N.Y. Public Health Law § 2807-t: Assessments on covered lives

* § 2807-t. Assessments on covered lives. 1. Definitions. (a)

"Individual" means a person for whom the specified third-party payor has

agreed to provide reimbursement for inpatient hospital services in the

period other than:

(i) any person who is eligible for payments as a beneficiary of title

XVIII of the federal social security act (medicare);

(ii) any person for whom the specified third-party payor has agreed to

provide reimbursement for inpatient hospital services contingent upon

such person's relationship to an "individual" as a spouse, child,

stepchild, adopted child, family member, or dependent, as defined by the

specified third-party payor, or as contingent upon any other similar

relationship to an "individual" as such relationship is defined by the

specified third-party payor;

(iii) any person for whom the specified third-party payor has agreed

to provide coverage for hospital confinement on other than an expense

incurred basis;

(iv) any person for whom the specified third-party payor has agreed to

provide reimbursement for inpatient hospital services pursuant to the

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

the volunteer ambulance workers' benefit law;

(v) any person for whom the specified third-party payor has agreed to

provide reimbursement for inpatient hospital services pursuant to the

comprehensive motor vehicle insurance reparations act;

(vi) any person (hereinafter referred to as the "primary insured")

otherwise meeting the definition of an "individual" as set forth under

this section if the specified third-party payor has agreed to provide

reimbursement for such person as part of a "family unit"; and

(vii) effective on and after April first, two thousand five, any

person covered under a student policy issued pursuant to article

forty-three of the insurance law, or a blanket student accident, blanket

student health, or blanket student accident and health insurance policy.

(b) "Family unit" means any person for whom the specified third-party

payor has agreed to provide reimbursement for inpatient hospital

services in the period, together with one or more additional persons for

whom the specified third-party payor has agreed to provide reimbursement

for inpatient hospital services in the period contingent upon such

person's relationship to said person as a spouse, child, stepchild,

adopted child, family member, or dependent, as defined by the specified

third-party payor, or as contingent upon any other similar relationship,

as such relationship is defined by the specified third-party payor.

Excluded from the definition is any family unit where the specified

third-party payor has agreed to provide: coverage for hospital

confinement on other than an expense incurred basis; reimbursement for

inpatient hospital services pursuant to the worker's compensation law,

the volunteer firefighters' benefit law, or the volunteer ambulance

workers' benefit law; and reimbursement for inpatient hospital services

pursuant to the comprehensive motor vehicle insurance reparations act.

If a family unit of two persons includes one person who is eligible for

payments as a beneficiary of title XVIII of the social security act

(medicare), that family unit shall be deemed an individual for purposes

of this section. If a family unit of three or more persons includes one

person who is not eligible for medicare and the remaining two or more

persons are eligible for medicare, that family unit shall be deemed an

individual for purposes of this section. A family unit of two or more

persons, all of whom are eligible for medicare, shall not be considered

a family unit or an individual for purposes of this section.

(c) "Specified third-party payor", for purposes of this section, shall

have the same meaning as set forth in section twenty-eight hundred

seven-s of this article.

(d) "Region", for purposes of this section, shall have the same

meaning as set forth in section twenty-eight hundred seven-s of this

article.

2. Determination of annual regional payment amount. The sum total to

be generated each year for each region shall be referred to as the

annual regional payment amount, as determined in accordance with

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

3. Election. Any specified third-party payor may make an election to

make payments for the assessments required by this section, on behalf of

the liable persons or entities pursuant to subdivision eight of this

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

The election pursuant to this subdivision 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 by a

specified third-party payor shall take effect for nineteen hundred

ninety-seven on the next following January first, April first, July

first, or October first not less than thirty days after the election is

filed. Beginning December first, nineteen hundred ninety-seven, an

election pursuant to this section must be made no later than December

first of the year prior to the assessment year. However, any specified

third-party 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 or

certification 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. Specified

third-party payors other than those licensed pursuant to the insurance

law or certified pursuant to this chapter which have not provided

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 said

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. 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 calendar year quarter, provided

that such payor has provided notice of its intention to so revoke at

least thirty days prior to the beginning of such calendar quarter.

(a) A specified third-party payor filing an election pursuant to this

subdivision must agree: to provide the data and information required by

subdivision four of this section; to provide such certification of data

and access to individual and family unit data for audit verification

purposes as the commissioner shall require for purposes of this section;

and 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 assessments.

(b) If a specified third-party 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 paragraph (a) of this subdivision must be submitted with the

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

between the specified third-party payor and the organization.

(c) If a specified third-party payor, including a payor operating in

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

making an election pursuant to this subdivision is acting in an

administrative services capacity on behalf of an organization or

organizations, such specified third-party payor must specify (i) whether

such election applies to payments on behalf of all such organizations,

and (ii) identify any organizations for which such specified third-party

payor is acting to which the election does not apply and establish, in

accordance with guidelines established by the superintendent of

financial services, a system through which general hospitals and the

commissioner can identify the status of a patient as a patient for whom

the election does not apply.

(d) The commissioner may deny a specified third-party payor the

opportunity to make an election pursuant to this subdivision based on

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

provide adequate verification of the accuracy of payments.

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

available to all general hospitals a list of the specified third-party

payors which have elected pursuant to this subdivision to remit payments

pursuant to this section.

4. Assessments shall be calculated as follows: (a) Every specified

third-party payor that has made an election pursuant to this section

shall report to the commissioner or the commissioner's designee the

number of individuals for a period as determined by the commissioner

during the calendar year prior to the assessment year residing within

each region ("individual member months"). Every such specified

third-party payor shall also report to the commissioner or the

commissioner's designee the number of family units for a period as

determined by the commissioner during the calendar year prior to the

assessment year residing within each region ("family member months").

For purposes of this section, the family unit is considered to reside in

the region in which the primary insured resides.

(b) The superintendent of financial services shall advise the

commissioner of the average number of persons covered under family

insurance contracts providing health care coverage approved by the

superintendent for the year two years prior to the assessment year.

(c) The commissioner shall calculate the total number of "individual

member months" for each region for all specified third-party payors to

determine "aggregate individual member months" for each region.

(d) The commissioner shall calculate the total number of "family

member months" for each region for all specified third-party payors to

determine "aggregate family member months" for each region. The

commissioner shall multiply the average number of persons covered under

family insurance contracts, as reported to the commissioner by the

superintendent of financial services, by the "aggregate family member

months" to determine "adjusted aggregate family member months" for each

region. The commissioner shall add the number of "adjusted aggregate

family member months" for each region to the total number of "aggregate

individual member months" for each region. This amount shall be known as

"total covered member months" for each region.

(e) The annual regional payment amount for nineteen hundred

ninety-seven, nineteen hundred ninety-eight, nineteen hundred

ninety-nine, two thousand and each year thereafter, respectively for

each region determined pursuant to subdivision two of this section shall

be divided by an estimate derived from population based data sources of

the total covered member months determined consistent with the

provisions of paragraphs (a), (b), (c) and (d) of this subdivision in

that region to establish the individual annual assessment for nineteen

hundred ninety-seven, nineteen hundred ninety-eight, nineteen hundred

ninety-nine, two thousand and each year thereafter, respectively. The

individual annual assessment shall be multiplied by the average family

size reported to the commissioner by the superintendent of financial

services to establish the family unit annual assessment in that region

for nineteen hundred ninety-seven, nineteen hundred ninety-eight,

nineteen hundred ninety-nine, two thousand and each year thereafter,

respectively.

(f) Effective January first, two thousand nine, a specified

third-party payor that has made an election pursuant to this section may

report to the commissioner or the commissioner's designee the number of

individuals and family units enrolled as of the last day of each month

in fulfillment of the monthly reporting requirement set forth in

paragraph (a) of this subdivision. A specified third-party payor

choosing to report monthly enrollment counts on this basis shall

indicate its choice at the beginning of a calendar year in a form and

manner specified by the commissioner and such reporting method shall

remain in effect the entire calendar year.

5. Monthly payments. (a) Within thirty days after the end of each

month, a specified third-party payor which made an election pursuant to

this section shall remit to the commissioner or the commissioner's

designee one-twelfth of the individual annual assessment for each of the

individuals residing in this state which were included on the membership

rolls of that specified third-party payor during all or any portion of

the prior month. Within thirty days after the end of each month, a

specified third-party payor which made an election pursuant to this

section shall also remit to the commissioner or the commissioner's

designee one-twelfth of the family unit annual assessment for each

family unit for which the primary insured resided in this state which

were included on the membership rolls of that specified third-party

payor during all or any portion of the prior month. Provided, however,

for assessment obligations arising out of individual and family

assessments established pursuant to this section on or after January

first, two thousand, the commissioner may permit certain specified

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

article are not expected to exceed ten thousand dollars in the current

pool year. If a specified third-party payor fails to make such payments

within sixty days of notification of a delinquency, the commissioner may

assess a civil penalty of up to ten thousand dollars for each failure,

provided, however, that such civil penalty shall not be imposed if the

payor demonstrates good cause for such failure to timely make such

payments, and further provided that the amount of such penalty shall not

exceed the amount of the delinquent liability.

(b) The specified third party-payor shall be entitled to rely on the

residence location information provided to the payor by an employer,

group or other party providing enrollment information to the specified

third-party payor, provided the specified third-party payor has no

reason to doubt the accuracy of the information.

(c) Specified third-party payors shall not be responsible for

remitting the monthly assessment for any individual or for any family

unit for any month in which it is subsequently determined that the

specified third-party payor had no liability to provide coverage for

inpatient hospital services for such individual or family unit.

6. Prospective adjustments. (a) The commissioner shall annually

reconcile the sum of the actual payments made to the commissioner or the

commissioner's designee for each region pursuant to section twenty-eight

hundred seven-s of this article and pursuant to this section for the

prior year with the regional allocation of the gross annual statewide

amount specified in subdivision six of section twenty-eight hundred

seven-s of this article for such prior year. The difference between the

actual amount raised for a region and the regional allocation of the

specified gross annual amount for such prior year shall be applied as a

prospective adjustment to the regional allocation of the specified gross

annual payment amount for such region for the year next following the

calculation of the reconciliation. The authorized dollar value of the

adjustments shall be the same as if calculated retrospectively.

(b) Notwithstanding the provisions of paragraph (a) of this

subdivision, for covered lives assessment rate periods on and after

January first, two thousand fifteen through December thirty-first, two

thousand twenty-one, for amounts collected in the aggregate in excess of

one billion forty-five million dollars on an annual basis, and for the

period January first, two thousand twenty-two to December thirty-first,

two thousand twenty-nine for amounts collected in the aggregate in

excess of one billion eighty-five million dollars on an annual basis,

prospective adjustments shall be suspended if the annual reconciliation

calculation from the prior year would otherwise result in a decrease to

the regional allocation of the specified gross annual payment amount for

that region, provided, however, that such suspension shall be lifted

upon a determination by the commissioner, in consultation with the

director of the budget, that sixty-five million dollars in aggregate

collections on an annual basis over and above one billion forty-five

million dollars on an annual basis for the period on and after January

first, two thousand fifteen through December thirty-first, two thousand

twenty-one and for the period January first, two thousand twenty-two to

December thirty-first, two thousand twenty-nine for amounts collected in

the aggregate in excess of one billion eighty-five million dollars on an

annual basis have been reserved and set aside for deposit in the HCRA

resources fund. Any amounts collected in the aggregate at or below one

billion forty-five million dollars on an annual basis for the period on

and after January first, two thousand fifteen through December

thirty-first, two thousand twenty-two, and for the period January first,

two thousand twenty-three to December thirty-first, two thousand

twenty-nine for amounts collected in the aggregate in excess of one

billion eighty-five million dollars on an annual basis, shall be subject

to regional adjustments reconciling any decreases or increases to the

regional allocation in accordance with paragraph (a) of this

subdivision.

7. (a) In the case two or more specified third-party payors covering a

single contract holder where both specified third-party payors cover

separate components of the inpatient care benefits otherwise subject to

the assessment, the assessment shall be apportioned between the

insurers.

(b) With regard to assessment obligations arising out of individual

and family assessments established pursuant to this section, where a

single contract holder has separate components of the inpatient care

benefits otherwise subject to the assessment covered by two or more

entities, the assessment may be apportioned between the entities,

provided that:

(i) Apportionment agreements or arrangements may only be entered into

between or among specified third-party payers which have elected to make

direct payments to the commissioner or the commissioner's designee

pursuant to this subdivision; and

(ii) The aggregate of apportioned covered lives assessment payments

must result in the payment of one hundred percent of the applicable

covered lives assessment; and

(iii) Apportionment agreements between or among apportioning payers

and any modifications, amendments or termination of such agreements must

be in writing and signed by all such payers, provided, however, that

where one apportioning payor agrees to pay one hundred percent of the

applicable covered lives assessment, no written agreement shall be

required, provided there is other written evidence of the arrangement

and any modifications, amendments and/or terminations thereof, emanating

from the apportioning payor paying one hundred percent of the applicable

covered lives assessment to the other apportioning payor or payors or to

the particular group to which the arrangement relates, and further

provided that such written evidence contains the name of the particular

group to which the arrangement relates; and

(iv) Copies of apportionment agreements, and any modifications,

amendments and/or terminations thereof, and written evidence of

arrangements by which one apportioning payor agrees to pay one hundred

percent of the applicable covered lives assessment, and any

modifications, amendments and/or terminations thereof, must be

maintained in the files of each apportioning payor while the

apportionment is in effect and for a period of not less than six years

after termination thereof and shall be made available to the department

upon request for audit verification purposes.

8. Liability for assessments. (a) The assessments determined in

accordance with this section shall, for individuals who have paid

premiums directly to an insurer or to a health maintenance organization

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

forty-three of the insurance law for health care coverage which includes

coverage of inpatient hospital services, be the liability of said

individuals. The assessments determined in accordance with this section

shall, for groups and entities who have paid premiums to an insurer or

to a health maintenance organization certified pursuant to article

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

for health care coverage which includes coverage of inpatient hospital

services, be the liability of said groups and entities. The assessments

determined in accordance with this section shall, for individuals,

groups and entities who have contributed to a self-insured fund for

health care coverage which includes coverage of inpatient hospital

services, be the liability of said individuals, groups or entities.

(b) Specified third-party payors shall make payments to the

commissioner or the commissioner's designee of the full amount of the

assessments determined in accordance with this section. Specified

third-party payors may recover amounts due or paid to the commissioner

or the commissioner's designee from the parties liable in accordance

with paragraph (a) of this subdivision.

9. A specified third-party payor must either:

(a) jointly elect to pay the assessment pursuant to this section and

the allowance pursuant to paragraph (c) of subdivision two and

subdivision five of section twenty-eight hundred seven-j of this

article; or

(b) pay the surcharge for an allowance determined in accordance with

paragraph (b) of subdivision two of section twenty-eight hundred seven-j

of this article, including the allowance determined in accordance with

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

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

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

section by specified third-party payors 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 such specified 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 adjustments and reconciliation made by a specified third party payor

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.

(b) Specified third-party payors which, in the course of an audit

pursuant to this section 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 such specified third-party payor 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

specified third-party payors in accordance with this section shall

include, but not be limited to, on a monthly basis, the source records

generated by supporting information systems, financial accounting

records, relevant correspondence and the addresses and dates of coverage

for all individuals and family units, as defined by paragraphs (a) and

(b) of subdivision one of this section, and such other records as may be

required to prove compliance with, and to support reports submitted in

accordance with, this section.

(d) If a specified third-party payor fails to produce data or

documentation requested in furtherance of an audit pursuant to this

section 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 the enrollment exemptions permitted pursuant to this section

cannot be determined from such available financial and statistical data,

the estimated amount due may be calculated on the basis of aggregate

data derived from such available 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 to the third party payor pursuant to this article. Interest and

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

provisions of subdivision eight of section twenty-eight hundred seven-j

of this article.

(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 section

twenty-eight hundred seven-j of this article, 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 specified

third-party payors in regard to which audit findings or prior

settlements have been made pursuant to this section, 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 interest and penalties, 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, 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 payors

subsequent to such agreements.

* NB Expires December 31, 2029