NY Pub Health L § 2808-C (2021)
2021 New York Laws PBH - Public Health Article 28 - Hospitals 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