N.Y. Public Health Law § 2807-j: Patient services payments

* § 2807-j. Patient services payments. 1. Payments to designated

providers of services, as defined in paragraph (a) of subdivision one-a

of this section, by all payors, including the state governmental

agencies, corporations organized and operating in accordance with

article forty-three of the insurance law, organizations operating in

accordance with the provisions of article forty-four of this chapter,

local governmental agencies, self-insured funds, commercial insurers,

payors pursuant to the comprehensive motor vehicle insurance reparations

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

law and the volunteer ambulance workers' benefit law, and any other

rate, charge, or negotiated payment payor, for patient services provided

to persons who are not eligible for payments as beneficiaries of title

XVIII of the federal social security act (medicare) shall include a

surcharge for an allowance on net patient service revenues in the

percentage amount and for the periods specified in subdivision two of

this section. Any such allowance shall be submitted by or on behalf of

designated providers of services to the commissioner or the

commissioner's designee in accordance with subdivision five of this

section.

1-a. Definitions. (a) "Designated providers of services", for purposes

of this section, shall mean providers of services in the following

classes:

(i) general hospitals;

(ii) diagnostic and treatment centers that provide:

(A) a comprehensive range of primary health care services; or

(B) ambulatory surgical services; and

(iii) for periods prior to October first, two thousand, subject to the

provisions of paragraph (d) of subdivision three of this section,

free-standing clinical laboratories issued a permit pursuant to title

five of article five of this chapter.

(b) "Third-party coverage", for purposes of this section, shall

include, but not be limited to: payments by a governmental agency,

insurer, health maintenance organization, self-insured fund, or other

third-party entity making payments on behalf of a patient; whether made

directly to a designated provider of services or indirectly as indemnity

or similar payments made to the patient (or patient's representative

such as parent or family member) for services provided by a designated

provider of services, or through the use of payments made payable to

both the designated provider of services and the patient or patient's

representative, or similar devices.

(c) "Third-party payors", for purposes of this section, shall include,

but not be limited to: governmental agencies; corporations organized and

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

organizations operating in accordance with the provisions of article

forty-four of this chapter; providers of coverage pursuant to the

comprehensive motor vehicle insurance reparations act, the workers'

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

volunteer ambulance workers' benefit law; self-insured funds and

administrators acting on behalf of self-insured funds; and commercial

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

accident and health insurance and whose policy provides coverage on an

expense incurred basis.

2. (a) The total percentage allowance for any period 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, for a designated provider of services applicable to

a payor shall be determined in accordance with this subdivision and

applied to net patient service revenues.

(b) The total percentage allowance for each payor, other than

governmental agencies, or health maintenance organizations for services

provided to subscribers eligible for medical assistance pursuant to

title eleven of article five of the social services law, or approved

organizations for services provided to subscribers eligible for the

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

the social services law, and other than payments for a patient that has

no third-party coverage in whole or in part for services provided by a

designated provider of services, shall be:

(i) the sum of (A) eight and eighteen-hundredths percent, provided,

however, that for services provided on and after July first, two

thousand three, the percentage shall be eight and eighty-five hundredths

percent, and further provided that for services provided on and after

January first, two thousand six, the percentage shall be eight and

ninety-five hundredths percent, and further provided that for services

provided on and after April first, two thousand nine, the percentage

shall be nine and sixty-three hundredths percent, plus (B) twenty-four

percent, provided, however, that for services provided on and after July

first, two thousand three, the percentage shall be twenty-five and

ninety-seven hundredths percent, and further provided that for services

provided on and after January first, two thousand six, the percentage

shall be twenty-six and twenty-six hundredths percent, and further

provided that for services provided on and after April first, two

thousand nine, the percentage shall be twenty-eight and twenty-seven

hundredths percent, and plus (C) for a specified third-party payor as

defined in subdivision one-a of section twenty-eight hundred seven-s of

this article the percentage allowance applicable for a general hospital

for inpatient hospital services pursuant to subdivision two of section

twenty-eight hundred seven-s of this article;

(ii) unless (A) an election in accordance with paragraph (a) of

subdivision five of this section to pay the allowance directly to the

commissioner or the commissioner's designee is in effect for a

third-party payor, and in addition (B) for a specified third-party payor

an election to pay the assessment in accordance with section

twenty-eight hundred seven-t of this article is in effect.

(c) If an election in accordance with subdivision five of this section

is in effect for a third-party payor and in addition in accordance with

section twenty-eight hundred seven-t of this article for a specified

third-party payor, the total percentage allowance factor shall be

reduced to eight and eighteen-hundredths percent, provided, however,

that for services provided on and after July first, two thousand three

the total percentage allowance factor shall be reduced to eight and

eighty-five hundredths percent, and further provided that for services

provided on and after January first, two thousand six, the total

percentage allowance factor shall be reduced to eight and ninety-five

hundredths percent, and further provided that for services provided on

and after April first, two thousand nine, the total percentage allowance

factor shall be reduced to nine and sixty-three hundredths percent.

(d) The total percentage allowance for payments by governmental

agencies, as determined in accordance with paragraphs (a) and (a-1) of

subdivision one of section twenty-eight hundred seven-c of this article

as in effect on December thirty-first, nineteen hundred ninety-six, or

health maintenance organizations for services provided to subscribers

eligible for medical assistance pursuant to title eleven of article five

of the social services law, or approved organizations for services

provided to subscribers eligible for the family health plus program

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

shall be five and ninety-eight-hundredths percent, provided, however,

that for services provided on and after July first, two thousand three

the total percentage allowance shall be six and forty-seven hundredths

percent, and further provided that for services provided on and after

January first, two thousand six, the total percentage allowance shall be

six and fifty-four hundredths percent, and further provided that for

services provided on and after April first, two thousand nine, the total

percentage allowance shall be seven and four hundredths percent.

(e) The total percentage allowance for payments for services provided

by designated providers of services for which there is no third-party

coverage in whole or in part shall be eight and eighteen-hundredths

percent, provided, however, that for services provided on and after July

first, two thousand three the total percentage allowance shall be eight

and eighty-five hundredths percent, and further provided that for

services provided on and after January first, two thousand six, the

total percentage allowance shall be eight and ninety-five hundredths

percent, and further provided that for services provided on and after

April first, two thousand nine, the total percentage allowance shall be

nine and sixty-three hundredths percent. This paragraph shall not apply

to patient deductibles and coinsurance amounts.

(f) The total percentage allowance for patient deductibles and

coinsurance amounts shall be the same percentage allowance applicable to

payments by the primary third-party payor covering the patient in each

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

subdivision.

(g) The total percentage allowance for secondary third-party payors

under coordination of benefits principles shall be the same percentage

allowance applicable to payments by the primary third-party payor in the

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

subdivision.

3. Net patient service revenues, for purposes of this section, shall

mean:

(a) for general hospitals all moneys received for or on account of

inpatient hospital services, outpatient services (including referred

ambulatory services), emergency services, ambulatory surgical services,

and other hospital or health-related services, including capitation

payments allocable to inpatient hospital services, outpatient services

(including referred ambulatory services), emergency services, ambulatory

surgical services and other hospital or health-related services

excluding services listed below, less refunds, for discharges occurring

or for visits made or services performed on or after January first,

nineteen hundred ninety-seven, or contracted service obligations for

periods on or after January first, nineteen hundred ninety-seven

excluding the following subject to the provisions of subdivision eleven

of this section:

(i) revenue received for services provided to beneficiaries of title

XVIII of the federal social security act (medicare);

(ii) revenue received by a general hospital for residential health

care facility services, adult day care services, hospice services, and

home care services;

(iii) revenue received from the allowances pursuant to this section

and section twenty-eight hundred seven-s of this article;

(iv) revenue received from bad debt and charity care and indigent care

rate adjustments and pool distributions pursuant to section twenty-eight

hundred seven-c of this article, general hospital indigent care pool

distributions pursuant to section twenty-eight hundred seven-k of this

article, health care services pool distributions pursuant to section

twenty-eight hundred seven-c of this article, health care initiatives

pool distributions pursuant to section twenty-eight hundred seven-l of

this article, professional education pool distributions pursuant to

section twenty-eight hundred seven-m of this article, tobacco control

and insurance initiatives pool distributions pursuant to section

twenty-eight hundred seven-v of this article, and high need indigent

care adjustment pool distributions pursuant to section twenty-eight

hundred seven-w of this article, 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 net patient service revenue for the

purposes of this section;

(v) revenue received from physician practice or faculty practice plan

discrete billings for physician services;

(vi) revenue received by a general hospital from a public hospital

pursuant to an affiliation agreement contract for the delivery of health

care services to such public hospital;

(vii) revenue received from governmental deficit financing;

(viii) subject to the provisions of paragraph (d) of this subdivision,

revenue received for or on account of referred ambulatory clinical

laboratory visits made or services performed on and after October first,

two thousand.

(b) for diagnostic and treatment centers providing services designated

in subparagraph (ii) of paragraph (a) of subdivision one-a of this

section all moneys received, including capitation payments allocable to

diagnostic and treatment center services otherwise covered by the

assessment, less refunds, for or on account of visits made or services

performed on or after January first, nineteen hundred ninety-seven or

contracted service obligations for periods on or after January first,

nineteen hundred ninety-seven:

(i) for the following services:

(A) for diagnostic and treatment centers providing a comprehensive

range of primary health care services, for all services;

(B) for diagnostic and treatment centers providing ambulatory surgical

services, for all ambulatory surgical services;

(ii) excluding the following subject to the provisions of subdivision

eleven of this section:

(A) revenue received for services provided to beneficiaries of title

XVIII of the federal social security act (medicare);

(B) revenue received from the allowances pursuant to this section;

(C) revenue received from bad debt and charity care rate adjustments

pursuant to paragraph (f) of subdivision two of section twenty-eight

hundred seven of this article, health care services pool distributions

pursuant to section twenty-eight hundred seven-c of this article, health

care initiatives pool distributions pursuant to section twenty-eight

hundred seven-l of this article, professional education pool

distributions pursuant to section twenty-eight hundred seven-m of this

article, tobacco control and insurance initiatives pool distributions

pursuant to section twenty-eight hundred seven-v of this article, and

high need indigent care adjustment pool distributions pursuant to

section twenty-eight hundred seven-w of this article;

(D) revenue received from physician practice or faculty practice plan

discrete billings for physician services;

(E) for a diagnostic and treatment center operated by a health

maintenance organization operating in accordance with the provisions of

article forty-four of this chapter or article forty-three of the

insurance law, revenue received for or on account of services provided

to subscribers of such health maintenance organization;

(F) revenue received from governmental deficit financing; and

(G) subject to the provisions of paragraph (d) of this subdivision,

revenue received for or on account of referred clinical laboratory

visits made or services performed on and after October first, two

thousand.

(c) for free-standing clinical laboratories, all moneys received,

including capitation payments, less refunds, for or on account of visits

made or services performed on or after January first, nineteen hundred

ninety-seven and prior to October first, two thousand, subject to the

provisions of paragraph (d) of this subdivision, or contracted service

obligations for periods on or after January first, nineteen hundred

ninety-seven and prior to October first, two thousand, subject to the

provisions of paragraph (d) of this subdivision, for clinical laboratory

services, excluding, subject to the provisions of subdivision eleven of

this section:

(i) revenue received for services provided to beneficiaries of title

XVIII of the federal social security act (medicare);

(ii) revenue received from the allowances pursuant to this section;

(iii) for a clinical laboratory operated by a health maintenance

organization operating in accordance with the provisions of article

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

revenue received for or on account of services provided to subscribers

of such health maintenance organization; and

(iv) revenue received from governmental deficit financing.

(d) Provided, however, that if either the provisions of clause (G) of

subparagraph (ii) of paragraph (b) of this subdivision or subparagraph

(viii) of paragraph (a) of this subdivision which exclude certain

revenues from the definition of net patient service revenues for the

purpose of imposing surcharges pursuant to this section, result in a

determination of an impermissible provider tax by the secretary of the

U.S. department of health and human services under the provisions of

section 1903(w) of the federal social security act, then clause (G) of

subparagraph (ii) of paragraph (b) of this subdivision, subparagraph

(viii) of paragraph (a) of this subdivision, and sections forty-eight

and forty-nine of chapter one of the laws of nineteen hundred

ninety-nine are rendered null and void as of October first, two

thousand. The commissioner will collect any retroactive amounts due as a

result of surcharges imposed on such services on and after October

first, two thousand, without interest or penalty.

4. (a) For periods prior to January first, two thousand five, the

commissioner is authorized to contract with the article forty-three

insurance law plans, or such other contractors as the commissioner shall

designate, to receive and distribute funds from the allowances

established pursuant to this section, and funds from the assessments

established pursuant to subdivision eighteen of section twenty-eight

hundred seven-c of this article. In the event contracts with the article

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

effectuated, the commissioner shall conduct annual audits of the receipt

and distribution of the funds. The reasonable costs and expenses of an

administrator as approved by the commissioner, not to exceed for

personnel services on an annual basis two million two hundred thousand

dollars for collection and distribution of allowances and assessments

established pursuant to this section and subdivision eighteen of section

twenty-eight hundred seven-c of this article, shall be paid from the

allowance and assessment funds.

(b) Notwithstanding any inconsistent provision of section one hundred

twelve or one hundred sixty-three of the state finance law or any other

law, at the discretion of the commissioner without a competitive bid or

request for proposal process, contracts in effect for administration of

bad debt and charity care pools for the period January first, nineteen

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

ninety-six pursuant to section twenty-eight hundred seven-c of this

article may be extended to provide for administration pursuant to this

section and distributions of allowance and assessment funds pursuant to

this article and may be amended as may be necessary.

(c) The commissioner shall contract with an independent certified

public accountant to conduct an annual independent audit, in conformance

with generally accepted auditing standards, of the receipts,

disbursements, revenues, expenditures and cash flows of funds, for each

calendar year beginning with nineteen hundred eighty-three, through the

most recent calendar year. As used in this section, "funds" shall mean:

(i) Funds accumulated and pooled pursuant to this section, paragraph

(a) of subdivision eighteen of section twenty-eight hundred seven-c of

this article, and sections twenty-eight hundred seven-s and twenty-eight

hundred seven-t of this article; and

(ii) Funds accumulated and pooled pursuant to chapters five hundred

thirty-six, five hundred thirty-seven and five hundred thirty-eight of

the laws of nineteen hundred eighty-two, chapters eight hundred seven

and nine hundred six of the laws of nineteen hundred eighty-five,

chapters two and six hundred five of the laws of nineteen hundred

eighty-eight, chapters nine hundred twenty-two and nine hundred

twenty-three of the laws of nineteen hundred ninety, chapter seven

hundred thirty-one of the laws of nineteen hundred ninety-three and

chapter eighty-one of the laws of nineteen hundred ninety-five.

Such annual independent audit shall be submitted to the director of

the budget, the temporary president of the senate and the speaker of the

assembly no later than April fifteenth of each year.

5. (a) Any third-party payor for services provided by a designated

provider of services may make an election to make payments on an

aggregated basis of funds due from the allowance determined pursuant to

subdivision two of this section directly to the commissioner or the

commissioner's designee on behalf of designated providers of services.

(i) The election pursuant to this paragraph to be effective must be in

writing, filed with the commissioner or the commissioner's designee on

such forms and in such manner as the commissioner shall require. An

election must apply to all classes of designated providers of service

and to all providers within each class. An election by a payor shall

take effect for nineteen hundred ninety-seven, on the next following

January first, April first, July first, or October first, and for each

calendar year thereafter on the next following January first, not less

than thirty days after the election is filed. Beginning December first,

nineteen hundred ninety-seven, an election pursuant to this paragraph

must be made no later than December first of the year prior to the

assessment year. However, any payor licensed pursuant to the insurance

law or certified pursuant to article forty-four of this chapter between

December first of the year prior to the assessment year and December

thirty-first of the assessment year may make an election subsequent to

such licensure, and during said time period, to take effect on the next

following January first, April first, July first or October first not

less than thirty days after such election is filed. Payors other than

those licensed pursuant to the insurance law or certified pursuant to

this chapter which have not provided third-party coverage prior to

December first of the year prior to the assessment year may make an

election at any time from December first of the year prior to said

assessment year to December thirty-first of the assessment year, to take

effect on the next following January first, April first, July first or

October first not less than thirty days after the election is filed.

Beginning June first, two thousand three an election by any payor or

organization shall begin on the first day of the month following the

date it was received by the commissioner.

(ii) An election shall remain in effect unless revoked in writing by a

specified third-party payor, which revocation shall be effective on the

first day of the next month, provided that such payor has provided

notice of its intention to so revoke at least twenty days prior to the

beginning of such month.

(iii) A payor filing an election pursuant to this paragraph must

agree:

(A) to provide reports in accordance with the provisions of paragraph

(b) of subdivision seven of this section;

(B) to provide such certification of data and access to allowance

expenditure data for audit verification purposes as the commissioner

shall require for purposes of this section; and

(C) to the jurisdiction of the state to maintain an action in the

courts of the state of New York to enforce any provision of this section

related to payment of the allowances.

(D) for periods on and after January first, two thousand nine, to

provide the commissioner or the commissioner's designee the payor's

federal tax identification number and agree to the use of such

identification number in connection with identifying the payor's

election status to designated providers of services, including the

posting of such identification numbers on secure websites maintained by

the commissioner or the commissioner's designee in furtherance of the

purposes of this section. The commissioner shall include for periods on

and after January first, two thousand nine on such secure websites, the

date such payor was first posted.

(iv) If a payor is acting in an administrative services capacity on

behalf of an organization, such as a self-insured fund, the consent of

the organization to the election and the conditions pursuant to

subparagraph (iii) of this paragraph must be submitted with the

election. Such consent may be set forth in writing in the agreement

between the payor and the organization and a photocopy of that portion

of the agreement submitted by the payor, together with a photocopy of

the signatures of the organization and the payor on the agreement, shall

be accepted in lieu of a separate election form from the organization.

On and after January first, two thousand four, the commissioner shall

have discretion to accept payments made on a timely basis if the reports

and information reports are routinely submitted, notwithstanding the

fact that the full and complete election form by or on behalf of an

organization was not filed on a timely basis. In the event the

commissioner accepts payments pursuant to this section where an election

form is missing or incomplete but the payments and information reports

were routinely submitted as if the election forms had been filed, the

election form from the payor and organization shall be deemed to have

been filed (and the organization and the payor shall be as legally bound

by the terms of the election form as if it had signed and filed the

election) and neither the payor nor the organization shall subsequently

refuse to abide by the terms of the election form for any year in which

payments were submitted and accepted pursuant to this section.

(v) If a payor, including a payor operating in accordance with the

insurance law or article forty-four of this chapter, making an election

pursuant to this paragraph is acting in an administrative services

capacity on behalf of an organization or organizations, such payor must

specify whether such election applies to payments on behalf of all such

organizations and establish, in accordance with guidelines established

by the superintendent of financial services, a system through which

designated providers of services and the commissioner can identify the

status of a patient as a patient for whom the election does not apply.

(b) The commissioner may deny a payor the opportunity to remit

directly to the commissioner or the commissioner's designee based on

repeated late payments, failure to remit correct amounts, or failure to

provide adequate verification of the accuracy of payments. The

percentage allowance for any such payor shall be the percentage

determined in accordance with paragraph (b) of subdivision two of this

section.

(c) The commissioner or the commissioner's designee shall make

available to all designated providers of services a list of the payors

which have elected pursuant to this paragraph to remit payments

directly.

5-a. (a) Payments by or on behalf of designated providers of services

to the commissioner or the commissioner's designee of funds due from the

allowances pursuant to subdivision two of this section or pursuant to

payment obligations incurred pursuant to section twenty-eight hundred

seven-s of this article or section twenty-eight hundred seven-t of this

article shall be made on a monthly basis, provided, however, that for

reporting periods relating to payments for services provided or dates of

inpatient discharge or contracted service obligations occurring on or

after January first, two thousand one, the commissioner may permit

certain third-party payors which have at least one full year of pool

payment experience to submit such payments on an annual basis, based on

an annual demonstration by a payor through its prior year's pool payment

experience that total pool obligations under this section and sections

twenty-eight hundred seven-s and twenty-eight hundred seven-t of this

article are not expected to exceed ten thousand dollars for annual

periods prior to January first, two thousand four, and twenty-five

thousand dollars for annual periods on and after January first, two

thousand four. Payments due by designated providers of services on

account of payors in accordance with paragraph (b) of subdivision two of

this section shall be two percentage points less than the percentage

specified in such paragraph. The designated provider of services shall

retain for compensation for such provider's administrative

responsibilities the amount that represents the difference. Payments due

by designated providers of services on account of all other payors shall

be calculated on the basis of the percentage allowance applicable to

such payor pursuant to paragraphs (d), (e), (f) and (g) of subdivision

two of this section. Payments shall be due on or before the thirtieth

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

(b) 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 section 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

designated providers of services and paid to pools on behalf of the

designated provider of services where a designated provider of services

elects such withholding in such time and manner as specified by the

commissioner, and in the event a designated provider of services does

not elect such withholding, payments by such designated provider of

services 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 designated

provider of services shall be considered received by such designated

provider of services and paid to the pool by such designated provider of

services for all purposes.

6. (a) If a payment made by a designated provider of services for a

month to which an allowance applies is less than seventy percent of the

amount due or which the commissioner estimates is due, based on

available financial and statistical data, the commissioner may collect

the deficiency pursuant to paragraph (c) of this subdivision.

(b) If a payment made by a designated provider of services for a month

to which an allowance applies is less than ninety percent of the amount

due or which the commissioner estimates is due, based on available

financial and statistical data, and at least two previous payments

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

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

deficiency pursuant to paragraph (c) of this subdivision.

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

provider of services' deficiency under this section, the comptroller or

a fiscal intermediary designated by the director of the budget, or the

commissioner of the office of temporary and disability assistance, 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 by such article

forty-three corporation or article forty-four organization to the

designated provider of services the amount of the deficiency determined

under paragraph (a), (b) or (e) of this subdivision or paragraph (d) of

subdivision eight-a of this section. Upon withholding such amount, the

comptroller or a designated fiscal intermediary, or the commissioner of

the office of temporary and disability assistance, or corporation

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

insurance law or organization operating in accordance with article

forty-four of this chapter shall pay the commissioner, or the

commissioner's designee, such amount withheld on behalf of the

designated provider of services. Such amount shall represent, in whole

or in part, the amounts due from the designated provider of services.

(d) The commissioner shall provide a designated provider of services

with notice of any estimate of an amount due for an allowance pursuant

to paragraph (a) or (b) of this subdivision or paragraph (d) of

subdivision eight-a of this section at least three days prior to

collection of such amount by the commissioner. Such notice shall contain

the financial basis for the commissioner's estimate.

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

estimate by the commissioner pursuant to paragraph (a) or (b) of this

subdivision or paragraph (d) of subdivision eight-a of this section of

the amount due for an allowance, the designated provider of services,

within sixty days of notice of an amount due, may request a public

hearing. If a hearing is requested, the commissioner shall provide the

designated provider of services an opportunity to be heard and to

present evidence bearing on the amount due for an allowance within

thirty days after collection of an amount due or receipt of a request

for a hearing, whichever is later. An administrative hearing is not a

prerequisite to seeking judicial relief.

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

request by a designated provider of services.

(g) In the event a hearing pursuant to paragraph (e) of this

subdivision is not requested and the delinquent amounts in question have

been referred for recoupment or offset pursuant to paragraph (c) of this

subdivision, or have been referred to the office of the attorney general

for collection, the amount of such delinquencies 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 designated provider of services, 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.

7. (a) (i) Every designated provider of services shall submit reports

of net patient service revenues received for or on account of patient

services for each month which shall be in such form as may be prescribed

by the commissioner to accurately disclose information required to

implement this section. For periods on and after January first, two

thousand five, reports by designated providers of services shall be

submitted electronically in a form as may be required by the

commissioner; provided, however, any designated provider of services is

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.

(ii) For periods on and after January first, two thousand nine, every

designated provider of services shall provide the commissioner or

commissioner's designee with its federal tax identification number and

such identification number shall be used in connection with identifying

such providers for purposes pursuant to this section, including the

posting of such identification numbers on secure websites maintained by

the commissioner or the commissioner's designee in furtherance of the

purposes of this section. The commissioner shall include for periods on

and after January first, two thousand nine on such secure websites, the

date such designated provider of services was first posted. In addition,

the commissioner shall, as a part of a final resolution of an audit

conducted pursuant to subdivision eight-a of this section, waive payment

of interest and penalties otherwise applicable pursuant to subdivision

eight of this section, when the audit findings conclusively indicate

that the liability for such interest and penalties are the result of a

delay in the listing of a new designated provider of services on the

secure website maintained by the department.

(b) (i) Every third-party payor making an election in accordance with

paragraph (a) of subdivision five of this section shall submit reports

of patient service expenditures for services provided by designated

providers of services for each month which shall be in such form as may

be prescribed by the commissioner to accurately disclose information

required to implement this section, provided, however, that for

reporting periods relating to payments for services provided or dates of

inpatient discharge or contracted service obligations occurring on or

after January first, two thousand one, the commissioner may permit

certain third-party payors which have at least one full year of pool

payment experience to submit such reports on an annual basis, based on

an annual demonstration by a payor through its prior year's pool payment

experience that total pool obligations under this section and sections

twenty-eight hundred seven-s and twenty-eight hundred seven-t of this

article are not expected to exceed ten thousand dollars for annual

periods prior to January first, two thousand four, and twenty-five

thousand dollars for annual periods on and after January first, two

thousand four.

(ii) For periods on and after July first, two thousand four, reports

submitted on a monthly basis by third-party payors in accordance with

subparagraph (i) of this paragraph and reports submitted on a monthly or

annual basis by payors acting in an administrative services capacity on

behalf of electing third-party payors in accordance with subparagraph

(i) of this paragraph shall be made electronically in a form as may be

required by the commissioner; provided, however, any third-party payor,

except payors acting in an administrative services capacity on behalf of

electing third-party payors, which, on or after January first, two

thousand four, elects to make payments directly to the commissioner or

the commissioner's designee pursuant to subdivision five of this

section, shall be subject to this subparagraph only after one full year

of pool payment experience which results in reports being submitted on a

monthly basis, 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. This subparagraph shall not be interpreted to prohibit any

third-party payor from submitting reports electronically on a voluntary

basis.

(c) If a designated provider of services or a third-party payor fails

to file reports required pursuant to paragraph (a) or (b) of this

subdivision and which are due on and after January first, two thousand,

within sixty days of the date such reports are due and after

notification of such reporting delinquency, the commissioner may assess

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

payor or provider demonstrates good cause for the failure to timely file

such reports. Such penalties shall be subject to the provisions of

section twelve-a of this chapter.

8. (a) If a payment made pursuant to this section or to section

twenty-eight hundred seven-s or twenty-eight hundred seven-t of this

article for a month to which an allowance applies is less than ninety

percent of the amount due or which the commissioner estimates, based on

available financial and statistical data, is due for such month,

interest shall be due and payable to the commissioner by a designated

provider of services, or by a third-party payor, other than a state

governmental agency, that has elected to pay an allowance directly, on

the difference between the amount paid and the amount due or estimated

to be due 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,

if greater, 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 due from a

designated provider of services, if not paid by the due date of the

following month's payment, may be collected by the commissioner pursuant

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

as an allowance pursuant to subdivision two of this section.

(b) If a payment made for a month to which an allowance applies is

less than seventy percent of the amount due or which the commissioner

estimates, based on available financial and statistical data, is due for

such month, a penalty shall be due and payable to the commissioner by a

designated provider of services, or by a third-party payor, other than a

state governmental agency, that has elected to pay an allowance

directly, of five percent of the difference between the amount paid and

the amount due or estimated to be due for such month when the failure to

pay is for a duration of not more than one month after the due date of

the payment with an additional five percent for each additional month or

fraction thereof during which such failure continues, not exceeding

twenty-five percent in the aggregate. A penalty due from a designated

provider of services may be collected by the commissioner pursuant to

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

an allowance pursuant to subdivision two of this section.

(c) Overpayment by or on behalf of a designated provider of services

of a payment shall be applied to any other payment due from the

designated provider of services pursuant to this section, or, if no

payment is due, at the election of the designated provider of services

shall be applied to future payments or refunded to the designated

provider of services. Interest shall be paid on overpayments from the

date of overpayment to the date of crediting or refund at the rate

determined in accordance with paragraph (a) of this subdivision only if

the overpayment was made at the direction of the commissioner. Interest

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

than one dollar.

8-a. (a) Payments and reports submitted or required to be submitted

to the commissioner or to the commissioner's designee pursuant to this

section and section twenty-eight hundred seven-s of this article by

designated providers of services and by third-party payors which have

elected to make payments directly to the commissioner or to the

commissioner's designee in accordance with subdivision five-a of this

section, 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 and reports 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 designated

providers of services or by third-party payors with regard to subsequent

payments, provided, however, that nothing herein shall be construed as

precluding the commissioner from pursuing collection of any such

payments 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 period, or from conducting an audit of any

adjustment or reconciliation made by a designated provider of services

or by a third party payor which has elected to make such payments

directly to the commissioner or the commissioner's designee, 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.

(b) Designated providers of services or third-party payors which, in

the course of an audit pursuant to this section or section twenty-eight

hundred seven-s of this article, 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 audited entity demonstrates good cause for such

failure. The imposition of civil penalties pursuant to this section

shall be subject to the provisions of section twelve-a of this chapter.

(c) Records required to be retained for audit verification purposes by

designated providers of services and third-party payors in accordance

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

article shall include, but not be limited to, on a monthly basis, the

source records generated by supporting information systems, detailed

claims information, detailed patient revenue information, capitation

arrangements, financial accounting records, relevant correspondence and

such other records as may be required to prove compliance with, and to

support the reports submitted in accordance with, this section and

section twenty-eight hundred seven-s of this article.

(d) If a designated provider of services or a third party payor fails

to produce data or documentation requested in furtherance of an audit

pursuant to this section or pursuant to section twenty-eight hundred

seven-s of this article, for a month to which an allowance 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 the patient services revenue exemptions specified

pursuant to this section, or pursuant to section twenty-eight hundred

seven-s of this article, cannot be determined from such available

financial and statistical data, the amount due may be calculated on the

basis of the aggregate total of patient services revenue derived from

such data for the year subject to audit. The commissioner shall take all

necessary steps to collect amounts due as determined pursuant to this

paragraph, including directing the state comptroller to offset such

amounts due from any payments made by the state pursuant to this article

to a designated provider of services or a third party payor. Interest

and penalties shall be applied to such amounts due in accordance with

the provisions of subdivision eight of this section.

(e) The commissioner may, as part of a final resolution of an audit

conducted pursuant to this subdivision, waive payment of interest and

penalties otherwise applicable pursuant to subdivision eight of this

section when amounts due as a result of such audit, other than such

waived penalties and interest, are paid in full to the commissioner or

the commissioner's designee within sixty days of the issuance of a final

audit report that is mutually agreed to by the commissioner and auditee,

provided, however, that if such final audit report is not so mutually

agreed upon, then neither the commissioner nor the auditee shall have

any obligations pursuant to this paragraph.

(f) The commissioner may enter into agreements with designated

providers of services, and with third-party payors, in regard to which

audit findings or prior settlements have been made pursuant to this

section or section twenty-eight hundred seven-s of this article,

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 unaudited 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 section and section

twenty-eight hundred seven-s of this article, 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

providers and payors subsequent to such agreements.

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

allowances specified in this section, and the assessments pursuant to

subdivision eighteen of section twenty-eight hundred seven-c of this

article, and the assessments pursuant to paragraph (c) of subdivision

nine of section twenty-eight hundred seven-d of this article, plus such

funds as may be allocated in accordance with section twenty-eight

hundred seven-s of this article, including interest and penalties, shall

be deposited by the commissioner or the commissioner's designee as

follows:

(a) funds shall be deposited and credited to a special revenue-other

fund to be established by the comptroller or to the health care reform

act (HCRA) resources fund established pursuant to section ninety-two-dd

of the state finance law, whichever is applicable. To the extent of

funds appropriated therefore, the commissioner shall make payments to

general hospitals related to bad debt and charity care pursuant to

section twenty-eight hundred seven-k of this article. Funds shall be

deposited in the following amounts:

(i) fifty-seven and thirty-three-hundredths percent of the funds

accumulated for the period January first, nineteen hundred ninety-seven

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

(ii) fifty-seven and one-hundredths percent of the funds accumulated

for the period January first, nineteen hundred ninety-eight through

December thirty-first, nineteen hundred ninety-eight,

(iii) fifty-five and thirty-two-hundredths percent of the funds

accumulated for the period January first, nineteen hundred ninety-nine

through December thirty-first, nineteen hundred ninety-nine, and

(iv) seven hundred sixty-five million dollars annually of the funds

accumulated for the periods January first, two thousand through December

thirty-first, two thousand twenty-eight, and

(v) one hundred ninety-one million two hundred fifty thousand dollars

of the funds accumulated for the period January first, two thousand

twenty-nine through March thirty-first, two thousand twenty-nine.

(b) funds shall be accumulated in a health care initiatives pool

established by the commissioner, for distribution in accordance with

section twenty-eight hundred seven-l of this article, in the following

amounts:

(i) forty-two and sixty-seven-hundredths percent of the funds

accumulated for the period January first, nineteen hundred ninety-seven

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

(ii) forty-two and ninety-nine-hundredths percent of the funds

accumulated for the period January first, nineteen hundred ninety-eight

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

(iii) forty-four and sixty-eight-hundredths percent of the funds

accumulated for the period January first, nineteen hundred ninety-nine

through December thirty-first, nineteen hundred ninety-nine, and

(iv) the remaining balance of the funds accumulated for each period on

and after January first, two thousand.

10. Notwithstanding any inconsistent provision of law or regulation to

the contrary, the allowances applicable to payments by state

governmental agencies pursuant to subdivision two of this section shall

be reflected in the determination of reimbursement rates pursuant to

sections twenty-eight hundred seven and twenty-eight hundred seven-c of

this article and fees for clinical laboratory services under the medical

assistance program.

11. Each exclusion from the allowances effective on or after January

first, nineteen hundred ninety-seven established pursuant to this

section shall be contingent upon either: (a) qualification of the

allowances for waiver pursuant to federal law and regulation; or (b)

consistent with federal law and regulation, not requiring a waiver by

the secretary of the department of health and human services related to

such exclusion; in order for the allowances 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 allowances not reducing

the amount expended by the state as medical assistance for purposes of

federal financial participation. The commissioner shall collect the

allowances 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 allowances do not so qualify based on any such

exclusion, then the exclusion shall be deemed to have been null and void

as of January first, nineteen hundred ninety-seven, and the commissioner

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

or penalty provided the designated provider of services or third-party

payor that has elected to pay directly pays the retroactive amount due

within ninety days of notice from the commissioner to the designated

provider of services or third-party payor that has elected to pay

directly that an exclusion is null and void. Interest and penalties

shall be measured from the due date of ninety days following notice from

the commissioner or the commissioner's designee to the designated

provider of services or third-party payor that has elected to pay

directly.

12. Revenue from the allowances pursuant to this section shall not be

included in gross revenue received for purposes of the assessments

pursuant to subdivision eighteen of section twenty-eight hundred seven-c

of this article, subject to the provisions of paragraph (e) of

subdivision eighteen of section twenty-eight hundred seven-c of this

article, and shall not be included in gross revenue 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.

* NB Expires December 31, 2029