2023 New York Laws › PBH - Public Health › Article 28 - Hospitals › 2807-J - Patient Services Payments.

* §  2807-j.  Patient  services  payments.  1.  Payments to designated
providers of services, as defined in paragraph (a) of subdivision  one-a
of  this  section,  by  all  payors,  including  the  state governmental
agencies,  corporations  organized  and  operating  in  accordance  with
article  forty-three  of  the  insurance law, organizations operating in
accordance with the provisions of article forty-four  of  this  chapter,
local  governmental  agencies,  self-insured funds, commercial insurers,
payors pursuant to the comprehensive motor vehicle insurance reparations
act, the workers' compensation law, the volunteer firefighters'  benefit
law  and  the  volunteer  ambulance  workers' benefit law, and any other
rate, charge, or negotiated payment payor, for patient services provided
to persons who are not eligible for payments as beneficiaries  of  title
XVIII  of  the  federal  social  security act (medicare) shall include a
surcharge for an allowance  on  net  patient  service  revenues  in  the
percentage  amount  and  for the periods specified in subdivision two of
this section. Any such allowance shall be submitted by or on  behalf  of
designated   providers   of   services   to   the  commissioner  or  the
commissioner's designee in accordance  with  subdivision  five  of  this
section.
1-a. Definitions. (a) "Designated providers of services", for purposes
of  this  section,  shall  mean  providers  of services in the following
classes:
(i) general hospitals;
(ii) diagnostic and treatment centers that provide:
(A) a comprehensive range of primary health care services; or
(B) ambulatory surgical services; and
(iii) for periods prior to October first, two thousand, subject to the
provisions of paragraph  (d)  of  subdivision  three  of  this  section,
free-standing  clinical  laboratories  issued a permit pursuant to title
five of article five of this chapter.
(b) "Third-party  coverage",  for  purposes  of  this  section,  shall
include,  but  not  be  limited  to:  payments by a governmental agency,
insurer, health maintenance organization, self-insured  fund,  or  other
third-party  entity making payments on behalf of a patient; whether made
directly to a designated provider of services or indirectly as indemnity
or similar payments made to the  patient  (or  patient's  representative
such  as  parent or family member) for services provided by a designated
provider of services, or through the use of  payments  made  payable  to
both  the  designated  provider of services and the patient or patient's
representative, or similar devices.
(c) "Third-party payors", for purposes of this section, shall include,
but not be limited to: governmental agencies; corporations organized and
operating in accordance with article forty-three of the  insurance  law;
organizations  operating  in  accordance  with the provisions of article
forty-four of this  chapter;  providers  of  coverage  pursuant  to  the
comprehensive  motor  vehicle  insurance  reparations  act, the workers'
compensation law, the  volunteer  firefighters'  benefit  law,  and  the
volunteer   ambulance  workers'  benefit  law;  self-insured  funds  and
administrators acting on behalf of self-insured  funds;  and  commercial
insurers  licensed  to do business in this state and authorized to write
accident and health insurance and whose policy provides coverage  on  an
expense incurred basis.
2. (a) The total percentage allowance for any period during the period
January   first,   nineteen   hundred   ninety-seven   through  December
thirty-first, nineteen hundred ninety-nine  and  on  and  after  January
first, two thousand, for a designated provider of services applicable to
a  payor  shall  be  determined  in accordance with this subdivision and
applied to net patient service revenues.
(b)  The  total  percentage  allowance  for  each  payor,  other  than
governmental  agencies, or health maintenance organizations for services
provided to subscribers eligible  for  medical  assistance  pursuant  to
title  eleven  of  article  five of the social services law, or approved
organizations  for  services  provided  to  subscribers eligible for the
family health plus program pursuant to title eleven-D of article five of
the social services law, and other than payments for a patient that  has
no  third-party  coverage in whole or in part for services provided by a
designated provider of services, shall be:
(i) the sum of (A) eight and  eighteen-hundredths  percent,  provided,
however,  that  for  services  provided  on  and  after  July first, two
thousand three, the percentage shall be eight and eighty-five hundredths
percent, and further provided that for services provided  on  and  after
January  first,  two  thousand  six,  the  percentage shall be eight and
ninety-five hundredths percent, and further provided that  for  services
provided  on  and  after  April first, two thousand nine, the percentage
shall be nine and sixty-three hundredths percent, plus  (B)  twenty-four
percent, provided, however, that for services provided on and after July
first,  two  thousand  three,  the  percentage  shall be twenty-five and
ninety-seven hundredths percent, and further provided that for  services
provided  on  and  after January first, two thousand six, the percentage
shall be twenty-six  and  twenty-six  hundredths  percent,  and  further
provided  that  for  services  provided  on  and  after April first, two
thousand nine, the percentage shall  be  twenty-eight  and  twenty-seven
hundredths  percent,  and  plus (C) for a specified third-party payor as
defined in subdivision one-a of section twenty-eight hundred seven-s  of
this  article the percentage allowance applicable for a general hospital
for inpatient hospital services pursuant to subdivision two  of  section
twenty-eight hundred seven-s of this article;
(ii)  unless  (A)  an  election  in  accordance  with paragraph (a) of
subdivision five of this section to pay the allowance  directly  to  the
commissioner   or  the  commissioner's  designee  is  in  effect  for  a
third-party payor, and in addition (B) for a specified third-party payor
an  election  to  pay  the  assessment  in   accordance   with   section
twenty-eight hundred seven-t of this article is in effect.
(c) If an election in accordance with subdivision five of this section
is  in effect for a third-party payor and in addition in accordance with
section twenty-eight hundred seven-t of this  article  for  a  specified
third-party  payor,  the  total  percentage  allowance  factor  shall be
reduced to eight and  eighteen-hundredths  percent,  provided,  however,
that  for  services provided on and after July first, two thousand three
the total percentage allowance factor shall  be  reduced  to  eight  and
eighty-five  hundredths  percent, and further provided that for services
provided on and  after  January  first,  two  thousand  six,  the  total
percentage  allowance  factor  shall be reduced to eight and ninety-five
hundredths percent, and further provided that for services  provided  on
and after April first, two thousand nine, the total percentage allowance
factor shall be reduced to nine and sixty-three hundredths percent.
(d)  The  total  percentage  allowance  for  payments  by governmental
agencies, as determined in accordance with paragraphs (a) and  (a-1)  of
subdivision  one of section twenty-eight hundred seven-c of this article
as in effect on December thirty-first, nineteen hundred  ninety-six,  or
health  maintenance  organizations  for services provided to subscribers
eligible for medical assistance pursuant to title eleven of article five
of the social services  law,  or  approved  organizations  for  services
provided  to  subscribers  eligible  for  the family health plus program
pursuant to title eleven-D of article five of the social  services  law,
shall  be  five  and ninety-eight-hundredths percent, provided, however,

that for services provided on and after July first, two  thousand  three
the  total  percentage allowance shall be six and forty-seven hundredths
percent, and further provided that for services provided  on  and  after
January first, two thousand six, the total percentage allowance shall be
six  and  fifty-four  hundredths  percent, and further provided that for
services provided on and after April first, two thousand nine, the total
percentage allowance shall be seven and four hundredths percent.
(e) The total percentage allowance for payments for services  provided
by  designated  providers  of services for which there is no third-party
coverage in whole or in part  shall  be  eight  and  eighteen-hundredths
percent, provided, however, that for services provided on and after July
first,  two thousand three the total percentage allowance shall be eight
and eighty-five  hundredths  percent,  and  further  provided  that  for
services  provided  on  and  after  January first, two thousand six, the
total percentage allowance shall be  eight  and  ninety-five  hundredths
percent,  and  further  provided that for services provided on and after
April first, two thousand nine, the total percentage allowance shall  be
nine  and sixty-three hundredths percent. This paragraph shall not apply
to patient deductibles and coinsurance amounts.
(f)  The  total  percentage  allowance  for  patient  deductibles  and
coinsurance amounts shall be the same percentage allowance applicable to
payments  by  the primary third-party payor covering the patient in each
case determined in accordance with paragraphs (a), (b) and (c)  of  this
subdivision.
(g)  The  total  percentage allowance for secondary third-party payors
under coordination of benefits principles shall be the  same  percentage
allowance applicable to payments by the primary third-party payor in the
case  determined  in accordance with paragraphs (a), (b) and (c) of this
subdivision.
3. Net patient service revenues, for purposes of this  section,  shall
mean:
(a)  for  general  hospitals  all moneys received for or on account of
inpatient hospital services,  outpatient  services  (including  referred
ambulatory  services), emergency services, ambulatory surgical services,
and other hospital  or  health-related  services,  including  capitation
payments  allocable to inpatient hospital services,  outpatient services
(including referred ambulatory services), emergency services, ambulatory
surgical  services  and  other  hospital  or   health-related   services
excluding  services listed below, less refunds, for discharges occurring
or for visits made or services performed  on  or  after  January  first,
nineteen  hundred  ninety-seven,  or  contracted service obligations for
periods  on  or  after  January  first,  nineteen  hundred  ninety-seven
excluding  the following subject to the provisions of subdivision eleven
of this section:
(i) revenue received for services provided to beneficiaries  of  title
XVIII of the federal social security act (medicare);
(ii)  revenue  received  by  a general hospital for residential health
care facility services, adult day care services, hospice  services,  and
home care services;
(iii)  revenue  received  from the allowances pursuant to this section
and section twenty-eight hundred seven-s of this article;
(iv) revenue received from bad debt and charity care and indigent care
rate adjustments and pool distributions pursuant to section twenty-eight
hundred seven-c of this article, general  hospital  indigent  care  pool
distributions  pursuant  to section twenty-eight hundred seven-k of this
article, health care services pool  distributions  pursuant  to  section
twenty-eight  hundred  seven-c  of this article, health care initiatives
pool distributions pursuant to section twenty-eight hundred  seven-l  of

this  article,  professional  education  pool  distributions pursuant to
section twenty-eight hundred seven-m of this  article,  tobacco  control
and   insurance  initiatives  pool  distributions  pursuant  to  section
twenty-eight  hundred  seven-v  of  this article, and high need indigent
care adjustment pool  distributions  pursuant  to  section  twenty-eight
hundred  seven-w of this article, provided, however, that funds received
as  medical  assistance  payments  which  include  state  share  amounts
authorized  pursuant  to  section  twenty-eight  hundred seven-v of this
article that are not disproportionate share hospital payments  shall  be
included  within  the  meaning  of  net  patient service revenue for the
purposes of this section;
(v) revenue received from physician practice or faculty practice  plan
discrete billings for physician services;
(vi)  revenue  received  by  a general hospital from a public hospital
pursuant to an affiliation agreement contract for the delivery of health
care services to such public hospital;
(vii) revenue received from governmental deficit financing;
(viii) subject to the provisions of paragraph (d) of this subdivision,
revenue received for or  on  account  of  referred  ambulatory  clinical
laboratory visits made or services performed on and after October first,
two thousand.
(b) for diagnostic and treatment centers providing services designated
in  subparagraph  (ii)  of  paragraph  (a)  of subdivision one-a of this
section all moneys received, including capitation payments allocable  to
diagnostic  and  treatment  center  services  otherwise  covered  by the
assessment, less refunds, for or on account of visits made  or  services
performed  on  or  after January first, nineteen hundred ninety-seven or
contracted service obligations for periods on or  after  January  first,
nineteen hundred ninety-seven:
(i) for the following services:
(A)  for  diagnostic  and  treatment centers providing a comprehensive
range of primary health care services, for all services;
(B) for diagnostic and treatment centers providing ambulatory surgical
services, for all ambulatory surgical services;
(ii) excluding the following subject to the provisions of  subdivision
eleven of this section:
(A)  revenue  received for services provided to beneficiaries of title
XVIII of the federal social security act (medicare);
(B) revenue received from the allowances pursuant to this section;
(C) revenue received from bad debt and charity care  rate  adjustments
pursuant  to  paragraph  (f)  of subdivision two of section twenty-eight
hundred seven of this article, health care services  pool  distributions
pursuant to section twenty-eight hundred seven-c of this article, health
care  initiatives  pool  distributions  pursuant to section twenty-eight
hundred  seven-l  of   this   article,   professional   education   pool
distributions  pursuant  to section twenty-eight hundred seven-m of this
article, tobacco control and insurance  initiatives  pool  distributions
pursuant  to  section  twenty-eight hundred seven-v of this article, and
high need  indigent  care  adjustment  pool  distributions  pursuant  to
section twenty-eight hundred seven-w of this article;
(D)  revenue received from physician practice or faculty practice plan
discrete billings for physician services;
(E) for a  diagnostic  and  treatment  center  operated  by  a  health
maintenance  organization operating in accordance with the provisions of
article forty-four  of  this  chapter  or  article  forty-three  of  the
insurance  law,  revenue received for or on account of services provided
to subscribers of such health maintenance organization;
(F) revenue received from governmental deficit financing; and
(G) subject to the provisions of paragraph (d)  of  this  subdivision,
revenue  received  for  or  on  account  of referred clinical laboratory
visits made or services  performed  on  and  after  October  first,  two
thousand.
(c)  for  free-standing  clinical  laboratories,  all moneys received,
including capitation payments, less refunds, for or on account of visits
made or services performed on or after January first,  nineteen  hundred
ninety-seven  and  prior  to October first, two thousand, subject to the
provisions of paragraph (d) of this subdivision, or  contracted  service
obligations  for  periods  on  or  after January first, nineteen hundred
ninety-seven and prior to October first, two thousand,  subject  to  the
provisions of paragraph (d) of this subdivision, for clinical laboratory
services,  excluding, subject to the provisions of subdivision eleven of
this section:
(i) revenue received for services provided to beneficiaries  of  title
XVIII of the federal social security act (medicare);
(ii) revenue received from the allowances pursuant to this section;
(iii)  for  a  clinical  laboratory  operated  by a health maintenance
organization operating in accordance  with  the  provisions  of  article
forty-four  of this chapter or article forty-three of the insurance law,
revenue received for or on account of services provided  to  subscribers
of such health maintenance organization; and
(iv) revenue received from governmental deficit financing.
(d)  Provided, however, that if either the provisions of clause (G) of
subparagraph (ii) of paragraph (b) of this subdivision  or  subparagraph
(viii)  of  paragraph  (a)  of  this  subdivision  which exclude certain
revenues from the definition of net patient  service  revenues  for  the
purpose  of  imposing  surcharges  pursuant to this section, result in a
determination of an impermissible provider tax by the secretary  of  the
U.S.  department  of  health  and human services under the provisions of
section 1903(w) of the federal social security act, then clause  (G)  of
subparagraph  (ii)  of  paragraph  (b) of this subdivision, subparagraph
(viii) of paragraph (a) of this subdivision,  and  sections  forty-eight
and   forty-nine  of  chapter  one  of  the  laws  of  nineteen  hundred
ninety-nine are  rendered  null  and  void  as  of  October  first,  two
thousand. The commissioner will collect any retroactive amounts due as a
result  of  surcharges  imposed  on  such  services on and after October
first, two thousand, without interest or penalty.
4. (a) For periods prior to January  first,  two  thousand  five,  the
commissioner  is  authorized  to  contract  with the article forty-three
insurance law plans, or such other contractors as the commissioner shall
designate,  to  receive  and  distribute  funds  from   the   allowances
established  pursuant  to  this  section, and funds from the assessments
established pursuant to subdivision  eighteen  of  section  twenty-eight
hundred seven-c of this article. In the event contracts with the article
forty-three  insurance  law  plans or other commissioner's designees are
effectuated, the commissioner shall conduct annual audits of the receipt
and distribution of the funds. The reasonable costs and expenses  of  an
administrator  as  approved  by  the  commissioner,  not  to  exceed for
personnel services on an annual basis two million two  hundred  thousand
dollars  for  collection  and distribution of allowances and assessments
established pursuant to this section and subdivision eighteen of section
twenty-eight hundred seven-c of this article, shall  be  paid  from  the
allowance and assessment funds.
(b)  Notwithstanding any inconsistent provision of section one hundred
twelve or one hundred sixty-three of the state finance law or any  other
law,  at the discretion of the commissioner without a competitive bid or
request for proposal process, contracts in effect for administration  of

bad  debt  and charity care pools for the period January first, nineteen
hundred  ninety-six  through  December  thirty-first,  nineteen  hundred
ninety-six  pursuant  to  section  twenty-eight  hundred seven-c of this
article  may  be extended to provide for administration pursuant to this
section and distributions of allowance and assessment funds pursuant  to
this article and may be amended as may be necessary.
(c)  The  commissioner  shall  contract  with an independent certified
public accountant to conduct an annual independent audit, in conformance
with  generally  accepted   auditing   standards,   of   the   receipts,
disbursements,  revenues, expenditures and cash flows of funds, for each
calendar year beginning with nineteen hundred eighty-three, through  the
most recent calendar year. As used in this section, "funds" shall mean:
(i)  Funds  accumulated and pooled pursuant to this section, paragraph
(a) of subdivision eighteen of section twenty-eight hundred  seven-c  of
this article, and sections twenty-eight hundred seven-s and twenty-eight
hundred seven-t of this article; and
(ii)  Funds  accumulated  and pooled pursuant to chapters five hundred
thirty-six, five hundred thirty-seven and five hundred  thirty-eight  of
the  laws  of  nineteen hundred eighty-two, chapters eight hundred seven
and nine hundred six  of  the  laws  of  nineteen  hundred  eighty-five,
chapters  two  and  six  hundred  five  of  the laws of nineteen hundred
eighty-eight,  chapters  nine  hundred  twenty-two  and   nine   hundred
twenty-three  of  the  laws  of  nineteen  hundred ninety, chapter seven
hundred thirty-one of the laws  of  nineteen  hundred  ninety-three  and
chapter eighty-one of the laws of nineteen hundred ninety-five.
Such  annual  independent  audit shall be submitted to the director of
the budget, the temporary president of the senate and the speaker of the
assembly no later than April fifteenth of each year.
5. (a) Any third-party payor for services  provided  by  a  designated
provider  of  services  may  make  an  election  to  make payments on an
aggregated basis of funds due from the allowance determined pursuant  to
subdivision  two  of  this  section  directly to the commissioner or the
commissioner's designee on behalf of designated providers of services.
(i) The election pursuant to this paragraph to be effective 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 must apply to all classes of designated  providers  of  service
and  to  all  providers  within each class. An election by a payor shall
take effect for nineteen hundred ninety-seven,  on  the  next  following
January  first,  April first, July first, or October first, and for each
calendar year thereafter on the next following January first,  not  less
than  thirty days after the election is filed. Beginning December first,
nineteen hundred ninety-seven, an election pursuant  to  this  paragraph
must  be  made  no  later  than  December first of the year prior to the
assessment year. However, any 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, 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.  Payors  other  than
those  licensed  pursuant  to the insurance law or certified pursuant to
this chapter which have  not  provided  third-party  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 the 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.

Beginning  June  first,  two  thousand three an election by any payor or
organization shall begin on the first day of  the  month  following  the
date it was received by the commissioner.
(ii) 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 month,  provided  that  such  payor  has  provided
notice  of  its intention to so revoke at least twenty days prior to the
beginning of such month.
(iii) A payor filing an  election  pursuant  to  this  paragraph  must
agree:
(A)  to provide reports in accordance with the provisions of paragraph
(b) of subdivision seven of this section;
(B) to provide such certification of  data  and  access  to  allowance
expenditure  data  for  audit  verification purposes as the commissioner
shall require for purposes of this section; and
(C) 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 allowances.
(D)  for  periods  on  and  after January first, two thousand nine, to
provide the commissioner or  the  commissioner's  designee  the  payor's
federal  tax  identification  number  and  agree  to  the  use  of  such
identification  number  in  connection  with  identifying  the   payor's
election  status  to  designated  providers  of  services, including the
posting of such identification numbers on secure websites maintained  by
the  commissioner  or  the commissioner's designee in furtherance of the
purposes of this section. The commissioner shall include for periods  on
and  after January first, two thousand nine on such secure websites, the
date such payor was first posted.
(iv) If a 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
subparagraph  (iii)  of  this  paragraph  must  be  submitted  with  the
election. Such consent may be set forth  in  writing  in  the  agreement
between  the  payor and the organization and a photocopy of that portion
of the agreement submitted by the payor, together with  a  photocopy  of
the signatures of the organization and the payor on the agreement, shall
be  accepted  in lieu of a separate election form from the organization.
On and after January first, two thousand four,  the  commissioner  shall
have discretion to accept payments made on a timely basis if the reports
and  information  reports  are  routinely submitted, notwithstanding the
fact that the full and complete election form by  or  on  behalf  of  an
organization  was  not  filed  on  a  timely  basis.  In  the  event the
commissioner accepts payments pursuant to this section where an election
form is missing or incomplete but the payments and  information  reports
were  routinely  submitted  as if the election forms had been filed, the
election form from the payor and organization shall be  deemed  to  have
been filed (and the organization and the payor shall be as legally bound
by  the  terms  of  the  election form as if it had signed and filed the
election) and neither the payor nor the organization shall  subsequently
refuse  to abide by the terms of the election form for any year in which
payments were submitted and accepted pursuant to this section.
(v) If a payor, including a payor operating  in  accordance  with  the
insurance  law or article forty-four of this chapter, making an election
pursuant to this paragraph  is  acting  in  an  administrative  services
capacity  on behalf of an organization or organizations, such payor must
specify whether such election applies to payments on behalf of all  such
organizations  and  establish, in accordance with guidelines established
by the superintendent of financial  services,  a  system  through  which

designated  providers  of services and the commissioner can identify the
status of a patient as a patient for whom the election does not apply.
(b)  The  commissioner  may  deny  a  payor  the  opportunity to remit
directly to the commissioner or the  commissioner's  designee  based  on
repeated  late payments, failure to remit correct amounts, or failure to
provide  adequate  verification  of  the  accuracy  of   payments.   The
percentage  allowance  for  any  such  payor  shall  be  the  percentage
determined in accordance with paragraph (b) of subdivision two  of  this
section.
(c)  The  commissioner  or  the  commissioner's  designee  shall  make
available to all designated providers of services a list of  the  payors
which  have  elected  pursuant  to  this  paragraph  to  remit  payments
directly.
5-a. (a) Payments by or on behalf of designated providers of  services
to the commissioner or the commissioner's designee of funds due from the
allowances  pursuant  to  subdivision two of this section or pursuant to
payment obligations incurred pursuant to  section  twenty-eight  hundred
seven-s  of this article or section twenty-eight hundred seven-t of this
article shall be made on a monthly basis, provided,  however,  that  for
reporting periods relating to payments for services provided or dates of
inpatient  discharge  or  contracted service obligations occurring on or
after January first, two  thousand  one,  the  commissioner  may  permit
certain  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-s and twenty-eight hundred  seven-t  of  this
article  are  not  expected  to  exceed  ten thousand dollars for annual
periods prior to January  first,  two  thousand  four,  and  twenty-five
thousand  dollars  for  annual  periods  on and after January first, two
thousand four. Payments due  by  designated  providers  of  services  on
account of payors in accordance with paragraph (b) of subdivision two of
this  section  shall  be  two percentage points less than the percentage
specified in such paragraph. The designated provider of  services  shall
retain    for    compensation   for   such   provider's   administrative
responsibilities the amount that represents the difference. Payments due
by designated providers of services on account of all other payors shall
be calculated on the basis of the  percentage  allowance  applicable  to
such  payor  pursuant to paragraphs (d), (e), (f) and (g) of subdivision
two of this section. Payments shall be due on or  before  the  thirtieth
day following the end of a calendar month to which an allowance applies.
(b)  Notwithstanding  any  inconsistent  provision of this section, as
shall be necessary to obtain federal financial participation in  medical
assistance  expenditures  in  accordance  with  title XIX of the federal
social security  act,  the  allowances  included  in  rates  of  payment
pursuant  to  this  section  on  behalf of patients eligible for medical
assistance pursuant to title  eleven  of  article  five  of  the  social
services  law  shall  be  withheld  from  medical assistance payments to
designated providers of services and paid to  pools  on  behalf  of  the
designated provider of services where a designated  provider of services
elects  such  withholding  in  such  time and manner as specified by the
commissioner, and in the event a designated provider  of  services  does
not  elect  such  withholding,  payments  by such designated provider of
services to a pool based on an allowance received for medical assistance
patients shall be due within five days of receipt of such  funds.  Funds
withheld  by  a  payor  and  paid  to  a  pool on behalf of a designated
provider of services shall be considered  received  by  such  designated

provider of services and paid to the pool by such designated provider of
services for all purposes.
6.  (a)  If  a payment made by a designated provider of services for a
month to which an allowance applies is less than seventy percent of  the
amount  due  or  which  the  commissioner  estimates  is  due,  based on
available financial and statistical data, the commissioner  may  collect
the deficiency pursuant to paragraph (c) of this subdivision.
(b) If a payment made by a designated provider of services for a month
to  which an allowance applies is less than ninety percent of the amount
due or which the commissioner  estimates  is  due,  based  on  available
financial  and  statistical  data,  and  at  least two previous payments
within the preceding six months were less than  ninety  percent  of  the
amount  due, based on similar evidence, the commissioner may collect the
deficiency pursuant to paragraph (c) of this subdivision.
(c) Upon receipt of notification from the commissioner of a designated
provider of services' deficiency under this section, the comptroller  or
a  fiscal  intermediary designated by the director of the budget, or the
commissioner of the office of temporary and disability assistance, or  a
corporation   organized   and   operating  in  accordance  with  article
forty-three of the  insurance  law,  or  an  organization  operating  in
accordance  with  article forty-four of this chapter shall withhold from
the amount of any payment to be made by the state  or  by  such  article
forty-three  corporation  or  article  forty-four  organization  to  the
designated provider of services the amount of the deficiency  determined
under  paragraph (a), (b) or (e) of this subdivision or paragraph (d) of
subdivision eight-a of this section. Upon withholding such  amount,  the
comptroller  or a designated fiscal intermediary, or the commissioner of
the office  of  temporary  and  disability  assistance,  or  corporation
organized  and  operating  in accordance with article forty-three of the
insurance law or  organization  operating  in  accordance  with  article
forty-four   of   this  chapter  shall  pay  the  commissioner,  or  the
commissioner's  designee,  such  amount  withheld  on  behalf   of   the
designated  provider  of services. Such amount shall represent, in whole
or in part, the amounts due from the designated provider of services.
(d) The commissioner shall provide a designated provider  of  services
with  notice  of any estimate of an amount due for an allowance pursuant
to paragraph (a)  or  (b)  of  this  subdivision  or  paragraph  (d)  of
subdivision  eight-a  of  this  section  at  least  three  days prior to
collection of such amount by the commissioner. Such notice shall contain
the financial basis for the commissioner's estimate.
(e) In the event a designated  provider  of  services  objects  to  an
estimate  by  the  commissioner pursuant to paragraph (a) or (b) of this
subdivision or paragraph (d) of subdivision eight-a of this  section  of
the  amount  due  for an allowance, the designated provider of services,
within sixty days of notice of an  amount  due,  may  request  a  public
hearing.  If  a hearing is requested, the commissioner shall provide the
designated provider of services  an  opportunity  to  be  heard  and  to
present  evidence  bearing  on  the  amount  due for an allowance within
thirty days after collection of an amount due or receipt  of  a  request
for  a  hearing,  whichever is later. An administrative hearing is not a
prerequisite to seeking judicial relief.
(f) The commissioner may direct that a hearing  be  held  without  any
request by a designated provider of services.
(g)  In  the  event  a  hearing  pursuant  to  paragraph  (e)  of this
subdivision is not requested and the delinquent amounts in question have
been referred for recoupment or offset pursuant to paragraph (c) of this
subdivision, or have been referred to the office of the attorney general
for collection, the amount of such delinquencies shall be  deemed  final

and   not   subject   to  further  revision  or  reconciliation  by  the
commissioner based  on  any  additional  reports  or  other  information
submitted  by  the  designated  provider of services, provided, however,
that such delinquencies shall not be referred for such recoupment or for
such  collection  based  on  estimated  amounts  unless the hospital has
received written notification of such delinquencies and has  been  given
no less than thirty days in which to submit delinquent reports.
7.  (a) (i) Every designated provider of services shall submit reports
of net patient service revenues received for or on  account  of  patient
services for each month which shall be in such form as may be prescribed
by  the  commissioner  to  accurately  disclose  information required to
implement this section. For periods on  and  after  January  first,  two
thousand  five,  reports  by  designated  providers of services shall be
submitted  electronically  in  a  form  as  may  be  required   by   the
commissioner;  provided, however, any designated provider of services is
not prohibited from submitting reports  electronically  on  a  voluntary
basis  prior  to such date, and provided further, however, that all such
electronic submissions submitted on and after July first,  two  thousand
twelve  shall  be verified with an electronic signature as prescribed by
the commissioner.
(ii) For periods on and after January first, two thousand nine,  every
designated  provider  of  services  shall  provide  the  commissioner or
commissioner's designee with its federal tax identification  number  and
such  identification number shall be used in connection with identifying
such providers for purposes pursuant  to  this  section,  including  the
posting  of such identification numbers on secure websites maintained by
the commissioner or the commissioner's designee in  furtherance  of  the
purposes  of this section. The commissioner shall include for periods on
and after January first, two thousand nine on such secure websites,  the
date such designated provider of services was first posted. In addition,
the  commissioner  shall,  as  a  part of a final resolution of an audit
conducted pursuant to subdivision eight-a of this section, waive payment
of interest and penalties otherwise applicable pursuant  to  subdivision
eight  of  this  section,  when the audit findings conclusively indicate
that the liability for such interest and penalties are the result  of  a
delay  in  the  listing  of a new designated provider of services on the
secure website maintained by the department.
(b) (i) Every third-party payor making an election in accordance  with
paragraph  (a)  of subdivision five of this section shall submit reports
of patient service expenditures  for  services  provided  by  designated
providers  of services for each month which shall be in such form as may
be prescribed by the commissioner  to  accurately  disclose  information
required   to  implement  this  section,  provided,  however,  that  for
reporting periods relating to payments for services provided or dates of
inpatient discharge or contracted service obligations  occurring  on  or
after  January  first,  two  thousand  one,  the commissioner may permit
certain third-party payors which have at least one  full  year  of  pool
payment  experience  to submit such reports 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-s  and twenty-eight hundred seven-t of this
article are not expected to  exceed  ten  thousand  dollars  for  annual
periods  prior  to  January  first,  two  thousand four, and twenty-five
thousand dollars for annual periods on  and  after  January  first,  two
thousand four.
(ii)  For  periods on and after July first, two thousand four, reports
submitted on a monthly basis by third-party payors  in  accordance  with
subparagraph (i) of this paragraph and reports submitted on a monthly or

annual  basis by payors acting in an administrative services capacity on
behalf of electing third-party payors in  accordance  with  subparagraph
(i)  of  this paragraph shall be made electronically in a form as may be
required  by the commissioner; provided, however, any third-party payor,
except payors acting in an administrative services capacity on behalf of
electing third-party payors, which,  on  or  after  January  first,  two
thousand  four,  elects to make payments directly to the commissioner or
the  commissioner's  designee  pursuant  to  subdivision  five  of  this
section,  shall be subject to this subparagraph only after one full year
of pool payment experience which results in reports being submitted on a
monthly basis, and provided further, however, that all  such  electronic
submissions submitted on and after July first, two thousand twelve shall
be   verified   with  an  electronic  signature  as  prescribed  by  the
commissioner. This subparagraph shall not be interpreted to prohibit any
third-party payor from submitting reports electronically on a  voluntary
basis.
(c)  If a designated provider of services or a third-party payor fails
to file reports required pursuant  to  paragraph  (a)  or  (b)  of  this
subdivision  and which are due on and after January first, two thousand,
within  sixty  days  of  the  date  such  reports  are  due  and   after
notification  of such reporting delinquency, the commissioner may assess
a civil penalty of up to ten thousand dollars  for  each  such  failure,
provided,  however,  that such civil penalty shall not be imposed if the
payor or provider demonstrates good cause for the failure to timely file
such reports. Such penalties shall  be  subject  to  the  provisions  of
section twelve-a of this chapter.
8.  (a)  If  a  payment  made  pursuant  to this section or to section
twenty-eight hundred seven-s or twenty-eight  hundred  seven-t  of  this
article  for  a  month to which an allowance applies is less than ninety
percent of the amount due or which the commissioner estimates, based  on
available  financial  and  statistical  data,  is  due  for  such month,
interest shall be due and payable to the commissioner  by  a  designated
provider  of  services,  or  by  a third-party payor, other than a state
governmental agency, that has elected to pay an allowance  directly,  on
the  difference  between the amount paid and the amount due or estimated
to be due from the day of the month the payment was due until  the  date
of  payment.  The rate of interest shall be twelve percent per annum or,
if greater, at the rate of interest set by the commissioner of  taxation
and  finance with respect to underpayments of tax pursuant to subsection
(e) of section one  thousand  ninety-six  of  the  tax  law  minus  four
percentage  points.  Interest  under this paragraph shall not be paid if
the amount thereof  is  less  than  one  dollar.  Interest  due  from  a
designated  provider  of  services,  if  not paid by the due date of the
following month's payment, may be collected by the commissioner pursuant
to paragraph (c) of subdivision six of this section in the  same  manner
as an allowance pursuant to subdivision two of this section.
(b)  If  a  payment  made for a month to which an allowance applies is
less than seventy percent of the amount due or  which  the  commissioner
estimates, based on available financial and statistical data, is due for
such  month, a penalty shall be due and payable to the commissioner by a
designated provider of services, or by a third-party payor, other than a
state  governmental  agency,  that  has  elected  to  pay  an  allowance
directly,  of five percent of the difference between the amount paid and
the amount due or estimated to be due for such month when the failure to
pay is for a duration of not more than one month after the due  date  of
the payment with an additional five percent for each additional month or
fraction  thereof  during  which  such  failure continues, not exceeding
twenty-five percent in the aggregate. A penalty due  from  a  designated

provider  of  services  may be collected by the commissioner pursuant to
paragraph (c) of subdivision six of this section in the same  manner  as
an allowance pursuant to subdivision two of this section.
(c)  Overpayment  by or on behalf of a designated provider of services
of a payment shall  be  applied  to  any  other  payment  due  from  the
designated  provider  of  services  pursuant  to this section, or, if no
payment is due, at the election of the designated provider  of  services
shall  be  applied  to  future  payments  or  refunded to the designated
provider of services.  Interest shall be paid on overpayments  from  the
date  of  overpayment  to  the  date  of crediting or refund at the rate
determined in accordance with paragraph (a) of this subdivision only  if
the  overpayment was made at the direction of the commissioner. Interest
under this paragraph shall not be paid if the  amount  thereof  is  less
than one dollar.
8-a.
(a) Payments and reports submitted or required to be submitted
to the commissioner or to the commissioner's designee pursuant  to  this
section  and  section  twenty-eight  hundred  seven-s of this article by
designated providers of services and by third-party  payors  which  have
elected  to  make  payments  directly  to  the  commissioner  or  to the
commissioner's designee in accordance with subdivision  five-a  of  this
section,  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   designated
providers of services or by 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
adjustment  or  reconciliation made by a designated provider of services
or by a third party payor  which  has  elected  to  make  such  payments
directly  to  the  commissioner  or the commissioner's designee, 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)  Designated  providers of services or third-party payors which, in
the course of an audit pursuant to this section or section  twenty-eight
hundred  seven-s  of this article, 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 the audited entity 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
designated  providers  of  services and third-party payors in accordance
with this section and  section  twenty-eight  hundred  seven-s  of  this
article  shall  include,  but not be limited to, on a monthly basis, the
source records generated by  supporting  information  systems,  detailed
claims  information,  detailed  patient  revenue information, capitation
arrangements, financial accounting records, relevant correspondence  and
such  other  records as may be required to prove compliance with, and to
support the reports submitted  in  accordance  with,  this  section  and
section twenty-eight hundred seven-s of this article.
(d)  If a designated provider of services or a third party payor fails
to produce data or documentation requested in furtherance  of  an  audit

pursuant  to  this  section  or pursuant to section twenty-eight hundred
seven-s of this article, for a month to which an allowance 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  patient  services  revenue  exemptions  specified
pursuant  to  this  section, or pursuant to section twenty-eight hundred
seven-s of this  article,  cannot  be  determined  from  such  available
financial  and statistical data, the amount due may be calculated on the
basis of the aggregate total of patient services  revenue  derived  from
such 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 pursuant to this article
to  a  designated  provider of services or a third party payor. Interest
and penalties shall be applied to such amounts due  in  accordance  with
the provisions of subdivision eight of this section.
(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 this
section 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  designated
providers  of  services, and with third-party payors, in regard to which
audit findings or prior settlements have  been  made  pursuant  to  this
section  or  section  twenty-eight  hundred  seven-s  of  this  article,
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 penalties and interest,
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  and  section
twenty-eight  hundred  seven-s  of  this  article, 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
providers and payors subsequent to such agreements.
9.  Funds  accumulated, including income from invested funds, from the
allowances specified in this section, and the  assessments  pursuant  to
subdivision  eighteen  of  section  twenty-eight hundred seven-c of this
article, and the assessments pursuant to paragraph  (c)  of  subdivision
nine  of section twenty-eight hundred seven-d of this article, plus such
funds as may  be  allocated  in  accordance  with  section  twenty-eight
hundred seven-s of this article, including interest and penalties, shall
be  deposited  by  the  commissioner  or  the commissioner's designee as
follows:
(a) funds shall be deposited and credited to a  special  revenue-other
fund  to  be established by the comptroller or to the health care reform
act (HCRA) resources fund established pursuant to section  ninety-two-dd

of  the  state  finance  law,  whichever is applicable. To the extent of
funds appropriated therefore, the commissioner shall  make  payments  to
general  hospitals  related  to  bad  debt  and charity care pursuant to
section  twenty-eight  hundred  seven-k  of this article. Funds shall be
deposited in the following amounts:
(i) fifty-seven  and  thirty-three-hundredths  percent  of  the  funds
accumulated  for the period January first, nineteen hundred ninety-seven
through December thirty-first, nineteen hundred ninety-seven,
(ii) fifty-seven and one-hundredths percent of the  funds  accumulated
for  the  period  January  first,  nineteen hundred ninety-eight through
December thirty-first, nineteen hundred ninety-eight,
(iii)  fifty-five  and  thirty-two-hundredths  percent  of  the  funds
accumulated  for  the period January first, nineteen hundred ninety-nine
through December thirty-first, nineteen hundred ninety-nine, and
(iv) seven hundred sixty-five million dollars annually  of  the  funds
accumulated for the periods January first, two thousand through December
thirty-first, two thousand twenty five, and
(v)  one hundred ninety-one million two hundred fifty thousand dollars
of the funds accumulated for the  period  January  first,  two  thousand
twenty-six through March thirty-first, two thousand twenty-six.
(b)  funds  shall  be  accumulated  in  a health care initiatives pool
established by the commissioner, for  distribution  in  accordance  with
section  twenty-eight  hundred seven-l of this article, in the following
amounts:
(i)  forty-two  and  sixty-seven-hundredths  percent  of   the   funds
accumulated  for the period January first, nineteen hundred ninety-seven
through December thirty-first, nineteen hundred ninety-seven,
(ii)  forty-two  and  ninety-nine-hundredths  percent  of  the   funds
accumulated  for the period January first, nineteen hundred ninety-eight
through December thirty-first, nineteen hundred ninety-eight,
(iii) forty-four  and  sixty-eight-hundredths  percent  of  the  funds
accumulated  for  the period January first, nineteen hundred ninety-nine
through December thirty-first, nineteen hundred ninety-nine, and
(iv) the remaining balance of the funds accumulated for each period on
and after January first, two thousand.
10. Notwithstanding any inconsistent provision of law or regulation to
the  contrary,  the  allowances  applicable   to   payments   by   state
governmental  agencies pursuant to subdivision two of this section shall
be reflected in the determination of  reimbursement  rates  pursuant  to
sections  twenty-eight hundred seven and twenty-eight hundred seven-c of
this article and fees for clinical laboratory services under the medical
assistance program.
11. Each exclusion from the allowances effective on or  after  January
first,  nineteen  hundred  ninety-seven  established  pursuant  to  this
section shall be  contingent  upon  either:  (a)  qualification  of  the
allowances  for  waiver  pursuant  to federal law and regulation; or (b)
consistent with federal law and regulation, not requiring  a  waiver  by
the  secretary of the department of health and human services related to
such exclusion; in order for the allowances under  this  section  to  be
qualified  as  a broad-based health care related tax for purposes of the
revenues received by the state pursuant to the allowances  not  reducing
the  amount  expended by the state as medical assistance for purposes of
federal financial participation.  The  commissioner  shall  collect  the
allowances  relying  on  such exclusions, pending any contrary action by
the secretary of the department of health and  human  services.  In  the
event  the  secretary  of  the  department  of health and human services
determines that the allowances do not  so  qualify  based  on  any  such
exclusion, then the exclusion shall be deemed to have been null and void

as of January first, nineteen hundred ninety-seven, and the commissioner
shall  collect  any retroactive amount due as a result, without interest
or penalty provided the designated provider of services  or  third-party
payor  that  has elected to pay directly pays the retroactive amount due
within ninety days of notice from the  commissioner  to  the  designated
provider  of  services  or  third-party  payor  that  has elected to pay
directly that an exclusion is null  and  void.  Interest  and  penalties
shall be measured from the due date of ninety days following notice from
the  commissioner  or  the  commissioner's  designee  to  the designated
provider of services or  third-party  payor  that  has  elected  to  pay
directly.
12.  Revenue from the allowances pursuant to this section shall not be
included in gross revenue  received  for  purposes  of  the  assessments
pursuant to subdivision eighteen of section twenty-eight hundred seven-c
of  this  article,  subject  to  the  provisions  of  paragraph  (e)  of
subdivision eighteen of section twenty-eight  hundred  seven-c  of  this
article,  and  shall  not  be  included  in  gross  revenue received for
purposes of the assessments pursuant  to  section  twenty-eight  hundred
seven-d of this article, subject to the provisions of subdivision twelve
of section twenty-eight hundred seven-d of this article.
* NB Expires December 31, 2026