thousand nine through December

thirty-first, two thousand nine, and as trended forward to adjust for

inflation, and shall reflect seventy-five percent of such per diem

amounts for periods on and after January first, two thousand ten, as

trended forward to adjust for inflation, provided, however, that such

payments shall be reduced by fifty percent for any services provided on

or after the sixth day of services through the tenth day of services,

and further provided that no payments shall be made for any services

provided on and after the eleventh day.

(D) Per diem payments for inpatients placed in observation beds, as

defined by applicable regulations promulgated by the office of

alcoholism and substance abuse services, shall be at the same level as

would be paid pursuant to clause (A) of this paragraph, provided,

however, that such payments shall not apply for more than two days of

care, after which payments for such inpatients shall reflect their

designation as requiring either medically managed detoxification

services or medically supervised withdrawal services, and further

provided that days of care provided in such observation beds shall, for

reimbursement purposes, be fully reflected in the computation of the

initial five days of care as set forth in clauses (A) and (B) of this

subparagraph.

(E) For the purposes of this paragraph, the regions of the state shall

be as follows:

(I) New York city, consisting of the counties of Bronx, New York,

Kings, Queens and Richmond;

(II) Long Island, consisting of the counties of Nassau and Suffolk;

(III) Northern metropolitan, consisting of the counties of Columbia,

Delaware, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and

Westchester;

(IV) Northeast, consisting of the counties of Albany, Clinton, Essex,

Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady,

Schoharie, Warren and Washington;

(V) Utica/Watertown, consisting of the counties of Franklin, Herkimer,

Lewis, Oswego, Otsego, St. Lawrence, Jefferson, Chenango, Madison and

Oneida;

(VI) Central, consisting of the counties of Broome, Cayuga, Chemung,

Cortland, Onondaga, Schuyler, Seneca, Steuben, Tioga and Tompkins;

(VII) Rochester, consisting of Monroe, Ontario, Livingston, Wayne and

Yates;

(VIII) Western, consisting of the counties of Allegany, Cattaraugus,

Chautauqua, Erie, Genesee, Niagara, Orleans and Wyoming.

(F) Capital cost reimbursement for general hospitals otherwise subject

to the provisions of this paragraph shall remain subject to the

provisions of subdivision eight of this section.

(v) the commissioner may promulgate regulations, including emergency

regulations, providing for an update of the base year costs and

statistics used to compute rates of payment pursuant to this paragraph,

provided, however, that such base year update shall take effect no

earlier than April first, two thousand fifteen, and provided further,

however, that the commissioner may make such adjustments to such

utilization and to the methodology for computing such rates as is

necessary to achieve no aggregate, net growth in overall Medicaid

expenditures related to such rates, as compared to such aggregate

expenditures from the prior year. In determining the updated base year

to be utilized pursuant to this subparagraph, the commissioner shall

take into account the base year determined in accordance with paragraph

(c) of subdivision thirty-five of this section.

5. Reimbursable inpatient operating cost component. (a) The

reimbursable inpatient operating cost component of case based rates of

payment per diagnosis-related group for general hospital inpatient

hospital services shall be the product of the average reimbursable

inpatient operating cost per discharge determined in accordance with

paragraph (b) of this subdivision, adjusted by a third-party payor of

hospital services for uncovered services by such payor, and the

weighting factors determined in accordance with paragraph (c) of

subdivision three of this section.

(b) (i) For the rate year January first, nineteen hundred eighty-eight

through December thirty-first, nineteen hundred eighty-eight, average

reimbursable inpatient operating cost per discharge shall be a composite

sum of no less than ninety percent of the general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge determined in accordance with paragraph (a) of subdivision six

of this section and a percentage amount not to exceed ten percent of the

general hospital's group category average inpatient reimbursable

operating cost per discharge (price) determined in accordance with

paragraph (a) of subdivision seven of this section such that the

composite sum equals one hundred percent.

(ii) For the rate year commencing January first, nineteen hundred

eighty-nine, average reimbursable inpatient operating cost per discharge

shall be a composite sum of no less than seventy-five percent of the

general hospital's hospital-specific average reimbursable inpatient

operating cost per discharge determined in accordance with paragraph (a)

of subdivision six of this section and a percentage amount not to exceed

twenty-five percent of the general hospital's group category average

inpatient reimbursable operating cost per discharge (price) determined

in accordance with paragraph (a) of subdivision seven of this section,

such that the composite sum equals one hundred percent.

(iii) Except as provided in clause (C) of this subparagraph, for

annual rate years commencing on or after January first, nineteen hundred

ninety, average reimbursable inpatient operating cost per discharge

shall be a composite sum of no less than forty-five percent of the

general hospital's hospital-specific average reimbursable inpatient

operating cost per discharge determined in accordance with paragraph (a)

of subdivision six of this section and a percentage amount not to exceed

fifty-five percent of the general hospital's group category average

inpatient reimbursable operating cost per discharge (price) determined

in accordance with paragraph (a) of subdivision seven of this section,

such that the composite sum equals one hundred percent.

** (A) Except as provided in clause (B) of this subparagraph and

subparagraph (iv) of this paragraph, for annual rate years commencing on

or after January first, nineteen hundred ninety, average reimbursable

inpatient operating cost per discharge shall be a composite sum of no

less than forty-five percent of the general hospital's hospital-specific

average reimbursable inpatient operating cost per discharge determined

in accordance with paragraph (a) of subdivision six of this section and

a percentage amount not to exceed fifty-five percent of the general

hospital's group category average inpatient reimbursable operating cost

per discharge (price) determined in accordance with paragraph (a) of

subdivision seven of this section, such that the composite sum equals

one hundred percent.

** NB There are 2 clause (A)'s

** (A) Except as provided in clauses (B) and (C) of this subparagraph

and subparagraphs (iv), (v) and (vi) of this paragraph, for annual rate

years commencing on or after January first, nineteen hundred ninety,

average reimbursable inpatient operating cost per discharge shall be a

composite sum of no less than forty-five percent of the general

hospital's hospital-specific average reimbursable inpatient operating

cost per discharge determined in accordance with paragraph (a) of

subdivision six of this section and a percentage amount not to exceed

fifty-five percent of the general hospital's group category average

inpatient reimbursable operating cost per discharge (price) determined

in accordance with paragraph (a) of subdivision seven of this section,

such that the composite sum equals one hundred percent.

** NB Effective until December 31, 2029

** (A) Except as provided in clause (B) of this subparagraph, for

annual rate years commencing on or after January first, nineteen hundred

ninety, average reimbursable inpatient operating cost per discharge

shall be a composite sum of no less than forty-five percent of the

general hospital's hospital-specific average reimbursable inpatient

operating cost per discharge determined in accordance with paragraph (a)

of subdivision six of this section and a percentage amount not to exceed

fifty-five percent of the general hospital's group category average

inpatient reimbursable operating cost per discharge (price) determined

in accordance with paragraph (a) of subdivision seven of this section,

such that the composite sum equals one hundred percent.

** NB Effective December 31, 2029

** NB There are 2 clause (A)'s

* (B) For discharges on or after April first, nineteen hundred

ninety-five for purposes of reimbursement of inpatient hospital services

for patients eligible for payments made by state governmental agencies

assigned to one of the twenty most common diagnosis-related groups for

all general hospitals, the average reimbursable inpatient operating cost

per discharge of a general hospital shall be the lower of (I) the amount

determined in accordance with clause (A) of this subparagraph or (II)

the average amount determined in accordance with clause (A) of this

subparagraph for all general hospitals in the group category to which

the hospital is assigned. The twenty most common diagnosis-related

groups shall be determined using discharge data for the year two years

prior to the rate year for all general hospitals, excluding

beneficiaries of title XVIII of the federal social security act

(medicare) and patients assigned to diagnosis related groups for human

immunodeficiency virus (HIV) infection, acquired immune deficiency

syndrome, alcohol/drug use or alcohol/drug induced organic mental

disorders, and exempt unit or exempt hospital patients.

* NB Expired March 31, 2011

* (C) (I) For discharges on or after July first, two thousand six

through December thirty-first, two thousand six, and subject to the

availability of federal financial participation, rates of payment by

state governmental agencies to Westchester medical center shall be

increased by an aggregate amount of twenty-five million dollars to

assist the medical center to maintain critically needed health care

services.

(II) For discharges on or after January first, two thousand seven

through December thirty-first, two thousand seven, and subject to the

availability of federal financial participation, rates of payment by

state governmental agencies to Westchester medical center shall be

increased by an aggregate amount of twenty-five million dollars to

assist the medical center to maintain critically needed health care

services.

(III) For discharges on or after January first, two thousand eight

through December thirty-first, two thousand eight, and subject to the

availability of federal financial participation, rates of payment by

state governmental agencies to Westchester medical center shall be

increased by an aggregate amount of twenty-five million dollars to

assist the medical center to maintain critically needed health care

services.

* NB Expired March 31, 2011

* (iv) for discharges on or after April first, nineteen hundred

ninety-six for purposes of reimbursement of inpatient hospital services

for patients eligible for payments made by state governmental agencies,

the average reimbursable inpatient operating cost per discharge of a

general hospital shall be the sum of:

(A) the amount determined in accordance with clause (B) of

subparagraph (iii) of this paragraph, excluding the value of direct

medical education expenses, as defined in subparagraph (i) of paragraph

(c) of subdivision seven of this section, reflected in the general

hospital's hospital-specific average reimbursable inpatient operating

cost per discharge and group category average inpatient reimbursable

operating cost per discharge, and excluding the value of forty-five

percent of the indirect medical education expenses, as defined in

subparagraph (ii) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital specific average

reimbursable inpatient operating cost per discharge, and excluding the

value of fifty-five percent of the indirect medical education expenses

reflected in a general hospital's group category average inpatient

reimbursable operating cost per discharge in accordance with subdivision

twenty-five of this section as amended;

(B) minus five percent of the amount determined in accordance with

clause (A) of this subparagraph;

(C) plus the value of direct medical education expenses, as defined in

subparagraph (i) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge and group category

average inpatient reimbursable operating cost per discharge;

(D) minus five percent of the costs of hospital based physicians

reflected in the direct medical education amount determined in

accordance with clause (C) of this subparagraph;

(E) plus the value of forty-five percent of the indirect medical

education expenses, as defined in subparagraph (ii) of paragraph (c) of

subdivision seven of this section, reflected in the general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge; and

(F) plus the value of fifty-five percent of the indirect medical

education expenses reflected in the general hospital's group category

average inpatient operating cost per discharge in accordance with

subdivision twenty-five of this section as amended.

* NB There are 3 subpar (iv)'s

* (iv) for discharges on or after April first, nineteen hundred

ninety-six for purposes of reimbursement of inpatient hospital services

for patients eligible for payments made by state governmental agencies,

the average reimbursable inpatient operating cost per discharge of a

general hospital shall to encourage improved productivity and efficiency

be the sum of:

(A) the amount determined in accordance with clause (B) of

subparagraph (iii) of this paragraph, excluding the value of direct

medical education expenses, as defined in subparagraph (i) of paragraph

(c) of subdivision seven of this section, reflected in the general

hospital's hospital-specific average reimbursable inpatient operating

cost per discharge and group category average inpatient reimbursable

operating cost per discharge, and excluding the value of forty-five

percent of the indirect medical education expenses, as defined in

subparagraph (ii) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital specific average

reimbursable inpatient operating cost per discharge, and excluding the

value of fifty-five percent of the indirect medical education expenses

reflected in a general hospital's group category average inpatient

reimbursable operating cost per discharge in accordance with subdivision

twenty-five of this section as amended;

(B) minus five percent of the amount determined in accordance with

clause (A) of this subparagraph;

(C) plus the value of direct medical education expenses, as defined in

subparagraph (i) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge and group category

average inpatient reimbursable operating cost per discharge;

(D) minus five percent of the costs of hospital based physicians

reflected in the direct medical education amount determined in

accordance with clause (C) of this subparagraph;

(E) plus the value of forty-five percent of the indirect medical

education expenses, as defined in subparagraph (ii) of paragraph (c) of

subdivision seven of this section, reflected in the general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge; and

(F) plus the value of fifty-five percent of the indirect medical

education expenses reflected in the general hospital's group category

average inpatient operating cost per discharge in accordance with

subdivision twenty-five of this section as amended.

* NB There are 3 subpar (iv)'s

* (iv) for discharges on or after April first, nineteen hundred

ninety-six through July thirty-first, nineteen hundred ninety-six for

purposes of reimbursement of inpatient hospital services for patients

eligible for payments made by state governmental agencies, the average

reimbursable inpatient operating cost per discharge of a general

hospital shall, to encourage improved productivity and efficiency, be

the sum of:

(A) the amount determined in accordance with clause (B) of

subparagraph (iii) of this paragraph, excluding the value of direct

medical education expenses, as defined in subparagraph (i) of paragraph

(c) of subdivision seven of this section, reflected in the general

hospital's hospital-specific average reimbursable inpatient operating

cost per discharge and group category average inpatient reimbursable

operating cost per discharge, and excluding the value of forty-five

percent of the indirect medical education expenses, as defined in

subparagraph (ii) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital specific average

reimbursable inpatient operating cost per discharge, and excluding the

value of fifty-five percent of the indirect medical education expenses

reflected in a general hospital's group category average inpatient

reimbursable operating cost per discharge in accordance with subdivision

twenty-five of this section as amended;

(B) minus five percent of the amount determined in accordance with

clause (A) of this subparagraph;

(C) plus the value of direct medical education expenses, as defined in

subparagraph (i) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge and group category

average inpatient reimbursable operating cost per discharge;

(D) minus five percent of the costs of hospital based physicians

reflected in the direct medical education amount determined in

accordance with clause (C) of this subparagraph;

(E) plus the value of forty-five percent of the indirect medical

education expenses, as defined in subparagraph (ii) of paragraph (c) of

subdivision seven of this section, reflected in the general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge; and

(F) plus the value of fifty-five percent of the indirect medical

education expenses reflected in the general hospital's group category

average inpatient operating cost per discharge in accordance with

subdivision twenty-five of this section as amended.

* NB Expires December 31, 2029

* NB There are 3 subpar (iv)'s

* (v) for discharges on or after August first, nineteen hundred

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

purposes of reimbursement of inpatient hospital services for patients

eligible for payments made by state governmental agencies, the average

reimbursable inpatient operating cost per discharge of a general

hospital shall, to encourage improved productivity and efficiency, be

the sum of:

(A) the amount determined in accordance with clause (B) of

subparagraph (iii) of this paragraph, excluding the value of direct

medical education expenses, as defined in subparagraph (i) of paragraph

(c) of subdivision seven of this section, reflected in the general

hospital's hospital-specific average reimbursable inpatient operating

cost per discharge and group category average inpatient reimbursable

operating cost per discharge, and excluding the value of forty-five

percent of the indirect medical education expenses, as defined in

subparagraph (ii) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital specific average

reimbursable inpatient operating cost per discharge, and excluding the

value of fifty-five percent of the indirect medical education expenses

reflected in a general hospital's group category average inpatient

reimbursable operating cost per discharge in accordance with subdivision

twenty-five of this section as amended;

(B) minus two and five-tenths percent of the amount determined in

accordance with clause (A) of this subparagraph;

(C) plus the value of direct medical education expenses, as defined in

subparagraph (i) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge and group category

average inpatient reimbursable operating cost per discharge;

(D) minus two and five-tenths percent of the costs of hospital based

physicians reflected in the direct medical education amount determined

in accordance with clause (C) of this subparagraph;

(E) plus the value of forty-five percent of the indirect medical

education expenses, as defined in subparagraph (ii) of paragraph (c) of

subdivision seven of this section, reflected in the general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge; and

(F) plus the value of fifty-five percent of the indirect medical

education expenses reflected in the general hospital's group category

average inpatient operating cost per discharge in accordance with

subdivision twenty-five of this section as amended.

* NB Expires December 31, 2029

* (vi) for discharges on or after April first, nineteen hundred

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

and for discharges on or after July first, nineteen hundred ninety-nine

through March thirty-first, two thousand and for discharges on or after

April first, two thousand through March thirty-first, two thousand five

and for discharges on or after April first, two thousand five through

March thirty-first, two thousand six, and for discharges on or after

April first, two thousand six through March thirty-first, two thousand

seven, and for discharges on or after April first, two thousand seven

through March thirty-first, two thousand nine, and for discharges on or

after April first, two thousand nine through March thirty-first, two

thousand eleven, for purposes of reimbursement of inpatient hospital

services for patients eligible for payments made by state governmental

agencies, the average reimbursable inpatient operating cost per

discharge of a general hospital shall, to encourage improved

productivity and efficiency, be the sum of:

(A) the amount determined in accordance with clause (B) of

subparagraph (iii) of this paragraph, excluding the value of direct

medical education expenses, as defined in subparagraph (i) of paragraph

(c) of subdivision seven of this section, reflected in the general

hospital's hospital-specific average reimbursable inpatient operating

cost per discharge and group category average inpatient reimbursable

operating cost per discharge, and excluding the value of forty-five

percent of the indirect medical education expenses, as defined in

subparagraph (ii) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge, and excluding the

value of fifty-five percent of the indirect medical education expenses

reflected in a general hospital's group category average inpatient

reimbursable operating cost per discharge in accordance with subdivision

twenty-five of this section as amended;

(B) minus three and thirty-three hundredths percent of the amount

determined in accordance with clause (A) of this subparagraph;

(C) plus the value of direct medical education expenses, as defined in

subparagraph (i) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge and group category

average inpatient reimbursable operating cost per discharge;

(D) minus three and thirty-three hundredths percent of the costs of

hospital based physicians reflected in the direct medical education

amount determined in accordance with clause (C) of this subparagraph;

(E) plus the value of forty-five percent of the indirect medical

education expenses, as defined in subparagraph (ii) of paragraph (c) of

subdivision seven of this section, reflected in the general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge; and

(F) plus the value of fifty-five percent of the indirect medical

education expenses reflected in the general hospital's group category

average inpatient operating cost per discharge in accordance with

subdivision twenty-five of this section as amended.

* NB Effective until December 31, 2029

* (vi) for discharges on or after April first, nineteen hundred

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

and for discharges on or after July first, nineteen hundred ninety-nine

through March thirty-first, two thousand for purposes of reimbursement

of inpatient hospital services for patients eligible for payments made

by state governmental agencies, the average reimbursable inpatient

operating cost per discharge of a general hospital shall, to encourage

improved productivity and efficiency, be the sum of:

(A) the amount determined in accordance with clause (B) of

subparagraph (iii) of this paragraph, excluding the value of direct

medical education expenses, as defined in subparagraph (i) of paragraph

(c) of subdivision seven of this section, reflected in the general

hospital's hospital-specific average reimbursable inpatient operating

cost per discharge and group category average inpatient reimbursable

operating cost per discharge, and excluding the value of forty-five

percent of the indirect medical education expenses, as defined in

subparagraph (ii) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge, and excluding the

value of fifty-five percent of the indirect medical education expenses

reflected in a general hospital's group category average inpatient

reimbursable operating cost per discharge in accordance with subdivision

twenty-five of this section as amended;

(B) minus three and thirty-three hundredths percent of the amount

determined in accordance with clause (A) of this subparagraph;

(C) plus the value of direct medical education expenses, as defined in

subparagraph (i) of paragraph (c) of subdivision seven of this section,

reflected in the general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge and group category

average inpatient reimbursable operating cost per discharge;

(D) minus three and thirty-three hundredths percent of the costs of

hospital based physicians reflected in the direct medical education

amount determined in accordance with clause (C) of this subparagraph;

(E) plus the value of forty-five percent of the indirect medical

education expenses, as defined in subparagraph (ii) of paragraph (c) of

subdivision seven of this section, reflected in the general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge; and

(F) plus the value of fifty-five percent of the indirect medical

education expenses reflected in the general hospital's group category

average inpatient operating cost per discharge in accordance with

subdivision twenty-five of this section as amended.

* NB Effective and expires December 31, 2029

* (c) Notwithstanding any inconsistent provision of this section,

commencing July first, nineteen hundred ninety-six through March

thirty-first, nineteen hundred ninety-nine and July first, nineteen

hundred ninety-nine through March thirty-first, two thousand and April

first, two thousand through March thirty-first, two thousand five and

for periods on and after April first, two thousand five through March

thirty-first, two thousand six, and for periods on and after April

first, two thousand six through March thirty-first, two thousand seven,

and for periods on and after April first, two thousand seven through

March thirty-first, two thousand nine, and for periods on and after

April first, two thousand nine through March thirty-first, two thousand

eleven, rates of payment for a general hospital for patients eligible

for payments made by state governmental agencies shall be further

reduced by the commissioner to encourage improved productivity and

efficiency by providers by a factor determined as follows:

(i) an aggregate reduction shall be calculated for each general

hospital commencing July first, nineteen hundred ninety-six through

March thirty-first, nineteen hundred ninety-nine and July first,

nineteen hundred ninety-nine through March thirty-first, two thousand

and April first, two thousand through March thirty-first, two thousand

five and for periods on and after April first, two thousand five through

March thirty-first, two thousand six, and for periods on and after April

first, two thousand six through March thirty-first, two thousand seven,

and for periods on and after April first, two thousand seven through

March thirty-first, two thousand nine, and for periods on and after

April first, two thousand nine through March thirty-first, two thousand

eleven, as the result of (A) eighty-nine million dollars on an

annualized basis for each year, multiplied by (B) the ratio of patient

days for patients eligible for payments made by state governmental

agencies provided in a base year two years prior to the rate year by a

general hospital, divided by the total of such patient days summed for

all general hospitals; and

(ii) (A) the result for each general hospital shall be allocated to

units within such hospital exempt from case based rates of payment based

on the ratio of such patient days provided in the exempt unit to the

total of such patient days provided by the general hospital, and (B) the

result divided by such patient days provided in the exempt unit, for a

per diem unit of service reduction in rates of payment for such exempt

unit for patients eligible for payments made by state governmental

agencies for such general hospital; and

(iii) any amount not allocated to exempt units shall be divided by

case based discharges (or for exempt hospitals by patient days) in the

base year two years prior to the rate year for patients eligible for

payments made by state governmental agencies, for a per case (or for

exempt hospitals a per diem) unit of service reduction in rates of

payment for patients eligible for payments made by state governmental

agencies for such general hospital.

* NB Effective until December 31, 2029

* (c) Notwithstanding any inconsistent provision of this section,

commencing July first, nineteen hundred ninety-six through March

thirty-first, nineteen hundred ninety-nine and July first, nineteen

hundred ninety-nine through March thirty-first, two thousand rates of

payment for a general hospital for patients eligible for payments made

by state governmental agencies shall be further reduced by the

commissioner to encourage improved productivity and efficiency by

providers by a factor determined as follows:

(i) an aggregate reduction shall be calculated for each general

hospital commencing July first, nineteen hundred ninety-six through

March thirty-first, nineteen hundred ninety-nine and July first,

nineteen hundred ninety-nine through March thirty-first, two thousand as

the result of (A) eighty-nine million dollars on an annualized basis for

each year, multiplied by (B) the ratio of patient days for patients

eligible for payments made by state governmental agencies provided in a

base year two years prior to the rate year by a general hospital,

divided by the total of such patient days summed for all general

hospitals; and

(ii) (A) the result for each general hospital shall be allocated to

units within such hospital exempt from case based rates of payment based

on the ratio of such patient days provided in the exempt unit to the

total of such patient days provided by the general hospital, and (B) the

result divided by such patient days provided in the exempt unit, for a

per diem unit of service reduction in rates of payment for such exempt

unit for patients eligible for payments made by state governmental

agencies for such general hospital; and

(iii) any amount not allocated to exempt units shall be divided by

case based discharges (or for exempt hospitals by patient days) in the

base year two years prior to the rate year for patients eligible for

payments made by state governmental agencies, for a per case (or for

exempt hospitals a per diem) unit of service reduction in rates of

payment for patients eligible for payments made by state governmental

agencies for such general hospital.

* NB Effective and expires December 31, 2029

6. Operating costs. (a) A general hospital's hospital-specific average

reimbursable inpatient operating cost per discharge shall be determined

in accordance with rules and regulations adopted by the council and

approved by the commissioner based on the hospital's reimbursable

inpatient operating cost base determined in accordance with paragraph

(d) of subdivision one of this section; adjusted in accordance with

paragraph (b) of this subdivision to reflect exceptions to case

payments; and projected to the applicable rate period by a trend factor

determined in accordance with subdivision ten of this section; and

increased in accordance with subparagraphs (i), (iii) and (iv) of

paragraph (e) of subdivision one of this section to reflect special

additional inpatient operating costs; and adjusted in accordance with

subparagraphs (i), (ii) and (iv) of paragraph (c) of this subdivision to

reflect modifications to case payments; and standardized to reflect

nineteen hundred eighty-seven hospital case mix. A general hospital's

hospital-specific average reimbursable inpatient operating cost per

discharge shall be adjusted on a payor category basis to reflect

allocation of malpractice insurance costs in accordance with the

methodology developed pursuant to subparagraph (ii) of paragraph (h) of

subdivision eleven of this section.

(b) In accordance with rules and regulations adopted by the council

and approved by the commissioner, the commissioner shall adjust

reimbursable inpatient operating costs and discharges to exclude

operating costs and statistics related to specialized hospital services

for which an alternative reimbursement methodology is adopted pursuant

to paragraph (e) or (g) of subdivision four of this section, a factor

for operating costs of patients who required an alternate level of care

in accordance with paragraph (h) of subdivision four of this section and

the operating costs and statistics of AIDS patients pursuant to

paragraph (i) of subdivision four of this section if effective.

(c) In accordance with rules and regulations adopted by the council

and approved by the commissioner, the commissioner shall adjust

weighting factors developed pursuant to paragraph (c) of subdivision

three of this section and reimbursable inpatient operating costs and

statistics on which case payment rates are based to take into account

the provisions for additional payments in accordance with paragraph (a),

(b), (c) or (d) of subdivision four of this section. The rules and

regulations are to be designed to identify an estimate of costs and

statistics as if the payment methodology effective for the applicable

rate period including payment based on the higher of high-cost outliers

or long-stay outliers was in effect during the period used to establish

such costs and statistics to accomplish the following:

(i) an estimate of costs for inpatient services to patients

transferred to another general hospital receiving case payment rates

pursuant to paragraph (a) of subdivision four of this section shall be

eliminated from reimbursable inpatient operating costs considering a

transfer patient cost conversion factor determined based on nineteen

hundred eighty-five data from a representative sample of general

hospitals; a case mix neutral acute care cost component of a general

hospital's reimbursable inpatient operating cost base per day after

application of the trend factor and the addition of special additional

inpatient operating costs; transfer patient days incurred by such

general hospital in nineteen hundred eighty-seven or the number of such

transfer patient days during a recent twelve month period prior thereto

established by regulation for which data are available subsequently

reconciled by an adjustment to reflect nineteen hundred eighty-seven

data; and the specific diagnosis-related groups with which the transfer

patients are identified. Such costs shall be eliminated in accordance

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

commissioner which shall contain the specific methodology to adequately

identify the costs related to transfer cases. Transfer cases shall be

eliminated in computing discharges of the transferring hospital. The

costs and discharges for transfer cases for each general hospital

participating in the determination of the weighting factors shall be

removed before calculating the weighting factors;

(ii) an estimate of costs for the outlier portion of inpatient

services which would qualify for additional payments as cost outliers in

accordance with paragraph (b) of subdivision four of this section shall

be eliminated from reimbursable inpatient operating costs based on a

general hospital's high cost percentage outlier factor, applied to an

acute care cost component of such general hospital's reimbursable

inpatient operating cost base after application of the trend factor and

the addition of special additional inpatient operating costs. The high

cost percentage outlier factor shall be calculated based on a

determination of the percentage of nineteen hundred eighty-seven

discharges of patients other than beneficiaries of title XVIII of the

federal social security act (medicare) for which the commissioner has

complete hospital bill submissions or such discharges during a recent

twelve month period prior thereto established by regulation for which

hospital bills are available, as follows, (a) for general hospitals that

have complete hospital bill submissions for at least ninety percent of

their discharges, a high cost percentage outlier factor based on such

data, and (b) for general hospitals that have complete hospital bill

submissions for at least eighty percent but less than ninety percent of

their discharges, a high cost percentage outlier factor based on such

data plus an additional one-quarter of one percent, and (c) for general

hospitals that have complete bill submissions for less than eighty

percent of their discharges, a high cost percentage outlier factor

determined based on nineteen hundred eighty-five data from a

representative sample of general hospitals plus an additional

one-quarter of one percent. The calculation of the high cost percentage

outlier factor shall be subsequently reconciled by an adjustment to

reflect the percentage of such complete hospital bill submissions for

such nineteen hundred eighty-seven discharges as submitted to the

commissioner prior to August first, nineteen hundred eighty-eight.

The minimum percentage threshold applicable pursuant to clause (a) of

the first paragraph of this subparagraph may be increased to "at least

ninety-five percent" and the percentage ceiling applicable pursuant to

clause (b) of the first paragraph of this subparagraph increased to

"less than ninety-five percent" pursuant to rules and regulations

adopted by the council and approved by the commissioner based upon a

study and a report by the commissioner of a sample of incomplete

discharge records which showed that there was a significant difference

in the value of high cost outlier cases potentially reflected in

incomplete records from the value of high cost outlier cases reflected

in records for which the commissioner has complete hospital bill

submissions.

The maximum amount to be eliminated on a statewide basis shall be

three percent of the total of nineteen hundred eighty-eight acute care

cost components of general hospital reimbursable inpatient operating

costs reimbursed on the case payment system. In the event that the total

amount as calculated exceeds three percent, the calculated amount will

be reduced to three percent by the application of a percentage computed

by dividing expected outlier costs based on the three percent by actual

outlier costs, which shall also be the percentage of outlier costs to be

reimbursed in the payment year. The costs for the outlier portion of

cost outliers for general hospitals participating in the determination

of the weighting factors shall be removed from each diagnosis-related

group before determining the weighting factors;

* (iii) an estimate of inpatient costs which are related to a hospital

stay in excess of the long stay threshold for long stay patients as

defined in paragraph (c) of subdivision four of this section shall be

eliminated from reimbursable inpatient operating costs in determining

group category average inpatient reimbursable operating costs

considering a long stay patient cost conversion factor, which shall be

established at sixty percent provided, however, such long stay patient

cost conversion factor may be revised for an annual rate period or

periods beginning on or after January first, nineteen hundred

eighty-nine in accordance with rules and regulations adopted by the

council and approved by the commissioner; a case mix neutral acute care

cost component of a general hospital's reimbursable inpatient operating

cost base per day after application of the trend factor and the addition

of special additional inpatient operating costs; long stay patient days

incurred by such general hospital in nineteen hundred eighty-seven or

the number of such long stay patient days during a recent twelve month

period prior thereto established by regulation for which data are

available subsequently reconciled by an adjustment to reflect nineteen

hundred eighty-seven data; and the specific diagnosis-related groups

with which the long stay patients are identified. The long stay outlier

thresholds shall be determined by adding a sufficient number of standard

deviations to the mean length of stay for each diagnosis-related group

such that it is estimated for rates of payment during the period January

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

nineteen hundred ninety based upon nineteen hundred eighty-five data

from a representative sample of general hospitals and for rates of

payment during the period January first, nineteen hundred ninety-one

through December thirty-first, nineteen hundred ninety-three based upon

nineteen hundred eighty-nine data from a representative sample of

general hospitals and for rates of payment during the period January

first, nineteen hundred ninety-four through December thirty-first,

nineteen hundred ninety-nine and periods on and after January first, two

thousand based upon nineteen hundred ninety-two data from a

representative sample of general hospitals that the costs associated

with the portion of hospital stays in excess of the long stay outlier

thresholds do not exceed three percent of the total of the acute care

cost components of reimbursable inpatient operating costs related to the

determination of case based rates of payment. The costs associated with

the outlier portion of long stay outliers for each general hospital

participating in the determination of the weighting factors shall be

removed from each diagnosis-related group before calculating the

weighting factors;

* NB Effective until December 31, 2029

* (iii) an estimate of inpatient costs which are related to a hospital

stay in excess of the long stay threshold for long stay patients as

defined in paragraph (c) of subdivision four of this section shall be

eliminated from reimbursable inpatient operating costs in determining

group category average inpatient reimbursable operating costs

considering a long stay patient cost conversion factor, which shall be

established at sixty percent provided, however, such long stay patient

cost conversion factor may be revised for an annual rate period or

periods beginning on or after January first, nineteen hundred

eighty-nine in accordance with rules and regulations adopted by the

council and approved by the commissioner; a case mix neutral acute care

cost component of a general hospital's reimbursable inpatient operating

cost base per day after application of the trend factor and the addition

of special additional inpatient operating costs; long stay patient days

incurred by such general hospital in nineteen hundred eighty-seven or

the number of such long stay patient days during a recent twelve month

period prior thereto established by regulation for which data are

available subsequently reconciled by an adjustment to reflect nineteen

hundred eighty-seven data; and the specific diagnosis-related groups

with which the long stay patients are identified. The long stay outlier

thresholds shall be determined by adding a sufficient number of standard

deviations to the mean length of stay for each diagnosis-related group

such that it is estimated for rates of payment during the period January

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

nineteen hundred ninety based upon nineteen hundred eighty-five data

from a representative sample of general hospitals and for rates of

payment during the period January first, nineteen hundred ninety-one

through December thirty-first, nineteen hundred ninety-three based upon

nineteen hundred eighty-nine data from a representative sample of

general hospitals and for rates of payment during the period January

first, nineteen hundred ninety-four through December thirty-first,

nineteen hundred ninety-nine based upon nineteen hundred ninety-two data

from a representative sample of general hospitals that the costs

associated with the portion of hospital stays in excess of the long stay

outlier thresholds do not exceed three percent of the total of the acute

care cost components of reimbursable inpatient operating costs related

to the determination of case based rates of payment. The costs

associated with the outlier portion of long stay outliers for each

general hospital participating in the determination of the weighting

factors shall be removed from each diagnosis-related group before

calculating the weighting factors;

* NB Effective and expires December 31, 2029

* (iii) an estimate of inpatient costs which are related to a hospital

stay in excess of the long stay threshold for long stay patients as

defined in paragraph (c) of subdivision four of this section shall be

eliminated from reimbursable inpatient operating costs in determining

group category average inpatient reimbursable operating costs

considering a long stay patient cost conversion factor, which shall be

established at sixty percent provided, however, such long stay patient

cost conversion factor may be revised for an annual rate period or

periods beginning on or after January first, nineteen hundred

eighty-nine in accordance with rules and regulations adopted by the

council and approved by the commissioner; a case mix neutral acute care

cost component of a general hospital's reimbursable inpatient operating

cost base per day after application of the trend factor and the addition

of special additional inpatient operating costs; long stay patient days

incurred by such general hospital in nineteen hundred eighty-seven or

the number of such long stay patient days during a recent twelve month

period prior thereto established by regulation for which data are

available subsequently reconciled by an adjustment to reflect nineteen

hundred eighty-seven data; and the specific diagnosis-related groups

with which the long stay patients are identified. The long stay outlier

thresholds shall be determined by adding a sufficient number of standard

deviations to the mean length of stay for each diagnosis-related group

such that it is estimated for rates of payment during the period January

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

nineteen hundred ninety based upon nineteen hundred eighty-five data

from a representative sample of general hospitals and for rates of

payment during the period January first, nineteen hundred ninety-one

through December thirty-first, nineteen hundred ninety-three based upon

nineteen hundred eighty-nine data from a representative sample of

general hospitals and for rates of payment during the period January

first, nineteen hundred ninety-four through June thirtieth, nineteen

hundred ninety-six based upon nineteen hundred ninety-two data from a

representative sample of general hospitals that the costs associated

with the portion of hospital stays in excess of the long stay outlier

thresholds do not exceed three percent of the total of the acute care

cost components of reimbursable inpatient operating costs related to the

determination of case based rates of payment. The costs associated with

the outlier portion of long stay outliers for each general hospital

participating in the determination of the weighting factors shall be

removed from each diagnosis-related group before calculating the

weighting factors;

* NB Effective December 31, 2029

(iv) an estimate of inpatient costs which are related to short stay

patients as defined in paragraph (d) of subdivision four of this section

shall be eliminated from reimbursable inpatient operating costs

considering a short stay patient cost conversion factor determined based

on nineteen hundred eighty-five data from a representative sample of

general hospitals; a case mix neutral acute care cost component of a

general hospital's reimbursable inpatient operating cost base per day

after application of the trend factor and the addition of special

additional inpatient operating costs; short stay patient days incurred

by such general hospital in nineteen hundred eighty-seven or the number

of such short stay patient days during a recent twelve month period

prior thereto established by regulation for which data are available

subsequently reconciled by an adjustment to reflect nineteen hundred

eighty-seven data; and the specific diagnosis-related groups with which

the short stay patients are identified. Such costs shall be eliminated

in accordance with rules and regulations adopted by the council and

approved by the commissioner which shall contain the specific

methodology to adequately identify the costs related to short stay

patients. Short stay cases shall be eliminated in computing discharges

of a general hospital. The costs and discharges for short stay cases for

each general hospital participating in the determination of the

weighting factors shall be removed before calculating the weighting

factors.

7. Operating cost group component. (a) A general hospital's group

category average inpatient reimbursable operating cost per discharge

(price) shall be a composite factor determined in accordance with rules

and regulations adopted by the council and approved by the commissioner

based on a group price component determined in accordance with

subparagraph (i) of this paragraph, a hospital-specific price component

determined in accordance with subparagraph (ii) of this paragraph, and

an adjustment in accordance with subparagraph (iii) of this paragraph.

(i) The group price component shall be based on the costs and

statistics of general hospitals in the group category established

pursuant to paragraph (b) of this subdivision to which the hospital is

assigned by the commissioner to compute a group based average inpatient

reimbursable operating cost per discharge for the group category.

General hospital costs and statistics shall be determined consistent

with the methodology to determine hospital-specific average reimbursable

inpatient operating cost per discharge pursuant to subdivision six of

this section; adjusted to reflect additional cost increases in

accordance with subparagraph (ii) of paragraph (e) of subdivision one of

this section; and adjusted to exclude the components of

hospital-specific inpatient reimbursable operating costs related to

education, physician, ambulance services and organ acquisition costs

determined in accordance with paragraph (c) of this subdivision and

malpractice insurance costs, and the components of special additional

inpatient operating costs determined and allocated in accordance with

subparagraphs (i), (iii) and (iv) of paragraph (e) of subdivision one of

this section associated with cost increases in such costs; and adjusted

to exclude the components of special additional inpatient operating

costs determined and allocated in accordance with clauses (B), (D), (H),

and (I) of subparagraph (iii) and clauses (A), (E) and (F) of

subparagraph (iv) of paragraph (e) of subdivision one of this section;

and adjusted to reflect additional modifications to case payments in

accordance with subparagraph (iii) of paragraph (c) of subdivision six

of this section. The group based average inpatient reimbursable

operating costs computed for a general hospital shall be adjusted to

reflect the hospital-specific indirect medical education costs

percentage of such hospital determined in accordance with subparagraph

(ii) of paragraph (c) of this subdivision.

Hospital costs shall be standardized for comparison purposes

considering differences in wage and wage-related costs levels and such

other economic factors, such as a power equalization factor, as may be

determined in accordance with rules and regulations adopted by the

council and approved by the commissioner.

(ii) A hospital-specific price component shall be determined for each

general hospital based on such hospital's hospital-specific education,

physician, ambulance services and organ acquisition costs determined in

accordance with subparagraphs (i), (iii) and (iv) of paragraph (c) of

this subdivision and malpractice insurance costs, and the components of

special additional inpatient operating costs determined and allocated in

accordance with subparagraphs (i), (iii) and (iv) of paragraph (e) of

subdivision one of this section associated with cost increases in such

costs, and special additional inpatient operating costs determined and

allocated in accordance with clauses (B), (D), (H) and (I) of

subparagraph (iii) and clauses (A), (E) and (F) of subparagraph (iv) of

paragraph (e) of subdivision one of this section, as excluded pursuant

to subparagraph (i) of this paragraph, per discharge, standardized to

reflect nineteen hundred eighty-seven hospital case mix.

(iii) A general hospital's group category average inpatient

reimbursable operating cost per discharge shall be adjusted on a payor

category basis to reflect allocation of malpractice insurance costs in

accordance with the methodology developed pursuant to subparagraph (ii)

of paragraph (h) of subdivision eleven of this section.

(b) General hospital group categories shall be established in

accordance with rules and regulations adopted by the council and

approved by the commissioner for purposes of computing group category

average inpatient reimbursable operating cost per discharge considering,

but not limited to, factors such as hospital size, hospital medical

education activity, teaching status and geographic divisions of the

state.

(c) Education, physician, ambulance services and organ acquisition

costs shall include:

(i) direct medical education expenses, defined as the reimbursable

costs of residents, fellows, and supervising physicians, combined with

the costs of hospital based physicians;

(ii) indirect medical education expenses, defined as an estimate of

the costs, other than direct costs, of educational activities in

teaching hospitals attributable to factors including but not limited to

increased overhead, more severely ill patients and the tendency of

residents to provide more tests than experienced licensed physicians.

For the rate period beginning January first, nineteen hundred

eighty-eight and ending December thirty-first, nineteen hundred

eighty-eight, an estimate of indirect medical education costs shall be

determined in accordance with the methodology applicable for purposes of

determining an estimate of indirect medical education costs for

reimbursement for inpatient hospital service pursuant to title XVIII of

the federal social security act (medicare) in effect on the first day of

July in the year preceding the rate period. The council may adopt rules

and regulations, subject to the approval of the commissioner, to revise

the methodology for the determination of an estimate of indirect medical

education costs to reflect revisions to the methodology applicable for

purposes of determining reimbursement for inpatient hospital service

pursuant to title XVIII of the federal social security act (medicare)

effective subsequent to the first day of July in the year preceding the

rate period. For annual rate periods beginning on or after January

first, nineteen hundred eighty-nine an estimate of indirect medical

education costs shall be determined in accordance with rules and

regulations adopted by the council and approved by the commissioner;

(iii) the reimbursable costs of schools of nursing, allied

professional programs and ambulance services; and

(iv) the reimbursable costs of organ acquisition services not

reimbursed pursuant to the methodology applicable for purposes of

reimbursement pursuant to title XVIII of the federal social security act

(medicare).

(d) The commissioner shall establish, in accordance with rules and

regulations adopted by the council and approved by the commissioner, the

methodology to determine the hospital's group category average inpatient

reimbursable operating cost per discharge (price) and the percentage

amounts, pursuant to subparagraphs (i), (ii) and (iii) of paragraph (b)

of subdivision five of this section, of the group category average

inpatient reimbursable operating cost per discharge to be used to

determine the inpatient reimbursable operating cost component of case

based rates for annual rate periods beginning on or after January first,

nineteen hundred eighty-eight.

8. Capital related inpatient expenses. (a) Capital related inpatient

expenses including but not limited to straight line depreciation on

buildings and non-movable equipment, accelerated depreciation on major

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 such article and article

twenty-eight of this chapter), shall be included in rates of payment

determined pursuant to this section based on a budget for capital

related inpatient expenses and subsequently reconciled to actual

expenses and statistics 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

expenditure which requires or required approval pursuant to this article

must have received such approval for any capital related expense

generated by such capital expenditure to be included in rates of

payment. 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 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 council shall adopt, with the approval of the commissioner,

regulations to:

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

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

general hospitals by requiring funding of inpatient depreciation on

building and fixed and movable equipment;

(iii) provide authorization to adjust inpatient rates by advancing

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

financial distress of voluntary, non-profit general hospitals; and

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

(b) Capital related inpatient expenses shall be included in case based

payments based on the hospital's average capital related inpatient

expenses per discharge. Adjustments shall be made to capital related

costs and statistics to reflect capital related inpatient expenses

reimbursed on a per diem basis in accordance with paragraphs (a), (d),

(e), (g) and (i) of subdivision four of this section.

(c) (i) In order to reconcile capital related inpatient expenses

included in rates of payment based on a budget to actual expenses and

statistics for the rate period for a general hospital, rates of payment

for a general hospital shall be adjusted to reflect the dollar value of

the difference between capital related inpatient expenses included in

the computation of rates of payment for a prior rate period based on a

budget and actual capital related inpatient expenses for such prior rate

period, each as determined in accordance with paragraph (a) of this

subdivision, adjusted to reflect increases or decreases in volume of

service in such prior rate period compared to statistics applied in

determining the capital related inpatient expenses component of rates of

payment based on a budget for such prior rate period.

(ii) For rates effective April first, two thousand twenty through

March thirty-first, two thousand twenty-one, the budgeted

capital-related expenses add-on as described in paragraph (a) of this

subdivision, based on a budget submitted in accordance to paragraph (a)

of this subdivision, shall be reduced by five percent relative to the

rate in effect on such date; and the actual capital expenses add-on as

described in paragraph (a) of this subdivision, based on actual expenses

and statistics through appropriate audit procedures in accordance with

paragraph (a) of this subdivision shall be reduced by five percent

relative to the rate in effect on such date.

(iii) For rates effective April first, two thousand twenty-one through

September thirtieth, two thousand twenty-four, the budgeted

capital-related expenses add-on as described in paragraph (a) of this

subdivision, based on a budget submitted in accordance to paragraph (a)

of this subdivision, shall be reduced by ten percent relative to the

rate in effect on such date; and the actual capital expenses add-on as

described in paragraph (a) of this subdivision, based on actual expenses

and statistics through appropriate audit procedures in accordance with

paragraph (a) of this subdivision shall be reduced by ten percent

relative to the rate in effect on such date.

(iv) For rates effective October first, two thousand twenty-four

through March thirty-first, two thousand twenty-six, the budgeted

capital-related expenses add-on as described in paragraph (a) of this

subdivision, based on a budget submitted in accordance with paragraph

(a) of this subdivision, shall be reduced by twenty percent relative to

the rate in effect on such date; and the actual capital expenses add-on

as described in paragraph (a) of this subdivision shall be reduced by

twenty percent relative to the rate in effect on such date.

(v) For rates effective on and after April first, two thousand

twenty-six, the budgeted capital-related expenses add-on as described in

paragraph (a) of this subdivision, based on a budget submitted in

accordance with paragraph (a) of this subdivision, shall be reduced by

ten percent relative to the rate in effect on such date; and the actual

capital expenses add-on as described in paragraph (a) of this

subdivision shall be reduced by ten percent relative to the rate in

effect on such date. Such rate adjustments shall be subject to federal

financial participation.

(vi) For any rate year, all reconciliation add-on amounts calculated

for the period of April first, two thousand twenty through September

thirtieth, two thousand twenty-four shall be reduced by ten percent, and

all reconciliation recoupment amounts calculated for the period of April

first, two thousand twenty through September thirtieth, two thousand

twenty-four shall increase by ten percent.

(vii) For any rate year, all reconciliation add-on amounts calculated

for the period October first, two thousand twenty-four through March

thirty-first, two thousand twenty-six shall be reduced by twenty

percent, and all reconciliation recoupment amounts calculated for the

period October first, two thousand twenty-four through March

thirty-first, two thousand twenty-six, shall increase by twenty percent.

Such rate adjustments shall be subject to federal financial

participation.

(viii) For any rate year, all reconciliation add-on amounts calculated

on and after April first, two thousand twenty-six shall be reduced by

ten percent, and all reconciliation recoupment amounts calculated on or

after April first, two thousand twenty-six shall increase by ten

percent. Such rate adjustments shall be subject to federal financial

participation.

(ix) Notwithstanding any inconsistent provision of subparagraph (i) of

paragraph (e) of subdivision nine of this section, capital related

inpatient expenses of a general hospital included in the computation of

rates of payment based on a budget shall not be included in the

computation of a volume adjustment made in accordance with such

subparagraph. Adjustments to rates of payment for a general hospital

made pursuant to this paragraph shall be made in accordance with

paragraph (c) of subdivision eleven of this section. Such adjustments

shall not be carried forward except for such volume adjustment as may be

authorized in accordance with subparagraph (i) of paragraph (e) of

subdivision nine of this section for such general hospital.

* (e) Notwithstanding any inconsistent provision of this subdivision,

commencing April first, nineteen hundred ninety-five, when a factor for

reconciliation of budgeted capital related inpatient expenses to actual

capital related inpatient expenses for a prior year is included in the

capital related inpatient expenses component of rates of payment, such

capital related inpatient expenses component of rates of payment shall

be reduced by the commissioner by the difference between the reconciled

capital related inpatient expenses included in rates of payment

determined in accordance with paragraphs (a), (b) and (c) of this

subdivision for such prior year and capital related inpatient expenses

for such prior year calculated based on the hospital's average capital

related inpatient expenses computed on a per diem basis.

* NB Effective through March 31, 2029

* (f) Notwithstanding any inconsistent provision of this section,

commencing April first, nineteen hundred ninety-five for purposes of

determining the capital related inpatient expenses component of rates of

payment for patients eligible for payments made by state governmental

agencies for a rate year, the submitted budget for capital related

inpatient expenses of a general hospital applicable to the rate year

shall be decreased by the commissioner to reflect the percentage amount

by which the budget for the base year two years prior to the rate year

for capital related inpatient expenses of the hospital exceeded actual

expenses.

* NB Effective through March 31, 2029

* (g) Notwithstanding any inconsistent provision of this article,

commencing April first, nineteen hundred ninety-five for rates of

payment for patients eligible for payments made by state governmental

agencies, the capital related inpatient expenses component determined in

accordance with paragraph (a) of this subdivision and the capital cost

per visit components determined in accordance with subparagraphs (i) and

(ii) of paragraph (g) of subdivision two of section twenty-eight hundred

seven of this article shall be adjusted by the commissioner to exclude

such expenses related to:

(i) forty-four percent of the costs of major movable equipment; and

(ii) staff housing.

* NB Effective through March 31, 2029

9. Adjustments. For annual rate periods beginning on or after January

first, nineteen hundred eighty-eight:

(a) 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 in

excess of costs reported by the general hospital in the nineteen hundred

eighty-five cost report, after application of the trend factor, 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 operational expenses to permit a more efficient and

economical method of delivering a service;

(v) increased costs determined to be needed to recruit or maintain an

appropriate level of personnel providing professional services to

patients; and

(vi) increased costs for compensation of employees.

(c) In determining the reasonableness or justification of an

adjustment to an established rate related to subparagraph (vi) 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) General hospitals may request and the commissioner shall consider

a change in assignment among the group categories established pursuant

to paragraph (b) of subdivision seven of this section to which the

hospital is assigned for purposes of computing group category average

reimbursable inpatient operating cost per discharge.

(e) (i) Volume adjustments which would result in revisions in case

payment rates shall not be made to reflect increases or decreases in

discharges for other than beneficiaries of title XVIII of the federal

social security act (medicare) in rate years beginning on or after

January first, nineteen hundred eighty-eight, except in those specific

instances where a decrease in volume as measured by discharges,

including discharges of patients for whom reimbursement is provided on a

per diem basis in accordance with paragraph (a) of subdivision eleven of

this section, is equal to or greater than one percent of discharges in

nineteen hundred eighty-seven for those general hospitals having two

hundred or less certified acute care beds and classified as a rural

hospital for purposes of determining payment for inpatient services

provided to beneficiaries of title XVIII of the federal social security

act (medicare) or under state regulations, based on the total number of

inpatient acute care beds for which such general hospital is certified

pursuant to the operating certificate issued for such general hospital

in accordance with section twenty-eight hundred five of this article in

effect on June thirtieth, nineteen hundred ninety, or equal to or

greater than ten percent of discharges in nineteen hundred eighty-seven

for all other general hospitals, and the failure to make such adjustment

seriously impacts on the financial stability of a needed hospital, and

except in those specific instances where an increase in volume as

measured by discharges is equal to or greater than ten percent of

discharges in nineteen hundred eighty-seven. Provided, however, that an

adjustment for volume increases shall not apply to those general

hospitals having two hundred or less certified acute care beds and

classified as a rural hospital for purposes of determining payment for

inpatient services provided to beneficiaries of title XVIII of the

federal social security act (medicare) or under state regulations, based

on the total number of inpatient acute care beds for which such general

hospital is certified pursuant to the operating certificate issued for

such general hospital in accordance with section twenty-eight hundred

five of this article in effect on June thirtieth, nineteen hundred

ninety. For general hospitals and distinct units of general hospitals

not reimbursed on a case based payment per discharge basis, volume

adjustments may be made during the above indicated rate years in

accordance with regulations adopted by the council and approved by the

commissioner.

(ii) The commissioner shall adjust the rates for those general

hospitals and units of general hospitals excluded from case payment in

accordance with paragraph (e) or (g) of subdivision four of this section

for case mix changes for other than beneficiaries of title XVIII of the

federal social security act (medicare).

(f) General hospitals that did not qualify for a volume adjustment for

the nineteen hundred eighty-six and nineteen hundred eighty-seven rate

periods for rates of payment determined in accordance with section

twenty-eight hundred seven-a of this article may request and the

commissioner shall consider an adjustment to an established case based

rate of payment for nineteen hundred eighty-eight based on increases in

volume as measured by discharges, based on a comparison between nineteen

hundred eighty-five and nineteen hundred eighty-seven discharges,

excluding in such comparison discharges of patients who are

beneficiaries of title XVIII of the federal social security act

(medicare) and discharges related to transfer cases (transferring

hospital) and short stay cases as defined in this section, provided such

general hospital meets performance criteria established in accordance

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

commissioner. Such criteria shall include but need not be limited to:

maintenance of like patient occupancy rates for the rate periods

nineteen hundred eighty-five, nineteen hundred eighty-six and nineteen

hundred eighty-seven; a reduction in patient length of stay for other

than beneficiaries of title XVIII of the federal social security act

(medicare) based on a comparison with nineteen hundred eighty-five data;

and an expanded use of ambulatory surgery by the general hospital based

on a comparison with nineteen hundred eighty-five data. Such adjustment

shall consider, but need not be limited to, the variable costs related

to volume changes in accordance with rules and regulations adopted by

the council and approved by the commissioner.

(g) 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.

(h) 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.

* 10. Trend factors. (a) The commissioner, in accordance with the

methodology developed for rate periods through March thirty-first, two

thousand, for rates of payment for state governmental agencies and

through December thirty-first, nineteen hundred ninety-six for rates of

payment for all other payors 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. 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 for rate periods through March

thirty-first, two thousand, for rates of payment for state governmental

agencies and through December thirty-first, nineteen hundred ninety-six

for rates of payment for all other payors by four independent

consultants with expertise in health economics or reimbursement

methodologies for health-related services appointed by the

commissioner. For nineteen hundred ninety-six, through March

thirty-first, two thousand, the commissioner shall apply the nineteen

hundred ninety-five trend factor methodology. The commissioner shall

monitor the actual price movements of the external price indicators

used in the methodology for one interim adjustment to the trend factors

to reflect such price movements and one final adjustment to the trend

factors to reflect such price movements. At the same time adjustments

are made to the trend factors in accordance with this paragraph,

adjustments shall be made to all inpatient rates of payment affected by

the adjusted trend factors.

(c) (1) For rate periods on and after April first, two thousand, the

commissioner shall establish trend factors for rates of payment for

state governmental agencies to project for the effects of inflation

except that such trend factors shall not be applied to services for

which rates of payment are established by the commissioners of the

department of mental hygiene. The factors shall be applied to the

appropriate portion of reimbursable costs.

(2) In developing trend factors for such rates of payment, the

commissioner shall use the most recent Congressional Budget Office

estimate of the rate year's U.S. Consumer Price Index for all urban

consumers published in the Congressional Budget Office Economic and

Budget Outlook after June first of the rate year prior to the year for

which rates are being developed.

(3) After the final U.S. Consumer Price Index (CPI) for all urban

consumers is published by the United States Department of Labor, Bureau

of Labor Statistics, for a particular rate year, the commissioner shall

reconcile such final CPI to the projection used in subparagraph two of

this paragraph and any difference will be included in the prospective

trend factor for the current year.

(4) At the time adjustments are made to the trend factors in

accordance with this paragraph, adjustments shall be made to all

inpatient rates of payment affected by the trend factor adjustment.

* NB Effective until December 31, 2029

* 10. Trend factors. (a) The commissioner, in accordance with the

methodology developed 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. 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 or reimbursement methodologies for

health-related services appointed by the commissioner. On or about

September first of each year, the consultants shall provide to the

commissioner and the council a report in writing detailing 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 movements 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 the

recommendations of the consultants for one prospective interim annual

adjustment to the trend factors to reflect such price movements and to

be effective on January first, one year after the initial trend factor

was established and one prospective final annual adjustment to the trend

factors to reflect such price movements and to be effective on January

first, two years after the initial trend factor was established. At the

same time adjustments are made to the trend factors in accordance with

this paragraph, adjustments shall be made to all inpatient rates of

payment affected by the adjusted trend factors.

* NB Effective December 31, 2029

11. Special provisions. (a) Notwithstanding any inconsistent provision

of this chapter or any other law to the contrary, payment for inpatient

hospital services provided on or after January first, nineteen hundred

eighty-eight to a patient admitted to a general hospital prior to

January first, nineteen hundred eighty-eight otherwise eligible for

payment on a case based payment per discharge basis for a

diagnosis-related group shall be at the rate of payment for such general

hospital for such patient in effect for December thirty-first, nineteen

hundred eighty-seven provided, however, that the operating cost

components of such rates of payment for inpatient hospital services

provided on or after January first, nineteen hundred eighty-eight shall

be projected to the rate period by the trend factor determined in

accordance with subdivision ten of this section and reconciled on a

cumulative basis on or about March thirty-first, nineteen hundred

eighty-eight and December thirty-first, nineteen hundred eighty-eight

for payment of adjusted rates of payment based on such trend factor

adjustment. The component of such rates of payment based on the

allowances provided in accordance with paragraphs (e) and (f) of

subdivision eight of section twenty-eight hundred seven-a of this

article shall be returned to the applicable regional pool created in

accordance with subdivision fifteen of such section and distributed in

accordance with subdivision sixteen of such section based on needs for

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

charity care as determined for purposes of nineteen hundred eighty-seven

distributions.

(b) The council shall adopt rules and regulations subject to the

approval of the commissioner regarding payor payment responsibilities

when a patient has coverage with more than one payor for general

hospital inpatient services and during a hospital stay exhausts benefits

available from the primary payor, or receives services not reimbursed by

the primary payor, so that the hospital shall be reimbursed by a

secondary payor for services not reimbursed by the primary payor that

are included as a benefit of the secondary payor. A primary payor for

purposes of this paragraph shall include benefits available pursuant to

title XVIII of the federal social security act (medicare).

* (c)(i) Adjustments to rates made pursuant to this section for rate

periods commencing on or after January first, nineteen hundred

ninety-seven may be made prospectively or retrospectively on the next

following January or July unless otherwise specifically authorized.

(ii) The commissioner may further adjust rates retrospectively for

payments by state governmental agencies upon a finding that the failure

to do so seriously impacts on a general hospital's financial stability.

(iii) Regardless of whether rates are adjusted prospectively or

retrospectively the authorized dollar value of the adjustment shall be

the same, calculated by including the retroactive impact of such

adjustment if such adjustment is made prospectively. A prospective

adjustment to reflect the retroactive impact of an adjustment shall be

included in the determination of rates of payment for a prospective rate

period based on the methodology applied in accordance with this section

for calculation of rates of payment for such prospective rate period.

The allowance reflected in payments to a general hospital or a pool

related to a prospective adjustment which reflects the retroactive

impact of an adjustment shall be computed based on the allowance

percentage in effect during the prospective period such adjustment is in

effect. No recalculation of the basis for distribution of funds from bad

debt and charity care regional pools determined in accordance with

subdivision seventeen of this section shall be made for a prospective

adjustment which reflects the retroactive impact of an adjustment.

* NB Effective until December 31, 2029

* (c)(i) Adjustments to rates made pursuant to this section shall be

made prospectively on the next following January or July unless

otherwise specifically authorized provided, however, that adjustments to

rates of payment to reflect nineteen hundred eighty-seven data and

statistics may be made retrospectively and such retrospective

adjustments shall, to the extent practicable, be cumulated for one

comprehensive adjustment.

(ii) The commissioner may further adjust rates retrospectively upon a

finding that the failure to do so seriously impacts on a general

hospital's financial stability.

(iii) Regardless of whether rates are adjusted prospectively or

retrospectively the authorized dollar value of the adjustment shall be

the same, calculated by including the retroactive impact of such

adjustment if such adjustment is made prospectively. A prospective

adjustment to reflect the retroactive impact of an adjustment shall be

included in the determination of rates of payment for a prospective rate

period based on the methodology applied in accordance with this section

for calculation of rates of payment for such prospective rate period,

provided, however, that no recalculation of bad debt and charity care

allowance percentages determined in accordance with subdivision fourteen

of this section shall be made for a prospective adjustment which

reflects the retroactive impact of an adjustment. The bad debt and

charity care allowance of a general hospital related to a prospective

adjustment which reflects the retroactive impact of an adjustment shall

be computed based on the bad debt and charity care allowance percentage

of such hospital in effect during the prospective period such adjustment

is in effect. No recalculation of the basis for distribution of funds

from bad debt and charity care regional pools determined in accordance

with subdivision seventeen of this section shall be made for a

prospective adjustment which reflects the retroactive impact of an

adjustment.

* NB Effective December 31, 2029

(d) 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.

Financing or working capital charges shall not be applied to hospital

billings to third party payors participating in an advance payment

system. Any payor not participating in an advance payment system or

offering admission billing shall allow interim billing for a patient

whose stay exceeds thirty days.

(e) (i) Except for payments made pursuant to the workers' compensation

law, the volunteer firefighters' benefit law, or the volunteer ambulance

workers' benefit law, a two percent discount from general hospital

payments shall be available to all payors whose payments are calculated

in accordance with paragraphs (b) and (c) of subdivision one of this

section making payment in full to a general hospital for covered

hospital services within ten calendar days of receipt from the hospital

by the appropriate payor of a bill for such services.

(ii) A three percentage point reduction in the differential of five

percent for general hospital payments shall be available to all payors

whose payments are calculated in accordance with paragraph (b) of

subdivision one or paragraph (e) of subdivision four of this section

which are making payments pursuant to the workers' compensation law, the

volunteer firefighters' benefit law, or the volunteer ambulance workers'

benefit law when such payments are made in full to a general hospital

for covered hospital services within ninety calendar days of receipt

from the hospital by the appropriate payor of a bill for such services,

and an additional two percentage point reduction shall be available for

such payors if such payment is made within forty-five calendar days of

receipt of such a bill.

(f) (i) * In order to allow for real increases in general hospital

case mix while limiting the effect of potential case mix changes that

are the result of changes in coding practices rather than real changes

in case mix, the commissioner shall annually for rate periods through

December thirty-first, nineteen hundred ninety-six, in accordance with

rules and regulations adopted by the council and approved by the

commissioner, adjust individual general hospitals' case payment rates

determined in accordance with paragraphs (a) and (b) of subdivision one

of this section to account for increases in the statewide average case

mix, based on increases in statewide average assignment to

diagnosis-related groups for all patients other than beneficiaries of

title XVIII of the federal social security act (medicare), that exceed

the allowable statewide increase determined in accordance with this

subparagraph. The commissioner further shall adjust individual general

hospitals' case payment rates determined in accordance with this section

for state governmental agencies for the periods January first, nineteen

hundred ninety-seven through March thirty-first, two thousand and on and

after April first, two thousand, in accordance with clause (G) of this

subparagraph and to account for increases in statewide average case mix,

based on increases in statewide average assignment to diagnosis-related

groups based on data only for patients that are eligible for medical

assistance pursuant to title eleven of article five of the social

services law, including such patients enrolled in health maintenance

organizations, that exceed the allowable statewide increase determined

in accordance with clause (B-1) of this subparagraph.

* NB Effective until December 31, 2029

* In order to allow for real increases in general hospital case mix

while limiting the effect of potential case mix changes that are the

result of changes in coding practices rather than real changes in case

mix, the commissioner shall annually for rate periods through December

thirty-first, nineteen hundred ninety-six, in accordance with rules and

regulations adopted by the council and approved by the commissioner,

adjust individual general hospitals' case payment rates determined in

accordance with paragraphs (a) and (b) of subdivision one of this

section to account for increases in the statewide average case mix,

based on increases in statewide average assignment to diagnosis-related

groups for all patients other than beneficiaries of title XVIII of the

federal social security act (medicare), that exceed the allowable

statewide increase determined in accordance with this subparagraph. The

commissioner further shall adjust individual general hospitals' case

payment rates determined in accordance with this section for state

governmental agencies for the periods January first, nineteen hundred

ninety-seven through March thirty-first, two thousand in accordance with

clause (G) of this subparagraph and to account for increases in

statewide average case mix, based on increases in statewide average

assignment to diagnosis-related groups based on data only for patients

that are eligible for medical assistance pursuant to title eleven of

article five of the social services law, including such patients

enrolled in health maintenance organizations, that exceed the allowable

statewide increase determined in accordance with clause (B-1) of this

subparagraph.

* NB Effective and expires December 31, 2029

* In order to allow for real increases in general hospital case mix

while limiting the effect of potential case mix changes that are the

result of changes in coding practices rather than real changes in case

mix, the commissioner shall annually, in accordance with rules and

regulations adopted by the council and approved by the commissioner,

adjust individual general hospitals' case payment rates determined in

accordance with paragraphs (a) and (b) of subdivision one of this

section to account for increases in the statewide average case mix,

based on increases in statewide average assignment to diagnosis-related

groups for all patients other than beneficiaries of title XVIII of the

federal social security act (medicare), that exceed the allowable

statewide increase determined in accordance with this subparagraph.

* NB Effective December 31, 2029

(A) The increase in the statewide average case mix in a rate year

during the period January first, nineteen hundred eighty-eight through

December thirty-first, nineteen hundred ninety-three from the nineteen

hundred eighty-seven statewide average case mix shall not exceed two

percent in nineteen hundred eighty-eight compared to nineteen hundred

eighty-seven, three percent in nineteen hundred eighty-nine compared to

nineteen hundred eighty-seven, four percent in nineteen hundred ninety

compared to nineteen hundred eighty-seven, five percent in nineteen

hundred ninety-one compared to nineteen hundred eighty-seven, and,

notwithstanding any inconsistent rule or regulation, for rates of

payment for state governmental agencies six percent in nineteen hundred

ninety-two compared to nineteen hundred eighty-seven and seven percent

in nineteen hundred ninety-three compared to nineteen hundred

eighty-seven, and for rates of payment for payors other than state

governmental agencies six and seven-tenths percent in nineteen hundred

ninety-two compared to nineteen hundred eighty-seven and seven percent

in nineteen hundred ninety-three compared to nineteen hundred

eighty-seven.

* (B) The increase in the statewide average case mix in a rate year

during the period January first, nineteen hundred ninety-four through

December thirty-first, nineteen hundred ninety-six from the nineteen

hundred ninety-two statewide average case mix, plus adjustments, shall

not exceed: for rates of payment for state governmental agencies two

percent in the period January first, nineteen hundred ninety-four

through June thirtieth, nineteen hundred ninety-four, and,

notwithstanding any inconsistent rule or regulation, six and two-tenths

percent in the period July first, nineteen hundred ninety-four through

December thirty-first, nineteen hundred ninety-four, three percent in

the period January first, nineteen hundred ninety-five through March

thirty-first, nineteen hundred ninety-five, two percent in the period

April first, nineteen hundred ninety-five through December thirty-first,

nineteen hundred ninety-five, and three percent in the period January

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

nineteen hundred ninety-six; and for rates of payment for payors other

than state governmental agencies two percent in nineteen hundred

ninety-four, three percent in nineteen hundred ninety-five, and four

percent in the period January first, nineteen hundred ninety-six through

December thirty-first, nineteen hundred ninety-six. Adjustments to the

nineteen hundred ninety-two statewide average case mix shall mean an

adjustment for any increase in nineteen hundred ninety-two statewide

average case mix compared to nineteen hundred eighty-seven statewide

average case mix in excess of six percent of nineteen hundred

eighty-seven statewide average case mix and a further adjustment to

reflect that measurement of case mix increase from the nineteen hundred

ninety-two statewide average case mix rather than the nineteen hundred

eighty-seven statewide average case mix reflects the increase in

statewide average case mix from nineteen hundred eighty-seven to

nineteen hundred ninety-two in order to maintain the effective maximum

rate of allowable statewide average case mix increases at a percentage

per year of the nineteen hundred eighty-seven statewide average case

mix. Nineteen hundred ninety-two case mix shall be determined based on

nineteen hundred ninety-two data received by the department by April

thirtieth, nineteen hundred ninety-three.

* NB Effective until December 31, 2029

* (B) The increase in the statewide average case mix in a rate year

during the period January first, nineteen hundred ninety-four through

June thirtieth, nineteen hundred ninety-six from the nineteen hundred

ninety-two statewide average case mix, plus adjustments, shall not

exceed: for rates of payment for state governmental agencies two percent

in the period January first, nineteen hundred ninety-four through June

thirtieth, nineteen hundred ninety-four, and, notwithstanding any

inconsistent rule or regulation, six and two-tenths percent in the

period July first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-four, three percent in the period

January first, nineteen hundred ninety-five through March thirty-first,

nineteen hundred ninety-five, and two percent in the period April first,

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

hundred ninety-five, and three percent in the period January first,

nineteen hundred ninety-six through June thirtieth, nineteen hundred

ninety-six; and for rates of payment for payors other than state

governmental agencies two percent in nineteen hundred ninety-four, three

percent in nineteen hundred ninety-five, and four percent in the period

January first, nineteen hundred ninety-six through June thirtieth,

nineteen hundred ninety-six. Adjustments to the nineteen hundred

ninety-two statewide average case mix shall mean an adjustment for any

increase in nineteen hundred ninety-two statewide average case mix

compared to nineteen hundred eighty-seven statewide average case mix in

excess of six percent of nineteen hundred eighty-seven statewide average

case mix and a further adjustment to reflect that measurement of case

mix increase from the nineteen hundred ninety-two statewide average case

mix rather than the nineteen hundred eighty-seven statewide average case

mix reflects the increase in statewide average case mix from nineteen

hundred eighty-seven to nineteen hundred ninety-two in order to maintain

the effective maximum rate of allowable statewide average case mix

increases at a percentage per year of the nineteen hundred eighty-seven

statewide average case mix. Nineteen hundred ninety-two case mix shall

be determined based on nineteen hundred ninety-two data received by the

department by April thirtieth, nineteen hundred ninety-three.

* NB Effective December 31, 2029

(B-1) The increase in the statewide average case mix in the periods

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

two thousand and on and after April first, two thousand through March

thirty-first, two thousand six and on and after April first, two

thousand six through March thirty-first, two thousand seven, and on and

after April first, two thousand seven through March thirty-first, two

thousand nine, and on and after April first, two thousand nine through

March thirty-first, two thousand eleven, from the statewide average case

mix for the period January first, nineteen hundred ninety-six through

December thirty-first, nineteen hundred ninety-six shall not exceed one

percent for nineteen hundred ninety-seven, two percent for nineteen

hundred ninety-eight, three percent for the period January first,

nineteen hundred ninety-nine through September thirtieth, nineteen

hundred ninety-nine, four percent for the period October first, nineteen

hundred ninety-nine through December thirty-first, nineteen hundred

ninety-nine, and four percent for two thousand plus an additional one

percent per year thereafter, based on comparison of data only for

patients that are eligible for medical assistance pursuant to title

eleven of article five of the social services law, including such

patients enrolled in health maintenance organizations.

(C) Rate year case mix shall be determined based on rate year data

received by the department by April thirtieth next following the end of

the rate year. Case mix may be determined based on general hospital data

received or amended after such due dates provided, however, that a

general hospital that does not submit the appropriate data in a timely

manner shall be subject to the provisions of section twelve-d of this

chapter.

* (D) If in any rate period on an annualized basis the cumulative case

mix increase exceeds the allowable statewide increase, rates of payment

to general hospitals shall be adjusted in accordance with rules and

regulations adopted by the council and approved by the commissioner

which shall contain the specific methodology to allocate the reduction

among general hospitals, in order to reduce the effect of the statewide

increase on rates of payment to reflect the allowable increase.

Notwithstanding any inconsistent provision of this paragraph, rate

adjustments for purposes of this paragraph shall be made on a six month

rate period basis for the period July first, nineteen hundred

ninety-four through December thirty-first, nineteen hundred ninety-four.

The retroactive impact of adjustments to rates of payment for payors

other than state governmental agencies based on the amendments to this

paragraph effective July first, nineteen hundred ninety-four shall be

reflected in a prospective adjustment to rates of payment for such

payors for the period July first, nineteen hundred ninety-four through

December thirty-first, nineteen hundred ninety-four.

* NB Effective until December 31, 2029

* (D) If in any rate year the cumulative case mix increase exceeds the

allowable statewide increase, rates of payment to general hospitals

shall be adjusted in accordance with rules and regulations adopted by

the council and approved by the commissioner which shall contain the

specific methodology to allocate the reduction among general hospitals,

in order to reduce the effect of the statewide increase on rates of

payment to reflect the allowable increase. Notwithstanding any

inconsistent provision of this paragraph, rate adjustments for purposes

of this paragraph shall be made on a six month rate period basis for the

period July first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-four. The retroactive impact of

adjustments to rates of payment for payors other than state governmental

agencies based on the amendments to this paragraph effective July first,

nineteen hundred ninety-four shall be reflected in a prospective

adjustment to rates of payment for such payors for the period July

first, nineteen hundred ninety-four through December thirty-first,

nineteen hundred ninety-four.

* NB Effective December 31, 2029

(E) Such methodology shall take into account past trends of individual

general hospitals' case mix changes, and, within the aggregate allowable

statewide increase in case mix, permit general hospitals to appeal to

the commissioner their proposed allocation of a reduction in rates of

payment related to increases in statewide average case mix based on such

factors as changes in hospital service delivery and referral patterns.

(F) Case mix changes due to acquired immune deficiency syndrome,

tuberculosis, epidemics or other catastrophes resulting in extraordinary

hospital utilization shall not be subject to this limitation.

* (G) Adjustments determined in accordance with clause (B) of this

subparagraph for the period January first, nineteen hundred ninety-six

through December thirty-first, nineteen hundred ninety-six on a final

basis, and in accordance with subparagraph (ii) of this paragraph on an

interim basis, shall be applied to rates of payment for state

governmental agencies during the period January first, nineteen hundred

ninety-seven through March thirty-first, two thousand and periods on and

after April first, two thousand.

* NB Expires December 31, 2029

* (G) Adjustments determined in accordance with clause (B) of this

subparagraph for the period January first, nineteen hundred ninety-six

through December thirty-first, nineteen hundred ninety-six on a final

basis, and in accordance with subparagraph (ii) of this paragraph on an

interim basis, shall be applied to rates of payment for state

governmental agencies during the period January first, nineteen hundred

ninety-seven through March thirty-first, two thousand.

* NB Effective and repealed December 31, 2029

* (ii) (A) The commissioner shall, in accordance with rules and

regulations adopted by the council and approved by the commissioner, for

purposes of payments on an interim basis periodically compute an

adjustment to individual general hospitals' case payment rates for prior

periods for the payor categories specified in paragraphs (a) and (b) of

subdivision one of this section to account for increases in the

statewide average case mix, based on increases in statewide average

assignment to diagnosis-related groups for all patients other than

beneficiaries of title XVIII of the federal social security act

(medicare), that exceed the allowable statewide increase. The increase

in the statewide average case mix in a rate year during the period

January first, nineteen hundred eighty-eight through December

thirty-first, nineteen hundred ninety-three from the nineteen hundred

eighty-seven statewide average case mix and in a rate year during the

period January first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-six from the adjusted nineteen

hundred ninety-two statewide average case mix shall not exceed the

allowable statewide increase as determined in accordance with

subparagraph (i) of this paragraph. Adjustments may be made on a

quarterly basis consistent with this annual limitation. If in any

quarter of the rate year the cumulative case mix increase for the rate

year exceeds the allowable statewide increase, payment rates to general

hospitals shall be adjusted in accordance with rules and regulations

adopted by the council and approved by the commissioner which shall

contain the specific methodology to allocate the reduction among general

hospitals provided, however, that any funds to be recovered from

hospitals based on such adjustments for prior periods shall be recovered

by prospective adjustment of rates of payment in accordance with

paragraph (c) of this subdivision, in order to reduce the effect of the

statewide increase on rates of payment to reflect the allowable

increase, taking into consideration the effect of any adjustment

applicable in the rate period made in accordance with subparagraph (iii)

of this paragraph. Case mix changes due to acquired immune deficiency

syndrome, tuberculosis, epidemics or other catastrophes resulting in

extraordinary hospital utilization shall not be subject to this

limitation, pursuant to rules and regulations adopted by the council and

approved by the commissioner.

(B) The commissioner further shall for purposes of payments on an

interim basis periodically compute an adjustment to individual general

hospitals' case payment rates for prior periods for payments made by

state governmental agencies to account for increases in the statewide

average case mix, based on increases in statewide average assignment to

diagnosis-related groups for patients that are eligible for medical

assistance pursuant to title eleven of article five of the social

services law eligible for payments made by state governmental agencies

or by health maintenance organizations, that exceed the allowable

statewide increase as determined in accordance with clause (B-1) of

subparagraph (i) of this paragraph.

* NB Effective until December 31, 2029

* (ii) The commissioner shall, in accordance with rules and

regulations adopted by the council and approved by the commissioner, for

purposes of payments on an interim basis periodically compute an

adjustment to individual general hospitals' case payment rates for prior

periods for the payor categories specified in paragraphs (a) and (b) of

subdivision one of this section to account for increases in the

statewide average case mix, based on increases in statewide average

assignment to diagnosis-related groups for all patients other than

beneficiaries of title XVIII of the federal social security act

(medicare), that exceed the allowable statewide increase. The increase

in the statewide average case mix in a rate year during the period

January first, nineteen hundred eighty-eight through December

thirty-first, nineteen hundred ninety-three from the nineteen hundred

eighty-seven statewide average case mix and in a rate year during the

period January first, nineteen hundred ninety-four through June

thirtieth, nineteen hundred ninety-six from the adjusted nineteen

hundred ninety-two statewide average case mix shall not exceed the

allowable statewide increase as determined in accordance with

subparagraph (i) of this paragraph. Adjustments may be made on a

quarterly basis consistent with this annual limitation. If in any

quarter of the rate year the cumulative case mix increase for the rate

year exceeds the allowable statewide increase, payment rates to general

hospitals shall be adjusted in accordance with rules and regulations

adopted by the council and approved by the commissioner which shall

contain the specific methodology to allocate the reduction among general

hospitals provided, however, that any funds to be recovered from

hospitals based on such adjustments for prior periods shall be recovered

by prospective adjustment of rates of payment in accordance with

paragraph (c) of this subdivision, in order to reduce the effect of the

statewide increase on rates of payment to reflect the allowable

increase, taking into consideration the effect of any adjustment

applicable in the rate period made in accordance with subparagraph (iii)

of this paragraph. Case mix changes due to acquired immune deficiency

syndrome, tuberculosis, epidemics or other catastrophes resulting in

extraordinary hospital utilization shall not be subject to this

limitation, pursuant to rules and regulations adopted by the council and

approved by the commissioner.

* NB Effective December 31, 2029

(iii) The commissioner shall, in accordance with rules and regulations

adopted by the council and approved by the commissioner, periodically

prospectively adjust for purposes of payments on an interim basis

individual general hospitals' case payment rates for the payor

categories specified in paragraphs (a) and (b) of subdivision one of

this section to account for increases in statewide average assignment to

diagnosis-related groups which exceed the allowable statewide increase

as determined in accordance with subparagraph (ii) of this paragraph.

(iv) Rates of payment of a general hospital shall be adjusted in

accordance with paragraph (c) of this subdivision to reflect the

difference between an individual general hospital's case payment rates

adjusted in accordance with subparagraph (i) of this paragraph for a

rate period and such rates determined in accordance with paragraphs (a)

and (b) of subdivision one of this section, taking into consideration

any adjustment to case payment rates applicable for such rate period

made in accordance with subparagraphs (ii) and (iii) and for the periods

beginning on or after July first, nineteen hundred ninety, subparagraph

(v) of this paragraph.

(v) Notwithstanding any inconsistent provision of law, for the periods

beginning on or after July first, nineteen hundred ninety and subsequent

annual rate periods beginning January first the commissioner shall

reduce, in accordance with the methodology adopted for purposes of

adjustments pursuant to subparagraph (ii) of this paragraph, for

purposes of payments on an interim basis individual general hospitals'

case payment rates applicable to state governmental agencies for a

prospective period to reflect an estimate of the cumulative increase in

statewide average assignment to diagnosis-related groups for prior

periods including prior quarters of the rate period which exceeds the

allowable statewide increase specified in subparagraph (i) of this

paragraph for the prospective period. Such adjustment if effected for

less than an annual prospective rate period shall reflect an annualized

adjustment.

(vi) Notwithstanding any inconsistent provision of law, adjustments to

rates of payment pursuant to this paragraph based on nineteen hundred

ninety-three data that reflects an increase in statewide average case

mix compared to nineteen hundred eighty-seven that exceeds the increase

based on nineteen hundred ninety-two data in statewide average case mix

compared to nineteen hundred eighty-seven shall not be implemented until

April first, nineteen hundred ninety-five and shall be made

prospectively for rates of payment issued effective April first,

nineteen hundred ninety-five including the impact of such adjustment for

the period January first, nineteen hundred ninety-five through March

thirtieth, nineteen hundred ninety-five.

(g) Notwithstanding any other provisions of this section, all costs

and statistics that are related to inpatient services provided to

beneficiaries of title XVIII of the federal social security act

(medicare) shall not be included in the establishment of any payment

rates computed in accordance with the provisions of this section.

(i) Unless provided otherwise in specific provisions included in this

section, the exclusion of costs which are related to routine inpatient

services provided to beneficiaries of title XVIII of the federal social

security act (medicare) and covered by title XVIII of the federal social

security act (medicare) shall be based on the nineteen hundred

eighty-five inpatient days actually paid on behalf of beneficiaries of

title XVIII of the federal social security act (medicare) plus any days

for such beneficiaries not paid on the basis of a decision by a review

agent that the days were unnecessary. Ancillary costs related to

inpatient services provided to beneficiaries of title XVIII of the

federal social security act (medicare) and covered by title XVIII of the

federal social security act (medicare) shall be excluded on the basis of

the nineteen hundred eighty-five cost center ratio of hospital ancillary

inpatient service charges related to such beneficiaries to total

hospital cost center inpatient ancillary services charges applied to

cost center costs. Inpatient malpractice insurance costs which are

attributable to title XVIII of the federal social security act

(medicare) shall be excluded based on the methodology employed by title

XVIII of the federal social security act (medicare) to identify such

costs.

(ii) Costs and statistics related to inpatient services provided to

beneficiaries of title XVIII of the federal social security act

(medicare) and covered by a secondary payor shall be excluded in

accordance with rules and regulations adopted by the council and

approved by the commissioner in the determination of case payment rates

computed in accordance with the provisions of this section.

(h)(i) Any malpractice insurance costs which are the result of general

hospitals having to purchase or provide excess malpractice insurance

coverage for physicians in accordance with section nineteen of chapter

two hundred ninety-four of the laws of nineteen hundred eighty-five or

section eighteen of chapter two hundred sixty-six of the laws of

nineteen hundred eighty-six as amended shall not be included in

calculating malpractice insurance costs for purposes of paragraph (e) of

subdivision one of this section.

(ii) The component of general hospital reimbursable inpatient

operating costs based on the general hospital's inpatient malpractice

insurance costs plus the component of special additional inpatient

operating costs determined in accordance with subparagraphs (i) and

(iii) of paragraph (e) of subdivision one of this section specifically

related to inpatient malpractice insurance costs used to determine

payment rates for annual rate periods beginning on or after January

first, nineteen hundred eighty-eight shall be allocated among the payors

in accordance with regulations adopted by the council and approved by

the commissioner.

(i) For patients discharged during the period April first, nineteen

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

ninety-three insured under a commercial insurer licensed to do business

in this state and authorized to write accident and health insurance and

whose policy provides inpatient hospital coverage on an expense incurred

basis, the payment rate shall be increased in addition to the payment

rate conversion factor of thirteen percent by a supplementary payment

rate conversion factor of eleven percent for a total conversion factor

of twenty-four percent. This paragraph shall not apply to payments

pursuant to the workers' compensation law, the volunteer firefighters'

benefit law, the volunteer ambulance workers' benefit law, the

comprehensive motor vehicle insurance reparations act, the terms of any

personal injury liability insurance policy, marine and inland marine

insurance policy or marine protections and indemnity insurance policy.

(j) No operating cost ceilings or disallowances other than those

applicable for purposes of the determination of a general hospital's

reimbursable inpatient operating cost base in accordance with paragraph

(d) of subdivision one of this section shall be applied to general

hospitals, except for any cost ceilings or disallowances applied for

purposes of subdivision twenty-four of this section and cost

disallowances for general hospitals with rates based on budgeted costs.

(k) Notwithstanding any inconsistent provision of this section, case

based rates of payment per discharge may, in accordance with rules and

regulations adopted by the council and approved by the commissioner,

reflect incorporation of severity of illness considerations in the

methodology to determine such rates of payment.

(l) Notwithstanding any inconsistent provision of this section,

nothing in this section shall preclude a modification to case based

rates of payment per discharge in accordance with rules and regulations

adopted by the council and approved by the commissioner to reflect

readmission of an individual or unnecessary multiple admissions of an

individual to a general hospital or general hospitals.

(m) Notwithstanding any inconsistent provision of this section, a

general hospital that exceeded maximum charge limitations as determined

by the commissioner in the rate periods nineteen hundred eighty-four

through nineteen hundred eighty-seven may be authorized in accordance

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

commissioner to reduce payments determined pursuant to this section in

order to effect a reduction equivalent to such amount by which such

general hospital exceeded maximum charge limitations.

(n) (i) For a patient discharged from a general hospital on or after

August first, nineteen hundred eighty-eight and covered by a payor

included in the payor categories specified in paragraph (a) or (b) of

subdivision one of this section that provides for a percentage

coinsurance responsibility by or on behalf of such patient for covered

hospital services: (A) the dollar value of such percentage coinsurance

responsibility by or on behalf of such patient shall be determined by

multiplying such coinsurance percentage by the hospital's charges for

such patient, determined in accordance with paragraph (c) of subdivision

one of this section or paragraph (e) of subdivision four of this section

for a general hospital or distinct unit of a general hospital not

reimbursed on case based payments, for the services covered by the

payor, considering any applicable deductibles, and (B) the payment due

to a general hospital for reimbursement of inpatient hospital services

by such payor shall be determined by multiplying the payment rate

determined in accordance with this section for such patient for covered

hospital services by the coinsurance percentage for which such payor is

responsible, considering any applicable deductibles.

(ii) A patient covered by a payor included in the payor categories

specified in paragraph (a) or (b) of subdivision one of this section

shall be deemed liable for the payment rate for inpatient hospital

services for such patient for covered services determined in accordance

with this section based on the rate of payment for such payor, provided,

however, that for a patient discharged from a general hospital on or

after August first, nineteen hundred eighty-eight a percentage

coinsurance responsibility by or on behalf of such patient shall be

deemed satisfied by payment of the dollar value of such percentage

coinsurance responsibility determined in accordance with clause (A) of

subparagraph (i) of this paragraph.

(o) No general hospital shall refuse to provide hospital services to a

person presented or proposed to be presented for admission to such

general hospital by a representative of a correctional facility or a

local correctional facility as defined respectively in subdivisions

four, fifteen and sixteen of section two of the correction law based

solely on the grounds such person is an incarcerated individual of such

correctional facility or local correctional facility. No general

hospital may demand or request any charge for hospital services provided

to such person in addition to the charges or rates authorized in

accordance with this article, except for charges for identifiable

additional hospital costs associated with or reasonable additional

charges associated with security arrangements for such person.

(p)(i) Notwithstanding any inconsistent provision of law, a general

hospital that provides an inpatient component of hospice care for

persons eligible for payments to a hospice by a government agency made

in accordance with subdivisions two and three of section four thousand

twelve of this chapter shall be reimbursed for such inpatient services

by or on behalf of the hospice at a rate of payment no greater than the

applicable rate of payment determined in accordance with subdivisions

two and three of section four thousand twelve of this chapter for such

hospice and no general hospital may charge for such inpatient services

rendered an amount in excess of such applicable rate of payment.

(ii) Notwithstanding any inconsistent provision of law, a general

hospital that provides in accordance with contractual arrangements

between a hospice and such general hospital an inpatient component of

hospice care for persons who are not eligible for payments to the

hospice by a government agency made in accordance with subdivisions two

and three of section four thousand twelve of this chapter or as

beneficiaries of title XVIII of the federal social security act

(medicare) shall be reimbursed for such inpatient services by or on

behalf of the hospice in accordance with such contractual arrangements.

(q) A third-party payor specified in paragraph (a), (b) or (c) of

subdivision one of this section, with the exception of governmental

agencies, shall provide the general hospital with a remittance advice at

the time payment or adjustment to such payment is made. Such remittance

advice shall include the patient's name, date of service, admission or

financial control number if available and diagnosis-related group

classification number if applicable and if different than that billed by

the hospital. Such remittance advice shall also include (i) the amount

or percentage payable under the policy or certificate after deductibles,

co-payments and any other reduction of the amount billed including

deductions for prompt payment; and (ii) a specific explanation of any

denial, reduction, or other reason including any other third-party payor

coverage, for not providing full reimbursement of the amount claimed.

* (r) Notwithstanding any inconsistent provision of this section, for

purposes of establishing rates of payment by state governmental agencies

for general hospital inpatient services provided for discharges on or

after April first, nineteen hundred ninety-five, the reimbursable base

year inpatient administrative and general costs of a general hospital,

which shall include but not be limited to reported administrative and

general, data processing, non-patient telephone, purchasing, admitting,

and credit and collection costs, excluding a provider reimbursed on an

initial budget basis, shall not exceed the statewide average of total

reimbursable base year inpatient administrative and general costs. For

the purposes of this paragraph, reimbursable base year administrative

and general costs shall mean those base year administrative and general

costs remaining after application of all other efficiency standards,

including, but not limited to, peer group cost ceilings or guidelines.

The limitation on reimbursement for provider administrative and general

expenses provided by this paragraph shall be expressed as a percentage

reduction of the operating cost component of the rate promulgated by the

commissioner for each general hospital.

* NB Expired March 31, 2011

* (s) Notwithstanding any inconsistent provisions of this section, for

the period July first, nineteen hundred ninety-six through March

thirty-first, nineteen hundred ninety-seven, the commissioner shall

increase rates of payment for patients eligible for payments made by

state governmental agencies by an amount not to exceed forty-five

million dollars in the aggregate to be allocated among those voluntary

non-profit and private proprietary general hospitals which qualified for

rate adjustments pursuant to this paragraph as in effect for the period

July first, nineteen hundred ninety-five through June thirtieth,

nineteen hundred ninety-six proportionally based on each such general

hospital's proportional share of the total funds allocated pursuant to

this paragraph as in effect for the period of July first, nineteen

hundred ninety-five through June thirtieth, nineteen hundred ninety-six.

* NB Expires December 31, 2029

(s-1) To the extent funds are available pursuant to the provisions of

paragraph (s-2) of this subdivision and otherwise notwithstanding any

inconsistent provision of law to the contrary, for the rate periods

September first, nineteen hundred ninety-seven through March

thirty-first, nineteen hundred ninety-eight, and April first, nineteen

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

ninety-nine, the commissioner shall increase rates of payment for

patients eligible for payments made by state governmental agencies by an

amount not to exceed forty-eight million dollars in the aggregate for

each such rate period, allocated among those voluntary non-profit and

private proprietary general hospitals which qualified for rate

adjustments pursuant to paragraph (s) of this subdivision as in effect

for the period July first, nineteen hundred ninety-five through June

thirtieth, nineteen hundred ninety-six proportionally based on each such

general hospital's proportional share of total funds allocated pursuant

to paragraph (s) of this subdivision as in effect for the period of July

first, nineteen hundred ninety-five through June thirtieth, nineteen

hundred ninety-six. The rate adjustments calculated in accordance with

this paragraph shall be subject to retrospective reconciliation to

ensure that each hospital receives in the aggregate its proportionate

share of the full allocation, to the extent allowable under federal law,

provided however that the department shall not be required to reconcile

payments made pursuant to paragraph (s) of this subdivision applicable

to periods prior to September first, nineteen hundred ninety-seven.

(s-2) (i) Notwithstanding any inconsistent provision of law to the

contrary, the following funds heretofore or hereinafter accumulated

shall be transferred by the commissioner and credited to the credit of

the state general fund medical assistance local assistance account in an

aggregate amount equal to the non-federal share of the costs of the rate

adjustments authorized pursuant to paragraph (s-1) of this subdivision:

(A) from pool reserves from statewide and regional pools established

pursuant to sections twenty-eight hundred seven-a, twenty-eight hundred

seven-c, and twenty-eight hundred eight-c of this article;

(B) from unobligated monies available pursuant to paragraph (b) of

subdivision nineteen of section twenty-eight hundred seven-c of this

article;

(C) from interest income derived from pools established pursuant to

sections twenty-eight hundred seven-k, twenty-eight hundred seven-l and

twenty-eight hundred seven-s of this article.

(ii) To the extent that funds available pursuant to the provisions of

subparagraph (i) of this paragraph are insufficient to meet the

non-federal share of the costs of the rate adjustments authorized

pursuant to paragraph (s-1) of this subdivision, the following funds

hereto or hereinafter accumulated may be transferred by the commissioner

to the state general fund medical assistance local assistance account

for the purposes set forth in subparagraph (i) of this paragraph:

(A) from unobligated monies available pursuant to paragraphs (g) and

(j) of subdivision 1 of section twenty-eight hundred seven-l of this

article;

(B) from unobligated monies available pursuant to clause (D) of

subparagraph (ii) of paragraph (b) of subdivision one of section

twenty-eight hundred seven-l of this article.

(iii) Notwithstanding any inconsistent provision of law to the

contrary, the commissioner shall transfer up to an additional two

million dollars from the funding sources identified in subparagraph (i)

of this paragraph to the state general fund. To the extent monies

available from the funding sources identified in subparagraph (i) of

this paragraph total less than two million dollars, the commissioner

shall transfer monies from funding sources identified in subparagraph

(ii) of this paragraph to the state general fund so that the total

amount transferred pursuant to this provision equals two million

dollars.

(s-3) To the extent funds are available pursuant to the provisions of

paragraph (s-4) of this subdivision and otherwise notwithstanding any

inconsistent provision of law to the contrary, for the rate period July

first, nineteen hundred ninety-nine through March thirty-first, two

thousand, the commissioner shall increase rates of payment for patients

eligible for payments made by state governmental agencies by an amount

not to exceed thirty-six million dollars in the aggregate. Such amount

shall be allocated among those voluntary non-profit and private

proprietary general hospitals which continue to provide inpatient

services as of July first, nineteen hundred ninety-nine under a previous

or new name and which qualified for rate adjustments pursuant to

paragraph (s) of this subdivision as in effect for the period July

first, nineteen hundred ninety-five through June thirtieth, nineteen

hundred ninety-six proportionally based on each such general hospital's

proportional share of total funds allocated pursuant to paragraph (s) of

this subdivision as in effect for the period of July first, nineteen

hundred ninety-five through June thirtieth, nineteen hundred ninety-six,

provided however, that amounts allocable to previously but no longer

qualified hospitals shall be proportionally reallocated to the remaining

qualified hospitals. The rate adjustments calculated in accordance with

this paragraph shall be subject to retrospective reconciliation to

ensure that each hospital receives in the aggregate its proportionate

share of the full allocation, to the extent allowable under federal law,

provided however that the department shall not be required to reconcile

payments made pursuant to paragraph (s) of this subdivision applicable

to periods prior to September first, nineteen hundred ninety-seven.

(s-4) Notwithstanding any inconsistent provision of law to the

contrary, funds available pursuant to section 32-c of part F of the

chapter of the laws of nineteen hundred ninety-nine which adds this

paragraph shall be transferred by the commissioner and credited to the

credit of the state general fund medical assistance local assistance

account in an aggregate amount equal to the non-federal share of the

costs of the rate adjustments authorized pursuant to paragraph (s-3) of

this subdivision.

* (s-5) To the extent funds are available pursuant to paragraph (s) of

subdivision one of section twenty-eight hundred seven-v of this article

and otherwise notwithstanding any inconsistent provision of law, for

rate periods April first, two thousand through March thirty-first, two

thousand three, the commissioner shall increase rates of payment for

patients eligible for payments made by state governmental agencies by an

amount not to exceed forty-eight million dollars annually in the

aggregate. Such amount shall be allocated among those voluntary

non-profit and private proprietary general hospitals which continue to

provide inpatient services as of July first, nineteen hundred

ninety-nine under a previous or new name and which qualified for rate

adjustments pursuant to paragraph (s) of this subdivision as in effect

for the period July first, nineteen hundred ninety-five through June

thirtieth, nineteen hundred ninety-six proportionally based on each such

general hospital's proportional share of total funds allocated pursuant

to paragraph (s) of this subdivision as in effect for the period of July

first, nineteen hundred ninety-five through June thirtieth, nineteen

hundred ninety-six, provided however, that amounts allocable to

previously but no longer qualified hospitals shall be proportionally

reallocated to the remaining qualified hospitals. The rate adjustments

calculated in accordance with this paragraph shall be subject to

retrospective reconciliation to ensure that each hospital receives in

the aggregate its proportionate share of the full allocation, to the

extent allowable under federal law, provided however that the department

shall not be required to reconcile payments made pursuant to paragraph

(s) of this subdivision applicable to periods prior to September first,

nineteen hundred ninety-seven.

* NB Expires December 31, 2029

(s-6) To the extent funds are available otherwise notwithstanding any

inconsistent provision of law to the contrary, for rate periods April

first, two thousand three through March thirty-first, two thousand five,

the commissioner shall increase rates of payment for patients eligible

for payments made by state governmental agencies by an amount not to

exceed forty-eight million dollars annually in the aggregate. Such

amount shall be allocated among those voluntary non-profit and private

proprietary general hospitals which continue to provide inpatient

services as of July first, nineteen hundred ninety-nine under a previous

or new name and which qualified for rate adjustments pursuant to

paragraph (s) of this subdivision as in effect for the period July

first, nineteen hundred ninety-five through June thirtieth, nineteen

hundred ninety-six proportionally based on each such general hospital's

proportional share of total funds allocated pursuant to paragraph (s) of

this subdivision as in effect for the period of July first, nineteen

hundred ninety-five through June thirtieth, nineteen hundred ninety-six,

provided however, that amounts allocable to previously but no longer

qualified hospitals shall be proportionally reallocated to the remaining

qualified hospitals. The rate adjustments calculated in accordance with

this paragraph shall be subject to retrospective reconciliation to

ensure that each hospital receives in the aggregate its proportionate

share of the full allocation, to the extent allowable under federal law,

provided however that the department shall not be required to reconcile

payments made pursuant to paragraph (s) of this subdivision applicable

to periods prior to September first, nineteen hundred ninety-seven.

These payments may be added to rates of payment or made as aggregate

payments to eligible hospitals.

(s-7) To the extent funds are available otherwise notwithstanding any

inconsistent provision of law to the contrary, for rate periods April

first, two thousand five through March thirty-first, two thousand seven,

the commissioner shall increase rates of payment for patients eligible

for payments made by state governmental agencies by an amount not to

exceed forty-eight million dollars annually in the aggregate. Such

amount shall be allocated among those voluntary non-profit and private

proprietary general hospitals which continue to provide inpatient

services as of April first, two thousand five under a previous or new

name and which qualified for rate adjustments pursuant to paragraph (s)

of this subdivision as in effect for the period July first, nineteen

hundred ninety-five through June thirtieth, nineteen hundred ninety-six

proportionally based on each such general hospital's proportional share

of total funds allocated pursuant to paragraph (s) of this subdivision

as in effect for the period of July first, nineteen hundred ninety-five

through June thirtieth, nineteen hundred ninety-six, provided however,

that amounts allocable to previously but no longer qualified hospitals

shall be proportionally reallocated to the remaining qualified

hospitals. The rate adjustments calculated in accordance with this

paragraph shall be subject to retrospective reconciliation to ensure

that each hospital receives in the aggregate its proportionate share of

the full allocation, to the extent allowable under federal law, provided

however that the department shall not be required to reconcile payments

made pursuant to paragraph (s) of this subdivision applicable to periods

prior to September first, nineteen hundred ninety-seven.

(s-8) To the extent funds are available and otherwise notwithstanding

any inconsistent provision of law to the contrary, for rate periods on

and after April first, two thousand seven through November thirtieth,

two thousand nine, the commissioner shall increase rates of payment for

patients eligible for payments made by state governmental agencies by an

amount not to exceed sixty million dollars annually in the aggregate.

Such amount shall be allocated among those voluntary non-profit general

hospitals which continue to provide inpatient services as of April

first, two thousand seven through March thirty-first, two thousand eight

and which have medicaid inpatient discharges percentages equal to or

greater than thirty-five percent. This percentage shall be computed

based upon data reported to the department in each hospital's two

thousand four institutional cost report, as submitted to the department

on or before January first, two thousand seven. The rate adjustments

calculated in accordance with this paragraph shall be allocated

proportionally based on each eligible hospital's total reported medicaid

inpatient discharges in two thousand four, to the total reported

medicaid inpatient discharges for all such eligible hospitals in two

thousand four, provided, however, that such rate adjustments shall be

subject to reconciliation to ensure that each hospital receives in the

aggregate its proportionate share of the full allocation to the extent

allowable under federal law. Such payments may be added to rates of

payment or made as aggregate payments to eligible hospitals, provided,

however, that subject to the availability of federal financial

participation and solely for the period April first, two thousand seven

through March thirty-first, two thousand eight, six million dollars in

the aggregate of this sixty million dollars shall be allocated to

voluntary non-profit hospitals which continue to provide inpatient

services as of April first, two thousand seven through March

thirty-first, two thousand eight and which have Medicaid inpatient

discharge percentages of less than thirty-five percent and which had

previously qualified for distributions pursuant to paragraph (s-7) of

this subdivision. The rate adjustment calculated in accordance with this

paragraph shall be allocated proportionally based on the amount of money

the hospital had received in two thousand six.

12. 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 commissioner for payments by such article

forty-three insurance law corporations or article forty-four

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

nine-c 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 payments

established by such hospital for patient services in accordance with the

provisions of paragraph (c) of subdivision one of this section, or in

the event the article forty-three insurance law corporation or

comprehensive health services plan operating pursuant to the provisions

of article forty-four of this chapter provides for reimbursement on an

expense incurred basis and makes payment directly to such hospital for

patient services for its subscribers or beneficiaries, such article

forty-three insurance law corporation or comprehensive health services

plan shall be an additional category of payor of inpatient hospital

services whose rates of payment are determined in accordance with

paragraph (b) of subdivision one of this section based on an imputed

rate of payment determined in accordance with paragraph (a) of

subdivision one of this section for an article forty-three insurance law

corporation, adjusted for uncovered services, and increased by thirteen

percent.

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

nine-c 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 payments established by such

hospital for patient services in accordance with the provisions of

paragraph (c) of subdivision one of this section, or in the event the

article forty-three insurance law corporation or comprehensive health

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

of this chapter provides for reimbursement on an expense incurred basis

and makes payment directly to such hospital for patient services for its

subscribers or beneficiaries, such article forty-three insurance law

corporation or comprehensive health services plan shall be an additional

category of payor of inpatient hospital services whose rates of payment

are determined in accordance with paragraph (b) of subdivision one of

this section based on an imputed rate of payment determined in

accordance with paragraph (a) of subdivision one of this section for an

article forty-three insurance law corporation, adjusted for uncovered

services, and increased by thirteen percent.

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

such subscribers or beneficiaries solely on the grounds of such

subscription or membership.

(d) The provisions of this subdivision shall also apply to payments to

general hospitals by a corporation organized and operating in accordance

with article forty-three of the insurance law for inpatient and

outpatient services on behalf of subscribers of a foreign corporation

which performs similar functions in another state or which belongs to a

national association comprised of similar corporations to which the

article forty-three corporation also belongs; provided, however, the

foreign corporation or the laws of the state in which the foreign

corporation is organized extends to article forty-three corporations

organized and operating in this state a reciprocal right to have the

foreign corporation make payments to hospitals in that other state on

behalf of subscribers of the article forty-three corporations at the

same rate of payment as that foreign corporation pays for its own

subscribers.

* (e) The provisions of this subdivision shall not apply to patients

discharged on or after January first, nineteen hundred ninety-seven.

* NB Expires December 31, 2029

13. Restitution authorization. In enforcing the provisions of

subdivisions one and twelve 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 objects to any order of the commissioner

hereunder. The commissioner may direct that such a hearing be held

without any request by a hospital.

14. Bad debt and charity care allowance. * (a) With the exception of

rates of payment for services provided to beneficiaries of title XVIII

of the federal social security act (medicare), all rates and general

hospital charges, including rates of payment for state governmental

agencies provided all federal approvals necessary by federal law and

regulation for federal financial participation in payments made for

beneficiaries eligible for medical assistance under title XIX of the

federal social security act based upon the allowance provided herein as

a component of such payments are granted, established for rate periods

commencing on or after January first, nineteen hundred eighty-eight and

prior to January first, nineteen hundred ninety-seven in accordance with

this section shall include the allowance specified in paragraph (c) of

this subdivision. The allowance shall be computed on the basis of the

operating and capital related components of such rates after trending of

the operating portion. For the purposes of this subdivision and

subdivision seventeen 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.

* NB Effective until December 31, 2029

* (a) With the exception of rates of payment for services provided to

beneficiaries of title XVIII of the federal social security act

(medicare), all rates and general hospital charges, including rates of

payment for state governmental agencies provided all federal approvals

necessary by federal law and regulation for federal financial

participation in payments made for beneficiaries eligible for medical

assistance under title XIX of the federal social security act based upon

the allowance provided herein as a component of such payments are

granted, established for rate periods commencing on or after January

first, nineteen hundred eighty-eight in accordance with this section

shall include the allowance specified in paragraph (c) of this

subdivision. The allowance shall be computed on the basis of the

operating and capital related components of such rates after trending of

the operating portion. For the purposes of this subdivision and

subdivision seventeen 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.

* NB Effective December 31, 2029

(b) The allowance shall be 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

sixteen of this section, and within a statewide determination of

financial resources to be committed for this purpose.

Need shall be defined as inpatient losses from bad debts reduced to

cost and the inpatient costs of charity care increased by any deficit of

such hospital 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. Funds received by major public general hospitals

pursuant to article forty-one of the mental hygiene law shall be

considered to have been provided for inpatient hospital deficits only.

The council shall adopt rules and regulations, subject to the approval

of the commissioner, to establish uniform reporting and accounting

principles designed to enable hospitals to fairly and accurately

determine and report losses from bad debts and the costs of charity

care.

(c) The regional amounts to be included in rates approved for the rate

year commencing January first, nineteen hundred eighty-eight shall be

equal to the sum of the following two components divided by the total

reimbursable inpatient costs for the general hospitals located in the

region, excluding inpatient costs related to beneficiaries of title

XVIII of the federal social security act (medicare), and after

application of the trend factor. The first component shall be the result

of the ratio between the total nominal payment amount in dollars as

determined in subparagraph (i) of this paragraph that would be allocated

to voluntary non-profit, private proprietary and public general

hospitals other than major public general hospitals in the region based

on a targeted need formula applied in accordance with subparagraphs (i)

and (ii) of this paragraph and the statewide sum of such nominal payment

amounts to voluntary non-profit, private proprietary and public general

hospitals other than major public general hospitals applied to the total

statewide resources committed for this purpose to regional pools in the

rate year, excluding the total statewide amount allocated in the rate

year for this purpose to major public general hospitals in accordance

with subparagraph (iii) of this paragraph. The second component shall be

the dollar amount allocated to major public general hospitals in the

region in accordance with subparagraph (iii) of this paragraph. The

regional amount to be included in the rates approved for the rate years

commencing on or after January first, nineteen hundred eighty-nine shall

be computed in the same manner except that the base year for the

targeted need as specified in subparagraph (i) of this paragraph shall

be the calendar year which is two years prior to the rate year. For each

annual rate period commencing on or after January first, nineteen

hundred eighty-eight, the statewide amount to be available in regional

pools for this purpose shall equal five and forty-eight hundredths

percent of the total hospital reimbursable inpatient costs, excluding

inpatient costs related to services provided to beneficiaries of title

XVIII of the federal social security act (medicare), computed without

consideration of inpatient uncollectible amounts, and after application

of the trend factor.

(i) Targeted need shall be defined as the relationship of need to net

patient service revenue expressed as a percentage. Net patient service

revenue shall be defined as net patient revenue attributable to

inpatient and outpatient services excluding referred ambulatory

services. For the rate year beginning January first, nineteen hundred

eighty-eight and ending December thirty-first, nineteen hundred

eighty-eight the scale specified in subparagraph (ii) of this paragraph

shall be utilized to calculate individual hospital's nominal payment

amounts on the basis of the percentage relationship between their

nineteen hundred eighty-six need and nineteen hundred eighty-six net

patient service revenues. The nominal payment amount shall be defined as

the sum of the dollars attributable to the application of an

incrementally increasing proportion of reimbursement for percentage

increases in targeted need according to the scale specified in

subparagraph (ii) of this paragraph. The sum of the nominal payment

amounts for all hospitals in a region shall be the region's total

nominal payment amount.

(ii) The scale utilized for development of each hospital's nominal

payment amount shall be as follows:

Percentage of Reimbursement

Attributable to that Portion

Targeted Need Percentage of Targeted Need

0 -1% 35%

1+ -2% 50%

2+ -3% 65%

3+ -4% 85%

4+ -5% 90%

5%+ 95%

(iii) The dollar amount allocated to major public general hospitals in

a region in the rate years nineteen hundred eighty-eight, nineteen

hundred eighty-nine and in that portion of the nineteen hundred ninety

rate year beginning on January first and ending on June thirtieth shall

be one hundred two percent and in that portion of the nineteen hundred

ninety rate year beginning on July first and ending on December

thirty-first, and in subsequent rate years shall be one hundred ten

percent of the result of the application of the ratio of the major

public general hospitals' inpatient reimbursable costs within the region

to total statewide general hospital inpatient reimbursable costs, as

computed on the basis of nineteen hundred eighty-five financial and

statistical reports and excluding costs related to services to

beneficiaries of title XVIII of the federal social security act

(medicare), to the statewide resources committed for this purpose to

regional pools, computed without consideration of inpatient

uncollectible amounts.

(iv) Notwithstanding any inconsistent provision of this section,

commencing April first, nineteen hundred ninety-five the allowance

pursuant to this subdivision shall be a uniform regional allowance

percentage of five and forty-eight hundredths percent for all regions.

(d) In the event the regional percentage bad debt and charity care

allowances for general hospitals for a rate period commencing on or

after January first, nineteen hundred ninety-four determined in

accordance with paragraph (c) of this subdivision to be submitted to bad

debt and charity care regional pools established pursuant to subdivision

sixteen of this section and deposited in accordance with subdivision

seventeen of this section do not qualify for waiver pursuant to federal

law and regulation related to such regional allowance variations, in

order for such allowances to be qualified as a broad-based health care

related tax for purposes of the revenues received by the state from such

allowances not reducing the amount expended by the state as medical

assistance for purposes of federal financial participation, but the

regional percentage allowances for the nineteen hundred ninety-three

rate year do so qualify, then the regional percentage allowances for the

regions for the nineteen hundred ninety-three rate year determined in

accordance with paragraph (c) of this subdivision shall be further

continued for such period for such regions.

14-a. Supplementary bad debt and charity care adjustment. (a)

Notwithstanding any inconsistent provision of this section, rates of

payment for inpatient hospital services for persons eligible for

payments made by state governmental agencies for the period April first,

nineteen hundred eighty-nine to December thirty-first, nineteen hundred

eighty-nine and for each annual period commencing January first during

the period January first, nineteen hundred ninety to December

thirty-first, nineteen hundred ninety-three applicable to patients

eligible for federal financial participation under title XIX of the

federal social security act in medical assistance provided pursuant to

title eleven of article five of the social services law determined in

accordance with this section for a major public general hospital, as

defined in paragraph (a) of subdivision fourteen of this section, shall

include a supplementary bad debt and charity care adjustment determined

in accordance with paragraph (b) of this subdivision provided the state

governmental agency or the county government in which such general

hospital is located, or the city of New York for a general hospital

operated by the New York city health and hospitals corporation, files in

such time and manner as may be specified by the commissioner an election

for such adjustment for such hospital for each period provided that such

election is subject to the approval of the state director of the budget

and provided all federal approvals necessary by federal law and

regulation for federal financial participation in payments made for

beneficiaries eligible for medical assistance under title XIX of the

federal social security act based upon the adjustment provided herein as

a component of such payments are granted.

(b)(i) A supplementary bad debt and charity care adjustment for the

period April first, nineteen hundred eighty-nine to December

thirty-first, nineteen hundred eighty-nine and for each annual period

commencing January first during the period January first, nineteen

hundred ninety to December thirty-first, nineteen hundred ninety-three

for an eligible major public general hospital shall be determined for

each period in accordance with rules and regulations adopted by the

council and approved by the commissioner based upon the amount

calculated by subtracting the amount projected to be distributed to such

major public general hospital pursuant to paragraph (a) of subdivision

seventeen of this section for such period from an amount calculated as

the product of the projected bad debt and charity care nominal payment

amount coverage ratio for such period for voluntary non-profit, private

proprietary and public general hospitals other than major public general

hospitals multiplied by the base year bad debt and charity care imputed

nominal payment amount for such major public general hospital determined

in accordance with the methodology provided in paragraph (c) of

subdivision fourteen of this section for calculation of a nominal

payment amount for voluntary non-profit, private proprietary and public

general hospitals other than major public general hospitals. The

coverage ratio shall be computed as the ratio between the sum of the

dollar value of the amount committed to the regional pools in accordance

with paragraph (c) of subdivision fourteen of this section and paragraph

(a) of subdivision nineteen of this section for the rate period that

would be allocated to voluntary non-profit, private proprietary and

public general hospitals other than major public general hospitals in

accordance with paragraph (b) of subdivision seventeen of this section

and the base year nominal payment amount for such hospitals.

(ii) A supplementary bad debt and charity care adjustment provided in

accordance with subparagraph (i) of this paragraph shall be adjusted to

reflect actual distributions pursuant to paragraph (a) and (b) of

subdivision seventeen of this section.

* (c) Notwithstanding any inconsistent provision of this subdivision,

a supplementary bad debt and charity care adjustment shall be determined

and provided for each of the nineteen hundred ninety-four, nineteen

hundred ninety-five and nineteen hundred ninety-six rate periods,

provided that the election pursuant to paragraph (a) of this subdivision

is continued for such period, for a major public general hospital equal

to the higher of such adjustment for the nineteen hundred ninety-one

rate period or for the nineteen hundred ninety-three rate period. The

adjustment may be made to rates of payment or as aggregate payments to

an eligible hospital.

* NB Effective until December 31, 2029

* (c) Notwithstanding any inconsistent provision of this subdivision,

a supplementary bad debt and charity care adjustment shall be determined

and provided for each of the nineteen hundred ninety-four, nineteen

hundred ninety-five and for the period January first, nineteen hundred

ninety-six through June thirtieth, nineteen hundred ninety-six rate

periods, provided that the election pursuant to paragraph (a) of this

subdivision is continued for such period, for a major public general

hospital equal to the higher of such adjustment for the nineteen hundred

ninety-one rate period or for the nineteen hundred ninety-three rate

period. The adjustment may be made to rates of payment or as aggregate

payments to an eligible hospital.

* NB Effective December 31, 2029

* (d) Notwithstanding any inconsistent provision of law, the

provisions of paragraphs (a), (b) and (c) of this subdivision shall not

apply to payments for patients discharged on or after January first,

nineteen hundred ninety-seven.

* NB Expires December 31, 2029

14-b. General health care services allowance. (a) With the exception

of rates of payment for services provided to beneficiaries of title

XVIII of the federal social security act (medicare), all rates and

general hospital charges established for rate periods commencing on or

after January first, nineteen hundred ninety-one in accordance with this

section shall include a percentage allowance of the general hospital's

reimbursable inpatient costs, excluding inpatient costs related to

services provided to beneficiaries of title XVIII of the federal social

security act (medicare), computed without consideration of inpatient

uncollectible amounts, and after application of the trend factor, as

follows:

(i) for the nineteen hundred ninety-one, nineteen hundred ninety-two

and nineteen hundred ninety-three rate periods, an allowance of

twenty-three hundredths of one percent;

(ii) for the nineteen hundred ninety-four rate period, an allowance of

six hundred fourteen thousandths of one percent;

(iii) for the January first, nineteen hundred ninety-five through June

thirtieth, nineteen hundred ninety-five rate period, an allowance of six

hundred thirty-seven thousandths of one percent;

(iv) for the July first, nineteen hundred ninety-five through December

thirty-first, nineteen hundred ninety-five rate period, an allowance of

one and forty-two hundredths percent; and

* (v) for the January first, nineteen hundred ninety-six through

December thirty-first, nineteen hundred ninety-six rate period, an

allowance of one and nine hundredths percent.

* NB Effective until December 31, 2029

* (v) for the January first, nineteen hundred ninety-six through June

thirtieth, nineteen hundred ninety-six rate period, an allowance of one

and nine hundredths percent.

* NB Effective December 31, 2029

(b) For rate periods beginning on or after January first, nineteen

hundred ninety-one but prior to January first, nineteen hundred

ninety-four, funds will be accumulated and made available in regional

pools created by the commissioner for regional distributions in

accordance with section twenty-eight hundred seven-bb of this chapter

through the submission by or on behalf of general hospitals of the

allowance included in rates and charges in accordance with paragraph (a)

of this subdivision. Such regions shall be those established pursuant to

paragraph (b) of subdivision sixteen of this section. The regional pools

may be administered in accordance with the provisions of paragraph (c)

of subdivision sixteen of this section applicable to bad debt and

charity care regional pools. Payments by or on behalf of general

hospitals to regional pools shall be due and arrearages shall be treated

in accordance with the provisions of subdivision twenty of this section

applicable to bad debt and charity care regional pools.

(c) If on September thirtieth, nineteen hundred ninety-four, any funds

accumulated over the period January first, nineteen hundred ninety-one

through December thirty-first, nineteen hundred ninety-three are unused

or uncommitted for the allocations provided for in this subdivision,

such unused or uncommitted funds shall be reallocated for use in

accordance with the provisions of subdivision seventeen of this section.

(d) For the rate periods commencing on or after January first,

nineteen hundred ninety-four, funds will be accumulated in a statewide

pool created by the commissioner through the submission by or on behalf

of general hospitals of the allowance included in rates and charges in

accordance with paragraph (a) of this subdivision, for distributions in

accordance with subdivision nineteen-a of this section.

(e) The commissioner is authorized to contract with a pool

administrator designated in accordance with paragraph (c) of subdivision

sixteen of this section or, if not available, such other administrators

as the commissioner shall designate, to receive funds for the pools

created pursuant to this subdivision and to distribute funds in

accordance with this subdivision and subdivision nineteen-a of this

section. If a pool administrator is designated, the commissioner shall

conduct or cause to be conducted an annual audit of the receipt and

distribution of pool funds. The reasonable costs and expenses of a pool

administrator as approved by the commissioner, not to exceed for

personnel services on an annual basis two hundred thousand dollars,

shall be paid from the pooled funds.

(f) (i) Payments to the pools by or on behalf of general hospitals of

funds due based on the allowances provided in accordance with this

subdivision shall be due in accordance with the provisions of

subdivision twenty of this section in the same manner as applicable to

bad debt and charity care regional pools. Arrearages in payments due may

be collected and interest and penalties due shall be determined and may

be collected by the commissioner in accordance with the provisions of

subdivision twenty of this section in the same manner as applicable to

bad debt and charity care regional pools.

(ii) Notwithstanding any inconsistent provision of this section, as

shall be necessary to obtain federal financial participation in medical

assistance expenditures in accordance with title XIX of the federal

social security act, the allowances included in rates of payment

pursuant to this subdivision on behalf of patients eligible for medical

assistance pursuant to title eleven of article five of the social

services law shall be withheld from medical assistance payments to

general hospitals and paid to pools on behalf of the general hospitals

where a general hospital elects such withholding in such time and manner

as specified by the commissioner, and in the event a general hospital

does not elect such withholding, payments by such general hospital to a

pool based on an allowance received for medical assistance patients

shall be due within five days of receipt of such funds. Funds withheld

by a payor and paid to a pool on behalf of a general hospital shall be

considered received by such general hospital and paid to the pool by

such general hospital for all purposes.

(g) The allowances provided pursuant to paragraph (a) of this

subdivision shall be effective and implemented for purposes of

determining rates of payment for state governmental agencies contingent

on receipt of all federal approvals necessary by federal law or

regulations for federal financial participation in payments made for

beneficiaries eligible for medical assistance under title XIX of the

federal social security act based upon such allowances as a component of

such payments. If such federal approvals are not granted for such

allowances or components thereof, rates of payment for state

governmental agencies shall be determined in accordance with the

provisions of this section without consideration of such allowances or

such components plus an adjustment not subject to federal financial

participation equal to one-half of the difference between such rates of

payment determined without consideration of such allowances or

components and a rate of payment determined based on such allowances or

components. The pools established pursuant to this subdivision shall

refund to the state governmental agency from pool reserves, current

funds or future receipts any overpayment received based on a retroactive

reduction pursuant to this paragraph in the allowances.

(h) The allowances provided pursuant to paragraph (a) of this

subdivision or components thereof shall be of no force and effect and

shall be deemed to have been null and void as of January first, nineteen

hundred ninety-four in the event the secretary of the department of

health and human services determines that such allowances or such

components thereof are an impermissible health care related tax for

purposes of the federal medicaid voluntary contribution and

provider-specific tax amendments of nineteen hundred ninety-one for

purposes of such funds reducing the amount deemed expended by the state

as medical assistance for purposes of federal financial participation.

14-c. Bad debt and charity care allowance for financially distressed

hospitals. * (a) With the exception of rates of payment for services

provided to beneficiaries of title XVIII of the federal social security

act (medicare), all rates and general hospital charges established for

rate periods commencing on or after January first, nineteen hundred

ninety-one but prior to January first, nineteen hundred ninety-four in

accordance with this section shall include an allowance of two hundred

thirty-five thousandths of one percent; and for the rate periods during

the period January first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-six an allowance of three hundred

twenty-five thousandths of one percent of the general hospital's

reimbursable inpatient costs, excluding inpatient costs related to

services provided to beneficiaries of title XVIII of the federal social

security act (medicare), computed without consideration of inpatient

uncollectible amounts, and after application of the trend factor.

* NB Effective until December 31, 2029

* (a) With the exception of rates of payment for services provided to

beneficiaries of title XVIII of the federal social security act

(medicare), all rates and general hospital charges established for rate

periods commencing on or after January first, nineteen hundred

ninety-one but prior to January first, nineteen hundred ninety-four in

accordance with this section shall include an allowance of two hundred

thirty-five thousandths of one percent; and for the rate periods during

the period January first, nineteen hundred ninety-four through June

thirtieth, nineteen hundred ninety-six an allowance of three hundred

twenty-five thousandths of one percent of the general hospital's

reimbursable inpatient costs, excluding inpatient costs related to

services provided to beneficiaries of title XVIII of the federal social

security act (medicare), computed without consideration of inpatient

uncollectible amounts, and after application of the trend factor.

* NB Effective December 31, 2029

(b) A statewide pool shall be created through the submissions by or on

behalf of general hospitals of the allowance included in rates and

charges in accordance with paragraph (a) of this subdivision. Funds

accumulated in the statewide pool, including income from invested funds,

shall be deposited by the commissioner and credited to a special

revenue-other fund to be established by the comptroller. To the extent

of funds appropriated therefor, funds shall be made available for

distributions by or on behalf of the state, as payments under the state

medical assistance program provided pursuant to title eleven of article

five of the social services law, from the statewide pool in the same

manner as distributions made in accordance with paragraph (c) of

subdivision nineteen of this section. The statewide pools may be

administered in accordance with the provisions of paragraph (c) of

subdivision sixteen of this section applicable to bad debt and charity

care regional pools. Payments by or on behalf of general hospitals to

statewide pools shall be due and arrearages, interest and penalties

shall be treated in accordance with the provisions of subdivision twenty

of this section applicable to bad debt and charity care regional pools.

(c) Notwithstanding any inconsistent provision of law, the

commissioner may allocate and distribute funds accumulated in the

statewide pool created pursuant to this subdivision and funds

accumulated in the statewide pool created by the assessments authorized

in accordance with subdivision eighteen of this section and available

for distribution in accordance with paragraphs (c) and (d) of

subdivision nineteen of this section for contracts for independent

management audits of financially distressed hospitals, provided,

however, that the total amount for audits pursuant to this paragraph

shall not exceed two million five hundred thousand dollars over the

period January first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-five. Copies of management audit

reports of financially distressed hospitals shall be provided by the

commissioner to the chairs of the senate and assembly health committees.

14-d. Supplementary low income patient adjustment. * (a)

Notwithstanding any inconsistent provision of this section, payment for

inpatient hospital services for persons eligible for payments made by

state governmental agencies for rate periods during the period January

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

nineteen hundred ninety-six applicable to patients eligible for federal

financial participation under title XIX of the federal social security

act in medical assistance provided pursuant to title eleven of article

five of the social services law determined in accordance with this

section shall include for eligible general hospitals a supplementary low

income patient adjustment determined in accordance with paragraph (b) of

this subdivision, provided all federal approvals necessary by federal

law and regulation for federal financial participation in payments made

for beneficiaries eligible for medical assistance under title XIX of the

federal social security act based upon the adjustment provided herein as

a component of such payments are granted. The adjustment may be made to

rates of payment or as aggregate payments to an eligible hospital.

* NB Effective until December 31, 2029

* (a) Notwithstanding any inconsistent provision of this section,

payment for inpatient hospital services for persons eligible for

payments made by state governmental agencies for rate periods during the

period January first, nineteen hundred ninety-one through June

thirtieth, nineteen hundred ninety-six applicable to patients eligible

for federal financial participation under title XIX of the federal

social security act in medical assistance provided pursuant to title

eleven of article five of the social services law determined in

accordance with this section shall include for eligible general

hospitals a supplementary low income patient adjustment determined in

accordance with paragraph (b) of this subdivision, provided all federal

approvals necessary by federal law and regulation for federal financial

participation in payments made for beneficiaries eligible for medical

assistance under title XIX of the federal social security act based upon

the adjustment provided herein as a component of such payments are

granted. The adjustment may be made to rates of payment or as aggregate

payments to an eligible hospital.

* NB Effective December 31, 2029

* (b) A supplementary low income patient adjustment for the period

January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three shall be determined, subject

to the provisions of subparagraph (iv) of this paragraph, and for the

period January first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-six shall be determined for each

eligible hospital according to the scale specified in subparagraph (iii)

of this paragraph based upon the amount calculated by multiplying the

applicable supplemental percentage coverage of need amount for the

hospital by the hospital's need as defined in paragraph (b) of

subdivision fourteen of this section; provided, however, that for the

period January first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-six if the sum of the adjustments

pursuant to clause (C) of subparagraph (iii) of this paragraph would

exceed thirty-six million dollars for a rate year on an annualized basis

the supplemental percentage coverage of need scale pursuant to clause

(C) of subparagraph (iii) of this paragraph shall be reduced on a pro

rata basis so that the sum of such adjustments provided for the rate

year on an annualized basis shall not exceed thirty-six million dollars.

(i) The low income patient percentage of a general hospital shall be

defined as the ratio of the sum of inpatient discharges of patients

eligible for medical assistance pursuant to title eleven of article five

of the social services law plus inpatient discharges of self-pay

patients plus inpatient discharges of charity care patients divided by

total inpatient discharges expressed as a percentage. For the period

January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three, the percentages shall be

calculated based on base year nineteen hundred eighty-nine, received by

the department no later than November first, nineteen hundred ninety,

data from the statewide planning and research cooperative system

consistent with data submitted in accordance with section twenty-eight

hundred five-a of this article. For the period January first, nineteen

hundred ninety-four through December thirty-first, nineteen hundred

ninety-six, the percentages shall be calculated based on base year

nineteen hundred ninety-one, received by the department no later than

November first, nineteen hundred ninety-three, data from the statewide

planning and research cooperative system consistent with data submitted

in accordance with section twenty-eight hundred five-a of this article.

In order to be eligible for an adjustment pursuant to this subdivision,

a hospital must maintain its collection efforts to obtain payment in

full from self-pay patients.

(ii) For the period January first, nineteen hundred ninety-one through

December thirty-first, nineteen hundred ninety-three, hospital need

shall be calculated based on base year nineteen hundred eighty-nine

data. For the period January first, nineteen hundred ninety-four through

December thirty-first, nineteen hundred ninety-six, hospital need shall

be calculated based on base year nineteen hundred ninety-one data.

(iii)(A) The scale utilized for development of a hospital's

supplementary low income patient adjustment shall be as follows for the

period January first, nineteen hundred ninety-one through June

thirtieth, nineteen hundred ninety-one:

Low Income Supplemental Percentage

Patient Percentage Coverage of Need

50+ 55% 5%

55+ 60% 10%

60+ 65% 15%

65+ 70% 22.5%

70+ 75% 30%

75+ 80% 37.5%

80+ 45%

(B) The scale utilized for development of a hospital's supplementary

low income adjustment shall be as follows for the period July first,

nineteen hundred ninety-one for a public general hospital through

December thirty-first, nineteen hundred ninety-six and for a voluntary

non-profit or a private proprietary general hospital through September

thirtieth, nineteen hundred ninety-two:

Low Income Supplemental Percentage

Patient Percentage Coverage of Need

35+ 55% 20%

55+ 60% 25%

60+ 65% 30%

65+ 70% 37.5%

70+ 45%

(C) The scale utilized for development of a voluntary non-profit or

private proprietary general hospital's supplementary low income patient

adjustment shall be as follows for the period October first, nineteen

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

ninety-three and for the period January first, nineteen hundred

ninety-four through December thirty-first, nineteen hundred ninety-six:

Low Income Supplemental Percentage

Patient Percentage Coverage of Need

35+ 50% 10%

50+ 55% 20%

55+ 60% 25%

60+ 65% 30%

65+ 70% 37.5%

70+ 45%

(D) The scale utilized for development of a voluntary non-profit or

private proprietary general hospital's supplementary low income patient

adjustment for the period May fifteenth, nineteen hundred ninety-three

through December thirty-first, nineteen hundred ninety-three shall be at

one hundred twenty percent of the supplemental percentage coverage of

need scale specified in clause (C) of this subparagraph.

(iv) A supplementary low income patient adjustment determined

according to the scale specified in subparagraph (iii) of this paragraph

shall be limited for rate periods during the period January first,

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

hundred ninety-three such that the amount of such adjustment for an

eligible hospital, plus the amount committed to the regional pools in

accordance with paragraph (c) of subdivision fourteen of this section

and paragraph (a) of subdivision nineteen of this section for the rate

period that would be allocated to such hospital, plus, if applicable,

any distribution for the rate period pursuant to paragraph (d) of

subdivision nineteen of this section for such hospital, and plus for a

major public general hospital the amount of any supplementary bad debt

and charity care adjustment provided pursuant to subdivision fourteen-a

of this section for the rate period shall not exceed ninety percent of

need.

(v) The provisions of this subdivision shall not apply to a general

hospital eligible for distributions made pursuant to paragraph (c) of

subdivision nineteen of this section.

* NB Effective until December 31, 2029

* (b) A supplementary low income patient adjustment for the period

January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three shall be determined, subject

to the provisions of subparagraph (iv) of this paragraph, and for the

period January first, nineteen hundred ninety-four through June

thirtieth, nineteen hundred ninety-six shall be determined for each

eligible hospital according to the scale specified in subparagraph (iii)

of this paragraph based upon the amount calculated by multiplying the

applicable supplemental percentage coverage of need amount for the

hospital by the hospital's need as defined in paragraph (b) of

subdivision fourteen of this section; provided, however, that for the

period January first, nineteen hundred ninety-four through June

thirtieth, nineteen hundred ninety-six if the sum of the adjustments

pursuant to clause (C) of subparagraph (iii) of this paragraph would

exceed thirty-six million dollars for a rate year on an annualized basis

the supplemental percentage coverage of need scale pursuant to clause

(C) of subparagraph (iii) of this paragraph shall be reduced on a pro

rate basis so that the sum of such adjustments provided for the rate

year on an annualized basis shall not exceed thirty-six million dollars.

(i) The low income patient percentage of a general hospital shall be

defined as the ratio of the sum of inpatient discharges of patients

eligible for medical assistance pursuant to title eleven of article five

of the social services law plus inpatient discharges of self-pay

patients plus inpatient discharges of charity care patients divided by

total inpatient discharges expressed as a percentage. For the period

January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three, the percentages shall be

calculated based on base year nineteen hundred eighty-nine, received by

the department no later than November first, nineteen hundred ninety,

data from the statewide planning and research cooperative system

consistent with data submitted in accordance with section twenty-eight

hundred five-a of this article. For the period January first, nineteen

hundred ninety-four through June thirtieth, nineteen hundred ninety-six,

the percentages shall be calculated based on base year nineteen hundred

ninety-one, received by the department no later than November first,

nineteen hundred ninety-three, data from the statewide planning and

research cooperative system consistent with data submitted in accordance

with section twenty-eight hundred five-a of this article. In order to be

eligible for an adjustment pursuant to this subdivision, a hospital must

maintain its collection efforts to obtain payment in full from self-pay

patients.

(ii) For the period January first, nineteen hundred ninety-one through

December thirty-first, nineteen hundred ninety-three, hospital need

shall be calculated based on base year nineteen hundred eighty-nine

data. For the period January first, nineteen hundred ninety-four through

June thirtieth, nineteen hundred ninety-six, hospital need shall be

calculated based on base year nineteen hundred ninety-one data.

(iii)(A) The scale utilized for development of a hospital's

supplementary low income patient adjustment shall be as follows for the

period January first, nineteen hundred ninety-one through June

thirtieth, nineteen hundred ninety-one:

Low Income Supplemental Percentage

Patient Percentage Coverage of Need

50+ 55% 5%

55+ 60% 10%

60+ 65% 15%

65+ 70% 22.5%

70+ 75% 30%

75+ 80% 37.5%

80+ 45%

(B) The scale utilized for development of a hospital's supplementary

low income adjustment shall be as follows for the period July first,

nineteen hundred ninety-one for a public general hospital through June

thirtieth, nineteen hundred ninety-six and for a voluntary non-profit or

a private proprietary general hospital through September thirtieth,

nineteen hundred ninety-two:

Low Income Supplemental Percentage

Patient Percentage Coverage of Need

35+ 55% 20%

55+ 60% 25%

60+ 65% 30%

65+ 70% 37.5%

70+ 45%

(C) The scale utilized for development of a voluntary non-profit or

private proprietary general hospital's supplementary low income patient

adjustment shall be as follows for the period October first, nineteen

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

ninety-three and for the period January first, nineteen hundred

ninety-four through June thirtieth, nineteen hundred ninety-six:

Low Income Supplemental Percentage

Patient Percentage Coverage of Need

35+ 50% 10%

50+ 55% 20%

55+ 60% 25%

60+ 65% 30%

65+ 70% 37.5%

70+ 45%

(D) The scale utilized for development of a voluntary non-profit or

private proprietary general hospital's supplementary low income patient

adjustment for the period May fifteenth, nineteen hundred ninety-three

through December thirty-first, nineteen hundred ninety-three shall be at

one hundred twenty percent of the supplemental percentage coverage of

need scale specified in clause (C) of this subparagraph.

(iv) A supplementary low income patient adjustment determined

according to the scale specified in subparagraph (iii) of this paragraph

shall be limited for rate periods during the period January first,

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

hundred ninety-three such that the amount of such adjustment for an

eligible hospital, plus the amount committed to the regional pools in

accordance with paragraph (c) of subdivision fourteen of this section

and paragraph (a) of subdivision nineteen of this section for the rate

period that would be allocated to such hospital, plus, if applicable,

any distribution for the rate period pursuant to paragraph (d) of

subdivision nineteen of this section for such hospital, and plus for a

major public general hospital the amount of any supplementary bad debt

and charity care adjustment provided pursuant to subdivision fourteen-a

of this section for the rate period shall not exceed ninety percent of

need.

(v) The provisions of this subdivision shall not apply to a general

hospital eligible for distributions made pursuant to paragraph (c) of

subdivision nineteen of this section.

* NB Effective December 31, 2029

(c) A supplementary low income patient adjustment provided in

accordance with this subdivision for rate periods during the period

January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three shall be adjusted to reflect

actual distributions pursuant to paragraphs (a) and (b) of subdivision

seventeen of this section and paragraph (d) of subdivision nineteen of

this section and adjustments provided pursuant to subdivision fourteen-a

of this section.

(d) Notwithstanding any inconsistent provision of law, a voluntary

non-profit or proprietary general hospital where the low income patient

percentage, as determined in accordance with provisions of this

subdivision, is between thirty-five and sixty-five percent shall be

charged an assessment which for the period July first, nineteen hundred

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

shall equal five percent of the general hospital's bad debt and charity

care need as determined in accordance with paragraph (b) of subdivision

fourteen of this section and for the period January first, nineteen

hundred ninety-two through September thirtieth, nineteen hundred

ninety-two shall equal seven and one-half percent of the general

hospital's bad debt and charity care need as determined in accordance

with paragraph (b) of subdivision fourteen of this section. Such

assessment shall be paid to the commissioner or his designee prior to

October first, nineteen hundred ninety-two in accordance with a schedule

established by the commissioner. The assessments may be administered in

accordance with the provisions of paragraph (c) of subdivision sixteen

of this section applicable to bad debt and charity care regional pools.

Payments of the assessments shall be due and arrearages shall be treated

in accordance with the provisions of subdivision twenty of this section

applicable to bad debt and charity care regional pools. Funds

accumulated shall be deposited by the commissioner and credited to the

department of social services medical assistance program general fund -

local assistance account appropriation.

* (e) Notwithstanding any inconsistent provision of law, the

provisions of paragraphs (a) and (b) of this subdivision shall not apply

to payments for patients discharged on or after January first, nineteen

hundred ninety-seven.

* NB Expires December 31, 2029

* 14-f. Public general hospital indigent care adjustment.

Notwithstanding any inconsistent provision of this section and subject

to the availability of federal financial participation, payment for

inpatient hospital services for persons eligible for payments made by

state governmental agencies for the period January first, nineteen

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

ninety-nine and periods on and after January first, two thousand

applicable to patients eligible for federal financial participation

under title XIX of the federal social security act in medical assistance

provided pursuant to title eleven of article five of the social services

law determined in accordance with this section shall include for

eligible public general hospitals a public general hospital indigent

care adjustment equal to the aggregate amount of the adjustments

provided for such public general hospital for the period January first,

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

hundred ninety-six pursuant to subdivisions fourteen-a and fourteen-d of

this section on an annualized basis, provided, however, that for periods

on and after January first, two thousand thirteen an annual amount of

four hundred twelve million dollars shall be allocated to eligible major

public hospitals based on each hospital's proportionate share of

medicaid and uninsured losses to total medicaid and uninsured losses for

all eligible major public hospitals, net of any disproportionate share

hospital payments received pursuant to sections twenty-eight hundred

seven-k and twenty-eight hundred seven-w of this article. The adjustment

may be made to rates of payment or as aggregate payments to an eligible

hospital.

* NB Effective until December 31, 2029

* 14-f. Public general hospital indigent care adjustment.

Notwithstanding any inconsistent provision of this section, payment for

inpatient hospital services for persons eligible for payments made by

state governmental agencies for the period January first, nineteen

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

ninety-nine applicable to patients eligible for federal financial

participation under title XIX of the federal social security act in

medical assistance provided pursuant to title eleven of article five of

the social services law determined in accordance with this section shall

include for eligible public general hospitals a public general hospital

indigent care adjustment equal to the aggregate amount of the

adjustments provided for such public general hospital for the period

January first, nineteen hundred ninety-six through December

thirty-first, nineteen hundred ninety-six pursuant to subdivisions

fourteen-a and fourteen-d of this section on an annualized basis,

provided all federal approvals necessary by federal law and regulation

for federal financial participation in payments made for beneficiaries

eligible for medical assistance under title XIX of the federal social

security act based upon the adjustment provided herein as a component of

such payments are granted. The adjustment may be made to rates of

payment or as aggregate payments to an eligible hospital.

* NB Effective and repealed December 31, 2029

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

event that federal financial participation in payments made for

beneficiaries eligible for medical assistance under title XIX of the

federal social security act based upon the allowance specified in

paragraph (c) of subdivision fourteen of this section as a component of

such payments is not approved by the federal government, rates of

payment by governmental agencies for the operating cost component of

general hospital inpatient services shall be increased for each hospital

by the same percentage allowance as each hospital's federal fiscal year

nineteen hundred eighty-seven disproportionate share payment adjustment

factor for revenues received from services provided to beneficiaries of

title XVIII of the federal social security act (medicare) as determined

in accordance with the provisions of section eighteen hundred

eighty-six-d of title XVIII of the federal social security act

(medicare). Increased amounts received by general hospitals in

accordance with the provision of this subdivision shall be offset

against distributions to such hospitals that were made or would be made

pursuant to the provisions contained in subdivisions seventeen and

nineteen of this section. In the event that distributions had been made

to such hospitals pursuant to such subdivisions, the hospital shall, on

a proportional basis, return to the pool from which the distributions

were made an amount equal to the increased amounts received under this

subdivision to the extent that such increased amounts do not exceed

distributions made. Funds in the statewide pool created in accordance

with subdivision sixteen of this section, which would have been

distributed in accordance with paragraph (c) of subdivision nineteen of

this section if the provisions of this subdivision were not in effect,

less any amounts not distributed as the result of the offset provisions

of this subdivision shall be distributed to regional pools to the extent

that such funds are available and necessary to maintain regional pool

distributions, with consideration of the offset provisions in this

subdivision, at the levels that would be available pursuant to the

provisions of subdivision fourteen of this section if the provisions of

this subdivision did not apply.

16. Bad debt and charity care regional pools and bad debt and charity

care and capital statewide pool, general. (a) Funds will be made

available in bad debt and charity care regional pools created by the

commissioner for distributions in accordance with subdivision seventeen

of this section through the submissions by or on behalf of general

hospitals of the allowance included in rates and charges in accordance

with paragraph (c) of subdivision fourteen of this section and through

the transfer of funds available from the bad debt and charity care and

capital statewide pool in accordance with paragraph (a) of subdivision

nineteen of this section. Funds will be made available for distributions

in accordance with subdivision nineteen of this section from a bad debt

and charity care and capital statewide pool created by the commissioner

through the submissions by general hospitals of the amount of the

assessments authorized in accordance with subdivision eighteen of this

section.

(b) 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

fourteen and seventeen 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.

(c) For periods prior to January first, two thousand five, the

commissioner and the commissioner of social services are authorized to

contract with the article forty-three insurance law plans, or if not

available such other administrators as the commissioner and the

commissioner of social services shall designate, to receive funds for

the bad debt and charity care regional pools and/or the bad debt and

charity care and capital statewide pool and distribute funds from such

pools. In the event contracts with the article forty-three insurance law

plans or other commissioners' designees are effectuated, the

commissioner and the commissioner of social services shall jointly

conduct or cause to be conducted annual audits of the receipt and

distribution of the pooled funds. The reasonable costs and expenses of a

pool administrator as approved by the commissioner and the commissioner

of social services, not to exceed for personnel services on an annual

basis four hundred thousand dollars for all pools, shall be paid from

the pooled funds. Such pool administrator or pool administrators shall

be acting on behalf of the state medical assistance program provided

pursuant to title eleven of article five of the social services law in

the distribution to hospitals pursuant to subdivisions fourteen-c,

seventeen and paragraphs (c) and (d) of subdivision nineteen of this

section of pooled funds.

(d) In order for a general hospital to participate in the distribution

of funds from the pools, the general hospital must implement collection

policies and procedures approved by the commissioner.

(e) In order for a general hospital to be eligible for distribution of

funds from the pools, such general hospital if it provides obstetrical

care and services must agree to participate in a program approved by the

department for the provision of prenatal care to persons eligible for

medical assistance or medically indigent persons if requested by such a

program. Nothing stated herein shall require a hospital to grant

admitting privileges to a physician solely because such person is part

of an approved program. The participation of hospitals in an approved

program shall include, but not be limited to:

(i) arrangements with designated prenatal care providers for

prebooking pregnant women for approximate delivery time, and provision

of staff and facilities for the delivery and necessary postpartum care

for women and infants involved in such programs;

(ii) a system for medical record transfer from a prenatal care

provider to hospital staff participating in delivery and for the

transfer of information regarding hospital delivery and care back to the

prenatal care provider for postpartum follow-up; and

(iii) an agreement with designated prenatal care providers to accept

the care of high risk patients on a referral basis and/or to provide

special tests and procedures which are not ordinarily available to

prenatal care clinics if such hospital is capable of caring for high

risk patients and/or providing special tests and procedures.

(f) The council may adopt regulations subject to the approval of the

commissioner to allow advanced distributions from these pools to a

general hospital qualifying for distributions in accordance with

paragraph (c) of subdivision nineteen of this section, based on a

demonstration by the hospital that there is an inability to finance

current obligations and obtain needed working capital.

* (g) Notwithstanding any inconsistent provision of law to the

contrary, from interest heretofore earned or hereinafter earned on funds

in bad debt and charity care regional pools and the bad debt and charity

care and capital statewide pool established pursuant to this section,

such amounts as shall be necessary, within amounts appropriated, shall

be reallocated to, and the state comptroller is hereby authorized and

directed to receive for deposit to, the credit of the department of

health's special revenue fund - other, hospital based grants program

account, for purposes of services and expenses related to general

hospital based grant programs for the period April first, nineteen

hundred ninety-four through June thirtieth, nineteen hundred ninety-six

and for the period July first, nineteen hundred ninety-six through March

thirty-first, nineteen hundred ninety-seven.

* NB Effective until December 31, 2029

* (g) Notwithstanding any inconsistent provision of law to the

contrary, from interest heretofore earned or hereinafter earned on funds

in bad debt and charity care regional pools and the bad debt and charity

care and capital statewide pool established pursuant to this section,

such amounts as shall be necessary, within amounts appropriated, shall

be reallocated to, and the state comptroller is hereby authorized and

directed to receive for deposit to, the credit of the department of

health's special revenue fund - other, hospital based grants program

account, for purposes of services and expenses related to general

hospital based grant programs for the period April first, nineteen

hundred ninety-four through June thirtieth, nineteen hundred ninety-six.

* NB Effective December 31, 2029

16-a. Pool administration, general. (a) If a general hospital fails to

timely file a report with the department of funds due to a regional pool

or a statewide pool established pursuant to this section, the

commissioner may estimate the amount due from such hospital based on

available financial and statistical data and may collect in accordance

with subdivision twenty of this section any amount due based on such

estimate as a deficiency in payments to such regional pool or statewide

pool with interest and penalties. The commissioner shall provide a

general hospital with notice of any estimate of the amount due pursuant

to this paragraph at least three days prior to collection of a

deficiency by the commissioner. Such notice shall contain the financial

basis for the commissioner's estimate.

* (b) Notwithstanding any inconsistent provision of section one

hundred twelve or one hundred seventy-four of the state finance law or

any other law, at the discretion of the commissioner and the

commissioner of social services without a competitive bid or request for

proposal process, regional pool and statewide pool administration

contracts in effect for rate year nineteen hundred ninety-three may be

extended for administration of regional pools and statewide pools

established for rate years nineteen hundred ninety-four and nineteen

hundred ninety-five and nineteen hundred ninety-six to provide an

uninterrupted continuation of services and may be amended as may be

necessary.

* NB Effective until December 31, 2029

* (b) Notwithstanding any inconsistent provision of section one

hundred twelve or one hundred seventy-four of the state finance law or

any other law, at the discretion of the commissioner and the

commissioner of social services without a competitive bid or request for

proposal process, regional pool and statewide pool administration

contracts in effect for rate year nineteen hundred ninety-three may be

extended for administration of regional pools and statewide pools

established for rate years nineteen hundred ninety-four and nineteen

hundred ninety-five and for the rate period January first, nineteen

hundred ninety six through June thirtieth, nineteen hundred ninety-six

to provide an uninterrupted continuation of services and may be amended

as may be necessary.

* NB Effective December 31, 2029

17. Bad debt and charity care regional pool distributions. Funds

accumulated in bad debt and charity care regional pools, including

income from invested funds, from the allowance specified in paragraph

(c) of subdivision fourteen of this section and funds accumulated in bad

debt and charity care regional pools, including income from invested

funds, from the transfer of funds available from the bad debt and

charity care and capital statewide pool in accordance with paragraph (a)

of subdivision nineteen of this section shall be deposited by the

commissioner and credited to a special revenue-other fund to be

established by the comptroller. To the extent of funds appropriated

therefor, funds shall be made available for distribution by or on behalf

of the state, as payments under the state medical assistance program

provided pursuant to title eleven of article five of the social services

law, from bad debt and charity care regional pools in accordance with

the following methodology and sequence:

(a) For the nineteen hundred eighty-eight, nineteen hundred

eighty-nine and for that portion of the nineteen hundred ninety rate

year beginning on January first and ending on June thirtieth, each

eligible major public general hospital shall receive a portion of its

bad debt and charity care need equal to one hundred two percent of the

result of the application of its percentage of statewide inpatient

reimbursable costs excluding costs related to services provided to

beneficiaries of title XVIII of the federal social security act

(medicare), developed on the basis of nineteen hundred eighty-five

financial and statistical reports, to the total of all regional pools.

For that portion of the nineteen hundred ninety rate year beginning on

July first and ending on December thirty-first and in the annual rate

years beginning on or after January first, nineteen hundred ninety-one,

each eligible major public general hospital shall receive a portion of

its bad debt and charity care need equal to one hundred ten percent of

the result of the application of its percentage of statewide inpatient

reimbursable costs excluding costs related to services provided to

beneficiaries of title XVIII of the federal social security act

(medicare), developed on the basis of nineteen hundred eighty-five

financial and statistical reports, to the total of all regional pools.

(b) (i) Funds remaining in the regional pools after distribution in

accordance with paragraph (a) of this subdivision shall be distributed

to voluntary non-profit, private proprietary and public general

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

each hospital's targeted need share. For the rate year beginning January

first, nineteen hundred eighty-eight, an individual hospital's targeted

need share shall be defined as the relationship between each hospital's

nineteen hundred eighty-six nominal payment amount as defined in

subparagraph (i) of paragraph (c) of subdivision fourteen of this

section to the nineteen hundred eighty-six nominal payment amounts for

all hospitals in the region other than major public general hospitals.

For annual rate years beginning on or after January first, nineteen

hundred eighty-nine, the base need shall be the calendar year which is

two years prior to the rate year. The amount of funds to be distributed

in accordance with this paragraph and paragraph (a) of this subdivision

shall be limited to the amount of funds accumulated in the pools.

(ii) Notwithstanding any inconsistent provision of this section,

commencing April first, nineteen hundred ninety-five funds remaining in

the regional pools after distribution in accordance with paragraph (a)

of this subdivision shall be aggregated on a statewide basis and treated

as a common pool for statewide distributions and distributed to

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

other than major public general hospitals, on the basis of each

hospital's targeted need share defined as the relationship between each

hospital's base year nominal payment amount as defined in subparagraph

(i) of paragraph (c) of subdivision fourteen of this section to the base

year nominal payment amounts for all hospitals statewide other than

major public general hospitals.

(d) The department may provide for interim payments to general

hospitals of funds available for distribution from regional pools

pursuant to this subdivision, subject to reasonable retainage for

adjustments, subsequently reconciled to amounts due determined in

accordance with this subdivision.

(e) Notwithstanding any inconsistent provision of this section, in the

event funds available pursuant to paragraph (b-1) of subdivision

nineteen of this section for programs to provide health care coverage

for uninsured or underinsured children are inadequate to provide

coverage to all eligible children for whom application for coverage is

made in a rate period, such additional amounts not to exceed twenty-five

million dollars for nineteen hundred ninety-four as shall be necessary

to provide such coverage shall be reserved by the commissioner from the

amount to be available in bad debt and charity care regional pools for

such rate period for additional distributions to such programs. Ten

million dollars of the amount reserved for nineteen hundred ninety-four

shall not result in a decrease to disproportionate share payments to

hospitals.

18. Bad debt and charity care and capital statewide pool funding.

* The commissioner shall create a bad debt and charity care and capital

statewide pool which shall be funded by a transfer of funds, which is

hereby authorized, for the period January first, nineteen hundred

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

the period January first, nineteen hundred ninety-six through June

thirtieth, nineteen hundred ninety-six and the period July first,

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

hundred ninety-six equal to seven million five hundred thousand dollars

for the nineteen hundred ninety-five period, three million seven hundred

fifty thousand dollars for the January first, nineteen hundred

ninety-six through June thirtieth, nineteen hundred ninety-six period

and three million seven hundred fifty thousand dollars for the July

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

nineteen hundred ninety-six period to be submitted to a statewide pool,

as designated by the commissioner, from the medical malpractice

insurance association pursuant to section five thousand five hundred

sixteen-c of the insurance law and through an assessment which shall be

charged to general hospitals. In the event that the transfers of funds

authorized by section five thousand five hundred sixteen-c of the

insurance law do not occur by January first, nineteen hundred

ninety-five, January first, nineteen hundred ninety-six and August

first, nineteen hundred ninety-six respectively, the commissioner for

each period for which such transfer from the medical malpractice

insurance association has not occurred shall transfer seven million five

hundred thousand dollars for the nineteen hundred ninety-five period,

three million seven hundred fifty thousand dollars for the January

first, nineteen hundred ninety-six through June thirtieth, nineteen

hundred ninety-six period and three million seven hundred fifty thousand

dollars for the July first, nineteen hundred ninety-six through December

thirty-first, nineteen hundred ninety-six period from regional or

statewide pool reserves for pools established pursuant to this section

and section twenty-eight hundred eight-c or twenty-eight hundred seven-a

of this article to the bad debt and charity care and capitol statewide

pool established pursuant to this subdivision. Such assessment shall be

submitted to a statewide pool as designated by the commissioner and

distributed on a monthly basis in accordance with subdivision twenty of

this section. The assessment shall be:

* NB Effective until December 31, 2029

* The commissioner shall create a bad debt and charity care and

capital statewide pool which shall be funded by a transfer of funds,

which is hereby authorized, for the period January first, nineteen

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

ninety-five and the period January first, nineteen hundred ninety-six

through June thirtieth, nineteen hundred ninety-six equal to seven

million five hundred thousand dollars for the nineteen hundred

ninety-five period and three million seven hundred fifty thousand

dollars for the January first, nineteen hundred ninety-six through June

thirtieth, nineteen hundred ninety-six period to be submitted to a

statewide pool, as designated by the commissioner, from the medical

malpractice insurance association pursuant to section five thousand five

hundred sixteen-c of the insurance law and through an assessment which

shall be charged to general hospitals. In the event that the transfers

of funds authorized by section five thousand five hundred sixteen-c of

the insurance law do not occur by January first, nineteen hundred

ninety-five and January first nineteen hundred ninety-six respectively,

the commissioner for each period for which such transfer from the

medical malpractice insurance association has not occurred shall

transfer seven million five hundred thousand dollars for the nineteen

hundred ninety-five period and three million seven hundred fifty

thousand dollars for the January first, nineteen hundred ninety-six

through June thirtieth, nineteen hundred ninety-six period from regional

or statewide pool reserves for pools established pursuant to this

section and section twenty-eight hundred eight-c or twenty-eight hundred

seven-a of this article to the bad debt and charity care and capital

statewide pool established pursuant to this subdivision. Such assessment

shall be submitted to a statewide pool as designated by the commissioner

and distributed on a monthly basis in accordance with subdivision twenty

of this section. The assessment shall be:

* NB Effective December 31, 2029

* (a) one and seventy-five thousandths percent of each general

hospital's gross revenue received for inpatient hospital services

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

through December thirty-first, nineteen hundred eighty-eight; one and

five hundredths percent of each general hospital's gross revenue

received for inpatient hospital services provided during the period

January first, nineteen hundred eighty-nine through December

thirty-first, nineteen hundred eighty-nine; and one percent of each

general hospital's gross revenue received for inpatient hospital

services provided during annual periods beginning on or after January

first, nineteen hundred ninety through December thirty-first, nineteen

hundred ninety-nine and on or after January first, two thousand,

* NB Effective until December 31, 2029

* (a) one and seventy-five thousandths percent of each general

hospital's gross revenue received for inpatient hospital services

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

through December thirty-first, nineteen hundred eighty-eight; one and

five hundredths percent of each general hospital's gross revenue

received for inpatient hospital services provided during the period

January first, nineteen hundred eighty-nine through December

thirty-first, nineteen hundred eighty-nine; and one percent of each

general hospital's gross revenue received for inpatient hospital

services provided during annual periods beginning on or after January

first, nineteen hundred ninety through December thirty-first, nineteen

hundred ninety-nine,

* NB Effective and expires December 31, 2029

* (a) one and seventy-five thousandths percent of each general

hospital's gross revenue received for inpatient hospital services

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

through December thirty-first, nineteen hundred eighty-eight; one and

five hundredths percent of each general hospital's gross revenue

received for inpatient hospital services provided during the period

January first, nineteen hundred eighty-nine through December

thirty-first, nineteen hundred eighty-nine; and one percent of each

general hospital's gross revenue received for inpatient hospital

services provided during annual rate periods beginning on or after

January first, nineteen hundred ninety,

* NB Effective December 31, 2029

* (b) provided, however, subject to the provisions of paragraph (e) of

this subdivision there shall be no assessment against those voluntary

non-profit and private proprietary general hospitals which qualify for

distributions made in accordance with paragraph (c) of subdivision

nineteen of this section, or for the annual assessment period January

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

nineteen hundred ninety-seven which qualified for distributions made in

accordance with paragraph (c) of subdivision nineteen of this section as

of December thirty-first, nineteen hundred ninety-five, and

* NB Effective until December 31, 2029

* (b) provided, however, subject to the provisions of paragraph (e) of

this subdivision there shall be no assessment against those voluntary

non-profit and private proprietary general hospitals which qualify for

distributions made in accordance with paragraph (c) of subdivision

nineteen of this section, and

* NB Effective December 31, 2029

* (c) provided further, however, subject to the provisions of

paragraph (e) of this subdivision the assessment against those voluntary

non-profit and private proprietary general hospitals which qualified for

distributions made in accordance with paragraph (c) of subdivision

nineteen of this section as of December thirty-first, nineteen hundred

ninety-five shall for the annual assessment period January first,

nineteen hundred ninety-eight through December thirty-first, nineteen

hundred ninety-eight be abated in the amount of three-quarters of one

percent of gross revenue received and for the annual assessment period

January first, nineteen hundred ninety-nine through December

thirty-first, nineteen hundred ninety-nine be abated in the amount of

one-quarter of one percent of gross revenue received.

* NB Effective until December 31, 2029

* (c) provided further, however, subject to the provisions of

paragraph (e) of this subdivision the assessment against those voluntary

non-profit and private proprietary general hospitals which qualified for

distributions made in accordance with paragraph (b) of subdivision

sixteen of section twenty-eight hundred seven-a of this article during

the nineteen hundred eighty-seven rate period or qualified for

distributions made in accordance with paragraph (c) of subdivision

nineteen of this section during a rate period or rate periods but which

do not continue to qualify for distributions made in accordance with

paragraph (c) of subdivision nineteen of this section during a rate

period or rate periods shall for the initial rate period in which such

general hospital does not continue to qualify for distributions made in

accordance with paragraph (c) of subdivision nineteen of this section be

abated in the amount of two-thirds of one percent of gross revenue

received and for the next succeeding annual rate period be abated in the

amount of one-third of one percent of gross revenue received.

* NB Effective December 31, 2029

* (d) Gross revenue received shall mean all moneys received for or on

account of inpatient hospital service, provided, however, that subject

to the provisions of paragraph (e) of this subdivision gross revenue

received shall not include distributions from bad debt and charity care

regional pools, health care services pools, bad debt and charity care

for financially distressed hospitals statewide pools and bad debt and

charity care and capital statewide pools created in accordance with this

section or distributions from funds allocated in accordance with section

twenty-eight hundred seven-l, twenty-eight hundred seven-k, twenty-eight

hundred seven-v or twenty-eight hundred seven-w of this article and

shall not include the components of rates of payment or charges related

to the allowances provided in accordance with subdivisions fourteen,

fourteen-b and fourteen-c of this section, the adjustment provided in

accordance with subdivision fourteen-a of this section, the adjustment

provided in accordance with subdivision fourteen-d of this section, the

adjustment for health maintenance organization reimbursement rates

provided in accordance with former subdivision two-a of this section,

payments made pursuant to paragraph (i) of subdivision thirty-five of

this section or, if effective, the adjustment provided in accordance

with subdivision fifteen of this section, the adjustment provided in

accordance with section eighteen of chapter two hundred sixty-six of the

laws of nineteen hundred eighty-six as amended, revenue received from

physician practice or faculty practice plan discrete billings for

private practicing physician services, revenue from affiliation

agreements or contracts with public hospitals for the delivery of health

care services at such public hospitals, revenue received as

disproportionate share hospital payments in accordance with title

nineteen of the federal social security act, or revenue from government

deficit financing, provided, however, that funds received as medical

assistance payments which include state share amounts authorized

pursuant to section twenty-eight hundred seven-v of this article that

are not disproportionate share hospital payments shall be included

within the meaning of gross revenue for purposes of this subdivision.

* NB Effective until December 31, 2029

* (d) Gross revenue received shall mean all moneys received for or on

account of inpatient hospital service, provided, however, that subject

to the provisions of paragraph (e) of this subdivision gross revenue

received shall not include distributions from bad debt and charity care

regional pools, health care services pools, bad debt and charity care

for financially distressed hospitals statewide pools and bad debt and

charity care and capital statewide pools created in accordance with this

section and shall not include the components of rates of payment or

charges related to the allowances provided in accordance with

subdivisions fourteen, fourteen-b and fourteen-c of this section, the

adjustment provided in accordance with subdivision fourteen-a of this

section, the adjustment provided in accordance with subdivision

fourteen-d of this section, the adjustment for health maintenance

organization reimbursement rates provided in accordance with subdivision

two-a of this section, or, if effective, the adjustment provided in

accordance with subdivision fifteen of this section or the adjustment

provided in accordance with section eighteen of chapter two hundred

sixty-six of the laws of nineteen hundred eighty-six as amended.

* NB Effective December 31, 2029

(e) Each exclusion of hospitals or sources of gross revenue received

from the assessments effective on or after October first, nineteen

hundred ninety-two established pursuant to this subdivision shall be

contingent upon either: (i) qualification of the assessments for waiver

pursuant to federal law and regulation; or, (ii) 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 the 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 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 October first, nineteen hundred ninety-two and the commissioner

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

or penalty provided the hospital pays the retroactive amount due within

ninety days of notice from the commissioner to the hospital 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

to the hospital.

(f) Payments of assessments and allowances required to be submitted by

general hospitals pursuant to this subdivision and subdivisions fourteen

and fourteen-b of this section and paragraph (a) of subdivision two of

section twenty-eight hundred seven-d of this article shall be subject to

audit by the commissioner for a period of six years following the close

of the calendar year in which such payments are due, after which such

payments shall be deemed final and not subject to further adjustment or

reconciliation, including through offset adjustments or reconciliations

made by general hospitals with regard to subsequent payments, provided,

however, that nothing herein shall be construed as precluding the

commissioner from pursuing collection of any such assessments and

allowances which are identified as delinquent within such six year

period, or which are identified as delinquent as a result of an audit

commenced within such six year audit period, or from conducting an audit

of any adjustment or reconciliation made by a general hospital within

such six year period, or from conducting an audit of payments made prior

to such six year period which are found to be commingled with payments

which are otherwise subject to timely audit pursuant to this section.

General hospitals which, in the course of such an audit, fail to produce

data or documentation requested in furtherance of such an audit, within

thirty days of such request may be assessed a civil penalty of up to ten

thousand dollars for each such failure, provided, however, that such

civil penalty shall not be imposed if the hospital demonstrates good

cause for such failure. The imposition of such civil penalties shall be

subject to the provisions of section twelve-a of this chapter.

(g) If a general hospital fails to produce data or documentation

requested in furtherance of an audit for a month to which an assessment

applies, the commissioner may estimate, based on available financial and

statistical data as determined by the commissioner, the amount due for

such month. If the impact of exemptions permitted pursuant to paragraph

(d) of this subdivision cannot be determined from such available

financial and statistical data the estimated amount due may be

calculated on the basis of the general hospital's aggregate gross

inpatient revenue amount, as determined from such available financial

and statistical data for the year subject to audit. Estimated amounts

due pursuant to this paragraph shall be paid by a general hospital

within sixty days or within such other time period as agreed to by the

commissioner and the facility. Thereafter the commissioner shall take

all necessary steps to collect amounts owed pursuant to this paragraph,

including by offsetting, or by directing the state comptroller to

offset, such amounts due from any other payments made by state

governmental agencies to the general hospital pursuant to this article.

Interest and penalties shall be applied to such amounts due in

accordance with the provisions of paragraph (c) of subdivision twenty of

this section.

(h) The commissioner shall take all necessary steps to collect

delinquent amounts owed pursuant to this subdivision, including by

recoupment or offsetting, or by directing the state comptroller to

offset, such amounts due from any other payments made by state

governmental agencies to the general hospital pursuant to this article.

Interest and penalties shall be applied to such amounts due in

accordance with the provisions of paragraph (c) of subdivision twenty of

this section. Delinquent amounts which have been referred for recoupment

or offset pursuant to this paragraph, or which have been referred to the

office of the attorney general for collection, shall be deemed final and

not subject to further revision or reconciliation by the commissioner

based on any additional reports or other information submitted by the

hospital, provided, however, that such delinquencies shall not be

referred for such recoupment or for such collection based on estimated

amounts unless the hospital has received written notification of such

delinquencies and has been given no less than thirty days in which to

submit delinquent reports.

(i) The commissioner may enter into agreements with general hospitals

subject to this subdivision, in regard to which audit findings or prior

settlements have been made pursuant to this subdivision, extending and

applying such audit findings or prior settlements or a portion thereof,

in settlement and satisfaction of potential audit liabilities for

subsequent un-audited periods. The commissioner may reduce or waive

payment of interest and penalties otherwise applicable to such

subsequent un-audited periods when such amounts due as a result of such

agreement, other than reduced or waived penalties and interest, are paid

in full to the commissioner or the commissioner's designee within sixty

days of execution of such agreement by all parties to the agreement. Any

payments made pursuant to agreements entered into in accordance with

this paragraph shall be deemed to be in full satisfaction of any

liability arising under this subdivision, as referenced in such

agreements and for the time periods covered by such agreements,

provided, however, that the commissioner may audit future retroactive

adjustments to payments made for such periods based on reports filed by

hospitals subsequent to such agreements.

19. Bad debt and charity care and capital statewide pool distribution.

* Funds accumulated in the statewide pool created by the assessment

authorized in accordance with subdivision eighteen of this section for

periods through December thirty-first, nineteen hundred ninety-six,

including income from invested funds, shall be distributed or retained

in accordance with the following sequence:

* NB Effective until December 31, 2029

* Funds accumulated in the statewide pool created by the assessment

authorized in accordance with subdivision eighteen of this section,

including income from invested funds, shall be distributed or retained

in accordance with the following sequence:

* NB Effective December 31, 2029

(a) Funds shall be distributed by the commissioner to bad debt and

charity care regional pools established pursuant to subdivision sixteen

of this section to provide additional funds for distribution from such

bad debt and charity care regional pools in accordance with subdivision

seventeen of this section equal to the amount computed as the difference

between the amount that would be available in such regional pools based

on a statewide determination of financial resources to be committed to

regional pools in each year in accordance with paragraph (c) of

subdivision fourteen of this section based upon a percentage factor

equal to five and ninety-three hundredths percent and the amount to be

available in such regional pools based on a statewide determination of

financial resources to be committed to regional pools in each year in

accordance with paragraph (c) of subdivision fourteen of this section

based upon a percentage factor equal to five and forty-eight hundredths

percent.

* (b) An amount not to exceed seventeen million dollars on an

annualized basis from the assessment through December thirty-first,

nineteen hundred ninety-six may annually be placed in a statewide

account in accordance with rules and regulations adopted by the council

and approved by the commissioner for the purpose of securing financing

of capital improvement projects for general hospitals qualifying for

distributions made in accordance with paragraph (c) of this subdivision.

Any reserved funds available on September first, nineteen hundred

ninety-seven and not obligated, in accordance with section twelve of

chapter nine hundred thirty-four of the laws of nineteen hundred

eighty-five as amended, for the purpose of securing financing of capital

improvement projects for general hospitals and any reserved funds that

thereafter become available may be transferred by the commissioner, in

consultation with the director of the budget and the dormitory

authority, to the health facility restructuring pool established

pursuant to section twenty-eight hundred fifteen of this article or to

the general hospital indigent care pool established pursuant to section

twenty-eight hundred seven-k of this article.

* NB Effective until December 31, 2029

* (b) An amount not to exceed seventeen million dollars may annually

be placed in a statewide account in accordance with rules and

regulations adopted by the council and approved by the commissioner for

the purpose of securing financing of capital improvement projects for

general hospitals qualifying for distributions made in accordance with

paragraph (c) of this subdivision.

* NB Effective December 31, 2029

* (b-1) An amount equal to: twenty million dollars annually for the

period January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three; thirty million dollars for

the period January first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-four; thirty-seven million five

hundred thousand dollars for the period January first, nineteen hundred

ninety-five through December thirty-first, nineteen hundred ninety-five;

eighteen million seven hundred fifty thousand dollars for the period

January first, nineteen hundred ninety-six through June thirtieth,

nineteen hundred ninety-six; and eighteen million seven hundred fifty

thousand dollars for the period July first, nineteen hundred ninety-six

through December thirty-first, nineteen hundred ninety-six shall

annually be reserved and accumulated from year to year by the

commissioner for distributions to programs to provide health care

coverage for uninsured or underinsured children. Such accumulated funds

shall not be used for any other purpose other than those authorized in

section twenty-five hundred ten and twenty-five hundred eleven of this

chapter. If on March thirty-first, nineteen hundred ninety-eight, any

funds accumulated during the period January first, nineteen hundred

ninety-one through December thirty-first, nineteen hundred ninety-seven

are unused or uncommitted for such distributions, such unused or

uncommitted funds shall be immediately transferred by the commissioner

to the health care initiatives pool established by the commissioner to

provide additional funds for distribution to programs to provide health

care coverage for uninsured or underinsured children pursuant to

sections twenty-five hundred ten and twenty-five hundred eleven of this

chapter. For cash flow purposes, the commissioner may borrow from

regional or statewide pool reserves for pools established pursuant to

this section such funds as shall be necessary not to exceed the amount

authorized to be reserved annually to meet premium requirements pursuant

to sections twenty-five hundred ten and twenty-five hundred eleven of

this chapter for a rate year and shall refund such moneys when pool

funds become available pursuant to this paragraph for such rate year.

* NB Effective until December 31, 2029

* (b-1) An amount equal to: twenty million dollars annually for the

period January first, nineteen hundred ninety-one through December

thirty-first, nineteen hundred ninety-three; thirty million dollars for

the period January first, nineteen hundred ninety-four through December

thirty-first, nineteen hundred ninety-four; thirty-seven million five

hundred thousand dollars for the period January first, nineteen hundred

ninety-five through December thirty-first, nineteen hundred ninety-five;

and eighteen million seven hundred fifty thousand dollars for the period

January first, nineteen hundred ninety-six through June thirtieth,

nineteen hundred ninety-six shall annually be reserved and accumulated

from year to year by the commissioner for distributions to programs to

provide health care coverage for uninsured or underinsured children.

Such accumulated funds shall not be used for any other purpose other

than those authorized in section twenty-five hundred ten and twenty-five

hundred eleven of this chapter. If on September thirtieth, nineteen

hundred ninety-seven, any funds accumulated during the period January

first, nineteen hundred ninety-one through June thirtieth, nineteen

hundred ninety-six are unused or uncommitted for such distributions,

such unused or uncommitted funds shall be immediately transferred by the

commissioner to bad debt and charity care regional pools established

pursuant to subdivision sixteen of this section to provide additional

funds for distribution from such bad debt and charity care regional

pools in accordance with subdivision seventeen of this section. For cash

flow purposes, the commissioner may borrow from regional or statewide

pool reserves for pools established pursuant to this section such funds

as shall be necessary not to exceed the amount authorized to be reserved

annually to meet premium requirements pursuant to sections twenty-five

hundred ten and twenty-five hundred eleven of this chapter for a rate

year and shall refund such moneys when pool funds become available

pursuant to this paragraph for such rate year.

* NB Effective December 31, 2029

(b-2) Funds available for distribution in accordance with paragraphs

(c) and (d) of this subdivision shall be deposited by the commissioner

and credited to a special revenue-other fund to be established by the

comptroller. To the extent of funds appropriated therefor, funds shall

be made available for distributions by or on behalf of the state, as

payments under the state medical assistance program provided pursuant to

title eleven of article five of the social services law from the bad

debt and charity care and capital statewide pool pursuant to paragraphs

(c) and (d) of this subdivision.

(c) 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.

Amounts to be distributed for bad debt and charity care purposes shall

be determined after consideration of amounts to be distributed from

regional pools in accordance with subdivision seventeen of this section

and shall result in up to one hundred percent as defined in paragraph

(b) of subdivision fourteen of this section being financed for these

general hospitals.

(d) 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

which qualified for distributions made in accordance with paragraph (b)

of subdivision sixteen of section twenty-eight hundred seven-a of this

article during the nineteen hundred eighty-seven rate period or

qualified for distributions made in accordance with paragraph (c) of

this subdivision during a rate period or rate periods but which do not

continue to qualify for distributions made in accordance with paragraph

(c) of this subdivision during a rate period or rate periods. Amounts to

be distributed to a general hospital pursuant to this paragraph for the

initial rate period in which such general hospital does not continue to

qualify for distributions made in accordance with paragraph (c) of this

subdivision shall be two-thirds of the amount such general hospital

would have received in accordance with paragraph (c) of this subdivision

for such initial rate period if the hospital had continued to be

eligible for such distribution and for the next succeeding annual rate

period one-third of the amount such general hospital would have received

in accordance with paragraph (c) of this subdivision for such succeeding

rate period.

(e) There shall be set aside within a transition account in the

statewide pool, from accumulated funds, from the total allocation to the

bad debt and charity care and capital statewide pool of the assessment

of one and seventy-five thousandths percent of gross revenue received in

accordance with paragraph (a) of subdivision eighteen of this section

for the rate period commencing January first, nineteen hundred

eighty-eight and the assessment of one and five hundredths percent of

gross revenue received in accordance with paragraph (a) of subdivision

eighteen of this section for the rate period commencing January first,

nineteen hundred eighty-nine an amount equal to seventy-five thousandths

of one percent of gross revenue received and five hundredths of one

percent of gross revenue received respectively to be distributed to

voluntary non-profit, private proprietary and public general hospitals

receiving less bad debt and charity care funds under the provisions of

this section than if the provisions of section twenty-eight hundred

seven-a of this article had applied using the same base year need as

calculated in accordance with subdivision fourteen of this section.

Rules for such distribution shall be those adopted by the council and

approved by the commissioner.

(f) Any balance in the statewide pool shall be distributed in

accordance with the following:

(i) Fifty percent of the balance shall be reserved and accumulated

from year to year by the commissioner for distributions to regional

pilot projects to provide health care coverage under insurance or

equivalent mechanisms for uninsured or underinsured individuals and

families and to provide health care coverage for catastrophic expenses

provided legislation is enacted before July fifteenth, nineteen hundred

eighty-eight authorizing such regional pilot projects and including an

authorization for such regional pilot projects, notwithstanding any

inconsistent provision of law, to negotiate special payment rate

methodologies with general hospitals for inpatient hospital services.

(ii) * The remaining balance shall be reserved and accumulated from

year to year by the commissioner for priority distributions in

accordance with rules and regulations adopted by the council and

approved by the commissioner: (A) to assist general hospitals in

offsetting losses from bad debt and the costs of charity care in

providing existing or expanded priority health services to the medically

indigent or medically underserved in urban and rural areas including,

but not limited to, services for pregnant women, services for children

under the age of six, and services related to acquired immune deficiency

syndrome; (B) for quality assurance demonstration projects; (C) for

severity of illness measurement demonstration projects; (D) for cost

analyses and evaluations of health care provider services; (E) for

quality improvement program grants and contracts pursuant to subdivision

fifteen of section two hundred six of this chapter and department of

health administrative costs related thereto; and (F) for initiatives to

improve public health and to expand the availability of health care

services.

* NB Effective until December 31, 2029

* The remaining balance shall be reserved and accumulated from year to

year by the commissioner for priority distributions in accordance with

rules and regulations adopted by the council and approved by the

commissioner: (A) to assist general hospitals in offsetting losses from

bad debt and the costs of charity care in providing existing or expanded

priority health services to the medically indigent or medically

underserved in urban and rural areas including, but not limited to,

services for pregnant women, services for children under the age of six,

and services related to acquired immune deficiency syndrome; (B) for

quality assurance demonstration projects; (C) for severity of illness

measurement demonstration projects; (D) for cost analyses and

evaluations of health care provider services; and (E) for quality

improvement program grants and contracts pursuant to subdivision fifteen

of section two hundred six of this chapter and department of health

administrative costs related thereto.

* NB Effective December 31, 2029

Notwithstanding any provision of law to the contrary, a sum not to

exceed three million five hundred thousand dollars from funds available

for distribution pursuant to this subparagraph may be allocated and

distributed to regional pilot projects to provide health care coverage

under insurance or equivalent mechanisms for uninsured or underinsured

individuals and families pursuant to chapter seven hundred three of the

laws of nineteen hundred eighty-eight.

Notwithstanding any inconsistent provision of section one hundred

twelve or one hundred seventy-four of the state finance law or any other

law, funds available for distribution pursuant to this subparagraph may

be allocated and distributed without a competitive bid or request for

proposal process.

(iii) Any unused funds from the allocations provided for in paragraph

(b) and paragraph (e) of this subdivision and subparagraph (i) of this

paragraph and any funds contingently allocated to regional pilot

projects pursuant to subparagraph (i) of this paragraph if authorizing

legislation is not enacted as required by such subparagraph shall be

reallocated for use in accordance with the provisions of subparagraph

(ii) of this paragraph.

(iv) Notwithstanding any inconsistent provision of this section, the

commissioner shall enter into agreements with one or more persons,

not-for-profit corporations, or other organizations, other than a state

employee, official or agency, for the purposes of an independent

evaluation of the implementation and effectiveness of primary care

initiatives, including preferred primary care provider designations,

applicable to general hospitals, diagnostic and treatment centers and

participating practitioners and may allocate and distribute funds

otherwise available for distribution in accordance with subparagraph

(ii) of this paragraph for the costs of such evaluation. The evaluation

shall assess factors including but not limited to:

(A) the overall effect of such primary care initiatives on access to

and utilization of health care services;

(B) the extent to which such initiatives have fostered cooperative

working relationships between various providers of health care services;

(C) the impact of such initiatives on the cost of health care

services.

An initial evaluation pursuant to this subparagraph shall be submitted

to the governor and the legislature on or before April first, nineteen

hundred ninety-two and a further evaluation shall be submitted by April

first, nineteen hundred ninety-three.

* 19-a. Health care services allowance statewide pool distribution.

Funds accumulated in the statewide pool created by the allowance

authorized in accordance with subparagraphs (ii) and (iii) of paragraph

(a) of subdivision fourteen-b of this section, including income from

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

following:

(a) Funds shall be transferred to primary health care services

regional pools created by the commissioner, and shall be available,

including income from invested funds, for distributions in accordance

with section twenty-eight hundred seven-bb of this article. Such funds

shall be transferred to each regional pool so that the regional pool

receives, for the rate periods January first, nineteen hundred

ninety-four through December thirty-first, nineteen hundred ninety-four

fifty-one and five-tenths percent, January first, nineteen hundred

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

forty-nine and six-tenths percent, and January first, nineteen hundred

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

forty-nine and six-tenths percent of the total funds to be accumulated

in the statewide pool from the allowance submitted by or on behalf of

hospitals in that region. Such regions shall be those established for

purposes of section two thousand nine hundred four-b of this chapter.

(b) A fixed percentage of the total funds accumulated in the statewide

pool, including income from invested funds, shall be available for

primary care education and training. For the rate periods January first,

nineteen hundred ninety-four through December thirty-first, nineteen

hundred ninety-four, such percentage shall be twenty-two and one-tenth

percent, and January first, nineteen hundred ninety-five through

December thirty-first, nineteen hundred ninety-five, such percentage

shall be twenty and four-tenths percent, and January first, nineteen

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

ninety-six such percentage shall be twenty and four-tenths percent.

Funds shall be available for distributions as follows:

(i) up to four million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for primary care undergraduate medical education in

accordance with section nine hundred two of this chapter;

(ii) up to four million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for the primary care physician loan repayment program in

accordance with section nine hundred three of this chapter;

(iii) up to two million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for the primary care practitioner scholarship program in

accordance with section nine hundred four of this chapter;

(iv) up to two million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for the primary care practitioner education program in

accordance with section nine hundred five of this chapter;

(v) the balance remaining annually plus income thereon from invested

funds shall be set aside and reserved from accumulated funds and may be

accumulated from year to year for distributions by the commissioner for

health care development in accordance with section nine hundred six of

this chapter; and

(vi) provided, however, that the commissioner in the absence of

qualified recipients within a category may reallocate any funds

remaining or unallocated within such a category for distribution by the

commissioner for the primary care practitioner scholarship program in

accordance with section nine hundred four of this chapter and the

primary care practitioner education program in accordance with section

nine hundred five of this chapter.

(c) A fixed percentage of the total funds accumulated in the statewide

pool, including income from invested funds, shall be deposited by the

commissioner into the miscellaneous special revenue fund - 339, health

care planning account, which is established for services and expenses

for health planning, for purposes of: (i) per capita support of health

systems agencies, provided no health systems agency shall receive less

than two hundred fifty thousand dollars annually from the per capita

allocation, and provided further that a health systems agency receiving

the minimum level of funding provided pursuant to a per capita formula

shall also be entitled to receive matching support; (ii) matching

support for other contributions received by health systems agencies from

qualified sources as determined by the commissioner; (iii) five hundred

thousand dollars for global budgeting demonstrations grants authorized

pursuant to section twenty-eight hundred fourteen of this article; and

(iv) five hundred thousand dollars for health networks grants authorized

pursuant to section twenty-eight hundred fourteen of this article. For

the rate period January first, nineteen hundred ninety-four through

December thirty-first, nineteen hundred ninety-four such percentage

shall be eight and eight-tenths percent, and for the rate period January

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

nineteen hundred ninety-six such percentage shall be eight and

two-tenths percent.

(c-1) Notwithstanding any other provision of law to the contrary, any

unspent funds available for programs and services pursuant to

subparagraphs (iii) and (iv) of paragraph (c) of this subdivision as of

April first, nineteen hundred ninety-five and any additional funds

available for programs and services pursuant to subparagraphs (iii) and

(iv) of paragraph (c) of this subdivision for the period April first,

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

hundred ninety-five shall be transferred by the commissioner and

deposited and credited to the medical assistance program general fund -

local assistance account.

(c-2) Notwithstanding any other provision of law to the contrary,

funds accumulated for programs and services pursuant to subparagraphs

(i) and (ii) of paragraph (c) of this subdivision for nineteen hundred

ninety-five shall be transferred by the commissioner and deposited and

credited to the general fund - local assistance account.

(d) A fixed percentage of the total funds accumulated in the statewide

pool, including income from invested funds, shall be deposited by the

commissioner and credited to the emergency medical services training

account established for purposes of section ninety-seven-q of the state

finance law for services and expenses related to emergency medical

services training and administration. For the rate period January first,

nineteen hundred ninety-four through December thirty-first, nineteen

hundred ninety-four, such percentage shall be seventeen and six-tenths

percent, for the rate period January first, nineteen hundred ninety-five

through December thirty-first, nineteen hundred ninety-five, such

percentage shall be twenty-one and eight-tenths percent, and for the

rate period January first, nineteen hundred ninety-six through December

thirty-first, nineteen hundred ninety-six, such percentage shall be

twenty-one and eight-tenths percent.

(f) Distributions from the pools created in accordance with this

subdivision and subdivision fourteen-b of this section, and the

components of rates of payment or charges related to the allowances

provided in accordance with subdivision fourteen-b of this section shall

not be included in gross revenue received for purposes of the

assessments pursuant to subdivision eighteen of this section, subject to

the provisions of paragraph (e) of subdivision eighteen of this section,

and shall not be included in gross receipts received for purposes of the

assessments pursuant to section twenty-eight hundred seven-d of this

article, subject to the provisions of subdivision twelve of section

twenty-eight hundred seven-d of this article.

(g) Notwithstanding any inconsistent provisions of law, the

commissioner may borrow from regional or statewide pool reserves for

pools established pursuant to sections twenty-eight hundred eight-c,

twenty-eight hundred seven-a or this section of this article such funds

as shall be necessary, not to exceed the amounts projected to be

available pursuant to paragraph (d) of subdivision fourteen-b of this

section, annually for distributions in accordance with paragraphs (a),

(b), (c), (d) and (h) of this subdivision for a rate year and shall

refund such moneys when pool funds become available pursuant to

paragraphs (a), (b), (c), (d) and (h) of this subdivision for such rate

year.

(h) Notwithstanding any inconsistent provision of this subdivision,

prior to allocation of funds in accordance with paragraphs (a), (b), (c)

and (d) of this subdivision from the allowance for the period July

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

nineteen hundred ninety-five and from the allowance for the period

January first, nineteen hundred ninety-six through June thirtieth,

nineteen hundred ninety-six, thirty-nine million five hundred thousand

dollars from the nineteen hundred ninety-five pool and forty-four

million five hundred thousand dollars from the nineteen hundred

ninety-six pool respectively shall be reserved by the commissioner from

the amount accumulated in the statewide pool, proportionally based on

the total amount of funds projected to be accumulated in the pool for

the year, for additional distributions in accordance with paragraph

(b-1) of subdivision nineteen of this section to programs to provide

health care coverage for uninsured or underinsured children, and the

balance of funds accumulated in the statewide pool shall be

proportionally allocated in accordance with paragraphs (a), (b), (c) and

(d) of this subdivision.

* NB Effective until December 31, 2029

* 19-a. Health care services allowance statewide pool distribution.

Funds accumulated in the statewide pool created by the allowance

authorized in accordance with subparagraphs (ii) and (iii) of paragraph

(a) of subdivision fourteen-b of this section, including income from

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

following:

(a) Funds shall be transferred to primary health care services

regional pools created by the commissioner, and shall be available,

including income from invested funds, for distributions in accordance

with section twenty-eight hundred seven-bb of this article. Such funds

shall be transferred to each regional pool so that the regional pool

receives, for the rate periods January first, nineteen hundred

ninety-four through December thirty-first, nineteen hundred ninety-four

fifty-one and five-tenths percent, January first, nineteen hundred

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

forty-nine and six-tenths percent, and January first, nineteen hundred

ninety-six through June thirtieth, nineteen hundred ninety-six

forty-nine and six tenths percent of the total funds to be accumulated

in the statewide pool from the allowance submitted by or on behalf of

hospitals in that region. Such regions shall be those established for

purposes of section two thousand nine hundred four-b of this chapter.

(b) A fixed percentage of the total funds accumulated in the statewide

pool, including income from invested funds, shall be available for

primary care education and training. For the rate periods January first,

nineteen hundred ninety-four through December thirty-first, nineteen

hundred ninety-four, such percentage shall be twenty-two and one-tenth

percent, January first, nineteen hundred ninety-five through December

thirty-first, nineteen hundred ninety-five, such percentage shall be

twenty and four-tenths percent, and January first, nineteen hundred

ninety-six through June thirtieth, nineteen hundred ninety-six, such

percentage shall be twenty and four-tenths percent. Funds shall be

available for distributions as follows:

(i) up to four million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for primary care undergraduate medical education in

accordance with section nine hundred two of this chapter;

(ii) up to four million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for the primary care physician loan repayment program in

accordance with section nine hundred three of this chapter;

(iii) up to two million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for the primary care practitioner scholarship program in

accordance with section nine hundred four of this chapter;

(iv) up to two million dollars annually plus income thereon from

invested funds shall be set aside and reserved from accumulated funds

and may be accumulated for the following year for distribution by the

commissioner for the primary care practitioner education program in

accordance with section nine hundred five of this chapter;

(v) the balance remaining annually plus income thereon from invested

funds shall be set aside and reserved from accumulated funds and may be

accumulated from year to year for distributions by the commissioner for

health care development in accordance with section nine hundred six of

this chapter; and

(vi) provided, however, that the commissioner in the absence of

qualified recipients within a category may reallocate any funds

remaining or unallocated within such a category for distribution by the

commissioner for the primary care practitioner scholarship program in

accordance with section nine hundred four of this chapter and the

primary care practitioner education program in accordance with section

nine hundred five of this chapter.

(c) A fixed percentage of the total funds accumulated in the statewide

pool including income from invested funds, shall be deposited by the

commissioner into the miscellaneous special revenue fund - 339, health

care planning account, which is established for services and expenses

for health planning, for purposes of: (i) per capita support of health

systems agencies, provided no health systems agency shall receive less

than two hundred fifty thousand dollars annually from the per capita

allocation, and provided further that a health systems agency receiving

the minimum level of funding provided pursuant to a per capita formula

shall also be entitled to receive matching support; (ii) matching

support for other contributions received by health systems agencies from

qualified sources as determined by the commissioner; (iii) five hundred

thousand dollars for global budgeting demonstrations grants authorized

pursuant to section twenty-eight hundred fourteen of this article; and

(iv) five hundred thousand dollars for health networks grants authorized

pursuant to section twenty-eight hundred fourteen of this article. For

the rate period January first, nineteen hundred ninety-four through

December thirty-first, nineteen hundred ninety-four such percentage

shall be eight and eight-tenths percent, and for the rate period January

first, nineteen hundred ninety-five through June thirtieth, nineteen

hundred ninety-six such percentage shall be eight and two-tenths

percent.

(c-1) Notwithstanding any other provision of law to the contrary, any

unspent funds available for programs and services pursuant to

subparagraphs (iii) and (iv) of paragraph (c) of this subdivision as of

April first, nineteen hundred ninety-five and any additional funds

available for programs and services pursuant to subparagraphs (iii) and

(iv) of paragraph (c) of this subdivision for the period April first,

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

hundred ninety-five shall be transferred by the commissioner and

deposited and credited to the medical assistance program general fund

local assistance account.

(c-2) Notwithstanding any other provision of law to the contrary,

funds accumulated for programs and services pursuant to subparagraphs

(i) and (ii) of paragraph (c) of this subdivision for nineteen hundred

ninety-five shall be transferred by the commissioner and deposited and

credited to the general fund - local assistance account.

(d) A fixed percentage of the total funds accumulated in the statewide

pool, including income from invested funds, shall be deposited by the

commissioner and credited to the emergency medical services training

account established for purposes of section ninety-seven-q of the state

finance law for services and expenses related to emergency medical

services training and administration. For the rate period January first,

nineteen hundred ninety-four through December thirty-first, nineteen

hundred ninety-four, such percentage shall be seventeen and six-tenths

percent, for the rate period January first, nineteen hundred ninety-five

through December thirty-first, nineteen hundred ninety-five, such

percentage shall be twenty-one and eight-tenths percent, and for the

rate period January first, nineteen hundred ninety-six through June

thirtieth, nineteen hundred ninety-six, such percentage shall be

twenty-one and eight-tenths percent.

(e) If on September thirtieth, nineteen hundred ninety-seven, any

funds accumulated over the period January first, nineteen hundred

ninety-four through June thirtieth, nineteen hundred ninety-six in the

regional pools established pursuant to paragraph (a) of this subdivision

are unused or uncommitted for the allocations provided for, such unused

or uncommitted funds shall be reallocated for use in accordance with the

provisions of subdivision seventeen of this section.

(f) Distributions from the pools created in accordance with this

subdivision and subdivision fourteen-b of this section, and the

components of rates of payment or charges related to the allowances

provided in accordance with subdivision fourteen-b of this section shall

not be included in gross revenue received for purposes of the

assessments pursuant to subdivision eighteen of this section, subject to

the provisions of paragraph (e) of subdivision eighteen of this section,

and shall not be included in gross receipts received for purposes of the

assessments pursuant to section twenty-eight hundred seven-d of this

article, subject to the provisions of subdivision twelve of section

twenty-eight hundred seven-d of this article.

(g) Notwithstanding any inconsistent provisions of law, the

commissioner may borrow from regional or statewide pool reserves for

pools established pursuant to sections twenty-eight hundred eight-c,

twenty-eight hundred seven-a or this section of this article such funds

as shall be necessary, not to exceed the amounts projected to be

available pursuant to paragraph (d) of subdivision fourteen-b of this

section, annually for distributions in accordance with paragraphs (a),

(b), (c), (d) and (h) of this subdivision for a rate year and shall

refund such moneys when pool funds become available pursuant to

paragraphs (a), (b), (c), (d) and (h) of this subdivision for such rate

year.

(h) Notwithstanding any inconsistent provision of this subdivision,

prior to allocation of funds in accordance with paragraphs (a), (b), (c)

and (d) of this subdivision from the allowance for the period July

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

nineteen hundred ninety-five and from the allowance for the period

January first, nineteen hundred ninety-six through June thirtieth,

nineteen hundred ninety-six, thirty-nine million five hundred thousand

dollars from the nineteen hundred ninety-five pool and twenty-two

million two hundred fifty thousand dollars from the nineteen hundred

ninety-six pool respectively shall be reserved by the commissioner from

the amount accumulated in the statewide pool, proportionally based on

the total amount of funds projected to be accumulated in the pool for

the year, for additional distributions in accordance with paragraph

(b-1) of subdivision nineteen of this section to programs to provide

health care coverage for uninsured or underinsured children, and the

balance of funds accumulated in the statewide pool shall be

proportionally allocated in accordance with paragraphs (a), (b),(c) and

(d) of this subdivision.

* NB Effective December 31, 2029

* 19-b. Funds accumulated in the statewide pool created by the

assessment authorized in accordance with subdivision eighteen of this

section for a period during the period January first, nineteen hundred

ninety-seven through December thirty-first, nineteen hundred ninety-nine

and periods on and after January first, two thousand, including income

from invested funds, shall be transferred by the commissioner and

consolidated with funds accumulated from the allowance pursuant to

subdivision two of section twenty-eight hundred seven-j of this article

for such period and allocated in accordance with subdivision nine of

section twenty-eight hundred seven-j of this article.

* NB Effective until December 31, 2029

* 19-b. Funds accumulated in the statewide pool created by the

assessment authorized in accordance with subdivision eighteen of this

section for a period during the period January first, nineteen hundred

ninety-seven through December thirty-first, nineteen hundred

ninety-nine, including income from invested funds, shall be transferred

by the commissioner and consolidated with funds accumulated from the

allowance pursuant to subdivision two of section twenty-eight hundred

seven-j of this article for such period and allocated in accordance with

subdivision nine of section twenty-eight hundred seven-j of this

article.

* NB Effective and repealed December 31, 2029

20. Payments to pools. (a) Payments by or on behalf of general

hospitals to bad debt and charity care regional pools of funds due based

on the allowance included in rates and charges in accordance with

paragraph (c) of subdivision fourteen of this section and to regional

pools created pursuant to paragraph (b) of subdivision fourteen-b and to

a statewide pool created pursuant to paragraph (b) of subdivision

fourteen-c of this section shall be made on a time schedule established

by the council, subject to the approval of the commissioner, by

regulation; provided, however, that estimated payments of amounts due

for patients discharged in a calendar month commencing on or after

October first, nineteen hundred ninety-one must be made within sixty

days of the end of each month unless payments of actual amounts due for

such calendar months have been made within such sixty day time period.

Upon receipt of notification from the commissioner, 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 this

chapter shall withhold from the amount of any payment to be made by the

state or such article forty-three corporation or article forty-four

organization to a general hospital the amount of any arrearage resulting

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

pools of funds due based on the allowances included in rates and charges

in accordance with paragraph (c) of subdivision fourteen, paragraph (a)

of subdivision fourteen-b and paragraph (a) of subdivision fourteen-c of

this section. Upon withholding such amount, the comptroller, or a

designated fiscal intermediary, 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 this chapter shall pay the

commissioner, or his designee, such amount withheld for deposit into the

applicable pool. Any general hospital in arrears resulting from failure

to make a timely payment to a pool shall not be eligible for a

distribution from a bad debt and charity care regional pool in

accordance with subdivision seventeen of this section until such

arrearage is satisfied.

(b) (i) Payments by or on behalf of general hospitals to the bad debt

and charity care and capital statewide pool of funds due from the

assessments pursuant to subdivision eighteen of this section shall be

made on a time schedule established by the council, subject to the

approval of the commissioner, by regulation; provided, however, that

estimated payments of amounts due for patients discharged in a calendar

month commencing on or after October first, nineteen hundred ninety-one

must be made within sixty days of the end of each month unless payments

of actual amounts due for such calendar months have been made within

such sixty day time period. Upon receipt of notification from the

commissioner, the comptroller, or a fiscal intermediary designated by

the director of the budget, 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 this

chapter shall withhold from the amount of any payment to be made by the

state or such article forty-three corporation or article forty-four

organization to a general hospital the amount of any arrearage resulting

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

debt and charity care and capital statewide pool of funds due from the

assessments. Upon withholding such amount, the comptroller, or a

designated fiscal intermediary, 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 this

chapter shall pay the commissioner, or his designee, such amount

withheld for deposit into the applicable pool. Any general hospital in

arrears resulting from failure to make a timely payment to the bad debt

and charity care and capital statewide pool shall not be eligible for a

distribution from the bad debt and charity care regional pools in

accordance with subdivision seventeen of this section or the bad debt

and charity care and capital statewide pool in accordance with

subdivision nineteen of this section until such arrearage is satisfied.

(ii) For periods on and after January first, two thousand five,

reports submitted by general hospitals to implement the assessment set

forth in subdivision eighteen of this section shall be submitted

electronically in a form as may be required by the commissioner;

provided, however, general hospitals are not prohibited from submitting

reports electronically on a voluntary basis prior to such date, and

provided further, however, that all such electronic submissions

submitted on and after July first, two thousand twelve shall be verified

with an electronic signature as prescribed by the commissioner.

(c) (i) Interest shall be due and payable to the commissioner by a

general hospital or by a payor paying directly to a pool on the

difference between the amount paid to a pool and the amount due to such

pool by the hospital or payor from the day of the month the 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 may be collected

by the commissioner in the same manner as an arrearage pursuant to this

subdivision.

(ii) If a payment by a general hospital or by a payor paying directly

to a pool is less than seventy percent of the amount due to such pool by

the hospital or payor, a penalty shall be due and payable to the

commissioner by the hospital or payor of five percent of the difference

between the amount paid to the pool and the amount due to such pool 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 in the same manner as an arrearage

pursuant to this subdivision.

21. Maximum distributions. (a) No general hospital may receive in

total from the distributions made in accordance with paragraph (b) of

subdivision fourteen-c, paragraphs (a) and (b) of subdivision seventeen

and paragraphs (c), (d) and (e) of subdivision nineteen 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 (b) of

subdivision fourteen of this section.

* (b)(i) No public general hospital may receive in total from

disproportionate share payment distributions made in accordance with

subdivision seventeen of this section and adjustments in accordance with

subdivisions fourteen-a and fourteen-d of this section for the period

April first, nineteen hundred ninety-four through December thirty-first,

nineteen hundred ninety-four or for annual rate periods beginning on

January first on or after January first, nineteen hundred ninety-five

through December thirty-first, nineteen hundred ninety-six, or made in

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

adjustments in accordance with subdivision fourteen-f of this section

for annual periods beginning on January first on and after January

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

nineteen hundred ninety-nine and on and after January first, two

thousand an amount which exceeds the costs incurred during such period

of furnishing inpatient and ambulatory hospital services, net of medical

assistance payments pursuant to title eleven of article five of the

social services law, other than disproportionate share payments pursuant

to subdivision twenty-six of this section or subdivision thirteen of

section twenty-eight hundred seven-k of this article, and payments by

uninsured patients, by the hospital to individuals who either are

eligible for medical assistance pursuant to title eleven of article five

of the social services law or have no health insurance or other source

of third party coverage; provided, however, that the commissioner shall

make such increase to such maximum or to the manner in which the

limitation on disproportionate share payments is applied as shall

increase the maximum limit for a period or part of a period as

authorized by federal law or regulation or the secretary of the

department of health and human services for purposes of federal

financial participation pursuant to title XIX of the federal social

security act. For purposes of this paragraph, payments to a general

hospital for services provided to indigent patients made by the state or

a unit of local government within the state shall not be considered to

be a source of third party payment.

(ii) Reductions pursuant to this paragraph shall be made in the

following sequence:

(A) for periods through December thirty-first, nineteen hundred

ninety-six, adjustments in accordance with subdivision fourteen-d of

this section; adjustments in accordance with subdivision fourteen-a of

this section; and distributions in accordance with subdivision seventeen

of this section, and

(B) for periods during the period January first, nineteen hundred

ninety-seven through December thirty-first, nineteen hundred ninety-nine

and on and after January first, two thousand, adjustments in accordance

with subdivision fourteen-f of this section; and distributions in

accordance with section twenty-eight hundred seven-k of this article.

(iii) (A) In the event a reduction pursuant to subparagraphs (i) and

(ii) of this paragraph is effective for distributions in accordance with

subdivision seventeen of this section for a general hospital, such

general hospital shall receive a supplementary distribution not as a

disproportionate share payment and not subject to federal financial

participation from funds available pursuant to subdivision seventeen of

this section for periods through December thirty-first, nineteen hundred

ninety-six equal to one-half of such reduction.

(B) In the event a reduction pursuant to subparagraphs (i) and (ii) of

this paragraph is effective for distributions in accordance with section

twenty-eight hundred seven-k of this article for a general hospital,

such general hospital shall receive a supplementary distribution not as

a disproportionate share payment and not subject to federal financial

participation from funds available pursuant to section twenty-eight

hundred seven-k of this article for periods during the period January

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

nineteen hundred ninety-nine and on and after January first, two

thousand equal to one-half of such reduction.

* NB Effective until December 31, 2029

* (b)(i) No public general hospital may receive in total from

disproportionate share payment distributions made in accordance with

subdivision seventeen of this section and adjustments in accordance with

subdivisions fourteen-a and fourteen-d of this section for the period

April first, nineteen hundred ninety-four through December thirty-first,

nineteen hundred ninety-four or for annual rate periods beginning on

January first on or after January first, nineteen hundred ninety-five

through December thirty-first, nineteen hundred ninety-six, or made in

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

adjustments in accordance with subdivision fourteen-f of this section

for annual periods beginning on January first on and after January

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

nineteen hundred ninety-nine an amount which exceeds the costs incurred

during such period of furnishing inpatient and ambulatory hospital

services, net of medical assistance payments pursuant to title eleven of

article five of the social services law, other than disproportionate

share payments pursuant to subdivision twenty-six of this section or

subdivision thirteen of section twenty-eight hundred seven-k of this

article, and payments by uninsured patients, by the hospital to

individuals who either are eligible for medical assistance pursuant to

title eleven of article five of the social services law or have no

health insurance or other source of third party coverage; provided,

however, that the commissioner shall make such increase to such maximum

or to the manner in which the limitation on disproportionate share

payments is applied as shall increase the maximum limit for a period or

part of a period as authorized by federal law or regulation or the

secretary of the department of health and human services for purposes of

federal financial participation pursuant to title XIX of the federal

social security act. For purposes of this paragraph, payments to a

general hospital for services provided to indigent patients made by the

state or a unit of local government within the state shall not be

considered to be a source of third party payment.

(ii) Reductions pursuant to this paragraph shall be made in the

following sequence:

(A) for periods through December thirty-first, nineteen hundred

ninety-six, adjustments in accordance with subdivision fourteen-d of

this section; adjustments in accordance with subdivision fourteen-a of

this section; and distributions in accordance with subdivision seventeen

of this section, and

(B) for periods during the period January first, nineteen hundred

ninety-seven through December thirty-first, nineteen hundred

ninety-nine, adjustments in accordance with subdivision fourteen-f of

this section; and distributions in accordance with section twenty-eight

hundred seven-k of this article.

(iii) (A) In the event a reduction pursuant to subparagraphs (i) and

(ii) of this paragraph is effective for distributions in accordance with

subdivision seventeen of this section for a general hospital, such

general hospital shall receive a supplementary distribution not as a

disproportionate share payment and not subject to federal financial

participation from funds available pursuant to subdivision seventeen of

this section for periods through December thirty-first, nineteen hundred

ninety-six.

(B) In the event a reduction pursuant to subparagraphs (i) and (ii) of

this paragraph is effective for distributions in accordance with section

twenty-eight hundred seven-k of this article for a general hospital,

such general hospital shall receive a supplementary distribution not as

a disproportionate share payment and not subject to federal financial

participation from funds available pursuant to section twenty-eight

hundred seven-k of this article for periods during the period January

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

nineteen hundred ninety-nine equal to one-half of such reduction.

* NB Effective and expires December 31, 2029

* (b) (i) No public general hospital may receive in total from

disproportionate share payment distributions made in accordance with

subdivision seventeen of this section and adjustments in accordance with

subdivisions fourteen-a and fourteen-d of this section for the period

April first, nineteen hundred ninety-four through December thirty-first,

nineteen hundred ninety-four or for annual rate period beginning on

January first on or after January first, nineteen hundred ninety-five an

amount which exceeds the costs incurred during such period of furnishing

inpatient and ambulatory hospital services, net of medical assistance

payments pursuant to title eleven of article five of the social services

law, other than disproportionate share payments pursuant to subdivision

twenty-six of this section, and payments by uninsured patients, by the

hospital to individuals who either are eligible for medical assistance

pursuant to title eleven of article five of the social services law or

have no health insurance or other source of third party coverage;

provided, however, that the commissioner shall make such increase to

such maximum or to the manner in which the limitation on

disproportionate share payments is applied as shall increase the maximum

limit for a period or part of a period as authorized by federal law or

regulation or the secretary of the department of health and human

services for purposes of federal financial participation pursuant to

title XIX of the federal social security act. For purposes of this

paragraph, payments to a general hospital for services provided to

indigent patients made by the state or a unit of local government within

the state shall not be considered to be a source of third party payment.

(ii) Reductions pursuant to this paragraph shall be made in the

following sequence: adjustments in accordance with subdivision

fourteen-d of this section; adjustments in accordance with subdivision

fourteen-a of this section; and distributions in accordance with

subdivision seventeen of this section.

(iii) In the event a reduction pursuant to subparagraphs (i) and (ii)

of this paragraph is effective for distributions in accordance with

subdivision seventeen of this section for a general hospital, such

general hospital shall receive a supplementary distribution not as a

disproportionate share payment and not subject to federal financial

participation from funds available pursuant to subdivision seventeen of

this section equal to one-half of such reduction.

* NB Effective December 31, 2029

* (c)(i) No general hospital other than a public general hospital may

receive in total from disproportionate share payment distributions made

in accordance with paragraph (b) of subdivision fourteen-c, subdivision

seventeen and paragraphs (c) and (d) of subdivision nineteen of this

section and adjustments in accordance with subdivision fourteen-d of

this section for the period April first, nineteen hundred ninety-five

through December thirty-first, nineteen hundred ninety-five or for the

annual rate period beginning on January first, nineteen hundred

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

or made in accordance with section twenty-eight hundred seven-k of this

article for annual periods beginning on January first on and after

January first, nineteen hundred ninety-seven through December

thirty-first, nineteen hundred ninety-nine and on and after January

first, two thousand an amount which exceeds the costs incurred during

such period of furnishing inpatient and ambulatory hospital services,

net of medical assistance payments pursuant to title eleven of article

five of the social services law, other than disproportionate share

payments pursuant to subdivision twenty-six of this section or

subdivision thirteen of section twenty-eight hundred seven-k of this

article, and payments by uninsured patients, by the hospital to

individuals who either are eligible for medical assistance pursuant to

title eleven of article five of the social services law or have no

health insurance or other source of third party coverage; provided,

however, that the commissioner shall make such modifications to the

manner in which the limitation on disproportionate share payments is

applied to such hospitals as shall increase the maximum limit for a

period or part of a period as authorized by federal law or regulation or

the secretary of the department of health and human services for

purposes of federal financial participation pursuant to title XIX of the

federal social security act. For purposes of this paragraph, payments to

a general hospital for services provided to indigent patients made by

the state or a unit of local government within the state shall not be

considered to be a source of third party payment.

(ii)(A) Reductions pursuant to this paragraph for periods through

December thirty-first, nineteen hundred ninety-six shall be made in the

following sequence for general hospitals other than financially

distressed hospitals: adjustments in accordance with subdivision

fourteen-d of this section; and distributions in accordance with

subdivision seventeen of this section.

(B) Reductions pursuant to this paragraph for periods through December

thirty-first, nineteen hundred ninety-six shall be made in the following

sequence for general hospitals designated as financially distressed

hospitals: distributions in accordance with paragraph (b) of subdivision

fourteen-c of this section; distributions in accordance with paragraphs

(c) and (d) of subdivision nineteen of this section; and distributions

in accordance with subdivision seventeen of this section.

(C) Reductions pursuant to this paragraph for periods during the

period January first, nineteen hundred ninety-seven through December

thirty-first, nineteen hundred ninety-nine and on and after January

first, two thousand, shall be made from distributions in accordance with

section twenty-eight hundred seven-k of this article.

(iii) (A) In the event a reduction pursuant to subparagraphs (i) and

(ii) of this paragraph is effective for distributions in accordance with

paragraph (b) of subdivision fourteen-c of this section, paragraph (c)

or (d) of subdivision nineteen of this section, subdivision fourteen-d

of this section or subdivision seventeen of this section for a general

hospital, such general hospital shall receive a supplementary

distribution not as a disproportionate share payment and not subject to

federal financial participation from funds available pursuant to such

subdivisions equal to one-half of such reduction for periods through

December thirty-first, nineteen hundred ninety-six.

(B) In the event a reduction pursuant to subparagraphs (i) and (ii) of

this paragraph is effective for distributions in accordance with section

twenty-eight hundred seven-k of this article for a general hospital,

such general hospital shall receive a supplementary distribution not as

a disproportionate share payment and not subject to federal financial

participation from funds available pursuant to section twenty-eight

hundred seven-k of this article for periods during the period January

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

nineteen hundred ninety-nine and on and after January first, two

thousand equal to one-half of such reduction.

* NB Effective until December 31, 2029

* (c)(i) No general hospital other than a public general hospital may

receive in total from disproportionate share payment distributions made

in accordance with paragraph (b) of subdivision fourteen-c, subdivision

seventeen and paragraphs (c) and (d) of subdivision nineteen of this

section and adjustments in accordance with subdivision fourteen-d of

this section for the period April first, nineteen hundred ninety-five

through December thirty-first, nineteen hundred ninety-five or for the

annual rate period beginning on January first, nineteen hundred

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

or made in accordance with section twenty-eight hundred seven-k of this

article for annual periods beginning on January first on and after

January first, nineteen hundred ninety-seven through December

thirty-first, nineteen hundred ninety-nine an amount which exceeds the

costs incurred during such period of furnishing inpatient and ambulatory

hospital services, net of medical assistance payments pursuant to title

eleven of article five of the social services law, other than

disproportionate share payments pursuant to subdivision twenty-six of

this section or subdivision thirteen of section twenty-eight hundred

seven-k of this article, and payments by uninsured patients, by the

hospital to individuals who either are eligible for medical assistance

pursuant to title eleven of article five of the social services law or

have no health insurance or other source of third party coverage;

provided, however, that the commissioner shall make such modifications

to the manner in which the limitation on disproportionate share payments

is applied to such hospitals as shall increase the maximum limit for a

period or part of a period as authorized by federal law or regulation or

the secretary of the department of health and human services for

purposes of federal financial participation pursuant to title XIX of the

federal social security act. For purposes of this paragraph, payments to

a general hospital for services provided to indigent patients made by

the state or a unit of local government within the state shall not be

considered to be a source of third party payment.

(ii)(A) Reductions pursuant to this paragraph for periods through

December thirty-first, nineteen hundred ninety-six shall be made in the

following sequence for general hospitals other than financially

distressed hospitals: adjustments in accordance with subdivision

fourteen-d of this section; and distributions in accordance with

subdivision seventeen of this section.

(B) Reductions pursuant to this paragraph for periods through December

thirty-first, nineteen hundred ninety-six shall be made in the following

sequence for general hospitals designated as financially distressed

hospitals: distributions in accordance with paragraph (b) of subdivision

fourteen-c of this section; distributions in accordance with paragraphs

(c) and (d) of subdivision nineteen of this section; and distributions

in accordance with subdivision seventeen of this section.

(C) Reductions pursuant to this paragraph for periods during the

period January first, nineteen hundred ninety-seven through December

thirty-first, nineteen hundred ninety-nine, shall be made from

distributions in accordance with section twenty-eight hundred seven-k of

this article.

(iii) (A) In the event a reduction pursuant to subparagraphs (i) and

(ii) of this paragraph is effective for distributions in accordance with

paragraph (b) of subdivision fourteen-c of this section, paragraph (c)

or (d) of subdivision nineteen of this section, subdivision fourteen-d

of this section or subdivision seventeen of this section for a general

hospital, such general hospital shall receive a supplementary

distribution not as a disproportionate share payment and not subject to

federal financial participation from funds available pursuant to such

subdivisions equal to one-half of such reduction for periods through

December thirty-first, nineteen hundred ninety-six.

(B) In the event a reduction pursuant to subparagraphs (i) and (ii) of

this paragraph is effective for distributions in accordance with section

twenty-eight hundred seven-k of this article for a general hospital,

such general hospital shall receive a supplementary distribution not as

a disproportionate share payment and not subject to federal financial

participation from funds available pursuant to section twenty-eight

hundred seven-k of this article for periods during the period January

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

nineteen hundred ninety-nine equal to one-half of such reduction.

* NB Effective and expires December 31, 2029

* (c) (i) No general hospital other than a public general hospital may

receive in total from disproportionate share payment distributions made

in accordance with paragraph (b) of subdivision fourteen-c, subdivision

seventeen and paragraphs (c) and (d) of subdivision nineteen of this

section and adjustments in accordance with subdivision fourteen-d of

this section for the period April first, nineteen hundred ninety-five

through December thirty-first, nineteen hundred ninety-five or for the

annual rate period beginning on January first, nineteen hundred

ninety-six an amount which exceeds the costs incurred during such period

of furnishing inpatient and ambulatory hospital services, net of medical

assistance payments pursuant to title eleven of article five of the

social services law, other than disproportionate share payments pursuant

to subdivision twenty-six of this section, and payments by uninsured

patients, by the hospital to individuals who either are eligible for

medical assistance pursuant to title eleven of article five of the

social services law or have no health insurance or other source of third

party coverage; provided, however, that the commissioner shall make such

modifications to the manner in which the limitation on disproportionate

share payments is applied to such hospitals as shall increase the

maximum limit for a period or part of a period as authorized by federal

law or regulation or the secretary of the department of health and human

services for purposes of federal financial participation pursuant to

title XIX of the federal social security act. For purposes of this

paragraph, payments to a general hospital for services provided to

indigent patients made by the state or a unit of local government within

the state shall not be considered to be a source of third party payment.

(ii)(A) Reductions pursuant to this paragraph shall be made in the

following sequence for general hospitals other than financially

distressed hospitals: adjustments in accordance with subdivision

fourteen-d of this section; and distributions in accordance with

subdivision seventeen of this section.

(B) Reductions pursuant to this paragraph shall be made in the

following sequence for general hospitals designated as financially

distressed hospitals: distributions in accordance with paragraph (b) of

subdivision fourteen-c of this section; distributions in accordance with

paragraphs (c) and (d) of subdivision nineteen of this section; and

distributions in accordance with subdivision seventeen of this section.

(iii) In the event a reduction pursuant to subparagraphs (i) and (ii)

of this paragraph is effective for distributions in accordance with

paragraph (b) of subdivision fourteen-c of this section, paragraph (c)

or (d) of subdivision nineteen of this section, subdivision fourteen-d

of this section or subdivision seventeen of this section for a general

hospital, such general hospital shall receive a supplementary

distribution not as a disproportionate share payment and not subject to

federal financial participation from funds available pursuant to such

subdivisions equal to one-half of such reduction.

* NB Effective December 31, 2029

* (d)(i) Commencing April first, nineteen hundred ninety-four, no

general hospital may be eligible to receive disproportionate share

payments determined in accordance with subdivision twenty-six of this

section through December thirty-first, nineteen hundred ninety-six or in

accordance with section twenty-eight hundred seven-k of this article for

periods during the period January first, nineteen hundred ninety-seven

through December thirty-first, nineteen hundred ninety-nine and on and

after January first, two thousand unless the hospital has an inpatient

utilization rate for patients eligible for payments pursuant to title

eleven of article five of the social services law eligible for federal

financial participation pursuant to title nineteen of the federal social

security act of not less than one percent.

(ii) In the event a general hospital is disqualified pursuant to

subparagraph (i) of this paragraph from receiving disproportionate share

payments for a period, such general hospital shall receive distributions

not as disproportionate share payments and not subject to federal

financial participation from funds available pursuant to subdivision

seventeen of this section for periods through December thirty-first,

nineteen hundred ninety-six, and pursuant to section twenty-eight

hundred seven-k of this article for periods during the period January

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

nineteen hundred ninety-nine and on and after January first, two

thousand equal to one-half of the distributions for which such general

hospital would have been qualified pursuant to subdivision seventeen of

this section for periods through December thirty-first, nineteen hundred

ninety-six, and pursuant to section twenty-eight hundred seven-k of this

article for periods during the period January first, nineteen hundred

ninety-seven through December thirty-first, nineteen hundred ninety-nine

and on and after January first, two thousand without consideration of

subparagraph (i) of this paragraph.

* NB Effective until December 31, 2029

* (d)(i) Commencing April first, nineteen hundred ninety-four, no

general hospital may be eligible to receive disproportionate share

payments determined in accordance with subdivision twenty-six of this

section through December thirty-first, nineteen hundred ninety-six or in

accordance with section twenty-eight hundred seven-k of this article for

periods during the period January first, nineteen hundred ninety-seven

through December thirty-first, nineteen hundred ninety-nine unless the

hospital has an inpatient utilization rate for patients eligible for

payments pursuant to title eleven of article five of the social services

law eligible for federal financial participation pursuant to title

nineteen of the federal social security act of not less than one

percent.

(ii) In the event a general hospital is disqualified pursuant to

subparagraph (i) of this paragraph from receiving disproportionate share

payments for a period, such general hospital shall receive distributions

not as disproportionate share payments and not subject to federal

financial participation from funds available pursuant to subdivision

seventeen of this section for periods through December thirty-first,

nineteen hundred ninety-six, and pursuant to section twenty-eight

hundred seven-k of this article for periods during the period January

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

nineteen hundred ninety-nine equal to one-half of the distributions for

which such general hospital would have been qualified pursuant to

subdivision seventeen of this section for periods through December

thirty-first, nineteen hundred ninety-six, and pursuant to section

twenty-eight hundred seven-k of this article for periods during the

period January first, nineteen hundred ninety-seven through December

thirty-first, nineteen hundred ninety-nine without consideration of

subparagraph (i) of this paragraph.

* NB Effective and expires December 31, 2029

* (d)(i) Commencing April first, nineteen hundred ninety-four, no

general hospital may be eligible to receive disproportionate share

payments determined in accordance with subdivision twenty-six of this

section unless the hospital has an inpatient utilization rate for

patients eligible for payments pursuant to title eleven of article five

of the social services law eligible for federal financial participation

pursuant to title nineteen of the federal social security act of not

less than one percent.

(ii) In the event a general hospital is disqualified pursuant to

subparagraph (i) of this paragraph from receiving disproportionate share

payments for a period, such general hospital shall receive distributions

not as disproportionate share payments and not subject to federal

financial participation from funds available pursuant to subdivision

seventeen of this section equal to one-half of the distributions for

which such general hospital would have been qualified pursuant to

subdivision seventeen of this section without consideration of

subparagraph (i) of this paragraph.

* NB Effective December 31, 2029

* (e) For purposes of calculations pursuant to paragraphs (b) and (c)

of this subdivision of maximum disproportionate share payment

distributions for a year or part thereof, costs incurred of furnishing

hospital services net of medical assistance payments, other than

disproportionate share payments, and payments by uninsured patients

shall be determined initially based on base year data and statistics for

the base year two years immediately preceding the year projected to the

year by the trend factor determined in accordance with subdivision ten

of this section and shall be subsequently revised to reflect actual

period data and statistics. For purposes of calculations pursuant to

paragraph (d) of this subdivision of eligibility to receive

disproportionate share payments for a year or part thereof, the hospital

inpatient utilization rate shall be determined based on base year

statistics in accordance with a methodology established by the

commissioner, and costs incurred of furnishing hospital services shall

be determined in accordance with a methodology established by the

commissioner consistent with requirements of the secretary of the

department of health and human services for purposes of federal

financial participation pursuant to title XIX of the federal social

security act in disproportionate share payments.

* NB Effective until December 31, 2029

* (e) For purposes of calculations pursuant to paragraphs (b) and (c)

of this subdivision of maximum disproportionate share payment

distributions for a rate year or part thereof, costs incurred of

furnishing hospital services net of medical assistance payments, other

than disproportionate share payments, and payments by uninsured patients

shall be determined initially based on base year data and statistics for

the base year two years immediately preceding the rate year projected to

the rate year by the trend factor determined in accordance with

subdivision ten of this section and shall be subsequently revised to

reflect actual rate period data and statistics. For purposes of

calculations pursuant to paragraph (d) of this subdivision of

eligibility to receive disproportionate share payments for a rate year

or part thereof, the hospital inpatient utilization rate shall be

determined based on base year statistics in accordance with a

methodology established by the commissioner, and costs incurred of

furnishing hospital services shall be determined in accordance with a

methodology established by the commissioner consistent with requirements

of the secretary of the department of health and human services for

purposes of federal financial participation pursuant to title XIX of the

federal social security act in disproportionate share payments.

* NB Effective December 31, 2029

(e-1) For periods on and after January first, two thousand eleven, for

purposes of calculations pursuant to paragraphs (b) and (c) of this

subdivision of maximum disproportionate share payment distributions for

a rate year or part thereof, costs incurred of furnishing hospital

services net of medical assistance payments, other than disproportionate

share payments, and payments by uninsured patients shall for the two

thousand eleven calendar year, shall be determined initially based on

each hospital's submission of a fully completed two thousand eight

disproportionate share hospital data collection tool, which is required

to be submitted to the department by March thirty-first, two thousand

eleven, and shall be subsequently revised to reflect each hospital's

submission of a fully completed two thousand nine disproportionate share

hospital data collection tool, which is required to be submitted to the

department by October first, two thousand eleven.

For calendar years on and after two thousand twelve, such initial

determinations shall reflect submission of data as required by the

commissioner on a specified date. All such initial determinations shall

subsequently be revised to reflect actual rate period data and

statistics. Indigent care payments will be withheld in instances when a

hospital has not submitted required information by the due dates

prescribed in this paragraph, provided, however, that such payments

shall be made upon submission of such required data. For purposes of

calculations pursuant to paragraph (d) of this subdivision of

eligibility to receive disproportionate share payments for a rate year

or part thereof, the hospital inpatient utilization rate shall be

determined based on the base year statistics in accordance with the

methodology established by the commissioner, and costs incurred of

furnishing hospital services shall be determined in accordance with a

methodology established by the commissioner consistent with requirements

of the secretary of the department of health and human services for

purposes of federal financial participation pursuant to the title XIX of

the federal social security act in disproportionate share payments.

(f) The commissioner may recover any amounts paid in excess of maximum

permissible distributions and adjustments determined pursuant to this

subdivision by retroactive adjustment and recoupment from payments made

for beneficiaries eligible for payments pursuant to title eleven of

article five of the social services law.

(g) Notwithstanding any inconsistent provision of this subdivision,

the provision of subparagraph (iii) of paragraph (b), subparagraph (iii)

of paragraph (c) or subparagraph (ii) of paragraph (d) of this

subdivision shall be of no force and effect and shall be deemed to have

been null and void as of January first, nineteen hundred ninety-four in

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

determines that distributions based on such provisions would render a

health care related tax on general hospitals an impermissible health

care related tax for purposes of the federal medicaid voluntary

contribution and provider specific tax amendments of nineteen hundred

ninety-one for purposes of such health care related tax receipts

reducing the amount deemed expended by the state as medical assistance

for purposes of federal financial participation.

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

funds, remaining in the bad debt and charity care and capital statewide

pool after distributions in accordance with paragraphs (a), (b), (b-1),

(c), (d), (e) and (f) of subdivision nineteen 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.

23. Reimbursement rates. The assessments pursuant to subdivision

eighteen 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 article.

24. Federal financial participation. The council may adopt rules and

regulations, subject to the approval of the commissioner, to adjust

rates of payment by governmental agencies for general hospital inpatient

services determined in accordance with this section as necessary to meet

federal requirements for securing federal financial participation

pursuant to title XIX of the federal social security act in the event

the state cannot provide assurances satisfactory to the secretary of

health and human services related to a comparison of rates of payment in

the aggregate to maximum aggregate payments determined in accordance

with federal law and regulation which are substantially the same as such

assurances as in effect on October twenty-sixth, nineteen hundred

eighty-seven for securing such federal financial participation.

Notwithstanding any other law, the state reserves the right to recoup

any payments by governmental agencies for general hospital inpatient

services authorized by this section for which federal financial

participation has been denied in connection with that determination by

the department of health and human services.

25. Medical education expenses. (a) Notwithstanding any inconsistent

provision of this section, to encourage the training of more primary

care physicians, for annual rate periods beginning on or after January

first, nineteen hundred ninety-two, indirect medical education expenses,

as defined in subparagraph (ii) of paragraph (c) of subdivision seven of

this section, of a general hospital included in the determination of the

operating cost component of general hospital rates of payment for a rate

period in accordance with subdivisions six and seven of this section or

in accordance with paragraph (e), (g) or (i) of subdivision four of this

section for general hospitals or distinct units of general hospitals not

reimbursed on the basis of case based payments per discharge shall be

adjusted to reflect the following modifications:

(i) the calculation of interns and residents to bed ratios for

purposes of determining indirect reimbursement shall include residents

in non-hospital ambulatory settings. The sum in total for all general

hospitals of the indirect medical education expenses shall equal the sum

in total for each general hospital determined as if the provisions of

this section were applied without consideration of residents in

non-hospital ambulatory settings; and

(ii) for annual rate periods beginning on or after January first,

nineteen hundred ninety-two, residencies shall be weighted to provide

higher weights for primary care and emergency medicine physicians.

Primary care residents specialties shall include family medicine,

general pediatrics, primary care internal medicine and primary care

obstetrics and gynecology. In determining whether a residency is in

primary care, the commissioner shall consult with the New York state

council on graduate medical education and the state hospital review and

planning council. Reimbursable indirect expenses of medical education of

a general hospital for a rate period shall be weighted based on

projected medical education statistics for such general hospital for

such rate period, and subsequently reconciled through appropriate audit

procedures to actual statistics by a prospective adjustment to rates of

payment. The weighting factors shall be determined based on nineteen

hundred ninety data and statistics and shall include residents

identified in subparagraph (i) of this paragraph not previously included

in such calculations such that the sum in total for all general

hospitals of the results of the weighting factors multiplied by the

indirect medical education expenses for each general hospital shall

equal, approximately, the sum in total for all general hospitals of the

indirect medical education expenses for each general hospital determined

as if the provisions of this section were applied without consideration

of the weighting factors or residents in non-hospital ambulatory

settings determined pursuant to this subdivision. Residency positions in

any specialty shall be weighted to equal no less than nine-tenths of

what such position would have equaled if reimbursement were to have been

calculated without regard to the weighting factors. If a general

hospital is reimbursed by this provision in excess of the amount such

hospital would have been reimbursed without regard to the weighting

factors, such general hospital shall apply such additional funds to

encourage the training of primary care physicians. The provisions of

this subparagraph shall not apply to those four specialty eye and ear,

special surgery and orthopedic and joint disease hospitals, specified by

the commissioner, whose primary mission is to engage in research,

training, and clinical care in the above-named areas.

(b) Hospitals shall furnish to the department such reports and

information as may be required by the commissioner to assess the cost,

quality and health system needs for medical education provided.

(c) For purposes of determining how such weighting factors have

resulted in the increased training of physicians in primary care

specialties, the council on graduate medical education shall prepare a

report on or before March thirty-first, nineteen hundred ninety-five.

Such report shall include, but shall not be limited to: an evaluation of

the effectiveness such weighting factors have had on the number of

residents matched in primary care specialties; the degree to which such

weighting factors have impacted general hospitals to redirect their

residency programs toward training primary care physicians; and the

impact such weighting factors have had on graduate medical education

within general hospitals. Such report shall also include recommendations

to the governor and the legislature on the continuation, expiration or

modification of such weighting factors.

(d) Notwithstanding any inconsistent provision of this section and

subject to the availability of federal financial participation:

(i) For periods on and after April first, two thousand four, the

commissioner shall adjust inpatient medical assistance rates of payment

established pursuant to this section, including discrete rates of

payment calculated pursuant to paragraph a-three of subdivision one of

this section, for non-public general hospitals, and for periods on and

after April first, two thousand seven, for public and non-public general

hospitals, in accordance with subparagraph (ii) of this paragraph, for

purposes of reimbursing graduate medical education costs based on the

following methodology:

(ii) Rate adjustments for each general hospital shall be based on the

difference between the graduate medical education component, direct and

indirect, of the two thousand three medical assistance inpatient rates

of payment, including exempt unit per diem rates, and an estimate of

what the graduate medical education component, direct and indirect, of

such medical assistance inpatient rates of payment, including exempt

unit per diem rates would be, stated at two thousand three levels and

calculated as follows:

(A) Each general hospital's total direct medical education costs as

reported in the two thousand one institutional cost report submitted as

of December thirty-first, two thousand three, and

(B) An estimate of the total indirect medical education costs for two

thousand one calculated in accordance with the methodology applicable

for purposes of determining an estimate of indirect medical education

costs pursuant to subparagraph (ii) of paragraph (c) of subdivision

seven of this section. The indirect medical education costs shall equal

the product of two thousand one hospital specific inpatient operating

costs, including exempt unit costs, and the indirect teaching cost

percentage determined by the following formula:

1-(1/(1+1.89(((1+r)^.405)-1)))

where r equals the ratio of residents and fellows to beds for two

thousand one adjusted to reflect the projected two thousand three

resident counts.

(C) Each hospital's rate adjustment shall be limited to seventy-five

percent of the graduate medical education component included in its two

thousand three medical assistance inpatient rates of payment, including

exempt unit rates. For periods on and after April first, two thousand

seven, the seventy-five percent limit shall not apply to rate decreases

calculated pursuant to this paragraph.

(D) For the period April first, two thousand four through March

thirty-first, two thousand seven, no hospital shall receive a rate

adjustment pursuant to this paragraph if such rate adjustment would be a

negative amount. For periods on and after April first, two thousand

seven, no public general hospital shall receive a rate increase

calculated pursuant to this paragraph.

(iii) If the aggregate amount of rate adjustments calculated pursuant

to this paragraph exceeds the upper payment limit calculated pursuant to

federal regulations, such rate adjustments shall be reduced

proportionally by the amount in excess of the federal upper payment

limit. Such reduction, if applicable, shall be calculated on an annual

basis.

(iv) Such rate adjustment shall be included as an add-on to medical

assistance inpatient rates of payment, excluding exempt unit rates, but

including inpatient rates of payment established in accordance with

paragraph a-three of subdivision one of this section. Such rate add-on

shall be based on medical assistance data reported in each hospital's

annual cost report submitted for the period two years prior to the rate

year and filed with the department by November first of the year prior

to the rate year. Such amounts shall not be reconciled to reflect

changes in medical assistance utilization between the year two years

prior to the rate year and the rate year.

(e) From amounts available pursuant to paragraph (oo) of subdivision

one of section twenty-eight hundred seven-v of this article, allocations

shall be made to non-public general hospitals receiving a rate

adjustment pursuant to paragraph (d) of this subdivision when the rate

adjustment pursuant to paragraph (d) of this subdivision results in the

general hospital exceeding its applicable disproportionate share payment

limit in the year in which the adjustment is made and the amount of the

associated reduction in the hospital's disproportionate share payments

would result in the hospital receiving less than its total distribution

amount in that year. A hospital's "total distribution amount" shall be

the amount that the hospital would have received pursuant to paragraphs

(c) and (d) of subdivision three of section twenty-eight hundred seven-m

of this article prior to the effective date of this paragraph. A

hospital's eligible loss for purposes of this paragraph shall be the

amount of the loss in such total distribution amount. Each eligible

hospital's allocation of available funds pursuant to this paragraph

within a year shall be determined based on its proportionate share of

the aggregate eligible losses for all such hospitals, limited by the

amount of the rate adjustment pursuant to paragraph (d) of this

subdivision.

26. Disproportionate share payments. Distributions to general

hospitals from bad debt and charity care regional pools pursuant to

subdivision seventeen of this section, distributions to general

hospitals from the bad debt and charity care and capital statewide pool

pursuant to paragraphs (c) and (d) of subdivision nineteen of this

section, distributions to general hospitals from the bad debt and

charity care for financially distressed hospitals statewide pool

pursuant to subdivision fourteen-c of this section and the adjustment

provided in accordance with subdivision fourteen-a of this section and

the adjustment provided in accordance with subdivision fourteen-d of

this section shall be considered disproportionate share payments for

inpatient hospital services to general hospitals serving a

disproportionate number of low income patients with special needs for

purposes of providing assurances to the secretary of health and human

services as necessary to meet federal requirements for securing federal

financial participation pursuant to title XIX of the federal social

security act.

27. Reports. (a) The commissioner of health shall submit a report to

the legislature and the council on health care financing on or before

February first, nineteen hundred eighty-eight detailing the objective,

impact, design and computation for an inpatient pricing component. In

terms of the design and computation for a pricing system such report

shall include but not be limited to: a description and methodology for

developing peer groups, identification of costs included in the

calculation of a group average and any adjustments made to such costs,

the methodology developed to reflect outliers, any teaching or

disproportionate share adjustments made, the calculation of wage and

power equalization factors, and identification of any adjustments made

to the service intensity weights or diagnosis-related group categories.

The commissioner shall explore methodologies for the inclusion of

severity of illness considerations in determining group average costs

and rates and shall include all details of his analysis in the report

required under this subparagraph. If it is determined that a severity of

illness adjustment cannot be developed for incorporation in the

computations, the report filed shall include the specific reasons for

this conclusion. With regard to a fiscal impact analysis such report

shall include but not be limited to the impact on major types of general

hospitals including rural, urban, teaching, non-teaching, plus a

regional analysis; and should indicate any characteristics which can be

observed regarding general hospitals which would be significantly

impacted by the introduction of a pricing component. The commissioner

shall expeditiously make available for inspection by interested parties

pertinent data used in the development of the inpatient pricing

component consistent with appropriate department procedures for the

release and protection of confidential data.

(b) The commissioner shall submit a report to the governor and the

legislature on or before February first, nineteen hundred ninety-five

regarding the objective, impact, design and implementation of the case

based payment system for inpatient hospital services based on

diagnosis-related groups created pursuant to this section including, in

particular, an analysis of the group price component of case based rates

of payment and the appropriateness and effectiveness of the provisions

relating to financing of uncompensated care. The reports shall include

but not be limited to a fiscal impact analysis of the impact of the case

based payment system on major types of general hospitals including

rural, urban, teaching and non-teaching, plus a regional analysis. Such

reports shall evaluate the impact of the case based payment system on

general hospital inpatient medical and clinical care and the quality of

hospital services. The reports shall also include recommendations for

continuation or modification of the case based payment system for

inpatient hospital services provided on or after January first, nineteen

hundred ninety-six.

** (c) The commissioner shall report to the governor and the

legislature on or before December first, nineteen hundred eighty-eight

with a plan relating to the structure and financing of graduate medical

education. Such plan shall include an evaluation of and recommendations

for graduate medical education with respect to health services delivery

and educational goals including but not limited to the following:

appropriate supply and distribution of primary care providers by

geographic area; adequate supply and distribution of medical specialists

according to projected population needs; educational opportunities

representative of current and future practice settings; the impact of

such plan on health care delivery in currently underserved and rural

areas; and reimbursement changes to effectuate the recommendations

included in the plan. Such plan shall be developed with substantial

participation by the department of education, the medical schools,

residency training programs, health systems agencies, health care

institutions, and physicians.

** NB Inadvertently omitted from 731/93 amendment

* 28. Notwithstanding any inconsistent provision of this section:

(a) the commissioner may adjust, on a per unit of service basis,

general hospital inpatient services rates of payment established

pursuant to this section as in effect on and before December

thirty-first, nineteen hundred ninety-six prospectively as an additional

factor to be paid, including the impact of payment differentials as were

in effect pursuant to this section, in addition to, or as a reduction

to, any hospital charges or negotiated rate (the adjustment may not be

negotiated by the payor); including, but not limited to, capital related

inpatient expenses reconciliation adjustments pursuant to subdivision

eight of this section, rate adjustments for corrections, appeals and

volume changes pursuant to subdivision nine of this section, rate

adjustments to reflect trend factor adjustments pursuant to subdivision

ten of this section, maximum case mix change adjustments pursuant to

paragraph (f) of subdivision eleven of this section, and adjustments

based on audits;

(b) the allowances percentages established pursuant to this article in

effect for a rate period shall be applied to hospital charges or

negotiated rates plus the prospectively adjusted payment of rates of

payment of a general hospital in accordance with paragraph (a) of this

subdivision;

(c) no recalculation of the basis for distribution of funds from

regional or statewide pools established pursuant to this section shall

be made based on the impact of a prospective adjustment to rates of

payment authorized pursuant to this subdivision; and

(d) prospective rate adjustments authorized pursuant to this

subdivision for a general hospital based on appeals approved after

January first, nineteen hundred ninety-eight shall be included in rates

of payment as a one hundred percent facility specific adjustment and

shall not affect the calculation of the group category average inpatient

reimbursable operating cost per discharge for such retrospective period

for any other general hospital.

* NB Expires December 31, 2029

* 29. Coinsurance and deductibles. (a) If a general hospital and a

third-party payor agree to a negotiated payment methodology for a period

on or after January first, nineteen hundred ninety-seven that is based

on a discount from hospital charges, such discount shall apply to the

calculation of the charge basis for deductible and coinsurance amounts

for such period owed for any patient covered by such third-party payor

as the primary payor.

(b) If a general hospital and a third-party payor agree to a

negotiated payment methodology for a period on or after January first,

nineteen hundred ninety-seven that is not based on a discount from

hospital charges, excluding capitation arrangements, the maximum amount

to be charged for deductible and coinsurance amounts for such period for

any patient covered by such third-party payor as the primary payor shall

not exceed the amount calculated by applying the deductible and

coinsurance amounts to the amount due on the basis of such negotiated

payment arrangement.

* NB Expires December 31, 2029

30. General hospital recruitment and retention of health care workers.

Notwithstanding any inconsistent provision of this section and subject

to the availability of federal financial participation:

(a) (i) The commissioner shall adjust inpatient medical assistance

rates of payment established pursuant to this section for non-public

general hospitals in accordance with subparagraph (ii) of this paragraph

for purposes of recruitment and retention of health care workers in the

following aggregate amounts for the following periods:

(A) ninety-three million two hundred thousand dollars on an annualized

basis for the period April first, two thousand two through December

thirty-first, two thousand two; one hundred eighty-seven million eight

hundred thousand dollars on an annualized basis for the period January

first, two thousand three through December thirty-first, two thousand

three; two hundred sixty-two million one hundred thousand dollars on an

annualized basis for the period January first, two thousand four through

December thirty-first, two thousand six; one hundred thirty-one million

one hundred thousand dollars for the period January first, two thousand

seven through June thirtieth, two thousand seven, and two hundred

forty-three million five hundred thousand dollars for the period July

first, two thousand seven through March thirty-first, two thousand

eight, two hundred forty-three million five hundred thousand dollars for

the period April first, two thousand eight through March thirty-first,

two thousand nine; one hundred sixty-three million one hundred

forty-five thousand dollars for the period April first, two thousand

nine through November thirtieth, two thousand nine.

(ii) Such increases shall be allocated proportionally based on each

non-public general hospital's reported total gross salary and fringe

benefit costs as reported on exhibit 11 of the 1999 institutional cost

report submitted as of November first, two thousand one to the total of

such reported costs for all non-public general hospitals, provided,

however, that for periods on and after July first, two thousand seven,

fifty percent of such increases shall be allocated proportionally, based

on each non-public hospital's reported total gross salary and fringe

benefit costs, as reported on exhibit 11 of the nineteen hundred

ninety-nine institutional cost report as submitted to the department

prior to November first, two thousand one, to the total of such reported

costs for all non-public general hospitals, and fifty percent of such

increases shall be allocated proportionally, based on each such

hospital's total reported medicaid inpatient discharges, as reported in

the two thousand four institutional cost report as submitted to the

department prior to November first, two thousand six, to the total of

such reported medicaid inpatient discharges for all non-public general

hospitals, as weighted proportionally to reflect the relative medicaid

case mix of each such hospital. These amounts shall be included as a

reimbursable cost add-on to medical assistance inpatient rates of

payment established pursuant to this section for non-public general

hospitals based on medical assistance utilization data in each

hospital's annual cost report submitted two years prior to the rate

year. Such amounts shall be reconciled to reflect changes in medical

assistance utilization between the year two years prior to the rate year

and the rate year based on data reported in each hospital's cost report

for the respective rate year. These amounts shall be included as a

reimbursable cost add-on to medical assistance inpatient rates of

payment established pursuant to this section for non-public general

hospitals based on medical assistance utilization data in each

facility's annual cost report submitted two years prior to the rate

year. For rate adjustments effective May first, two thousand five and

thereafter such amounts shall be reconciled to reflect changes in

medical assistance utilization between the year two years prior to the

rate year and the rate year based upon data reported in each hospital's

institutional cost report for the respective rate year.

(b) (i) Notwithstanding sections one hundred twelve and one hundred

sixty-three of the state finance law and any other inconsistent

provision of law, the commissioner shall make grants to public general

hospitals without a competitive bid or request for proposal process for

purposes of recruitment and retention of health care workers in the

following aggregate amounts for the following periods:

(A) eighteen million five hundred thousand dollars on an annualized

basis for the period April first, two thousand two through December

thirty-first, two thousand two; thirty-seven million four hundred

thousand dollars on an annualized basis for the period January first,

two thousand three through December thirty-first, two thousand three;

fifty-two million two hundred thousand dollars on an annualized basis

for the period January first, two thousand four through December

thirty-first, two thousand six; twenty-six million one hundred thousand

dollars for the period January first, two thousand seven through June

thirtieth, two thousand seven, forty-nine million dollars for the period

July first, two thousand seven through March thirty-first, two thousand

eight, and forty-nine million dollars for the period April first, two

thousand eight through March thirty-first, two thousand nine.

(ii) Such grants shall be allocated proportionally based on each

public general hospital's reported total gross salary and fringe benefit

costs as reported on exhibit 11 of the 1999 institutional cost report

submitted as of November first, two thousand one to the total of such

reported costs for all public general hospitals.

(c) From amounts available pursuant to paragraph (gg) of subdivision

one of section twenty-eight hundred seven-v of this article, allocations

shall be made to non-public general hospitals whose allocated labor

adjustments pursuant to paragraphs (a) and (e) of this subdivision and

adjustment pursuant to subdivision thirty-two of this section results in

the general hospital exceeding its applicable disproportionate share

payment limit. Each such hospital's allocation of available funds

pursuant to this paragraph within a year shall be determined based on

its proportionate share of the aggregate reduction of federal

disproportionate share funding for all such hospitals for the year

resulting from the allocated labor adjustments pursuant to paragraphs

(a) and (e) of this subdivision and from the adjustment pursuant to

subdivision thirty-two of this section.

(d) General hospitals which have their rates adjusted or receive

grants pursuant to paragraphs (a) and (b) of this subdivision,

respectively, shall use such funds for the purpose of recruitment and

retention of non-supervisory workers at health care facilities or any

worker with direct patient care responsibility and are prohibited from

using such funds for any other purpose. Funds under this subdivision are

not intended to supplant support provided by a local government. Each

such general hospital shall submit, at a time and in a manner to be

determined by the commissioner, a written certification attesting that

such funds will be used solely for the purpose of recruitment and

retention of non-supervisory workers at health care facilities or any

worker with direct patient care responsibility. The commissioner is

authorized to audit each general hospital to ensure compliance with the

written certification required by this paragraph and shall recoup any

funds determined to have been used for purposes other than recruitment

and retention of non-supervisory workers at health care facilities or

any worker with direct patient care responsibility. Such recoupment

shall be in addition to applicable penalties under sections twelve and

twelve-b of this chapter.

(e)(i) The commissioner shall adjust inpatient medical assistance

rates of payment established pursuant to this section for general

hospitals in accordance with subparagraph (ii) of this paragraph and

shall establish discrete rates of payment for such hospitals in

accordance with subparagraph (iii) of this paragraph, for purposes of

additional support of recruitment and retention of health care workers

in the following aggregate amounts for the following periods:

(A) one hundred twenty-one million dollars for the period May first,

two thousand five through December thirty-first, two thousand five and

one hundred twenty-one million dollars for the period January first, two

thousand six through December thirty-first, two thousand six.

(ii) Such increases shall be allocated proportionally based on each

general hospital's reported gross salary and fringe benefit costs as

reported on exhibit 11 of the 1999 institutional cost report submitted

as of November first, two thousand one to the total of such reported

costs for all general hospitals. These amounts shall be included as a

reimbursable cost add-on to medical assistance inpatient rates of

payment established pursuant to this section for general hospitals based

on medical assistance utilization data in each facility's annual cost

report submitted two years prior to the rate year. Such amounts shall be

reconciled to reflect changes in medical assistance utilization between

the year two years prior to the rate year and the rate year based upon

data reported in each hospital's institutional cost report for the

respective rate year.

(iii) The commissioner shall establish, subject to the approval of the

director of the budget, discrete rates of payment for general hospitals

for payments under the medical assistance program pursuant to titles

eleven and eleven-D of article five of the social services law for

persons eligible for medical assistance and family health plus who are

enrolled in health maintenance organizations based on the calculation

set forth in subparagraph (ii) of this paragraph for such general

hospitals. If discrete rates of payment under this subparagraph are not

established, the commissioner shall adjust the calculation established

pursuant to subparagraph (ii) of this paragraph to account for medical

assistance utilization described under this subparagraph for such

non-public general hospital.

(iv) Payment of the non-federal share of the medical assistance

payments made pursuant to this paragraph shall be the responsibility of

the state and shall not include a local share. Payments made pursuant to

this paragraph or pursuant to paragraph (a) of this subdivision may be

added to rates of payment or made as aggregate payments to eligible

general hospitals.

(f) In the event that a hospital entitled to an adjustment pursuant to

paragraph (a) or (e) of this subdivision closes or otherwise experiences

a change in status that eliminates its ability to continue to receive

such adjustments, the commissioner shall allocate the amount determined

under subparagraph (ii) of paragraph (a) and subparagraph (ii) of

paragraph (e) of this subdivision for such hospital to hospitals in the

immediate region of the closing hospital based upon the remaining

hospitals' reported gross salary and fringe benefit costs as reported on

exhibit eleven of the two thousand four institutional cost report

submitted as of November first, two thousand five to the total of such

reported costs for all general hospitals in the region, provided,

however, that for periods on and after July first, two thousand seven,

such allocations shall be based on such remaining hospitals' reported

medicaid inpatient discharges, as reported in the two thousand four

institutional cost report submitted to the department prior to November

first, two thousand six, to the total of such reported medicaid

inpatient discharges for all such remaining hospitals. The commissioner

shall define the immediate region as the county or counties within which

workers displaced from the closing hospital are likely to seek

re-employment.

31. Supplemental general hospital recruitment and retention

adjustment. (a) Notwithstanding any law, rule or regulation to the

contrary, the commissioner shall, within amounts appropriated, and

contingent on the availability of federal financial participation, make

Medicaid rate adjustments for non-public general hospitals to address

extraordinary costs associated with recruitment and retention of

non-supervisory workers at health care facilities or any worker with

direct patient care responsibility at such general hospitals. Eligible

hospitals shall be selected by the commissioner pursuant to a

competitive process. Requests for proposals for eligible projects shall

be issued by the commissioner.

(b) Such eligible projects may include:

(i) an increase in non-supervisory staff, either facility wide or

targeted at a particular area of care or shift;

(ii) increased training and education of non-supervisory staff,

including allowing non-supervisory staff to increase their level of

licensure relevant to general hospital care;

(iii) efforts to decrease staff turn-over; and

(iv) other efforts related to the recruitment and retention of

non-supervisory staff or any worker with direct patient care

responsibility that will affect the quality of care at such facility.

(c) The commissioner shall consider, in selecting eligible projects,

the likelihood that such project will provide needed resources to meet

legal commitments for increased labor costs, the financial need of the

facility, the existence of a shortage of qualified hospital workers in

the geographic area in which the facility is located, the existence of

high employee turn-over at the facility and such other matters as the

commissioner deems appropriate.

(d) In implementing rate adjustments authorized under this

subdivision, the commissioner shall establish, subject to the approval

of the director of the budget, discrete rates of payment for non-public

general hospitals for payments under the medical assistance program

pursuant to titles eleven and eleven-D of article five of the social

services law for persons eligible for medical assistance and family

health plus who are enrolled in health maintenance organizations.

(e) Adjustments to Medicaid rates of payment made pursuant to this

section shall not be subject to subsequent adjustment or reconciliation.

(f) Adjustments to Medicaid rates of payment made pursuant to this

section shall not, in aggregate, exceed fifteen million dollars for the

period beginning April first, two thousand two and ending December

thirty-first, two thousand two and, on an annualized basis, for each

annual period thereafter beginning January first, two thousand three and

ending December thirty-first, two thousand six, and shall not, in

aggregate, exceed seven million five hundred thousand dollars for the

period January first, two thousand seven through June thirtieth, two

thousand seven.

32. Rural hospital supplemental rate adjustment. Notwithstanding any

inconsistent provision of this section:

(a) The commissioner shall adjust inpatient medical assistance rates

of payment established pursuant to this section for rural hospitals as

defined in paragraph (c) of subdivision one of section twenty-eight

hundred seven-w of this article in accordance with paragraph (b) of this

subdivision for purposes of supporting critically needed health care

services in rural areas in the following aggregate amounts for the

following periods:

seven million dollars for the period May first, two thousand five

through December thirty-first, two thousand five, seven million dollars

for the period January first, two thousand six through December

thirty-first, two thousand six, seven million dollars for the period

April first, two thousand seven through December thirty-first, two

thousand seven, seven million dollars for calendar year two thousand

eight, and six million four hundred seventeen thousand dollars for the

period January first, two thousand nine through November thirtieth, two

thousand nine.

(b) Such increases shall be allocated proportionately based on each

such rural hospital's total reported medicaid inpatient discharges as

reported in the two thousand two institutional cost report to the total

of such discharges for all rural hospitals. These amounts shall be

included as a reimbursable cost add-on to medical assistance inpatient

rates of payment established pursuant to this section for rural

hospitals based on medical assistance utilization data in each

facility's annual cost report submitted two years prior to the rate

year. Such amounts shall be reconciled to reflect changes in medical

assistance utilization between the year two years prior to the rate year

and the rate year based upon data reported in each hospital's

institutional cost report for the respective rate year.

(c) Payment of the non-federal share of the medical assistance

payments made pursuant to this subdivision shall be the responsibility

of the state and shall not include a local share. Payments made pursuant

to this subdivision may be added to rates of payment or made as

aggregate payments to eligible general hospitals.

33. Notwithstanding any provision of law which is inconsistent with or

contrary to the structure established by this subdivision and

subdivision two-a of section twenty-eight hundred seven of this article

in order to transition from nineteen hundred eighty-one base year costs

to two thousand five base year costs by no later than December

thirty-first, two thousand twelve, and subject to the availability of

federal financial participation, medicaid per diem and per discharge

rates of payment for general hospital inpatient services for discharges

and days occurring on and after December first, two thousand eight,

shall be computed in accordance with the following:

(a)(i) for the period December first, two thousand eight through March

thirty-first, two thousand nine, such rates shall be subject to a

uniform transition adjustment which shall be based on each general

hospital's proportional share of projected medicaid reimbursable

inpatient operating costs and result in an aggregate reduction in such

rates equal to fifty-one million five hundred thousand dollars, as

determined by the commissioner, provided, however, that such transition

adjustment shall not apply to rates computed pursuant to paragraph (1)

of subdivision four of this section; and

(ii) for the period April first, two thousand nine through March

thirty-first, two thousand ten, such rates shall be revised pursuant to

a chapter of the laws of two thousand nine and as reflecting the

findings and recommendations of the commissioner as issued pursuant to

the provisions of paragraph (b) of this subdivision, provided, however,

that such revisions shall reflect an aggregate reduction in such rates

of no less than one hundred fifty-four million five hundred thousand

dollars, provided further, however, that, notwithstanding any contrary

provision of law, as determined by the commissioner, to the extent that

a chapter of the laws of two thousand nine is not enacted resulting in

such an aggregate annual reduction of no less than one hundred

fifty-four million five hundred thousand dollars in such rates, the

commissioner shall implement a uniform reduction of such rates in

accordance with the methodology described in subparagraph (i) of this

paragraph to the extent necessary, as determined by the commissioner, to

achieve such an aggregate reduction in such rates for the state fiscal

year beginning April first, two thousand nine and each state fiscal year

thereafter; and

(iii) for the periods April first, two thousand ten through March

thirty-first, two thousand twelve, rates shall reflect prior year rate

reductions and such additional reductions as are required to establish

rates based on two thousand five reported allowable Medicaid costs

pursuant to a chapter of the laws of two thousand ten.

(b) In consultation with the chairs of the senate and assembly health

committees, the commissioner shall, by no later than July first, two

thousand eight, establish a technical advisory committee for the

purposes of examining data and evaluating rate-setting methodological

issues, including the impact on hospitals of different methodologies in

preparation for the phased transition to the utilization of reported

allowable two thousand five operating costs for the purpose of setting

inpatient rates of payment for periods on and after April first, two

thousand nine, which phased transition shall be authorized in accordance

with a chapter of the laws of two thousand nine. The technical advisory

committee shall consist of three representatives of hospital

associations, two representatives of the health care industry and three

representatives of community providers and consumers as determined by

the commissioner. By no later than August first, two thousand eight, the

commissioner shall make available to the technical advisory committee

updated data and documentation relevant to the projected phased

transition to utilization of reported allowable two thousand five

operating costs for rate-setting purposes. The issues to be examined by

the technical advisory committee shall include, but not be limited to,

hospital re-basing, workforce recruitment and retention funding,

graduate medical education funding, peer group pricing, wage

equalization factors, case mix and such other related elements of the

general hospital inpatient reimbursement system as deemed appropriate by

the commissioner. The technical advisory committee shall also examine

the scope and volume of hospital out-patient services. By no later than

November first, two thousand eight the commissioner shall issue a report

setting forth findings and recommendations, including divergent views of

members of the technical advisory committee members concerning the

matters examined by the technical advisory committee and the projected

phased transition to utilization of two thousand five base year reported

allowable operating costs for inpatient rates of payments on and after

April first, two thousand nine.

(c) Paragraph (a) of this subdivision shall be effective the later of:

(i) December first, two thousand eight; (ii) after the commissioner

receives final approval of federal financial participation in payments

made for beneficiaries eligible for medical assistance under title XIX

of the federal social security act for the rate methodology established

pursuant to subdivision two-a of section twenty-eight hundred seven of

this article; or (iii) after the commissioner determines that the

department of health has the capability, for payments made pursuant to

subdivision two-a of section twenty-eight hundred seven of this article,

to electronically receive and process claims and transmit payments with

remittance statements. Prior to the commissioner making such a

determination, the department shall provide training sessions on the

rate methodology and billing requirements for services pursuant to

subdivision two-a of section twenty-eight hundred seven of this article

and opportunity for hospitals to perform end-to-end testing on claims

submission, processing and payment.

34. Enhanced safety net hospital program. (a) For the purposes of this

subdivision, "enhanced safety net hospital" shall mean a hospital which:

(i) in any of the previous three calendar years, has met the following

criteria:

(A) not less than fifty percent of the patients it treats receive

medicaid or are medically uninsured;

(B) not less than forty percent of its inpatient discharges are

covered by medicaid;

(C) twenty-five percent or less of its discharged patients are

commercially insured;

(D) not less than three percent of the patients it provides services

to are attributed to the care of uninsured patients; and

(E) provides care to uninsured patients in its emergency room,

hospital based clinics and community based clinics, including the

provision of important community services, such as dental care and

prenatal care;

(ii) is a public hospital operated by a county, municipality, public

benefit corporation or the state university of New York;

(iii) is an acute children's hospital licensed by the department

primarily for the provision of pediatric and neonatal services for which

a discrete institutional cost report was filed for the past three

calendar years, and which has medicaid discharges in excess of fifty

percent of its total discharges;

(iv) is federally designated as a critical access hospital; or

(v) is federally designated as a sole community hospital.

(b) Within amounts appropriated, the commissioner shall adjust medical

assistance rates to enhanced safety net hospitals for the purposes of

supporting critically needed health care services and to ensure the

continued maintenance and operation of such hospitals.

(c) Payments made pursuant to this subdivision may be added to rates

of payment or made as aggregate payments to eligible general hospitals.

35. Notwithstanding any inconsistent provision of this section, or any

other contrary provision of law and subject to the availability of

federal financial participation, rates of payment by governmental

agencies for general hospital inpatient services with regard to

discharges occurring on and after December first, two thousand nine

shall be in accordance with the following:

(a) For periods on and after December first, two thousand nine the

operating cost component of such rates of payments shall reflect the use

of two thousand five operating costs as reported by each facility to the

department prior to July first, two thousand nine and as otherwise

computed in accordance with the provisions of this subdivision;

(b) The commissioner shall promulgate regulations, and may promulgate

emergency regulations, establishing methodologies for the computation of

general hospital inpatient rates and such regulations shall include, but

not be limited to, the following:

(i) The computation of a case-mix neutral statewide base price,

applicable to each rate period, but excluding adjustments for graduate

medical education costs, high cost outlier costs, costs related to

patient transfers, and other non-comparable costs as determined by the

commissioner, such statewide base prices may be periodically adjusted to

reflect changes in provider coding patterns and case-mix and such other

factors as may be determined by the commissioner;

(ii) Only those two thousand five base year costs which relate to the

cost of services provided to Medicaid inpatients, as determined by the

applicable ratio of costs to charges methodology, shall be utilized for

rate-setting purposes, provided, however, that the commissioner may

utilize updated Medicaid inpatient related base year costs and

statistics as necessary to adjust inpatient rates in accordance with

clause (C) of subparagraph (x) of this paragraph;

(iii) Such rates shall reflect the application of hospital specific

wage equalization factors reflecting differences in wage rates;

(iv) Such rates shall reflect the utilization of the all patient

refined (APR) case mix methodology, utilizing diagnostic related groups

with assigned weights that incorporate differing levels of severity of

patient condition and the associated risk of mortality, and as may be

periodically updated by the commissioner;

* (iv-a) Effective April first, two thousand twenty, such rates for

public general hospitals or public health systems, other than those

operated by the state of New York or the state university of New York,

located in a city having a population of one million or more shall

include a rate add-on that reflects reimbursement for costs, to the

extent permitted under 42 CFR 447.272(b)(1) and based on actual

utilization of services. Such rate add-on shall be contingent upon

federal financial participation and approval, and subject to the terms

of a binding memorandum of understanding executed between the department

of health and the public general hospital or public health system

receiving the rate add-on. If payment of such rate add-on is projected

to cause Medicaid disbursements for such period to exceed the projected

department of health Medicaid state funds in the enacted budget

financial plan pursuant to subdivision three of section twenty-three of

the state finance law, as determined by the director of the budget, or

memorandum of understanding is not executed or is breached, the

commissioner, in consultation with the director of budget, may either

cancel or reduce payment of such rate add-on to achieve compliance with

the enacted budget financial plan.

* NB Repealed March 31, 2029

(v) such regulations shall incorporate quality related measures,

including, but not limited to, potentially preventable re-admissions

(PPRs) and provide for rate adjustments or payment disallowances related

to PPRs and other potentially preventable negative outcomes (PPNOs),

which shall be calculated in accordance with methodologies as determined

by the commissioner, provided, however, that such methodologies shall be

based on a comparison of the actual and risk adjusted expected number of

PPRs and other PPNOs in a given hospital and with benchmarks established

by the commissioner and provided further that such rate adjustments or

payment disallowances shall result in an aggregate reduction in Medicaid

payments of no less than thirty-five million dollars for the period July

first, two thousand ten through March thirty-first, two thousand eleven

and no less than fifty-one million dollars for annual periods beginning

April first, two thousand eleven through March thirty-first, two

thousand fifteen, provided further that such aggregate reductions shall

be offset by Medicaid payment reductions occurring as a result of

decreased PPRs during the period July first, two thousand ten through

March thirty-first, two thousand eleven and the period April first, two

thousand eleven through March thirty-first, two thousand fifteen and as

a result of decreased PPNOs during the period April first, two thousand

eleven through March thirty-first, two thousand fifteen; and provided

further that for the period July first, two thousand ten through March

thirty-first, two thousand fifteen, such rate adjustments or payment

disallowances shall not apply to behavioral health PPRs; or to

readmissions that occur on or after fifteen days following an initial

admission. By no later than July first, two thousand eleven the

commissioner shall enter into consultations with representatives of the

health care facilities subject to this section regarding potential

prospective revisions to applicable methodologies and benchmarks set

forth in regulations issued pursuant to this subparagraph;

(vi) Such regulations shall address adjustments based on the costs of

high cost outlier patients;

(vii) Such rates shall continue to reflect trend factor adjustments as

otherwise provided in paragraph (c) of subdivision ten of this section;

(viii) Such rates shall not include any adjustments pursuant to

subdivision nine of this section;

(ix) Rates for non-public, not for profit general hospitals which have

not, as of the effective date of this subdivision, published an

ancillary charges schedule as provided in paragraph (j) of subdivision

one of section twenty-eight hundred three of this article shall have

their inlier payments increased by an amount equal to the average of

cost outlier payments for comparable hospitals or by a methodology that

uses a statewide or regional ratio of cost to charges applied to

statewide or regional comparable charges for those cases determined by

the commissioner;

(x) Such regulations shall provide for administrative rate appeals,

but only with regard to: (A) the correction of computational errors or

omissions of data, including with regard to the hospital specific

computations pertaining to graduate medical education, wage equalization

factor adjustments, (B) capital cost reimbursement, and, (C) changes to

the base year statistics and costs used to determine the direct and

indirect graduate medical education components of the rates as a result

of new teaching programs at new teaching hospitals and/or as a result of

residents displaced and transferred as a result of teaching hospital

closures;

(xi) Rates for teaching general hospitals shall include reimbursement

for direct and indirect graduate medical education as defined and

calculated pursuant to such regulations. In addition, such regulations

shall specify the reports and information required by the commissioner

to assess the cost, quality and health system needs for medical

education provided;

(xii) Such regulations may incorporate quality related measures

pertaining to the inappropriate use of certain medical procedures,

including, but not limited to, cesarean deliveries, coronary artery

bypass grafts and percutaneous coronary interventions;

(xiii) Such regulations may impose a fee on general hospital

sufficient to cover the costs of auditing the institutional cost reports

submitted by general hospitals, which shall be deposited in the Health

Care Reform Act (HCRA) resources account.

(c) 1. The base period reported costs and statistics used for

rate-setting for operating cost components, including the weights

assigned to diagnostic related groups, shall be updated no less

frequently than every four years and the new base period shall be no

more than four years prior to the first applicable rate period that

utilizes such new base period provided, however, that the first updated

base period shall begin on or after April first, two thousand fourteen,

but no later than July first, two thousand fourteen; and further

provided that the updated base period subsequent to July first, two

thousand eighteen shall begin on or after January first, two thousand

twenty-four.

2. In the event of a declaration of a federal public health emergency,

as defined in 42 USC § 247d, or a state disaster emergency, as defined

in section twenty of the executive law, that severely impacts general

hospitals within the state, the department may exclude, for purposes of

this paragraph, the audited reported costs and statistics during such

declaration.

(d) Capital cost reimbursement for general hospitals otherwise subject

to the provisions of this subdivision shall remain subject to the

provisions of subdivision eight of this section.

(e) The provisions of this subdivision shall not apply to those

general hospitals or distinct units of general hospitals whose inpatient

reimbursement does not, as of November thirtieth, two thousand nine,

reflect case based payment per diagnosis-related group or whose

inpatient reimbursement is, for periods on and after July first, two

thousand nine, governed by the provisions of paragraphs (e-1) or (e-2)

of subdivision four of this section.

(f) Notwithstanding section one hundred twelve or one hundred

sixty-three of the state finance law or any other law, rule or

regulation to the contrary, the commissioner may contract with a vendor

for consideration to develop the specifications for the

diagnosis-related groups methodology as provided for in regulations

promulgated pursuant to paragraph (b) of this subdivision if the

commissioner certifies to the comptroller that such contract is in the

best interest of the health of the people of the state. Notwithstanding

that such specifications shall be available pursuant to article six of

the public officers law, such contract may provide that the

specifications for such adjusted or additional diagnosis-related groups

provided by the vendor shall be subject to copyright protection pursuant

to federal copyright law.

(g) Notwithstanding any inconsistent provision of this subdivision or

any other contrary provision of law, the commissioner may, for rate

periods on and after December first, two thousand nine and subject to

the availability of federal financial participation, make additional

adjustments to the inpatient rates of payment of eligible general

hospitals, to facilitate improvements in hospital operations and

finances, in accordance with the following:

(i) General hospitals eligible for distributions pursuant to this

paragraph shall be those non public hospitals with Medicaid discharges

equal to or greater than seventeen and one-half percent for two thousand

seven.

(ii) Funds distributed pursuant to this paragraph shall be allocated

to eligible hospitals pursuant to a formula such that, to the extent of

funds available, no hospital's reduction in Medicaid inpatient revenue

as a result of the application of the provisions of paragraphs (a) and

(b) of this subdivision exceeds a percentage reduction as determined by

the commissioner.

(iii) Funding pursuant to this paragraph shall be available for the

following periods and in the following amounts:

(A) for the period December first, two thousand nine through March

thirty-first, two thousand ten, up to thirty-three million five hundred

thousand dollars;

(B) for the period April first, two thousand ten through March

thirty-first, two thousand eleven, up to seventy-five million dollars,

provided, however, that, notwithstanding subparagraph (ii) of this

paragraph, no facility shall receive an amount pursuant to this clause

that is less than such facility received pursuant to clause (A) of this

subparagraph;

(C) for the period April first, two thousand eleven through March

thirty-first, two thousand twelve, up to fifty million dollars;

(D) for the period April first, two thousand twelve through March

thirty-first, two thousand thirteen, up to twenty-five million dollars.

(iv) Payments made pursuant to this paragraph shall be added to rates

of payments and not be subject to retroactive adjustment or

reconciliation.

(v) Each hospital receiving funds pursuant to this paragraph shall, as

a condition for eligibility for such funds, adopt a resolution of the

board of directors of each such hospital setting forth its current

financial condition and a plan for reforming and improving such

financial condition, including ongoing board oversight, and shall, after

two years, issue a report as adopted by each such board of directors

setting forth what progress has been achieved regarding such

improvement, provided, however, if such report is not issued and adopted

by each such board of directors, or if such report fails to set forth

adequate progress, as determined by the commissioner, the commissioner

may deem such facility ineligible for further distributions pursuant to

this paragraph and may redistribute such further distributions to other

eligible facilities in accordance with the provisions of this paragraph.

The commissioner shall be provided with copies of all such resolutions

and reports.

(h) Inpatient rate adjustments made pursuant to paragraphs (a) through

(f) of this subdivision after application of adjustments authorized

pursuant to subdivision thirty-three of this section shall result in a

net statewide decrease in aggregate Medicaid payments of no less than

seventy-five million dollars for the period December first, two thousand

nine through March thirty-first, two thousand ten, and no less than two

hundred twenty-five million dollars for the period April first, two

thousand ten through March thirty-first, two thousand eleven and each

state fiscal year thereafter, provided, however, that such reductions

shall be in addition to the reductions required pursuant to subparagraph

(ii) of paragraph (a) of subdivision thirty-three of this section.

(i) (i) Notwithstanding any inconsistent provision of this subdivision

or any other contrary provision of law and subject to the availability

of federal financial participation, for each state fiscal year from July

first, two thousand ten through December thirty-first, two thousand

twenty-four; and for the calendar year January first, two thousand

twenty-five through December thirty-first, two thousand twenty-five, the

commissioner shall make additional inpatient hospital payments up to the

aggregate upper payment limit for inpatient hospital services after all

other medical assistance payments, but not to exceed two hundred

thirty-five million five hundred thousand dollars for the period July

first, two thousand ten through March thirty-first, two thousand eleven,

three hundred fourteen million dollars for each state fiscal year

beginning April first, two thousand eleven, through March thirty-first,

two thousand thirteen, and no less than three hundred thirty-nine

million dollars for each state fiscal year until December thirty-first,

two thousand twenty-four; and then from calendar year January first, two

thousand twenty-five through December thirty-first, two thousand

twenty-five, to general hospitals, other than major public general

hospitals, providing emergency room services and including safety net

hospitals, which shall, for the purpose of this paragraph, be defined as

having either: a Medicaid share of total inpatient hospital discharges

of at least thirty-five percent, including both fee-for-service and

managed care discharges for acute and exempt services; or a Medicaid

share of total discharges of at least thirty percent, including both

fee-for-service and managed care discharges for acute and exempt

services, and also providing obstetrical services. Eligibility to

receive such additional payments shall be based on data from the period

two years prior to the rate year, as reported on the institutional cost

report submitted to the department as of October first of the prior rate

year. Such payments shall be made as medical assistance payments for

fee-for-service inpatient hospital services pursuant to title eleven of

article five of the social services law for patients eligible for

federal financial participation under title XIX of the federal social

security act and in accordance with the following:

(A) Thirty percent of such payments shall be allocated to safety net

hospitals based on each eligible hospital's proportionate share of all

eligible safety net hospitals' Medicaid discharges for inpatient

hospital services, including both Medicaid fee-for-service and managed

care discharges for acute and exempt services, based on data from the

period two years prior to the rate year, as reported on the

institutional cost report submitted to the department as of October

first of the prior rate year;

(B) Seventy percent of such payments shall be allocated to eligible

general hospitals based on each such hospital's proportionate share of

all eligible hospitals' Medicaid discharges for inpatient hospital

services, including both Medicaid fee-for-service and managed care

discharges for acute and exempt services, based on data from the period

two years prior to the rate year, as reported on the institutional cost

report submitted to the department as of October first of the prior rate

year;

(C) No eligible general hospital's annual payment amount pursuant to

this paragraph shall exceed the lower of the sum of the annual amounts

due that hospital pursuant to section twenty-eight hundred seven-k and

section twenty-eight hundred seven-w of this article; or the hospital's

facility specific projected disproportionate share hospital payment

ceiling established pursuant to federal law, provided, however, that

payment amounts to eligible hospitals pursuant to clauses (A) and (B) of

this subparagraph in excess of the lower of such sum or payment ceiling

shall be reallocated to eligible hospitals that do not have excess

payment amounts. Such reallocations shall be proportional to each such

hospital's aggregate payment amount pursuant to clauses (A) and (B) of

this subparagraph to the total of all payment amounts for such eligible

hospitals;

(D) Subject to the availability of federal financial participation,

the payment methodology set forth in this subparagraph may be further

revised by the commissioner on an annual basis pursuant to regulations

issued pursuant to this subdivision for periods on and after April

first, two thousand eleven; and

(E) Subject to the availability of federal financial participation and

in conformance with all applicable federal statutes and regulations,

such payments shall be made as upper payment limit payments and,

further, such payments shall be made as aggregate monthly payments to

eligible general hospitals.

(ii) In the event that the commissioner determines that federal

financial participation will not be available for aggregate payments

made in accordance with clause (E) of subparagraph (i) of this

paragraph, payments pursuant to this paragraph shall be included as rate

add-ons to medical assistance inpatient rates of payment established

pursuant to this subdivision based on data from the period two years

prior to the rate year, as reported on the institutional cost report

submitted to the department as of October first of the prior rate year,

provided, however, that if such payments are made as rate add-ons, the

commissioner shall establish a procedure to reconcile payment amounts to

reflect changes in medical assistance utilization from the period two

years prior to the rate year and the actual rate year based on data as

reported on each hospital's annual institutional cost report for the

respective rate year, as submitted to the department as of October first

of the year following the rate year.

(iii) Notwithstanding any other law, rule or regulation to the

contrary, projections of each general hospital's disproportionate share

limitations as computed by the commissioner pursuant to applicable

regulations shall be adjusted to reflect any additional revenue received

or anticipated to be received by each such general hospital pursuant to

this paragraph.

(j) Notwithstanding any contrary provision of law, with regard to

inpatient and outpatient Medicaid rates of payment for general hospital

services, the commissioner may make such adjustments to such rates and

to the methodology for computing such rates as is necessary to achieve

no aggregate, net increase or decrease in overall Medicaid expenditures

related to the implementation of the International Classification of

Diseases Version 10 (ICD-10) coding system on or about October first,

two thousand fourteen, as compared to such aggregate expenditures from

the twelve-month period immediately prior to such implementation.