2023 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-one, for amounts collected in the aggregate in excess of
one  billion  forty-five million dollars on an annual basis, and for the
period January first, two thousand twenty-two to December  thirty-first,
two thousand twenty-six for amounts collected in the aggregate in excess
of   one  billion  eighty-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 for the period on and  after  January
first,  two thousand fifteen through December thirty-first, two thousand
twenty-one and for the period January first, two thousand twenty-two  to
December  thirty-first, two thousand twenty-six for amounts collected in
the aggregate in excess of one billion eighty-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 for the period  on
and   after   January  first,  two  thousand  fifteen  through  December
thirty-first, two thousand twenty-two, and for the period January first,
two  thousand  twenty-three  to  December  thirty-first,  two   thousand
twenty-six  for  amounts  collected  in  the  aggregate in excess of one
billion eighty-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.
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