N.Y. Public Health Law § 2808-c: Reimbursement of general hospital inpatient services

* § 2808-c. Reimbursement of general hospital inpatient services. 1.

General hospital rates and inpatient revenue cap. In determining

payments from all sources for general hospital inpatient services for

the rate year commencing on January first, nineteen hundred eighty-three

and ending on December thirty-first, nineteen hundred eighty-three, the

allowances set forth in subdivision four of this section shall be

included. Effective January first, nineteen hundred eighty-four, the

commissioner shall establish, in accordance with regulations adopted by

the council and approved by the commissioner, the maximum amount of

inpatient revenue a general hospital will be authorized to receive for

services during a designated period not to exceed twelve months from all

payors for the provision of inpatient services. This maximum amount will

be known as the inpatient revenue cap and shall be established for each

general hospital possessing a valid operating certificate issued

pursuant to section twenty-eight hundred five of this article. The

inpatient revenue cap shall be established by projecting to anticipated

expense levels the reimbursable historical inpatient expenses and

financial needs as defined in subdivision four of this section, of a

general hospital approved for financing through inpatient service

revenues. Expenses included in the inpatient revenue cap are those

determined to be allowable and reasonable in the provision of authorized

inpatient services.

The inpatient revenue caps for the rate years nineteen hundred

eighty-four and nineteen hundred eighty-five shall be determined by

computing an imputed revenue cap for the period beginning January first,

nineteen hundred eighty-three and ending December thirty-first, nineteen

hundred eighty-three, which has been based on the cost analysis pursuant

to paragraphs (a) and (b) of subdivision two of this section and

adjusted each year to reflect the trend factors developed and applied in

accordance with paragraph (e) of subdivision two of this section,

capital related expenses in accordance with paragraph (c) of subdivision

two of this section, redetermination of additional financial needs or

revenue requirements in accordance with paragraph (d) of subdivision two

of this section, adjustments made in accordance with subdivision five of

this section and adjustments to reflect audit findings.

Hospital inpatient services to patients who are not beneficiaries or

subscribers of corporations organized and operating in accordance with

article forty-three of the insurance law, subchapter XVIII of the

federal social security act (medicare), eligible for payments made by

state governmental agencies, enrolled in organizations operating in

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

enrolled in a self-insured and self administered group covered under the

provisions of subdivision six of this section shall be at charges

established by the hospital in accordance with the provisions of

subdivision six of this section with the exception that for the period

from January first, nineteen hundred eighty-three through December

thirty-first, nineteen hundred eighty-three rates of payment pursuant to

the provisions of the workers' compensation law, the volunteer firemen's

benefit law and the comprehensive automobile insurance reparations act

shall be established at one hundred twelve percent of trended average

per diem reimbursable cost including allowances as specified in

subdivision four of this section.

Amounts prospectively established for payments for general hospital

inpatient services provided in rate years subsequent to nineteen hundred

eighty-three made on behalf of subscribers of corporations organized and

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

beneficiaries of subchapter XVIII of the federal social security act

(medicare), eligibles for payments made by state governmental agencies

and those enrolled in organizations operating in accordance with the

provisions of article forty-four of this chapter shall be based on that

portion of the prospectively established inpatient revenue cap that is

related to the utilization of inpatient services by the above programs,

provided, however, that that share of the cost of bad debt and charity

care to be paid under subchapter XVIII of the federal social security

act shall be based upon the ratio of subchapter XVIII inpatient charges

to total inpatient and outpatient charges, except for hospitals using an

all inclusive rate, in which case the subchapter XVIII share shall be

based upon the ratio of subchapter XVIII inpatient cost to total

inpatient and outpatient hospital costs. After reducing the dollar

amount liability of all payors by subtracting the dollar amount

liability of the subchapter XVIII payor, all other payors shall pay the

remaining liability in proportion to the ratio of their hospital

inpatient charges to total hospital inpatient charges less the

subchapter XVIII inpatient charges. These proportions shall be computed

on the basis of costs for hospitals using an all inclusive rate.

Any adjustments in the overall revenue cap in accordance with

subdivision five of this section shall be reflected in an appropriate

adjustment to this portion of the revenue cap and payment levels by

these programs. The year end adjustment as provided for in paragraph (d)

of subdivision five of this section which is based on data contained in

the financial and statistical report filed for the effective year of the

revenue cap may be further adjusted within the revenue cap when actual

data indicates a change in payor utilization and cost apportionment

between and among the above specified programs and all other payors.

After such adjustments the portion of the revenue cap initially

established, or as adjusted, that is related to the actual utilization

of covered inpatient services of the above programs shall constitute

guaranteed revenue to the general hospital. Nothing in this section

shall prohibit the negotiation by health maintenance organizations

operating in accordance with the provisions of article forty-three of

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

with general hospitals for rates of payment other than those provided

herein. Such contracts shall require approval by the commissioner and

must include provision for special benefit packages or arrangements for

providing inpatient services to encourage patient management behavior

that will minimize the length of patient stay, such as special admission

arrangements, bed leasing or other inpatient capitation arrangements.

2. The inpatient revenue cap established shall include:

(a) allowable historical inpatient operational expenses which are

comparable in nature and can reasonably be expected to be comparable in

amount to other general hospitals with similar cost influencing

characteristics (adjusted for comparison purposes for differences in

wage and fringe benefit levels) and which are equal to or less than

reasonable reimbursable operational cost ceilings developed from the

average allowable cost per unadjusted (except for newborn days)

appropriate unit of service of all hospitals in the comparison group.

The comparison group shall consist of general hospitals sharing similar

cost influencing characteristics and classified in accordance with

variables defined in regulation;

(b) allowable historical inpatient operational expenses, other than

capital related expenses as defined in subdivision three of this

section, and other than costs included in paragraph (a) hereof, which

may be subject to reasonable reimbursable cost standards adopted by the

council and approved by the commissioner;

(c) capital related expenses determined in accordance with subdivision

three of this section;

(d) additional financial needs or revenue requirements in accordance

with subdivision four of this section;

(e) projection of reimbursable expenses identified through the

application of paragraphs (a) and (b) of this subdivision by a trend

factor established by the panel of economists as set forth in

subdivision eight of this section; and

(f) an amount to reflect anticipated additional revenues resulting

from the implementation of the gross charge determination formula

provided by the commissioner in accordance with subdivision six of this

section.

The establishment of separate rates of payment for patients who

require different levels or types of care shall require a reallocation

of costs to insure that the total hospital inpatient revenue cap (or in

the case of the period January one, nineteen hundred eighty-three to

December thirty-one, nineteen hundred eighty-three the imputed revenue

cap), which shall include the revenue for different levels or types of

care, established under this subdivision remains unchanged except that

adjustments may be made based on the cost analysis pursuant to

paragraphs (a) and (b) of this subdivision.

Effective January first, nineteen hundred eighty-three through

December thirty-first, nineteen hundred eighty-five, the cost

limitations, utilization standards and limits on disallowances shall be

computed in accordance with the methodology approved by the federal

government to permit the determination of all payments for inpatient

services provided by general hospitals to be made in accordance with the

amendments made to sections twenty-eight hundred seven and twenty-eight

hundred seven-a of this chapter by sections three and four of a chapter

of the laws of nineteen hundred eighty-two. Specialty hospitals shall

not be included in any computations relating to disallowances,

limitations or ceilings pursuant to this paragraph but shall receive

reimbursement in accordance with rules and regulations adopted by the

state hospital review and planning council and approved by the

commissioner. In order to provide for a transition period for the

application of reimbursable cost limitations to payments authorized

under subchapter XVIII of the federal social security act, a reasonable

phase-in over a three year period is to be implemented.

3. Capital related inpatient expenses. Effective for the year

beginning January first, nineteen hundred eighty-four and thereafter,

capital related inpatient expenses including but not limited to

depreciation, rentals and interest on capital debt (or for hospitals

financed pursuant to article twenty-eight-B of this chapter, such

expenses, including amortization in lieu of depreciation, as determined

pursuant to the reimbursement regulations promulgated pursuant to that

article and article twenty-eight of this chapter, in the case of

payments on behalf of other than beneficiaries under subchapter XVIII of

the federal social security act), shall be included in the revenue cap

on a budget basis, and subsequently reconciled to actual expenses

through appropriate audit procedures. General hospitals shall submit to

the commissioner, at least one hundred twenty days prior to the

commencement of each revenue cap year, a schedule of capital related

inpatient expenses for the forthcoming year. Any capital related

inpatient expense generated by a capital expenditure which requires or

required approval pursuant to this article, must have received such

approval for the capital related expense to be included in the revenue

cap. The submitted budget may include the capital related inpatient

expenses of 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 revenue cap year. Any capital

related expense generated by a capital asset acquired or placed in use

during a revenue cap year, provided all required approvals pursuant to

this article have been obtained, shall be carried forward to the

subsequent revenue cap year. In instances where such approvals have

been obtained, the budget may include estimates for capital related

inpatient expenses. The basis for determining capital related inpatient

expenses shall be the lesser of actual cost or the final amount

specifically approved for the construction of the capital asset. The

council shall adopt, with the approval of the commissioner, regulations

to:

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

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

general hospitals by requiring funding of inpatient depreciation on

building and fixed and movable equipment;

(c) provide authorization to adjust the inpatient revenue cap by

advancing payment of depreciation as needed, in instances of capital

debt related financial distress of a voluntary, non-profit general

hospital; and

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

4. Allowances. Inpatient revenue caps established, or rates for

general hospital inpatient services, shall include for the three years

commencing on January first, nineteen hundred eighty-three, the

allowances specified below in paragraphs (a), (b), (c), (d) and (e) of

this subdivision. For the period from January first, nineteen hundred

eighty-three through December thirty-first, nineteen hundred

eighty-three the allowances shall be computed on the basis of the

general hospital's reimbursable inpatient costs after application of the

trend factor. Any additional allowances for the periods January first,

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

hundred eighty-four and from January first, nineteen hundred eighty-five

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

included in the certified inpatient revenue caps after application of

the trend factor and such adjustments as may be appropriate pursuant to

subdivision two of this section. For the purposes of this subdivision

and subdivision nine of this section, major public general hospitals are

defined as all state operated general hospitals, all general hospitals

operated by the New York city health and hospitals corporation as

established by chapter one thousand sixteen of the laws of nineteen

hundred sixty-nine, as amended and all other public general hospitals

having annual inpatient operating costs in excess of twenty-five million

dollars.

(a) For the period from January first, nineteen hundred eighty-three

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

of one percent of the general hospital's reimbursable inpatient costs to

provide funds to be used at the discretion of hospital governing boards.

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

percent for the second year and up to a further additional one percent

in the third year of the three year period commencing January first,

nineteen hundred eighty-three subject to the provisions of paragraph (d)

of this subdivision.

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

an additional allowance of up to one percent for the second year of the

three year period commencing January first, nineteen hundred

eighty-three and continued for the third year of the three year period

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

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

subdivision shall be available to general hospitals receiving approval

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

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

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

not met by the regional pool distributions as specified in subdivision

nine of this section, offsetting reductions in anticipated revenue

resulting from charge limits substantially below those applicable to the

particular hospital immediately prior to the enactment of subdivision

six of this section and needed improvement of current ratio. Allowances

authorized in paragraphs (b) and (c) of this subdivision are not to be

considered as a substitute for operational funds that are otherwise

reimbursable or subject to appeal.

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

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

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

other regions as adopted pursuant to subdivision nine of this section,

and within a statewide determination of financial resources to be

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

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

costs of charity care increased by any deficit of general hospitals from

providing ambulatory services, excluding any portion of such deficit

resulting from governmental payments below average visit costs and

revenues and expenses related to the provision of referred ambulatory

services. The regional amount to be included in rates approved for the

year commencing January first, nineteen hundred eighty-three and in the

inpatient revenue caps established in subsequent years for each general

hospital in the region will be equal to the result of the application of

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

proprietary and public general hospitals, other than major public

general hospitals that can be met from available resources computed

without consideration of inpatient uncollectible amounts to the regional

need for voluntary non-profit, private proprietary and public general

hospitals, other than major public general hospitals expressed in

dollars plus the dollar amount resulting from the application of the

ratio of major public general hospitals inpatient reimbursable costs

within the region to total statewide general inpatient reimbursable cost

(as computed on the basis of nineteen hundred eighty-one financial and

statistical reports) to the statewide resources committed for this

purpose computed without consideration of inpatient uncollectible

amounts and the ratio of these total dollars to the total regional

reimbursable inpatient cost after application of the trend factor. For

the three year period commencing on January first, nineteen hundred

eighty-three and ending on December thirty-first, nineteen hundred

eighty-five, the percentage allowances for this purpose shall not be

less than an average three percent of the total statewide general

hospital reimbursable inpatient cost after application of the trend

factor. The allocation of resources made available under this paragraph,

as specified in subdivision nine of this section, may be changed only as

follows: An annual review shall be conducted pursuant to rules and

regulations adopted by the council and approved by the commissioner with

respect to bad debt and charity care need within each article

forty-three insurance law region or such other regions as are adopted

pursuant to subdivision nine of this section. If within such a region

there is a definitive finding as a result of such review that there has

been a change in the proportional amounts of bad debts and charity care

provided by (i) major public general hospitals and (ii) voluntary

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

major public general hospitals, the allocation of resources made

available under this paragraph shall be adjusted pursuant to the rules

and regulations adopted pursuant to this paragraph so as to reflect this

change.

(f) An additional allowance of one-fourth of one percent shall be

included in each rate or revenue cap established for each voluntary

non-profit and private proprietary general hospital to be returned to a

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

subdivision nine of this section.

(g) An additional allowance of one-third of one percent shall be

included in each rate or revenue cap established for voluntary

non-profit and private proprietary general hospitals to be returned to a

regional pool and distributed in accordance with paragraph (d) of

subdivision nine of this section.

5. Adjustments. (a) The commissioner shall, on his own initiative, or

on the basis of a request from a general hospital, adjust an established

inpatient revenue cap 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 basis of the inpatient revenue cap established; and

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

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

an adjustment to an established revenue cap to reflect increased

expenses or reconsideration of disallowed expenses based on:

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

inpatient revenue cap resulting from the cost analysis process contained

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

(ii) additional operational expenses related to construction or

service changes. These changes if applicable must be approved under

section twenty-eight hundred two of this article;

(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 or federal requirements;

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

method of delivering a service; and

(v) increased costs for compensation of employees.

(c) In determining the reasonableness or justification of an

adjustment to an established inpatient revenue cap based on a request

related to subparagraph (v) of paragraph (b) of this subdivision the

commissioner shall consider:

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

increases from its own resources;

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

compensation increases and allowed compensation trend factors; and

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

located.

(d) The commissioner shall adjust a prospectively established

inpatient revenue cap on the basis of subsequent data that demonstrates

a significant cost influencing change in patient mix or volume of

service. Such adjustment will be made in conformity with regulations

adopted by the council as approved by the commissioner.

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

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

an opportunity for comment within a specified time period.

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

for adjustments concerning base year costs by November first of the

calendar year for which the revenue cap is effective provided that all

information necessary to determine whether an adjustment is justified is

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

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

determine whether an adjustment is justified is submitted after such

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

receiving the necessary information.

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

reported base year costs in instances where it is demonstrated that

recurring costs resulting from multi-year commitments beginning late in

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

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

adjustment the commissioner shall consider the offset of non-recurring

base year costs.

6. Hospital charge schedules. Effective for the year beginning January

first, nineteen hundred eighty-four and thereafter, each general

hospital shall establish a charge schedule for available and authorized

services in accordance with a gross charge determination formula

provided by the commissioner which shall:

(a) Establish gross charges sufficient to generate the inpatient

revenue authorized by the revenue cap; and

(b) Establish gross charges such that (i) the payment rate to be made

on behalf of subscribers of corporations organized and operating in

accordance with article forty-three of the insurance law, adjusted for

uncovered services, shall be at a specified discount from the gross

charge rate billed to or on behalf of charge paying patients; (ii)

permit the continuation of negotiated payment rate determination systems

between self-insured and self-administered groups and hospitals which

were in effect on May first, nineteen hundred eighty-two; and (iii) for

general hospitals subject to the provisions of paragraph (a) or (b) of

subdivision twelve of this section, the costs (including all allowances

specified in subdivision four of this section) of services provided to

charge paying patients shall be at a specified discount from the gross

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

During the period January first, nineteen hundred eighty-four through

December thirty-first, nineteen hundred eighty-five, the discount

referred to in subparagraphs (i) and (iii) of paragraph (b) of this

subdivision shall not exceed twelve percent for those hospitals which

had a discount of less than twelve percent during the previous year,

shall be no greater than the discount in effect during the previous year

for those hospitals whose previous year's discount was between twelve

and fifteen percent and shall not exceed fifteen percent for all others.

Self-insured and self-administered negotiated systems as described in

subparagraph (ii) of paragraph (b) of this subdivision may remain in

effect for the period commencing January first, nineteen hundred

eighty-three and ending on December thirty-first, nineteen hundred

eighty-five and shall be incorporated in the formula methodology

provided by the commissioner.

The commissioner shall effectuate direct repayment or adjustment of a

subsequent inpatient revenue cap to reflect actual inpatient revenues

received for inpatient services provided by a general hospital that

exceed the inpatient revenue cap initially established or adjusted in

accordance with provisions of this section. Revenue received in excess

of the revenue cap established as the result of the provisions of

subchapter XVIII of the federal social security act (medicare) phase-in

policies or from charges authorized under subdivision seven of this

section shall not be included in the adjustment.

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

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

paid within thirty days of submission or determination of payor

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

Revenues received from such financing or working capital charges shall

not be included in a revenue cap established or considered as a cost

offset. Financing or working capital charges shall not be applied to

hospital billings to third party payors participating in a periodic

interim payment system.

8. Trend factor. (a) The commissioner in accordance with the method-

ology developed by the consultants pursuant to paragraph (b) of this

subdivision shall establish trend factors to project for the effects of

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

charge levels and reimbursement rates in effect until December

thirty-first, nineteen hundred eighty-three and the appropriate portion

of the inpatient revenue cap in subsequent years. The methodology for

developing the trend factor shall include the appropriate external price

indicators and shall also include the data from major collective

bargaining agreements as reported quarterly by the federal department of

labor, bureau of labor statistics, for non-supervisory employees.

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

with expertise in health economics appointed by the commissioner. Not

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

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

determine the trend factors for the subsequent twelve month period

commencing January first. The commissioner shall monitor the actual

price movement during this twelve month period of the external price

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

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

recommendations of the consultants for adjustments to the trend factor

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

the trend factor shall not be required unless such adjustment would

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

rates or charge limits differing by more than one-half of one percent

from that which was previously determined.

9. Bad debt, charity care and transition pool. Regional pools

consisting of funds made available within each region through the

allowances specified in paragraphs (e), (f) and (g) of subdivision four

of this section shall be created. The regions are established as the

article forty-three insurance law plan regions, with the exception that

the southern sixteen counties will be divided into three regions for the

purposes of this subdivision and subdivision four 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. The council with the approval of the commissioner may combine

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

southern sixteen counties, upon application of the article forty-three

insurance law plans involved and a demonstration that significant

inequities would not occur. The commissioner is authorized to contract

with the article forty-three insurance law plans to receive funds for

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

article forty-three insurance law plans are effectuated, the

commissioner shall conduct annual audits of the receipt and distribution

of pooled funds and issue an annual report on the receipt and

distribution of the pooled funds. In order for general hospitals to

participate in the distribution of funds from the pool the general

hospital must implement collection policies and procedures approved by

the commissioner. Funds available in each regional pool shall be

distributed or retained in the following sequence:

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

subdivision four of this section shall receive from its regional pool

created by the allowance in paragraph (e) of subdivision four of this

section a portion of its bad debt and charity care need equal to the

result of the application of its percentage of statewide inpatient

reimbursable costs developed on the basis of nineteen hundred eighty-one

financial and statistical reports to the total of all regional pools.

(b) Funds remaining in the regional pool created by the allowance in

paragraph (e) of subdivision four of this section, after distribution in

accordance with paragraph (a) of this subdivision, shall be distributed

proportionately to voluntary non-profit, private proprietary and public

general hospitals, other than major public general hospitals on the

basis of need within the region as determined in accordance with

paragraph (e) of subdivision four, with the exception that any funds in

a regional pool that were allocated to major public general hospitals

and not distributed shall be distributed to each major third party payor

on the basis of its percentage of major third party payor liability for

bad debt and charity care as described in subdivision one of this

section, in the specific major public general hospital to which

distribution was not made.

(c) Funds in regional pools created by the allowance in paragraph (f)

of subdivision four of this section shall not be available for immediate

distribution from the regional pool but shall be retained in the pool

for distribution by the commissioner in accordance with rules adopted by

the state hospital review and planning council to assist in offsetting

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

non-profit and private proprietary general hospitals experiencing severe

fiscal hardship because of insufficient resources to finance such losses

or costs.

(d) Funds in regional pools created by the allowance in paragraph (g)

of subdivision four of this section shall be distributed by including

one-fourth of such funds with the funds to be distributed in accordance

with paragraph (c) of this subdivision and three-quarters of such funds

to be distributed to voluntary non-profit and private proprietary

general hospitals within the region that are severely negatively

impacted by the inclusion of title XVIII (medicare) patients, or changes

in the determination of payor liability, resulting from the

implementation of the reimbursement provisions in this section. Rules

for such distribution will be those adopted by the state hospital review

and planning council and approved by the commissioner.

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

allowance in paragraph (e) of subdivision four of this section, after

distribution in accordance with paragraph (b) of this subdivision,

including income from invested funds, shall be distributed to voluntary

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

major public general hospitals within the region on a basis related to

specific hospital need as defined for regional purposes in paragraph (e)

of subdivision four of this section. Any balance in the portion of

regional pools created by the allowance in paragraph (f) of subdivision

four of this section and the distribution specified in paragraph (d) of

this subdivision after distribution in accordance with paragraph (c) of

this subdivision, including income from invested funds, shall be

distributed to voluntary non-profit and private proprietary general

hospitals within the region on a basis related to specific hospital need

as defined for regional purposes in paragraph (e) of subdivision four of

this section. Any balance in the portion of regional pools created by

the allowance in paragraph (g) of subdivision four of this section after

distribution in accordance with this paragraph and paragraph (d) of this

subdivision, including income from invested funds, shall be returned to

voluntary non-profit and private proprietary general hospitals on the

basis of the reimbursable costs of those hospitals within the region.

10. Unit of service. The unit of general hospital inpatient service on

which payment shall be based should be uniform for all payors and shall

best identify the cost of services provided.

11. The commissioner shall provide to fiscal intermediaries for

subchapter XVIII of the federal social security act (medicare) and

article forty-three of the insurance law plans, the information required

to effectuate the provisions of this section, exclusive of adjustments

for uncovered services.

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 superintendent of financial services or approved

or certified by the commissioner, whichever is applicable and required

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

corporations or article forty-four organizations. No general hospital

may demand or request any charge for such covered services in addition

to the charges or rates authorized by this article.

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

forty-three insurance law corporation or a comprehensive health services

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

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

beneficiaries of contracts entered into pursuant to the provisions of

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

health services plan operating pursuant to the provisions of article

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

established by such hospital for patient services in effect on May

first, nineteen hundred seventy-eight, adjusted for the rate year

nineteen hundred eighty-three in accordance with the provisions of

subdivision thirteen of this section, and adjusted for the rate years

thereafter in accordance with the provisions of subdivision six of this

section.

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

forty-three corporation or a comprehensive health services plan prior to

June first, nineteen hundred seventy-eight of its intention to terminate

its contract with such corporation or plan in accordance with the terms

of such contract, except a general hospital subject to the provisions of

paragraph (a) of this subdivision may not charge a subscriber or

beneficiary of a contract entered into pursuant to the provisions of

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

health services plan operating pursuant to the provisions of article

forty-four of this chapter, after the effective date of termination of

such contract, amounts in excess of the schedule of charges established

by such hospital for patient services in effect on May first, nineteen

hundred seventy-eight, adjusted for the rate year nineteen hundred

eighty-three in accordance with the provisions of subdivision thirteen

of this section, and adjusted for the rate years thereafter in

accordance with the provisions of subdivision six of this section.

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

such subscribers or beneficiaries solely on the grounds of such

subscription or membership.

13. Charge control. For the period January first, nineteen hundred

eighty-three, and until January first, nineteen hundred eighty-four:

(a) No general hospital shall establish charges for inpatient services

in excess of those permitted by law immediately prior to the effective

date of this section adjusted by the applicable trend factor.

(b) The commissioner shall establish an appeals board within the

department to consider and recommend action in writing on an appeal by a

general hospital of the inpatient charge limits established pursuant to

this subdivision. The board and the commissioner may only consider, and

appeals shall be limited to, changes in the base charge or the allowable

limits because of the (i) establishment of an approved new hospital

service, (ii) substantial changes in the volume of services provided, or

(iii) substantial and adverse changes in the relationship between total

accrued inpatient revenues and total inpatient costs due to such factors

as significant increases in cost from labor settlements or increases in

bad debts. Expenditures resulting from such changes must be essential to

assure the continuance of quality medical care. In the event a

determination on such appeal is not made by the commissioner within

ninety days of receipt of a complete request as determined by the

commissioner, the hospital may increase its inpatient charges in

conformance with such request. If the commissioner shall determine

thereafter that all or a portion of such increase is not warranted

hereunder, the hospital on notice of such determination shall promptly

reduce its inpatient charges in conformance therewith. In no event shall

the hospital bear any liability to any payor for such interim increase.

(c) In any proceeding under this subdivision the recognized collective

bargaining agent shall be entitled to submit any relevant data. All data

submitted hereunder shall be agency records under the freedom of

information law. All proceedings and appeals hereunder shall be meetings

of public bodies under the open meetings law.

(d) No provision of this subdivision or subdivision twelve of this

section shall be construed to prohibit a general hospital from

continuing the amount of inpatient charges in effect on May first,

nineteen hundred seventy-eight.

14. Restitution authorization. In enforcing the provisions of

subdivisions twelve and thirteen of this section, the commissioner may,

in addition to the penalties and injunctions set forth in section twelve

of this chapter, order that any general hospital provide restitution for

any overpayments made by any party. Any hospital may request a formal

hearing pursuant to the provisions of section twelve-a of this chapter

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

commissioner hereunder. The commissioner may direct that such a hearing

be held without any request by a hospital.

* NB Expired January 1, 1986