N.Y. Public Health Law § 2826: Temporary adjustment to reimbursement rates

§ 2826. Temporary adjustment to reimbursement rates. (a)

Notwithstanding any provision of law to the contrary, within funds

appropriated and subject to the availability of federal financial

participation, the commissioner may grant approval of a temporary

adjustment to the non-capital components of rates, or make temporary

lump-sum Medicaid payments, to eligible general hospitals, skilled

nursing facilities, clinics and home care providers, provided however,

that should federal financial participation not be available for any

eligible provider, then payments pursuant to this subdivision may be

made as grants and shall not be deemed to be medical assistance

payments.

(b) Eligible providers shall include:

(i) providers undergoing closure;

(ii) providers impacted by the closure of other health care providers;

(iii) providers subject to mergers, acquisitions, consolidations or

restructuring; or

(iv) providers impacted by the merger, acquisition, consolidation or

restructuring of other health care providers.

(c) Providers seeking temporary rate adjustments under this section

shall demonstrate through submission of a written proposal to the

commissioner that the additional resources provided by a temporary rate

adjustment will achieve one or more of the following:

(i) protect or enhance access to care;

(ii) protect or enhance quality of care;

(iii) improve the cost effectiveness of the delivery of health care

services; or

(iv) otherwise protect or enhance the health care delivery system, as

determined by the commissioner.

(c-1) The commissioner, under applications submitted to the department

pursuant to subdivision (d) of this section, shall consider criteria

that includes, but is not limited to:

(i) Such applicant's financial condition as evidenced by operating

margins, negative fund balance or negative equity position;

(ii) The extent to which such applicant fulfills or will fulfill an

unmet health care need for acute inpatient, outpatient, primary or

residential health care services in a community;

(iii) The extent to which such application will involve savings to the

Medicaid program;

(iv) The quality of the application as evidenced by such application's

long term solutions for such applicant to achieve sustainable health

care services, improving the quality of patient care, and/or

transforming the delivery of health care services to meet community

needs;

(v) The extent to which such applicant is geographically isolated in

relation to other providers; or

(vi) The extent to which such applicant provides services to an

underserved area in relation to other providers.

(d) (i) Such written proposal shall be submitted to the commissioner

at least sixty days prior to the requested effective date of the

temporary rate adjustment, and shall include a proposed budget to

achieve the goals of the proposal. Any Medicaid payment issued pursuant

to this section shall be in effect for a specified period of time as

determined by the commissioner, of up to three years. At the end of the

specified timeframe such payments or adjustments to the non-capital

component of rates shall cease, and the provider shall be reimbursed in

accordance with the otherwise applicable rate-setting methodology as set

forth in applicable statutes and regulations. The commissioner may

establish, as a condition of receiving such temporary rate adjustments

or grants, benchmarks and goals to be achieved in conformity with the

provider's written proposal as approved by the commissioner and may also

require that the facility submit such periodic reports concerning the

achievement of such benchmarks and goals as the commissioner deems

necessary. Failure to achieve satisfactory progress, as determined by

the commissioner, in accomplishing such benchmarks and goals shall be a

basis for ending the facility's temporary rate adjustment or grant prior

to the end of the specified timeframe. (ii) The commissioner may require

that applications submitted pursuant to this section be submitted in

response to and in accordance with a Request For Applications or a

Request For Proposals issued by the commissioner.

(e) Notwithstanding any law to the contrary, general hospitals defined

as critical access hospitals pursuant to title XVIII of the federal

social security act shall be allocated no less than seven million five

hundred thousand dollars annually pursuant to this section. The

department of health shall provide a report to the governor and

legislature no later than June first, two thousand fifteen providing

recommendations on how to ensure the financial stability of, and

preserve patient access to, critical access hospitals, including an

examination of permanent Medicaid rate methodology changes.

(e-1) Thirty days prior to executing an allocation or modification to

an allocation made pursuant to this section, the commissioner shall

provide written notice to the chair of the senate finance committee and

the chair of the assembly ways and means committee with regards to the

intent to distribute such funds. Such notice shall include, but not be

limited to, information on the methodology used to distribute the funds,

the facility specific allocations of the funds, any facility specific

project descriptions or requirements for receiving such funds, the

multi-year impacts of these allocations, and the availability of federal

matching funds. The commissioner shall provide quarterly reports to the

chair of the senate finance committee and the chair of the assembly ways

and means committee on the distribution and disbursement of such funds.

Within sixty days of the effectiveness of this subdivision, the

commissioner shall provide a written report to the chair of the senate

finance committee and the chair of the assembly ways and means committee

on all awards made pursuant to this section prior to the effectiveness

of this subdivision, including all information that is required to be

included in the notice requirements of this subdivision.

(f) Notwithstanding any provision of law to the contrary, and subject

to federal financial participation, no less than ten million dollars

shall be allocated to providers described in this subdivision; provided,

however that if federal financial participation is unavailable for any

eligible provider, or for any potential investment under this

subdivision then the non-federal share of payments pursuant to this

subdivision may be made as state grants.

(i) Providers serving rural areas as such term is defined in section

two thousand nine hundred fifty-one of this chapter, including but not

limited to hospitals, residential health care facilities, diagnostic and

treatment centers, ambulatory surgery centers and clinics shall be

eligible for enhanced payments or reimbursement under a supplemental

rate methodology for the purpose of promoting access and improving the

quality of care.

(ii) Notwithstanding any provision of law to the contrary, and subject

to federal financial participation, essential community providers,

which, for the purposes of this section, shall mean a provider that

offers health services within a defined and isolated geographic region

where such services would otherwise be unavailable to the population of

such region, shall be eligible for enhanced payments or reimbursement

under a supplemental rate methodology for the purpose of promoting

access and improving quality of care. Eligible providers under this

paragraph may include, but are not limited to, hospitals, residential

health care facilities, diagnostic and treatment centers, ambulatory

surgery centers and clinics.

(iii) In making such payments the commissioner may contemplate the

extent to which any such provider receives assistance under subdivision

(a) of this section and may require such provider to submit a written

proposal demonstrating that the need for monies under this subdivision

exceeds monies otherwise distributed pursuant to this section.

(iv) Payments under this subdivision may include, but not be limited

to, temporary rate adjustments, lump sum Medicaid payments, supplemental

rate methodologies and any other payments as determined by the

commissioner.

(v) Payments under this subdivision shall be subject to approval by

the director of the budget.

(vi) The commissioner may promulgate regulations to effectuate the

provisions of this subdivision.

(vii) Thirty days prior to adopting or applying a methodology or

procedure for making an allocation or modification to an allocation made

pursuant to this subdivision, the commissioner shall provide written

notice to the chairs of the senate finance committee, the assembly ways

and means committee, and the senate and assembly health committees with

regard to the intent to adopt or apply the methodology or procedure,

including a detailed explanation of the methodology or procedure.

(viii) Thirty days prior to executing an allocation or modification to

an allocation made pursuant to this subdivision, the commissioner shall

provide written notice to the chairs of the senate finance committee,

the assembly ways and means committee, and the senate and assembly

health committees with regard to the intent to distribute such funds.

Such notice shall include, but not be limited to, information on the

methodology used to distribute the funds, the facility specific

allocations of the funds, any facility specific project descriptions or

requirements for receiving such funds, the multi-year impacts of these

allocations, and the availability of federal matching funds. The

commissioner shall provide quarterly reports to the chair of the senate

finance committee and the chair of the assembly ways and means committee

on the distribution and disbursement of such funds.

(g) Notwithstanding subdivision (a) of this section, and within

amounts appropriated for such purposes as described herein, the

commissioner may award a temporary adjustment to the non-capital

components of rates, or make temporary lump-sum Medicaid payments to

eligible facilities with serious financial instability and requiring

extraordinary financial assistance to enable such facilities to maintain

operations and vital services while such facilities establish long term

solutions to achieve sustainable health services. Provided, however, the

commissioner is authorized to make such a temporary adjustment or make

such temporary lump sum payment only pursuant to criteria, an

application, and an evaluation process acceptable to the commissioner in

consultation with the director of the division of the budget. The

department shall publish on its website the criteria, application, and

evaluation process and notification of any award recipients.

(i) Eligible facilities shall include:

(A) a public hospital, which for purposes of this subdivision, shall

mean a general hospital operated by a county, municipality or a public

benefit corporation;

(B) a federally designated critical access hospital;

(C) a federally designated sole community hospital;

(D) a residential health care facility;

(E) a general hospital that is a safety net hospital, which for

purpose of this subdivision shall mean:

(1) such hospital has at least thirty percent of its inpatient

discharges made up of Medicaid eligible individuals, uninsured

individuals or Medicaid dually eligible individuals and with at least

thirty-five percent of its outpatient visits made up of Medicaid

eligible individuals, uninsured individuals or Medicaid dually-eligible

individuals; or

(2) such hospital serves at least thirty percent of the residents of a

county or a multi-county area who are Medicaid eligible individuals,

uninsured individuals or Medicaid dually-eligible individuals; or

(3) such hospital that, in the discretion of the commissioner, serves

a significant population of Medicaid eligible individuals, uninsured

individuals or Medicaid dually-eligible individuals; or

(F) an independent practice association or accountable care

organization authorized under applicable regulations that participate in

managed care provider network arrangements with any of the provider

types in subparagraphs (A) through (F) of this paragraph; or an entity

that was formed as a preferred provider system pursuant to the delivery

system reform incentive payment (DSRIP) program and collaborated with an

independent practice association that received VBP innovator status from

the department for purposes of meeting DSRIP goals, and which preferred

provider system remains operational as an integrated care system.

(ii) Eligible applicants must demonstrate that without such award,

they will be in serious financial instability, as evidenced by:

(A) certification that such applicant has less than fifteen days cash

and equivalents;

(B) such applicant has no assets that can be monetized other than

those vital to operations; and

(C) such applicant has exhausted all efforts to obtain resources from

corporate parents and affiliated entities to sustain operations.

(iii) Awards under this subdivision shall be made upon application to

the department.

(A) Eligible applicants shall submit a completed application to the

department.

(B) The department may authorize initial award payments to eligible

applicants based solely on the criteria pursuant to paragraphs (i) and

(ii) of this subdivision.

(C) Notwithstanding subparagraph (B) of this paragraph, the department

may suspend or repeal an award if an eligible applicant fails to submit

a multi-year transformation plan pursuant to subparagraph (A) of this

paragraph that is acceptable to the department by no later than the

thirtieth day of September two thousand fifteen.

(D) Applicants under this subdivision shall detail the extent to which

the affected community has been engaged and consulted on potential

projects of such application, as well as any outreach to stakeholders

and health plans.

(E) The department shall review all applications under this

subdivision, and determine:

(1) applicant eligibility;

(2) each applicant's projected financial status;

(3) criteria or requirements upon which an award of funds shall be

conditioned, such as a transformation plan, savings plan or quality

improvement plan. In the event the department requires an applicant to

enter into an agreement or contract with a vendor or contractor, the

department shall approve the selected vendor or contractor but shall not

specify the vendor or contractor that the applicant must utilize; and

(4) the anticipated impact of the loss of such services.

(F) After review of all applications under this subdivision, and a

determination of the aggregate amount of requested funds, the department

may make awards to eligible applicants; provided, however, that such

awards may be in an amount lower than such requested funding, on a per

applicant or aggregate basis.

(iv) Awards under this subdivision may not be used for:

(A) capital expenditures, including, but not limited to: construction,

renovation and acquisition of capital equipment, including major medical

equipment; or

(B) bankruptcy-related costs.

(v) Payments made to awardees pursuant to this subdivision that are

made on a monthly basis will be based on the applicant's actual monthly

financial performance during such period and the reasonable cash amount

necessary to sustain operations for the following month. The applicant's

monthly financial performance shall be measured by such applicant's

monthly financial and activity reports, which shall include, but not be

limited to, actual revenue and expenses for the prior month, projected

cash need for the current month, and projected cash need for the

following month.

(vi) The department shall provide a report on a quarterly basis to the

chairs of the senate finance, assembly ways and means, senate health and

assembly health committees. Such reports shall be submitted no later

than sixty days after the close of the quarter, and shall include for

each award, the name of the applicant, the amount of the award, payments

to date, and a description of the status of the multi-year

transformation plan pursuant to paragraph (iii) of this subdivision.