NY Pub Health L § 2807-T (2021)
2021 New York Laws PBH - Public Health Article 28 - Hospitals 2807-T - Assessments on Covered Lives.

* §   2807-t.  Assessments  on  covered  lives.  1.  Definitions.  (a) "Individual" means a person for whom the specified third-party payor has agreed to provide reimbursement for inpatient hospital services  in  the period other than:  (i)  any person who is eligible for payments as a beneficiary of title XVIII of the federal social security act (medicare);  (ii) any person for whom the specified third-party payor has agreed to provide reimbursement for inpatient hospital  services  contingent  upon such  person's  relationship  to  an  "individual"  as  a spouse, child, stepchild, adopted child, family member, or dependent, as defined by the specified third-party payor, or as contingent  upon  any  other  similar relationship  to  an "individual" as such relationship is defined by the specified third-party payor;  (iii) any person for whom the specified third-party payor  has  agreed to  provide  coverage  for hospital confinement on other than an expense incurred basis;  (iv) any person for whom the specified third-party payor has agreed to provide reimbursement for inpatient hospital services  pursuant  to  the workers'  compensation  law, the volunteer firefighters' benefit law, or the volunteer ambulance workers' benefit law;  (v) any person for whom the specified third-party payor has agreed  to provide  reimbursement  for  inpatient hospital services pursuant to the comprehensive motor vehicle insurance reparations act;  (vi) any person (hereinafter referred to  as  the  "primary  insured") otherwise  meeting  the definition of an "individual" as set forth under this section if the specified third-party payor has  agreed  to  provide reimbursement for such person as part of a "family unit"; and  (vii)  effective  on  and  after  April  first, two thousand five, any person covered  under  a  student  policy  issued  pursuant  to  article forty-three of the insurance law, or a blanket student accident, blanket student health, or blanket student accident and health insurance policy.  (b)  "Family unit" means any person for whom the specified third-party payor  has  agreed  to  provide  reimbursement  for  inpatient  hospital services in the period, together with one or more additional persons for whom the specified third-party payor has agreed to provide reimbursement for  inpatient  hospital  services  in  the  period contingent upon such person's relationship to said person  as  a  spouse,  child,  stepchild, adopted  child, family member, or dependent, as defined by the specified third-party payor, or as contingent upon any other similar relationship, as such relationship is defined  by  the  specified  third-party  payor. Excluded  from  the  definition  is  any family unit where the specified third-party  payor  has  agreed  to  provide:  coverage   for   hospital confinement  on  other than an expense incurred basis; reimbursement for inpatient hospital services pursuant to the worker's  compensation  law, the  volunteer  firefighters'  benefit  law,  or the volunteer ambulance workers' benefit law; and reimbursement for inpatient hospital  services pursuant  to  the comprehensive motor vehicle insurance reparations act. If a family unit of two persons includes one person who is eligible  for payments  as  a  beneficiary  of  title XVIII of the social security act (medicare), that family unit shall be deemed an individual for  purposes of  this section. If a family unit of three or more persons includes one person who is not eligible for medicare and the remaining  two  or  more persons  are  eligible for medicare, that family unit shall be deemed an individual for purposes of this section. A family unit of  two  or  more persons,  all of whom are eligible for medicare, shall not be considered a family unit or an individual for purposes of this section.  (c) "Specified third-party payor", for purposes of this section, shall have the same meaning as  set  forth  in  section  twenty-eight  hundred seven-s of this article.  (d)  "Region",  for  purposes  of  this  section,  shall have the same meaning as set forth in section twenty-eight  hundred  seven-s  of  this article.   2.  Determination  of annual regional payment amount. The sum total to be generated each year for each region  shall  be  referred  to  as  the annual  regional  payment  amount,  as  determined  in  accordance  with subdivision six of section twenty-eight hundred seven-s of this article.   3. Election. Any specified third-party payor may make an  election  to make payments for the assessments required by this section, on behalf of the  liable  persons  or  entities pursuant to subdivision eight of this section, directly to the commissioner or  the  commissioner's  designee. The election pursuant to this subdivision must be in writing, filed with the  commissioner  or  the  commissioner's designee on such forms and in such manner  as  the  commissioner  shall  require.  An  election  by  a specified  third-party  payor  shall  take  effect  for nineteen hundred ninety-seven on the next following  January  first,  April  first,  July first,  or October first not less than thirty days after the election is filed. Beginning  December  first,  nineteen  hundred  ninety-seven,  an election  pursuant  to  this section must be made no later than December first of the year prior to the assessment year. However,  any  specified third-party  payor  licensed  pursuant to the insurance law or certified pursuant to article forty-four of this chapter between December first of the year prior to the assessment year and December thirty-first  of  the assessment  year  may  make  an election subsequent to such licensure or certification and during said time period, to take effect  on  the  next following  January  first,  April first, July first or October first not less  than  thirty  days  after  such  election  is   filed.   Specified third-party  payors  other than those licensed pursuant to the insurance law or certified pursuant  to  this  chapter  which  have  not  provided coverage  prior  to  December  first of the year prior to the assessment year may make an election at any time from December first  of  the  year prior   to  said  assessment  year  to  December  thirty-first  of  said assessment year, to take effect on the  next  following  January  first, April first, July first or October first not less than thirty days after the election is filed. An election shall remain in effect unless revoked in  writing  by a specified third-party payor, which revocation shall be effective on the first day of the next calendar year  quarter,  provided that  such  payor  has  provided notice of its intention to so revoke at least thirty days prior to the beginning of such calendar quarter.  (a) A specified third-party payor filing an election pursuant to  this subdivision  must agree: to provide the data and information required by subdivision four of this section; to provide such certification of  data and  access  to  individual  and family unit data for audit verification purposes as the commissioner shall require for purposes of this section; and to the jurisdiction of the state to maintain an action in the courts of the state of New York  to  enforce  any  provision  of  this  section related to payment of the assessments.  (b)  If  a  specified third-party payor is acting in an administrative services capacity on behalf of an organization, such as  a  self-insured fund, the consent of the organization to the election and the conditions pursuant to paragraph (a) of this subdivision must be submitted with the election.  Such  consent  may  be  set forth in writing in the agreement between the specified third-party payor and the organization.  (c) If a specified third-party payor, including a payor  operating  in accordance with the insurance law or article forty-four of this chapter,  making  an  election  pursuant  to  this  subdivision  is  acting  in an administrative  services  capacity  on  behalf  of  an  organization  or organizations, such specified third-party payor must specify (i) whether such  election  applies to payments on behalf of all such organizations, and (ii) identify any organizations for which such specified third-party payor is acting to which the election does not apply and  establish,  in accordance   with   guidelines  established  by  the  superintendent  of financial services, a system through which  general  hospitals  and  the commissioner  can identify the status of a patient as a patient for whom the election does not apply.  (d) The commissioner  may  deny  a  specified  third-party  payor  the opportunity  to  make  an election pursuant to this subdivision based on repeated late payments, failure to remit correct amounts, or failure  to provide adequate verification of the accuracy of payments.  (e)  The  commissioner  or  the  commissioner's  designee  shall  make available to all general hospitals a list of the  specified  third-party payors which have elected pursuant to this subdivision to remit payments pursuant to this section.   4.  Assessments  shall  be  calculated as follows: (a) Every specified third-party payor that has made an election  pursuant  to  this  section shall  report  to  the  commissioner  or the commissioner's designee the number of individuals for a period as  determined  by  the  commissioner during  the  calendar  year prior to the assessment year residing within each  region  ("individual  member  months").   Every   such   specified third-party   payor  shall  also  report  to  the  commissioner  or  the commissioner's designee the number of  family  units  for  a  period  as determined  by  the  commissioner  during the calendar year prior to the assessment year residing within each region  ("family  member  months"). For purposes of this section, the family unit is considered to reside in the region in which the primary insured resides.  (b)   The  superintendent  of  financial  services  shall  advise  the commissioner of the average  number  of  persons  covered  under  family insurance  contracts  providing  health  care  coverage  approved by the superintendent for the year two years prior to the assessment year.  (c) The commissioner shall calculate the total number  of  "individual member  months"  for each region for all specified third-party payors to determine "aggregate individual member months" for each region.  (d) The commissioner shall  calculate  the  total  number  of  "family member  months"  for each region for all specified third-party payors to determine  "aggregate  family  member  months"  for  each  region.   The commissioner  shall multiply the average number of persons covered under family insurance contracts, as  reported  to  the  commissioner  by  the superintendent  of  financial  services, by the "aggregate family member months" to determine "adjusted aggregate family member months" for  each region.  The  commissioner  shall  add the number of "adjusted aggregate family member months" for each region to the total number of  "aggregate individual member months" for each region. This amount shall be known as "total covered member months" for each region.  (e)   The   annual   regional  payment  amount  for  nineteen  hundred ninety-seven,   nineteen   hundred   ninety-eight,   nineteen    hundred ninety-nine,  two  thousand  and  each year thereafter, respectively for each region determined pursuant to subdivision two of this section shall be divided by an estimate derived from population based data sources  of the   total   covered  member  months  determined  consistent  with  the provisions of paragraphs (a), (b), (c) and (d) of  this  subdivision  in that  region  to establish the individual annual assessment for nineteen hundred ninety-seven, nineteen hundred  ninety-eight,  nineteen  hundred ninety-nine,  two  thousand  and each year thereafter, respectively. The  individual annual assessment shall be multiplied by the  average  family size  reported  to  the  commissioner by the superintendent of financial services to establish the family unit annual assessment in  that  region for   nineteen  hundred  ninety-seven,  nineteen  hundred  ninety-eight, nineteen hundred ninety-nine, two thousand  and  each  year  thereafter, respectively.  (f)   Effective   January   first,  two  thousand  nine,  a  specified third-party payor that has made an election pursuant to this section may report to the commissioner or the commissioner's designee the number  of individuals  and  family units enrolled as of the last day of each month in fulfillment  of  the  monthly  reporting  requirement  set  forth  in paragraph  (a)  of  this  subdivision.  A  specified  third-party  payor choosing to  report  monthly  enrollment  counts  on  this  basis  shall indicate  its  choice  at the beginning of a calendar year in a form and manner specified by the commissioner and  such  reporting  method  shall remain in effect the entire calendar year.   5.  Monthly  payments.  (a)  Within  thirty days after the end of each month, a specified third-party payor which made an election pursuant  to this  section  shall  remit  to  the  commissioner or the commissioner's designee one-twelfth of the individual annual assessment for each of the individuals residing in this state which were included on the membership rolls of that specified third-party payor during all or any  portion  of the  prior  month.  Within  thirty  days  after the end of each month, a specified third-party payor which made  an  election  pursuant  to  this section  shall  also  remit  to  the  commissioner or the commissioner's designee one-twelfth of the  family  unit  annual  assessment  for  each family  unit  for  which the primary insured resided in this state which were included on the membership  rolls  of  that  specified  third-party payor  during  all or any portion of the prior month. Provided, however, for  assessment  obligations  arising  out  of  individual  and   family assessments  established  pursuant  to  this section on or after January first, two thousand,  the  commissioner  may  permit  certain  specified third-party  payors  which  have  at least one full year of pool payment experience to submit such payments on  an  annual  basis,  based  on  an annual  demonstration  by  a payor through its prior year's pool payment experience that total pool obligations under this section  and  sections twenty-eight  hundred  seven-j  and twenty-eight hundred seven-s of this article are not expected to exceed ten thousand dollars in  the  current pool  year. If a specified third-party payor fails to make such payments within sixty days of notification of a delinquency, the commissioner may assess a civil penalty of up to ten thousand dollars for  each  failure, provided,  however,  that such civil penalty shall not be imposed if the payor demonstrates good cause for  such  failure  to  timely  make  such payments, and further provided that the amount of such penalty shall not exceed the amount of the delinquent liability.  (b)  The  specified third party-payor shall be entitled to rely on the residence location information provided to the  payor  by  an  employer, group  or  other party providing enrollment information to the specified third-party payor, provided  the  specified  third-party  payor  has  no reason to doubt the accuracy of the information.  (c)   Specified  third-party  payors  shall  not  be  responsible  for remitting the monthly assessment for any individual or  for  any  family unit  for  any  month  in  which  it is subsequently determined that the specified third-party payor had no liability  to  provide  coverage  for inpatient hospital services for such individual or family unit.   6.  Prospective  adjustments.  (a)  The  commissioner  shall  annually reconcile the sum of the actual payments made to the commissioner or the commissioner's designee for each region pursuant to section twenty-eight  hundred seven-s of this article and pursuant to  this  section  for  the prior  year  with  the regional allocation of the gross annual statewide amount specified in subdivision  six  of  section  twenty-eight  hundred seven-s  of this article for such prior year. The difference between the actual amount raised for a region and the  regional  allocation  of  the specified  gross annual amount for such prior year shall be applied as a prospective adjustment to the regional allocation of the specified gross annual payment amount for such region for the year  next  following  the calculation  of  the  reconciliation. The authorized dollar value of the adjustments shall be the same as if calculated retrospectively.  (b)  Notwithstanding  the  provisions  of  paragraph   (a)   of   this subdivision,  for  covered  lives  assessment  rate periods on and after January first, two thousand fifteen through December  thirty-first,  two thousand  twenty-three, for amounts collected in the aggregate in excess of  one  billion  forty-five  million  dollars  on  an   annual   basis, prospective  adjustments shall be suspended if the annual reconciliation calculation from the prior year would otherwise result in a decrease  to the regional allocation of the specified gross annual payment amount for that  region,  provided,  however,  that such suspension shall be lifted upon a determination by  the  commissioner,  in  consultation  with  the director  of  the  budget,  that sixty-five million dollars in aggregate collections on an annual basis over and  above  one  billion  forty-five million  dollars on an annual basis have been reserved and set aside for deposit in the  HCRA  resources  fund.  Any  amounts  collected  in  the aggregate  at  or  below  one  billion  forty-five million dollars on an annual basis, shall be subject to regional adjustments  reconciling  any decreases  or  increases  to  the regional allocation in accordance with paragraph (a) of this subdivision.   7. (a) In the case two or more specified third-party payors covering a single contract holder where both  specified  third-party  payors  cover separate  components of the inpatient care benefits otherwise subject to the  assessment,  the  assessment  shall  be  apportioned  between   the insurers.  (b)  With  regard  to assessment obligations arising out of individual and family assessments established pursuant to  this  section,  where  a single  contract  holder  has  separate components of the inpatient care benefits otherwise subject to the assessment  covered  by  two  or  more entities,  the  assessment  may  be  apportioned  between  the entities, provided that:  (i) Apportionment agreements or arrangements may only be entered  into between or among specified third-party payers which have elected to make direct  payments  to  the  commissioner  or  the commissioner's designee pursuant to this subdivision; and  (ii) The aggregate of apportioned covered  lives  assessment  payments must  result  in  the  payment  of one hundred percent of the applicable covered lives assessment; and  (iii) Apportionment agreements between or  among  apportioning  payers and any modifications, amendments or termination of such agreements must be  in  writing  and  signed by all such payers, provided, however, that where one apportioning payor agrees to pay one hundred  percent  of  the applicable  covered  lives  assessment,  no  written  agreement shall be required, provided there is other written evidence  of  the  arrangement and any modifications, amendments and/or terminations thereof, emanating from the apportioning payor paying one hundred percent of the applicable covered lives assessment to the other apportioning payor or payors or to the  particular  group  to  which  the  arrangement relates, and further provided that such written evidence contains the name of the  particular group to which the arrangement relates; and  (iv)  Copies  of  apportionment  agreements,  and  any  modifications, amendments  and/or  terminations  thereof,  and  written   evidence   of arrangements  by  which one apportioning payor agrees to pay one hundred percent  of  the  applicable   covered   lives   assessment,   and   any modifications,   amendments   and/or   terminations   thereof,  must  be maintained  in  the  files  of  each  apportioning   payor   while   the apportionment  is  in effect and for a period of not less than six years after termination thereof and shall be made available to the  department upon request for audit verification purposes.   8.  Liability  for  assessments.  (a)  The  assessments  determined in accordance with this  section  shall,  for  individuals  who  have  paid premiums  directly to an insurer or to a health maintenance organization certified pursuant to article forty-four  of  this  chapter  or  article forty-three of the insurance law for health care coverage which includes coverage  of  inpatient  hospital  services,  be  the  liability of said individuals. The assessments determined in accordance with this  section shall,  for  groups and entities who have paid premiums to an insurer or to a health  maintenance  organization  certified  pursuant  to  article forty-four  of  this chapter or article forty-three of the insurance law for health care coverage which includes coverage of  inpatient  hospital services,  be the liability of said groups and entities. The assessments determined in accordance  with  this  section  shall,  for  individuals, groups  and  entities  who  have  contributed to a self-insured fund for health care coverage  which  includes  coverage  of  inpatient  hospital services, be the liability of said individuals, groups or entities.  (b)   Specified   third-party   payors  shall  make  payments  to  the commissioner or the commissioner's designee of the full  amount  of  the assessments  determined  in  accordance  with  this  section.  Specified third-party payors may recover amounts due or paid to  the  commissioner or  the  commissioner's  designee  from the parties liable in accordance with paragraph (a) of this subdivision.   9. A specified third-party payor must either:  (a) jointly elect to pay the assessment pursuant to this  section  and the   allowance  pursuant  to  paragraph  (c)  of  subdivision  two  and subdivision  five  of  section  twenty-eight  hundred  seven-j  of  this article; or  (b)  pay  the surcharge for an allowance determined in accordance with paragraph (b) of subdivision two of section twenty-eight hundred seven-j of this article, including the allowance determined in  accordance  with section twenty-eight hundred seven-s of this article.   10.  (a) Payments and reports submitted or required to be submitted to the  commissioner  or  to  the  commissioner's designee pursuant to this section by specified third-party payors shall be subject to audit by the commissioner for a period of  six  years  following  the  close  of  the calendar  year  in  which such payments and reports are due, after which such  payments  shall  be  deemed  final  and  not  subject  to  further adjustment  or  reconciliation,  including through offset adjustments or reconciliations made by such specified third-party payors with regard to subsequent payments, provided, however, that  nothing  herein  shall  be construed as precluding the commissioner from pursuing collection of any such  payments  which  are identified as delinquent within such six year period, or which are identified as delinquent as a result  of  an  audit commenced  within  such  six year period, or from conducting an audit of any adjustments and reconciliation made by a specified third party payor within such six year period, or from conducting  an  audit  of  payments made prior to such six year period which are found to be commingled with payments  which  are  otherwise subject to timely audit pursuant to this section.  (b) Specified third-party payors which, in  the  course  of  an  audit pursuant to this section fail to produce data or documentation requested in furtherance of such an audit, within thirty days of such request, may be  assessed a civil penalty of up to ten thousand dollars for each such failure, provided, however, that such civil penalty shall not be imposed if  such  specified  third-party  payor demonstrates good cause for such failure. The imposition of civil  penalties  pursuant  to  this  section shall be subject to the provisions of section twelve-a of this chapter.  (c) Records required to be retained for audit verification purposes by specified  third-party  payors  in  accordance  with  this section shall include, but not be limited to, on a monthly basis, the  source  records generated   by  supporting  information  systems,  financial  accounting records, relevant correspondence and the addresses and dates of coverage for all individuals and family units, as defined by paragraphs  (a)  and (b) of subdivision one of this section, and such other records as may be required  to  prove compliance with, and to support reports submitted in accordance with, this section.  (d) If  a  specified  third-party  payor  fails  to  produce  data  or documentation  requested  in  furtherance  of  an audit pursuant to this section for a month to which an assessment applies, the commissioner may estimate,  based  on  available  financial  and  statistical   data   as determined  by  the  commissioner, the amount due for such month. If the impact of the enrollment exemptions permitted pursuant to  this  section cannot be determined from such available financial and statistical data, the  estimated  amount  due  may be calculated on the basis of aggregate data derived from such available data for the year subject to audit. The commissioner shall take all necessary steps to collect  amounts  due  as determined  pursuant  to  this  paragraph, including directing the state comptroller to offset such amounts due from any  payments  made  by  the state  to  the  third party payor pursuant to this article. Interest and penalties shall be applied to such amounts due in  accordance  with  the provisions  of subdivision eight of section twenty-eight hundred seven-j of this article.  (e) The commissioner may, as part of a final resolution  of  an  audit conducted  pursuant  to  this subdivision, waive payment of interest and penalties otherwise applicable pursuant to subdivision eight of  section twenty-eight  hundred  seven-j  of  this  article, when amounts due as a result of such audit, other than such waived penalties and interest, are paid in full to the commissioner or the commissioner's  designee  within sixty  days  of  the  issuance  of a final audit report that is mutually agreed to by the commissioner and auditee, provided,  however,  that  if such final audit report is not so mutually agreed upon, then neither the commissioner nor the auditee shall have any obligations pursuant to this paragraph.  (f)   The  commissioner  may  enter  into  agreements  with  specified third-party  payors  in  regard  to  which  audit  findings   or   prior settlements  have  been  made  pursuant  to  this section, extending and applying such audit findings or prior settlements, or a portion thereof, in settlement  and  satisfaction  of  potential  audit  liabilities  for subsequent  un-audited  periods.  The  commissioner  may reduce or waive payment  of  interest  and  penalties  otherwise  applicable   to   such subsequent  unaudited  periods when such amounts due as a result of such agreement, other than reduced or waived interest and penalties, are paid in full to the commissioner or the commissioner's designee within  sixty days of execution of such agreement by all parties to the agreement. Any payments  made  pursuant  to  agreements entered into in accordance with this paragraph shall be  deemed  to  be  in  full  satisfaction  of  any liability  arising  under this section, as referenced in such agreements  and for the time periods covered by such agreements, provided,  however, that  the  commissioner  may  audit  future  retroactive  adjustments to payments made  for  such  periods  based  on  reports  filed  by  payors subsequent to such agreements.   * NB Expires December 31, 2023