N.Y. PBH Law § 2807-J — New York Code / Act PBH / Article 28 / Section 2807-J
Patient services payments
Status: in_force

* § 2807-j. Patient services payments. 1. Payments to designated\nproviders of services, as defined in paragraph (a) of subdivision one-a\nof this section, by all payors, including the state governmental\nagencies, corporations organized and operating in accordance with\narticle forty-three of the insurance law, organizations operating in\naccordance with the provisions of article forty-four of this chapter,\nlocal governmental agencies, self-insured funds, commercial insurers,\npayors pursuant to the comprehensive motor vehicle insurance reparations\nact, the workers' compensation law, the volunteer firefighters' benefit\nlaw and the volunteer ambulance workers' benefit law, and any other\nrate, charge, or negotiated payment payor, for patient services provided\nto persons who are not eligible for payments as beneficiaries of title\nXVIII of the federal social security act (medicare) shall include a\nsurcharge for an allowance on net patient service revenues in the\npercentage amount and for the periods specified in subdivision two of\nthis section. Any such allowance shall be submitted by or on behalf of\ndesignated providers of services to the commissioner or the\ncommissioner's designee in accordance with subdivision five of this\nsection.\n  1-a. Definitions. (a) "Designated providers of services", for purposes\nof this section, shall mean providers of services in the following\nclasses:\n  (i) general hospitals;\n  (ii) diagnostic and treatment centers that provide:\n  (A) a comprehensive range of primary health care services; or\n  (B) ambulatory surgical services; and\n  (iii) for periods prior to October first, two thousand, subject to the\nprovisions of paragraph (d) of subdivision three of this section,\nfree-standing clinical laboratories issued a permit pursuant to title\nfive of article five of this chapter.\n  (b) "Third-party coverage", for purposes of this section, shall\ninclude, but not be limited to: payments by a governmental agency,\ninsurer, health maintenance organization, self-insured fund, or other\nthird-party entity making payments on behalf of a patient; whether made\ndirectly to a designated provider of services or indirectly as indemnity\nor similar payments made to the patient (or patient's representative\nsuch as parent or family member) for services provided by a designated\nprovider of services, or through the use of payments made payable to\nboth the designated provider of services and the patient or patient's\nrepresentative, or similar devices.\n  (c) "Third-party payors", for purposes of this section, shall include,\nbut not be limited to: governmental agencies; corporations organized and\noperating in accordance with article forty-three of the insurance law;\norganizations operating in accordance with the provisions of article\nforty-four of this chapter; providers of coverage pursuant to the\ncomprehensive motor vehicle insurance reparations act, the workers'\ncompensation law, the volunteer firefighters' benefit law, and the\nvolunteer ambulance workers' benefit law; self-insured funds and\nadministrators acting on behalf of self-insured funds; and commercial\ninsurers licensed to do business in this state and authorized to write\naccident and health insurance and whose policy provides coverage on an\nexpense incurred basis.\n  2. (a) The total percentage allowance for any period during the period\nJanuary first, nineteen hundred ninety-seven through December\nthirty-first, nineteen hundred ninety-nine and on and after January\nfirst, two thousand, for a designated provider of services applicable to\na payor shall be determined in accordance with this subdivision and\napplied to net patient service revenues.\n  (b) The total percentage allowance for each payor, other than\ngovernmental agencies, or health maintenance organizations for services\nprovided to subscribers eligible for medical assistance pursuant to\ntitle eleven of article five of the social services law, or approved\norganizations for services provided to subscribers eligible for the\nfamily health plus program pursuant to title eleven-D of article five of\nthe social services law, and other than payments for a patient that has\nno third-party coverage in whole or in part for services provided by a\ndesignated provider of services, shall be:\n  (i) the sum of (A) eight and eighteen-hundredths percent, provided,\nhowever, that for services provided on and after July first, two\nthousand three, the percentage shall be eight and eighty-five hundredths\npercent, and further provided that for services provided on and after\nJanuary first, two thousand six, the percentage shall be eight and\nninety-five hundredths percent, and further provided that for services\nprovided on and after April first, two thousand nine, the percentage\nshall be nine and sixty-three hundredths percent, plus (B) twenty-four\npercent, provided, however, that for services provided on and after July\nfirst, two thousand three, the percentage shall be twenty-five and\nninety-seven hundredths percent, and further provided that for services\nprovided on and after January first, two thousand six, the percentage\nshall be twenty-six and twenty-six hundredths percent, and further\nprovided that for services provided on and after April first, two\nthousand nine, the percentage shall be twenty-eight and twenty-seven\nhundredths percent, and plus (C) for a specified third-party payor as\ndefined in subdivision one-a of section twenty-eight hundred seven-s of\nthis article the percentage allowance applicable for a general hospital\nfor inpatient hospital services pursuant to subdivision two of section\ntwenty-eight hundred seven-s of this article;\n  (ii) unless (A) an election in accordance with paragraph (a) of\nsubdivision five of this section to pay the allowance directly to the\ncommissioner or the commissioner's designee is in effect for a\nthird-party payor, and in addition (B) for a specified third-party payor\nan election to pay the assessment in accordance with section\ntwenty-eight hundred seven-t of this article is in effect.\n  (c) If an election in accordance with subdivision five of this section\nis in effect for a third-party payor and in addition in accordance with\nsection twenty-eight hundred seven-t of this article for a specified\nthird-party payor, the total percentage allowance factor shall be\nreduced to eight and eighteen-hundredths percent, provided, however,\nthat for services provided on and after July first, two thousand three\nthe total percentage allowance factor shall be reduced to eight and\neighty-five hundredths percent, and further provided that for services\nprovided on and after January first, two thousand six, the total\npercentage allowance factor shall be reduced to eight and ninety-five\nhundredths percent, and further provided that for services provided on\nand after April first, two thousand nine, the total percentage allowance\nfactor shall be reduced to nine and sixty-three hundredths percent.\n  (d) The total percentage allowance for payments by governmental\nagencies, as determined in accordance with paragraphs (a) and (a-1) of\nsubdivision one of section twenty-eight hundred seven-c of this article\nas in effect on December thirty-first, nineteen hundred ninety-six, or\nhealth maintenance organizations for services provided to subscribers\neligible for medical assistance pursuant to title eleven of article five\nof the social services law, or approved organizations for services\nprovided to subscribers eligible for the family health plus program\npursuant to title eleven-D of article five of the social services law,\nshall be five and ninety-eight-hundredths percent, provided, however,\nthat for services provided on and after July first, two thousand three\nthe total percentage allowance shall be six and forty-seven hundredths\npercent, and further provided that for services provided on and after\nJanuary first, two thousand six, the total percentage allowance shall be\nsix and fifty-four hundredths percent, and further provided that for\nservices provided on and after April first, two thousand nine, the total\npercentage allowance shall be seven and four hundredths percent.\n  (e) The total percentage allowance for payments for services provided\nby designated providers of services for which there is no third-party\ncoverage in whole or in part shall be eight and eighteen-hundredths\npercent, provided, however, that for services provided on and after July\nfirst, two thousand three the total percentage allowance shall be eight\nand eighty-five hundredths percent, and further provided that for\nservices provided on and after January first, two thousand six, the\ntotal percentage allowance shall be eight and ninety-five hundredths\npercent, and further provided that for services provided on and after\nApril first, two thousand nine, the total percentage allowance shall be\nnine and sixty-three hundredths percent. This paragraph shall not apply\nto patient deductibles and coinsurance amounts.\n  (f) The total percentage allowance for patient deductibles and\ncoinsurance amounts shall be the same percentage allowance applicable to\npayments by the primary third-party payor covering the patient in each\ncase determined in accordance with paragraphs (a), (b) and (c) of this\nsubdivision.\n  (g) The total percentage allowance for secondary third-party payors\nunder coordination of benefits principles shall be the same percentage\nallowance applicable to payments by the primary third-party payor in the\ncase determined in accordance with paragraphs (a), (b) and (c) of this\nsubdivision.\n  3. Net patient service revenues, for purposes of this section, shall\nmean:\n  (a) for general hospitals all moneys received for or on account of\ninpatient hospital services, outpatient services (including referred\nambulatory services), emergency services, ambulatory surgical services,\nand other hospital or health-related services, including capitation\npayments allocable to inpatient hospital services,  outpatient services\n(including referred ambulatory services), emergency services, ambulatory\nsurgical services and other hospital or health-related services\nexcluding services listed below, less refunds, for discharges occurring\nor for visits made or services performed on or after January first,\nnineteen hundred ninety-seven, or contracted service obligations for\nperiods on or after January first, nineteen hundred ninety-seven\nexcluding the following subject to the provisions of subdivision eleven\nof this section:\n  (i) revenue received for services provided to beneficiaries of title\nXVIII of the federal social security act (medicare);\n  (ii) revenue received by a general hospital for residential health\ncare facility services, adult day care services, hospice services, and\nhome care services;\n  (iii) revenue received from the allowances pursuant to this section\nand section twenty-eight hundred seven-s of this article;\n  (iv) revenue received from bad debt and charity care and indigent care\nrate adjustments and pool distributions pursuant to section twenty-eight\nhundred seven-c of this article, general hospital indigent care pool\ndistributions pursuant to section twenty-eight hundred seven-k of this\narticle, health care services pool distributions pursuant to section\ntwenty-eight hundred seven-c of this article, health care initiatives\npool distributions pursuant to section twenty-eight hundred seven-l of\nthis article, professional education pool distributions pursuant to\nsection twenty-eight hundred seven-m of this article, tobacco control\nand insurance initiatives pool distributions pursuant to section\ntwenty-eight hundred seven-v of this article, and high need indigent\ncare adjustment pool distributions pursuant to section twenty-eight\nhundred seven-w of this article, provided, however, that funds received\nas medical assistance payments which include state share amounts\nauthorized pursuant to section twenty-eight hundred seven-v of this\narticle that are not disproportionate share hospital payments shall be\nincluded within the meaning of net patient service revenue for the\npurposes of this section;\n  (v) revenue received from physician practice or faculty practice plan\ndiscrete billings for physician services;\n  (vi) revenue received by a general hospital from a public hospital\npursuant to an affiliation agreement contract for the delivery of health\ncare services to such public hospital;\n  (vii) revenue received from governmental deficit financing;\n  (viii) subject to the provisions of paragraph (d) of this subdivision,\nrevenue received for or on account of referred ambulatory clinical\nlaboratory visits made or services performed on and after October first,\ntwo thousand.\n  (b) for diagnostic and treatment centers providing services designated\nin subparagraph (ii) of paragraph (a) of subdivision one-a of this\nsection all moneys received, including capitation payments allocable to\ndiagnostic and treatment center services otherwise covered by the\nassessment, less refunds, for or on account of visits made or services\nperformed on or after January first, nineteen hundred ninety-seven or\ncontracted service obligations for periods on or after January first,\nnineteen hundred ninety-seven:\n  (i) for the following services:\n  (A) for diagnostic and treatment centers providing a comprehensive\nrange of primary health care services, for all services;\n  (B) for diagnostic and treatment centers providing ambulatory surgical\nservices, for all ambulatory surgical services;\n  (ii) excluding the following subject to the provisions of subdivision\neleven of this section:\n  (A) revenue received for services provided to beneficiaries of title\nXVIII of the federal social security act (medicare);\n  (B) revenue received from the allowances pursuant to this section;\n  (C) revenue received from bad debt and charity care rate adjustments\npursuant to paragraph (f) of subdivision two of section twenty-eight\nhundred seven of this article, health care services pool distributions\npursuant to section twenty-eight hundred seven-c of this article, health\ncare initiatives pool distributions pursuant to section twenty-eight\nhundred seven-l of this article, professional education pool\ndistributions pursuant to section twenty-eight hundred seven-m of this\narticle, tobacco control and insurance initiatives pool distributions\npursuant to section twenty-eight hundred seven-v of this article, and\nhigh need indigent care adjustment pool distributions pursuant to\nsection twenty-eight hundred seven-w of this article;\n  (D) revenue received from physician practice or faculty practice plan\ndiscrete billings for physician services;\n  (E) for a diagnostic and treatment center operated by a health\nmaintenance organization operating in accordance with the provisions of\narticle forty-four of this chapter or article forty-three of the\ninsurance law, revenue received for or on account of services provided\nto subscribers of such health maintenance organization;\n  (F) revenue received from governmental deficit financing; and\n  (G) subject to the provisions of paragraph (d) of this subdivision,\nrevenue received for or on account of referred clinical laboratory\nvisits made or services performed on and after October first, two\nthousand.\n  (c) for free-standing clinical laboratories, all moneys received,\nincluding capitation payments, less refunds, for or on account of visits\nmade or services performed on or after January first, nineteen hundred\nninety-seven and prior to October first, two thousand, subject to the\nprovisions of paragraph (d) of this subdivision, or contracted service\nobligations for periods on or after January first, nineteen hundred\nninety-seven and prior to October first, two thousand, subject to the\nprovisions of paragraph (d) of this subdivision, for clinical laboratory\nservices, excluding, subject to the provisions of subdivision eleven of\nthis section:\n  (i) revenue received for services provided to beneficiaries of title\nXVIII of the federal social security act (medicare);\n  (ii) revenue received from the allowances pursuant to this section;\n  (iii) for a clinical laboratory operated by a health maintenance\norganization operating in accordance with the provisions of article\nforty-four of this chapter or article forty-three of the insurance law,\nrevenue received for or on account of services provided to subscribers\nof such health maintenance organization; and\n  (iv) revenue received from governmental deficit financing.\n  (d) Provided, however, that if either the provisions of clause (G) of\nsubparagraph (ii) of paragraph (b) of this subdivision or subparagraph\n(viii) of paragraph (a) of this subdivision which exclude certain\nrevenues from the definition of net patient service revenues for the\npurpose of imposing surcharges pursuant to this section, result in a\ndetermination of an impermissible provider tax by the secretary of the\nU.S. department of health and human services under the provisions of\nsection 1903(w) of the federal social security act, then clause (G) of\nsubparagraph (ii) of paragraph (b) of this subdivision, subparagraph\n(viii) of paragraph (a) of this subdivision, and sections forty-eight\nand forty-nine of chapter one of the laws of nineteen hundred\nninety-nine are rendered null and void as of October first, two\nthousand. The commissioner will collect any retroactive amounts due as a\nresult of surcharges imposed on such services on and after October\nfirst, two thousand, without interest or penalty.\n  4. (a) For periods prior to January first, two thousand five, the\ncommissioner is authorized to contract with the article forty-three\ninsurance law plans, or such other contractors as the commissioner shall\ndesignate, to receive and distribute funds from the allowances\nestablished pursuant to this section, and funds from the assessments\nestablished pursuant to subdivision eighteen of section twenty-eight\nhundred seven-c of this article. In the event contracts with the article\nforty-three insurance law plans or other commissioner's designees are\neffectuated, the commissioner shall conduct annual audits of the receipt\nand distribution of the funds. The reasonable costs and expenses of an\nadministrator as approved by the commissioner, not to exceed for\npersonnel services on an annual basis two million two hundred thousand\ndollars for collection and distribution of allowances and assessments\nestablished pursuant to this section and subdivision eighteen of section\ntwenty-eight hundred seven-c of this article, shall be paid from the\nallowance and assessment funds.\n  (b) Notwithstanding any inconsistent provision of section one hundred\ntwelve or one hundred sixty-three of the state finance law or any other\nlaw, at the discretion of the commissioner without a competitive bid or\nrequest for proposal process, contracts in effect for administration of\nbad debt and charity care pools for the period January first, nineteen\nhundred ninety-six through December thirty-first, nineteen hundred\nninety-six pursuant to section twenty-eight hundred seven-c of this\narticle may be extended to provide for administration pursuant to this\nsection and distributions of allowance and assessment funds pursuant to\nthis article and may be amended as may be necessary.\n  (c) The commissioner shall contract with an independent certified\npublic accountant to conduct an annual independent audit, in conformance\nwith generally accepted auditing standards, of the receipts,\ndisbursements, revenues, expenditures and cash flows of funds, for each\ncalendar year beginning with nineteen hundred eighty-three, through the\nmost recent calendar year. As used in this section, "funds" shall mean:\n  (i) Funds accumulated and pooled pursuant to this section, paragraph\n(a) of subdivision eighteen of section twenty-eight hundred seven-c of\nthis article, and sections twenty-eight hundred seven-s and twenty-eight\nhundred seven-t of this article; and\n  (ii) Funds accumulated and pooled pursuant to chapters five hundred\nthirty-six, five hundred thirty-seven and five hundred thirty-eight of\nthe laws of nineteen hundred eighty-two, chapters eight hundred seven\nand nine hundred six of the laws of nineteen hundred eighty-five,\nchapters two and six hundred five of the laws of nineteen hundred\neighty-eight, chapters nine hundred twenty-two and nine hundred\ntwenty-three of the laws of nineteen hundred ninety, chapter seven\nhundred thirty-one of the laws of nineteen hundred ninety-three and\nchapter eighty-one of the laws of nineteen hundred ninety-five.\n  Such annual independent audit shall be submitted to the director of\nthe budget, the temporary president of the senate and the speaker of the\nassembly no later than April fifteenth of each year.\n  5. (a) Any third-party payor for services provided by a designated\nprovider of services may make an election to make payments on an\naggregated basis of funds due from the allowance determined pursuant to\nsubdivision two of this section directly to the commissioner or the\ncommissioner's designee on behalf of designated providers of services.\n  (i) The election pursuant to this paragraph to be effective must be in\nwriting, filed with the commissioner or the commissioner's designee on\nsuch forms and in such manner as the commissioner shall require. An\nelection must apply to all classes of designated providers of service\nand to all providers within each class. An election by a payor shall\ntake effect for nineteen hundred ninety-seven, on the next following\nJanuary first, April first, July first, or October first, and for each\ncalendar year thereafter on the next following January first, not less\nthan thirty days after the election is filed. Beginning December first,\nnineteen hundred ninety-seven, an election pursuant to this paragraph\nmust be made no later than December first of the year prior to the\nassessment year. However, any payor licensed pursuant to the insurance\nlaw or certified pursuant to article forty-four of this chapter between\nDecember first of the year prior to the assessment year and December\nthirty-first of the assessment year may make an election subsequent to\nsuch licensure, and during said time period, to take effect on the next\nfollowing January first, April first, July first or October first not\nless than thirty days after such election is filed. Payors other than\nthose licensed pursuant to the insurance law or certified pursuant to\nthis chapter which have not provided third-party coverage prior to\nDecember first of the year prior to the assessment year may make an\nelection at any time from December first of the year prior to said\nassessment year to December thirty-first of the assessment year, to take\neffect on the next following January first, April first, July first or\nOctober first not less than thirty days after the election is filed.\nBeginning June first, two thousand three an election by any payor or\norganization shall begin on the first day of the month following the\ndate it was received by the commissioner.\n  (ii) An election shall remain in effect unless revoked in writing by a\nspecified third-party payor, which revocation shall be effective on the\nfirst day of the next month, provided that such payor has provided\nnotice of its intention to so revoke at least twenty days prior to the\nbeginning of such month.\n  (iii) A payor filing an election pursuant to this paragraph must\nagree:\n  (A) to provide reports in accordance with the provisions of paragraph\n(b) of subdivision seven of this section;\n  (B) to provide such certification of data and access to allowance\nexpenditure data for audit verification purposes as the commissioner\nshall require for purposes of this section; and\n  (C) to the jurisdiction of the state to maintain an action in the\ncourts of the state of New York to enforce any provision of this section\nrelated to payment of the allowances.\n  (D) for periods on and after January first, two thousand nine, to\nprovide the commissioner or the commissioner's designee the payor's\nfederal tax identification number and agree to the use of such\nidentification number in connection with identifying the payor's\nelection status to designated providers of services, including the\nposting of such identification numbers on secure websites maintained by\nthe commissioner or the commissioner's designee in furtherance of the\npurposes of this section. The commissioner shall include for periods on\nand after January first, two thousand nine on such secure websites, the\ndate such payor was first posted.\n  (iv) If a payor is acting in an administrative services capacity on\nbehalf of an organization, such as a self-insured fund, the consent of\nthe organization to the election and the conditions pursuant to\nsubparagraph (iii) of this paragraph must be submitted with the\nelection. Such consent may be set forth in writing in the agreement\nbetween the payor and the organization and a photocopy of that portion\nof the agreement submitted by the payor, together with a photocopy of\nthe signatures of the organization and the payor on the agreement, shall\nbe accepted in lieu of a separate election form from the organization.\nOn and after January first, two thousand four, the commissioner shall\nhave discretion to accept payments made on a timely basis if the reports\nand information reports are routinely submitted, notwithstanding the\nfact that the full and complete election form by or on behalf of an\norganization was not filed on a timely basis. In the event the\ncommissioner accepts payments pursuant to this section where an election\nform is missing or incomplete but the payments and information reports\nwere routinely submitted as if the election forms had been filed, the\nelection form from the payor and organization shall be deemed to have\nbeen filed (and the organization and the payor shall be as legally bound\nby the terms of the election form as if it had signed and filed the\nelection) and neither the payor nor the organization shall subsequently\nrefuse to abide by the terms of the election form for any year in which\npayments were submitted and accepted pursuant to this section.\n  (v) If a payor, including a payor operating in accordance with the\ninsurance law or article forty-four of this chapter, making an election\npursuant to this paragraph is acting in an administrative services\ncapacity on behalf of an organization or organizations, such payor must\nspecify whether such election applies to payments on behalf of all such\norganizations and establish, in accordance with guidelines established\nby the superintendent of financial services, a system through which\ndesignated providers of services and the commissioner can identify the\nstatus of a patient as a patient for whom the election does not apply.\n  (b) The commissioner may deny a payor the opportunity to remit\ndirectly to the commissioner or the commissioner's designee based on\nrepeated late payments, failure to remit correct amounts, or failure to\nprovide adequate verification of the accuracy of payments. The\npercentage allowance for any such payor shall be the percentage\ndetermined in accordance with paragraph (b) of subdivision two of this\nsection.\n  (c) The commissioner or the commissioner's designee shall make\navailable to all designated providers of services a list of the payors\nwhich have elected pursuant to this paragraph to remit payments\ndirectly.\n  5-a. (a) Payments by or on behalf of designated providers of services\nto the commissioner or the commissioner's designee of funds due from the\nallowances pursuant to subdivision two of this section or pursuant to\npayment obligations incurred pursuant to section twenty-eight hundred\nseven-s of this article or section twenty-eight hundred seven-t of this\narticle shall be made on a monthly basis, provided, however, that for\nreporting periods relating to payments for services provided or dates of\ninpatient discharge or contracted service obligations occurring on or\nafter January first, two thousand one, the commissioner may permit\ncertain third-party payors which have at least one full year of pool\npayment experience to submit such payments on an annual basis, based on\nan annual demonstration by a payor through its prior year's pool payment\nexperience that total pool obligations under this section and sections\ntwenty-eight hundred seven-s and twenty-eight hundred seven-t of this\narticle are not expected to exceed ten thousand dollars for annual\nperiods prior to January first, two thousand four, and twenty-five\nthousand dollars for annual periods on and after January first, two\nthousand four. Payments due by designated providers of services on\naccount of payors in accordance with paragraph (b) of subdivision two of\nthis section shall be two percentage points less than the percentage\nspecified in such paragraph. The designated provider of services shall\nretain for compensation for such provider's administrative\nresponsibilities the amount that represents the difference. Payments due\nby designated providers of services on account of all other payors shall\nbe calculated on the basis of the percentage allowance applicable to\nsuch payor pursuant to paragraphs (d), (e), (f) and (g) of subdivision\ntwo of this section. Payments shall be due on or before the thirtieth\nday following the end of a calendar month to which an allowance applies.\n  (b) Notwithstanding any inconsistent provision of this section, as\nshall be necessary to obtain federal financial participation in medical\nassistance expenditures in accordance with title XIX of the federal\nsocial security act, the allowances included in rates of payment\npursuant to this section on behalf of patients eligible for medical\nassistance pursuant to title eleven of article five of the social\nservices law shall be withheld from medical assistance payments to\ndesignated providers of services and paid to pools on behalf of the\ndesignated provider of services where a designated  provider of services\nelects such withholding in such time and manner as specified by the\ncommissioner, and in the event a designated provider of services does\nnot elect such withholding, payments by such designated provider of\nservices to a pool based on an allowance received for medical assistance\npatients shall be due within five days of receipt of such funds. Funds\nwithheld by a payor and paid to a pool on behalf of a designated\nprovider of services shall be considered received by such designated\nprovider of services and paid to the pool by such designated provider of\nservices for all purposes.\n  6. (a) If a payment made by a designated provider of services for a\nmonth to which an allowance applies is less than seventy percent of the\namount due or which the commissioner estimates is due, based on\navailable financial and statistical data, the commissioner may collect\nthe deficiency pursuant to paragraph (c) of this subdivision.\n  (b) If a payment made by a designated provider of services for a month\nto which an allowance applies is less than ninety percent of the amount\ndue or which the commissioner estimates is due, based on available\nfinancial and statistical data, and at least two previous payments\nwithin the preceding six months were less than ninety percent of the\namount due, based on similar evidence, the commissioner may collect the\ndeficiency pursuant to paragraph (c) of this subdivision.\n  (c) Upon receipt of notification from the commissioner of a designated\nprovider of services' deficiency under this section, the comptroller or\na fiscal intermediary designated by the director of the budget, or the\ncommissioner of the office of temporary and disability assistance, or a\ncorporation organized and operating in accordance with article\nforty-three of the insurance law, or an organization operating in\naccordance with article forty-four of this chapter shall withhold from\nthe amount of any payment to be made by the state or by such article\nforty-three corporation or article forty-four organization to the\ndesignated provider of services the amount of the deficiency determined\nunder paragraph (a), (b) or (e) of this subdivision or paragraph (d) of\nsubdivision eight-a of this section. Upon withholding such amount, the\ncomptroller or a designated fiscal intermediary, or the commissioner of\nthe office of temporary and disability assistance, or corporation\norganized and operating in accordance with article forty-three of the\ninsurance law or organization operating in accordance with article\nforty-four of this chapter shall pay the commissioner, or the\ncommissioner's designee, such amount withheld on behalf of the\ndesignated provider of services. Such amount shall represent, in whole\nor in part, the amounts due from the designated provider of services.\n  (d) The commissioner shall provide a designated provider of services\nwith notice of any estimate of an amount due for an allowance pursuant\nto paragraph (a) or (b) of this subdivision or paragraph (d) of\nsubdivision eight-a of this section at least three days prior to\ncollection of such amount by the commissioner. Such notice shall contain\nthe financial basis for the commissioner's estimate.\n  (e) In the event a designated provider of services objects to an\nestimate by the commissioner pursuant to paragraph (a) or (b) of this\nsubdivision or paragraph (d) of subdivision eight-a of this section of\nthe amount due for an allowance, the designated provider of services,\nwithin sixty days of notice of an amount due, may request a public\nhearing. If a hearing is requested, the commissioner shall provide the\ndesignated provider of services an opportunity to be heard and to\npresent evidence bearing on the amount due for an allowance within\nthirty days after collection of an amount due or receipt of a request\nfor a hearing, whichever is later. An administrative hearing is not a\nprerequisite to seeking judicial relief.\n  (f) The commissioner may direct that a hearing be held without any\nrequest by a designated provider of services.\n  (g) In the event a hearing pursuant to paragraph (e) of this\nsubdivision is not requested and the delinquent amounts in question have\nbeen referred for recoupment or offset pursuant to paragraph (c) of this\nsubdivision, or have been referred to the office of the attorney general\nfor collection, the amount of such delinquencies shall be deemed final\nand not subject to further revision or reconciliation by the\ncommissioner based on any additional reports or other information\nsubmitted by the designated provider of services, provided, however,\nthat such delinquencies shall not be referred for such recoupment or for\nsuch collection based on estimated amounts unless the hospital has\nreceived written notification of such delinquencies and has been given\nno less than thirty days in which to submit delinquent reports.\n  7. (a) (i) Every designated provider of services shall submit reports\nof net patient service revenues received for or on account of patient\nservices for each month which shall be in such form as may be prescribed\nby the commissioner to accurately disclose information required to\nimplement this section. For periods on and after January first, two\nthousand five, reports by designated providers of services shall be\nsubmitted electronically in a form as may be required by the\ncommissioner; provided, however, any designated provider of services is\nnot prohibited from submitting reports electronically on a voluntary\nbasis prior to such date, and provided further, however, that all such\nelectronic submissions submitted on and after July first, two thousand\ntwelve shall be verified with an electronic signature as prescribed by\nthe commissioner.\n  (ii) For periods on and after January first, two thousand nine, every\ndesignated provider of services shall provide the commissioner or\ncommissioner's designee with its federal tax identification number and\nsuch identification number shall be used in connection with identifying\nsuch providers for purposes pursuant to this section, including the\nposting of such identification numbers on secure websites maintained by\nthe commissioner or the commissioner's designee in furtherance of the\npurposes of this section. The commissioner shall include for periods on\nand after January first, two thousand nine on such secure websites, the\ndate such designated provider of services was first posted. In addition,\nthe commissioner shall, as a part of a final resolution of an audit\nconducted pursuant to subdivision eight-a of this section, waive payment\nof interest and penalties otherwise applicable pursuant to subdivision\neight of this section, when the audit findings conclusively indicate\nthat the liability for such interest and penalties are the result of a\ndelay in the listing of a new designated provider of services on the\nsecure website maintained by the department.\n  (b) (i) Every third-party payor making an election in accordance with\nparagraph (a) of subdivision five of this section shall submit reports\nof patient service expenditures for services provided by designated\nproviders of services for each month which shall be in such form as may\nbe prescribed by the commissioner to accurately disclose information\nrequired to implement this section, provided, however, that for\nreporting periods relating to payments for services provided or dates of\ninpatient discharge or contracted service obligations occurring on or\nafter January first, two thousand one, the commissioner may permit\ncertain third-party payors which have at least one full year of pool\npayment experience to submit such reports on an annual basis, based on\nan annual demonstration by a payor through its prior year's pool payment\nexperience that total pool obligations under this section and sections\ntwenty-eight hundred seven-s and twenty-eight hundred seven-t of this\narticle are not expected to exceed ten thousand dollars for annual\nperiods prior to January first, two thousand four, and twenty-five\nthousand dollars for annual periods on and after January first, two\nthousand four.\n  (ii) For periods on and after July first, two thousand four, reports\nsubmitted on a monthly basis by third-party payors in accordance with\nsubparagraph (i) of this paragraph and reports submitted on a monthly or\nannual basis by payors acting in an administrative services capacity on\nbehalf of electing third-party payors in accordance with subparagraph\n(i) of this paragraph shall be made electronically in a form as may be\nrequired by the commissioner; provided, however, any third-party payor,\nexcept payors acting in an administrative services capacity on behalf of\nelecting third-party payors, which, on or after January first, two\nthousand four, elects to make payments directly to the commissioner or\nthe commissioner's designee pursuant to subdivision five of this\nsection, shall be subject to this subparagraph only after one full year\nof pool payment experience which results in reports being submitted on a\nmonthly basis, and provided further, however, that all such electronic\nsubmissions submitted on and after July first, two thousand twelve shall\nbe verified with an electronic signature as prescribed by the\ncommissioner. This subparagraph shall not be interpreted to prohibit any\nthird-party payor from submitting reports electronically on a voluntary\nbasis.\n  (c) If a designated provider of services or a third-party payor fails\nto file reports required pursuant to paragraph (a) or (b) of this\nsubdivision and which are due on and after January first, two thousand,\nwithin sixty days of the date such reports are due and after\nnotification of such reporting delinquency, the commissioner may assess\na civil penalty of up to ten thousand dollars for each such failure,\nprovided, however, that such civil penalty shall not be imposed if the\npayor or provider demonstrates good cause for the failure to timely file\nsuch reports. Such penalties shall be subject to the provisions of\nsection twelve-a of this chapter.\n  8. (a) If a payment made pursuant to this section or to section\ntwenty-eight hundred seven-s or twenty-eight hundred seven-t of this\narticle for a month to which an allowance applies is less than ninety\npercent of the amount due or which the commissioner estimates, based on\navailable financial and statistical data, is due for such month,\ninterest shall be due and payable to the commissioner by a designated\nprovider of services, or by a third-party payor, other than a state\ngovernmental agency, that has elected to pay an allowance directly, on\nthe difference between the amount paid and the amount due or estimated\nto be due from the day of the month the payment was due until the date\nof payment. The rate of interest shall be twelve percent per annum or,\nif greater, at the rate of interest set by the commissioner of taxation\nand finance with respect to underpayments of tax pursuant to subsection\n(e) of section one thousand ninety-six of the tax law minus four\npercentage points. Interest under this paragraph shall not be paid if\nthe amount thereof is less than one dollar. Interest due from a\ndesignated provider of services, if not paid by the due date of the\nfollowing month's payment, may be collected by the commissioner pursuant\nto paragraph (c) of subdivision six of this section in the same manner\nas an allowance pursuant to subdivision two of this section.\n  (b) If a payment made for a month to which an allowance applies is\nless than seventy percent of the amount due or which the commissioner\nestimates, based on available financial and statistical data, is due for\nsuch month, a penalty shall be due and payable to the commissioner by a\ndesignated provider of services, or by a third-party payor, other than a\nstate governmental agency, that has elected to pay an allowance\ndirectly, of five percent of the difference between the amount paid and\nthe amount due or estimated to be due for such month when the failure to\npay is for a duration of not more than one month after the due date of\nthe payment with an additional five percent for each additional month or\nfraction thereof during which such failure continues, not exceeding\ntwenty-five percent in the aggregate. A penalty due from a designated\nprovider of services may be collected by the commissioner pursuant to\nparagraph (c) of subdivision six of this section in the same manner as\nan allowance pursuant to subdivision two of this section.\n  (c) Overpayment by or on behalf of a designated provider of services\nof a payment shall be applied to any other payment due from the\ndesignated provider of services pursuant to this section, or, if no\npayment is due, at the election of the designated provider of services\nshall be applied to future payments or refunded to the designated\nprovider of services.  Interest shall be paid on overpayments from the\ndate of overpayment to the date of crediting or refund at the rate\ndetermined in accordance with paragraph (a) of this subdivision only if\nthe overpayment was made at the direction of the commissioner. Interest\nunder this paragraph shall not be paid if the amount thereof is less\nthan one dollar.\n  8-a.  (a) Payments and reports submitted or required to be submitted\nto the commissioner or to the commissioner's designee pursuant to this\nsection and section twenty-eight hundred seven-s of this article by\ndesignated providers of services and by third-party payors which have\nelected to make payments directly to the commissioner or to the\ncommissioner's designee in accordance with subdivision five-a of this\nsection, shall be subject to audit by the commissioner for a period of\nsix years following the close of the calendar year in which such\npayments and reports are due, after which such payments shall be deemed\nfinal and not subject to further adjustment or reconciliation, including\nthrough offset adjustments or reconciliations made by designated\nproviders of services or by third-party payors with regard to subsequent\npayments, provided, however, that nothing herein shall be construed as\nprecluding the commissioner from pursuing collection of any such\npayments which are identified as delinquent within such six year period,\nor which are identified as delinquent as a result of an audit commenced\nwithin such six year period, or from conducting an audit of any\nadjustment or reconciliation made by a designated provider of services\nor by a third party payor which has elected to make such payments\ndirectly to the commissioner or the commissioner's designee, or from\nconducting an audit of payments made prior to such six year period which\nare found to be commingled with payments which are otherwise subject to\ntimely audit pursuant to this section.\n  (b) Designated providers of services or third-party payors which, in\nthe course of an audit pursuant to this section or section twenty-eight\nhundred seven-s of this article, fail to produce data or documentation\nrequested in furtherance of such an audit, within thirty days of such\nrequest, may be assessed a civil penalty of up to ten thousand dollars\nfor each such failure, provided, however, that such civil penalty shall\nnot be imposed if the audited entity demonstrates good cause for such\nfailure. The imposition of civil penalties pursuant to this section\nshall be subject to the provisions of section twelve-a of this chapter.\n  (c) Records required to be retained for audit verification purposes by\ndesignated providers of services and third-party payors in accordance\nwith this section and section twenty-eight hundred seven-s of this\narticle shall include, but not be limited to, on a monthly basis, the\nsource records generated by supporting information systems, detailed\nclaims information, detailed patient revenue information, capitation\narrangements, financial accounting records, relevant correspondence and\nsuch other records as may be required to prove compliance with, and to\nsupport the reports submitted in accordance with, this section and\nsection twenty-eight hundred seven-s of this article.\n  (d) If a designated provider of services or a third party payor fails\nto produce data or documentation requested in furtherance of an audit\npursuant to this section or pursuant to section twenty-eight hundred\nseven-s of this article, for a month to which an allowance applies, the\ncommissioner may estimate, based on available financial and statistical\ndata as determined by the commissioner, the amount due for such month.\nIf the impact of the patient services revenue exemptions specified\npursuant to this section, or pursuant to section twenty-eight hundred\nseven-s of this article, cannot be determined from such available\nfinancial and statistical data, the amount due may be calculated on the\nbasis of the aggregate total of patient services revenue derived from\nsuch data for the year subject to audit. The commissioner shall take all\nnecessary steps to collect amounts due as determined pursuant to this\nparagraph, including directing the state comptroller to offset such\namounts due from any payments made by the state pursuant to this article\nto a designated provider of services or a third party payor. Interest\nand penalties shall be applied to such amounts due in accordance with\nthe provisions of subdivision eight of this section.\n  (e) The commissioner may, as part of a final resolution of an audit\nconducted pursuant to this subdivision, waive payment of interest and\npenalties otherwise applicable pursuant to subdivision eight of this\nsection when amounts due as a result of such audit, other than such\nwaived penalties and interest, are paid in full to the commissioner or\nthe commissioner's designee within sixty days of the issuance of a final\naudit report that is mutually agreed to by the commissioner and auditee,\nprovided, however, that if such final audit report is not so mutually\nagreed upon, then neither the commissioner nor the auditee shall have\nany obligations pursuant to this paragraph.\n  (f) The commissioner may enter into agreements with designated\nproviders of services, and with third-party payors, in regard to which\naudit findings or prior settlements have been made pursuant to this\nsection or section twenty-eight hundred seven-s of this article,\nextending and applying such audit findings or prior settlements, or a\nportion thereof, in settlement and satisfaction of potential audit\nliabilities for subsequent un-audited periods. The commissioner may\nreduce or waive payment of interest and penalties otherwise applicable\nto such subsequent unaudited periods when such amounts due as a result\nof such agreement, other than reduced or waived penalties and interest,\nare paid in full to the commissioner or the commissioner's designee\nwithin sixty days of execution of such agreement by all parties to the\nagreement. Any payments made pursuant to agreements entered into in\naccordance with this paragraph shall be deemed to be in full\nsatisfaction of any liability arising under this section and section\ntwenty-eight hundred seven-s of this article, as referenced in such\nagreements and for the time periods covered by such agreements,\nprovided, however, that the commissioner may audit future retroactive\nadjustments to payments made for such periods based on reports filed by\nproviders and payors subsequent to such agreements.\n  9. Funds accumulated, including income from invested funds, from the\nallowances specified in this section, and the assessments pursuant to\nsubdivision eighteen of section twenty-eight hundred seven-c of this\narticle, and the assessments pursuant to paragraph (c) of subdivision\nnine of section twenty-eight hundred seven-d of this article, plus such\nfunds as may be allocated in accordance with section twenty-eight\nhundred seven-s of this article, including interest and penalties, shall\nbe deposited by the commissioner or the commissioner's designee as\nfollows:\n  (a) funds shall be deposited and credited to a special revenue-other\nfund to be established by the comptroller or to the health care reform\nact (HCRA) resources fund established pursuant to section ninety-two-dd\nof the state finance law, whichever is applicable. To the extent of\nfunds appropriated therefore, the commissioner shall make payments to\ngeneral hospitals related to bad debt and charity care pursuant to\nsection twenty-eight hundred seven-k of this article. Funds shall be\ndeposited in the following amounts:\n  (i) fifty-seven and thirty-three-hundredths percent of the funds\naccumulated for the period January first, nineteen hundred ninety-seven\nthrough December thirty-first, nineteen hundred ninety-seven,\n  (ii) fifty-seven and one-hundredths percent of the funds accumulated\nfor the period January first, nineteen hundred ninety-eight through\nDecember thirty-first, nineteen hundred ninety-eight,\n  (iii) fifty-five and thirty-two-hundredths percent of the funds\naccumulated for the period January first, nineteen hundred ninety-nine\nthrough December thirty-first, nineteen hundred ninety-nine, and\n  (iv) seven hundred sixty-five million dollars annually of the funds\naccumulated for the periods January first, two thousand through December\nthirty-first, two thousand twenty-eight, and\n  (v) one hundred ninety-one million two hundred fifty thousand dollars\nof the funds accumulated for the period January first, two thousand\ntwenty-nine through March thirty-first, two thousand twenty-nine.\n  (b) funds shall be accumulated in a health care initiatives pool\nestablished by the commissioner, for distribution in accordance with\nsection twenty-eight hundred seven-l of this article, in the following\namounts:\n  (i) forty-two and sixty-seven-hundredths percent of the funds\naccumulated for the period January first, nineteen hundred ninety-seven\nthrough December thirty-first, nineteen hundred ninety-seven,\n  (ii) forty-two and ninety-nine-hundredths percent of the funds\naccumulated for the period January first, nineteen hundred ninety-eight\nthrough December thirty-first, nineteen hundred ninety-eight,\n  (iii) forty-four and sixty-eight-hundredths percent of the funds\naccumulated for the period January first, nineteen hundred ninety-nine\nthrough December thirty-first, nineteen hundred ninety-nine, and\n  (iv) the remaining balance of the funds accumulated for each period on\nand after January first, two thousand.\n  10. Notwithstanding any inconsistent provision of law or regulation to\nthe contrary, the allowances applicable to payments by state\ngovernmental agencies pursuant to subdivision two of this section shall\nbe reflected in the determination of reimbursement rates pursuant to\nsections twenty-eight hundred seven and twenty-eight hundred seven-c of\nthis article and fees for clinical laboratory services under the medical\nassistance program.\n  11. Each exclusion from the allowances effective on or after January\nfirst, nineteen hundred ninety-seven established pursuant to this\nsection shall be contingent upon either: (a) qualification of the\nallowances for waiver pursuant to federal law and regulation; or (b)\nconsistent with federal law and regulation, not requiring a waiver by\nthe secretary of the department of health and human services related to\nsuch exclusion; in order for the allowances under this section to be\nqualified as a broad-based health care related tax for purposes of the\nrevenues received by the state pursuant to the allowances not reducing\nthe amount expended by the state as medical assistance for purposes of\nfederal financial participation. The commissioner shall collect the\nallowances relying on such exclusions, pending any contrary action by\nthe secretary of the department of health and human services. In the\nevent the secretary of the department of health and human services\ndetermines that the allowances do not so qualify based on any such\nexclusion, then the exclusion shall be deemed to have been null and void\nas of January first, nineteen hundred ninety-seven, and the commissioner\nshall collect any retroactive amount due as a result, without interest\nor penalty provided the designated provider of services or third-party\npayor that has elected to pay directly pays the retroactive amount due\nwithin ninety days of notice from the commissioner to the designated\nprovider of services or third-party payor that has elected to pay\ndirectly that an exclusion is null and void. Interest and penalties\nshall be measured from the due date of ninety days following notice from\nthe commissioner or the commissioner's designee to the designated\nprovider of services or third-party payor that has elected to pay\ndirectly.\n  12. Revenue from the allowances pursuant to this section shall not be\nincluded in gross revenue received for purposes of the assessments\npursuant to subdivision eighteen of section twenty-eight hundred seven-c\nof this article, subject to the provisions of paragraph (e) of\nsubdivision eighteen of section twenty-eight hundred seven-c of this\narticle, and shall not be included in gross revenue received for\npurposes of the assessments pursuant to section twenty-eight hundred\nseven-d of this article, subject to the provisions of subdivision twelve\nof section twenty-eight hundred seven-d of this article.\n  * NB Expires December 31, 2029\n