SubPart 86-1 - Medical Facilities

Effective Date: 
Wednesday, January 30, 2019
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Secs. 2803, 2807, 2807-a, 2807-c, 2807-c(35), 2807-m, 2808-c, 3612; 3614; L. 1983, ch. 758, Sec. 7; L. 1993, ch. 731; L. 1996, ch. 639

Section 86-1.1 - Definition

Section 86-1.1 Definition.

As used in this Subpart, the term medical facility or facility shall mean all facilities covered by the terms general hospital or certified home health agency as defined in articles 28 and 36 of the Public Health Law, provided that such facility possesses a valid operating certificate or certificate of approval issued by the State Commissioner of Health and has been established, licensed or certified as required by law.
 

Doc Status: 
Complete

Section 86-1.2 - Financial and statistical data required

86-1.2 Financial and statistical data required.

(a) Each medical facility shall complete and file with the department and/or its agent annual financial and statistical report forms supplied by the department and/or its agent. Medical facilities certified for title XVIII (Medicare) shall use the same fiscal year for title XIX (Medicaid) and title B (children's bureau programs) as is used for title XVIII. All other medical facilities must report their operations on a calendar-year basis.

(b) Financial and statistical reports required by this Subpart shall be submitted to the department and/or its agent no later than 5 months following the close of the fiscal period. Extensions of time for filing reports may be granted by the commissioner upon application received prior to the due date of the report only in those circumstances where the medical facility establishes, by documentary evidence, that the reports cannot be filed by the due date for reasons beyond the control of the facility.

(c) In the event a medical facility fails to file the required financial and statistical reports on or before the due dates, or as the same may be extended pursuant to subdivisions (b) or (e) of this section, or fails to comply with the provisions of subdivision (k) of this section, the commissioner shall reduce the current rate paid by state governmental agencies by two percent for a period beginning on the first day of the calendar month following the original due date of the required reports and continuing until the last day of the calendar month in which the required reports are filed.

(d) In the event that any information or data which a facility has submitted to the department on required reports, budgets or appeals for rate revisions intended for use in establishing rates is inaccurate or incorrect, whether by reason of subsequent events or otherwise, such facility shall forthwith submit to the department a correction of such information or data which meets the same certification requirements as the document being corrected.

(e) If the financial and statistical reports required by this Subpart are determined by the department or its agent to be incomplete, inaccurate or incorrect, the facility will have 30 days from date of receipt of notification to provide the corrected or additional data. Failure to file the corrected or additional data within 30 days, or within such period as extended by the commissioner, will result in application of subdivision (c) of this section.

(f) Specific additional data related to the rate setting process may be requested by the commissioner. These data, which may include but are not limited to, those for use in a wage geographic differential survey, a peer grouping data survey, a medical supplies survey, a malpractice insurance survey, a graduate medical education survey and a quarterly utilization survey must be provided by the medical facility within 30 days from the date of receipt of notification to supply such information. The commissioner must supply to each facility, prior to the start of each rate period, a preliminary listing of the data that will be required. Failure to submit the additional data shall result in application of the provisions of subdivision (c) of this section, unless the medical facility can prove by documentary evidence that the data being requested is not available.

(g) General hospitals shall submit to the commissioner at least 120 days prior to the commencement of each revenue cap year, a schedule of anticipated capital-related inpatient expenses for the forthcoming year pursuant to the provisions of section 86-1.25 of this Subpart.

(h) General hospitals with exempt psychiatric units shall submit hospital data regarding patients in such units as required by the Office of Mental Health (see 14 NYCRR Part 580).

(i) Each medical facility shall file with the department a complete copy of the Department of the Treasury, Internal Revenue Service Form 990, for that facility. The Form 990 shall be submitted to the department no later than 30 days following the annual filing with the Internal Revenue Service. Failure to submit the Form 990 shall result in application of the provisions of subdivision (c) of this section.

(j) Generally accepted accounting principles. The completion of the financial and statistical report forms shall be in accordance with generally accepted accounting principles as applied to the medical facility, unless the reporting instructions authorize specific variation in such principles. (k) Accountant's certification. With regard to institutional cost reports filed for report years prior to 2010, the institutional cost report shall be certified by an independent licensed public accountant or an independent certified public accountant. The minimum standard for the term independent shall be the standard used by the State Board of Public Accountancy. (1) Certification by operator, officer or official. (1) The institutional cost report shall be certified by the operator of a proprietary medical facility, an officer of a voluntary medical facility, or the public official responsible for the operation of a public medical facility. (2) The form of the certification required in paragraph (1) of this subdivision shall be as prescribed in the annual fiscal and statistical report forms provided by the commissioner.

Effective Date: 
Wednesday, February 13, 2013
Doc Status: 
Complete

Section 86-1.3 - Uniform system of accounting and reporting

86-1.3 Uniform system of accounting and reporting. (a) Medical facilities shall maintain their records in accordance with:

(1) Accounting and reporting. Hospitals shall maintain their accounts and records in accordance with the Healthcare Financial Management Association's (HFMA)
Introduction to Hospital Accounting, 5th edition, written by Michael Nowicki and published by the Health Administration Press. Such accounts and records are to be maintained on an accrual basis except where an alternate system is mandated by law. Hospitals shall also submit to the department or its authorized agent a certified Institutional Cost Report within 5 months after the close of each hospital's fiscal year. The data shall be reported as follows:

(i) In accordance with the policies and instructions in the following:

(a)
The Financial Management of Hospitals and Healthcare Organizations,4th edition, written by Michael Nowicki and published by the Health Administration Press.

(b) HFMA, Glossary of Terms.

(c)
Health Care Entities – American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guidepublished by the AICPA; and

(d) Medicare Provider Reimbursement Manual, Part 1.

(ii) All government subsidies shall be reported on the income statement of the Institutional Cost Report on the line provided and such amounts shall be itemized on the notes to financial statements by payor and purpose. Such grants shall not be used to reduce allowances as indicated in the American Institute of Certified Public Accountants manual,
Audit and Accounting Guide.

(iii) Investments, other than donations, shall be reported on the balance sheet of the Institutional Cost Report at cost. The notes to the financial statements shall describe the assets and indicate the quoted market value and cost for each category of investment.

(iv) Fixed assets, other than donations, shall be reported on the balance sheet of the Institutional Cost Report at cost.

(v) Discounts, allowances and bad debts shall be reported and broken out on the Institutional Cost Report by hospital service.

(vi) Copies of HFMA's
Introduction to Hospital Accountingand
The Financial Management of Hospitals and Healthcare Organizationsare available from the Health Administration Press, American College of Healthcare Executives, One North Franklin, Suite 1700, Chicago, IL 60606-3529 and at

http://www.ache.org/PUBS/redesign/productcatalog.cfm?pc=WWW1-2060
and

http://www.ache.org/PUBS/redesign/productcatalog.cfm?pc=WWW1-2087
, respectively. Copies of HFMA's Glossary of Terms are available from HFMA, 2 Westbrook Corporate Center, Suite 700, Westchester, IL 60154 and at

http://www.hfma.org/site/store/hfmaglossaryorderform.cfm
. Copies of
Health Care Entities – AICPA Audit and Accounting Guideare available from the AICPA, CPA2Biz Corporate Headquarters, 100 Broadway, 6th Floor, New York, NY 10005 and at http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/AuditAttest/Industryspec.... In addition, a copy of each publication is available for inspection at the offices of the Bureau of Primary and Acute Care Reimbursement, New York State Department of Health, Corning Tower, Empire State Plaza, Albany, NY 12237; and
(2) Article 8 of Subchapter A of Chapter V of this Title.
(b) Failure of a medical facility to file the reports required pursuant to this section will subject the medical facility to a rate reduction as set forth in section 86-1.2(c) of this Subpart.
(c) For purposes of rate setting, medical facilities shall submit to the department, or its authorized agent, a certified Institutional Cost Report in accordance with the policies and instructions as set forth in subdivision (a) of this section.
(d) The Institutional Cost Report and supplementary schedule form as adopted by the department shall be used to report financial and statistical data in order to establish rates of payment for title 19 providers.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.4 - Audits

86-1.4 Audits.

(a) All fiscal and statistical records and reports shall be subject to audit. All underlying books, records and documentation which formed the basis for the fiscal and statistical reports, filed by the medical facility with the department, shall he kept and maintained by the facility for a period of time not less than six years from the date of filing or the date upon which the fiscal and statistical records were to be filed, whichever is the later date. In this respect, any rate of payment certified or established by the State Commissioner of Health prior to audit shall be construed to represent a provisional rate until such audit is performed and completed, at which time such rate or adjusted rate will be construed to represent the audited rate.

(b) Subsequent to the filing of fiscal and statistical reports, field audits may be conducted of the records of medical facilities in a time, manner and place to be determined by the State Department of Health. Alternatively or in addition the Department may, in its sole discretion, conduct desk audits of such fiscal and statistical reports.

(c) The required fiscal and statistical reports shall be subject to audit for a period of six years from the date of their filing with the department or from the date when due, whichever is later. This limitation shall not apply to situations in which fraud may be involved, or where the provider or an agent thereof prevents or obstructs the commissioner from performing an audit pursuant to this section.

(d) Upon completion of the audit, the medical facility shall be afforded a closing conference. The medical facility may appear in person or by any one authorized in writing to act on behalf of the medical facility. The medical facility shall be afforded an opportunity at such conference to produce additional documentation in support of any modifications requested in the audit.

(e) The medical facility shall be provided with the audit report and the rate computation sheet per audit. The audit report shall be final unless within 30 days of receipt of the audit report, the medical facility initiates a bureau review of such final audit report by notifying the Division of Health Care financing by registered or certified mail, detailing the specific items of the audit report with which the provider disagrees, and such other material as the provider wishes to submit in its behalf, and forwarding all material documentation in support of the medical facility's position.

(f) The medical facility shall be notified in writing of the determination of the controverted items of the final audit report, including a statement of the reasons for such adjustments and the appropriate citation to applicable law, regulation or policy. The audit findings as adjusted in accordance with the determination of the bureau review shall be final, except that the medical facility may, within 30 days of receipt of the determination of the bureau review, initiate a hearing to refute those items of the audit report adverse to the interests of the medical facility presenting a factual issue by serving on the commissioner, by certified or registered mail, a notice containing a statement of the legal authority and jurisdiction under which the hearing should be held, a reference to the particular sections of the statutes and rules involved and a statement of the controverted items of the audit report and bureau determination, together with copies of any documentation relied on by the medical facility in support of its position.

(1) Upon receipt of such notice the commissioner shall:

(i) designate a hearing officer to hear and recommend;

(ii) establish a time and place for such hearing;

(iii) notify the medical facility of the time and place of such hearing at least 15 days prior thereto; and

(iv) include in a notice of hearing those issues of the audit report which are controverted in the notice served on the commissioner by the medical facility.

(2) The issues and documentation presented by the medical facility at such hearing shall be limited to the factual issues and documentation presented at the bureau review.

(3) The audit report shall be presumptive evidence of its content. The burden of proof at any such hearing shall be upon the medical facility to prove by substantial evidence that the items therein contained are incorrect.

(4) The hearing shall be conducted in conformity with section 12-a of the Public Health Law and the State Administrative Procedure Act. (5) At the conclusion of the hearing the medical facility may submit memoranda on any legal issues which it deems relevant to the proceeding. Such memoranda shall become part of the official record of the hearing.

(g) Rate revisions resulting from the procedure set forth in this section shall be made retroactive to the period or periods during which the rates based on the periods audited were established. Any resulting overpayment or underpayment shall be satisfied by either retroactive adjustment of the provisional rate paid, based on the period audited, or prospective adjustment of the current certified rate at the discretion of the State Commissioner of Health.

(h) Notwithstanding the provisions of this section, the commissioner may promulgate rate revisions based on audits completed by another State agency. Unless otherwise indicated, such audits shall not be considered final and shall not preclude conduct of a complete audit by the State Department of Health or its agent. (i) (1) Effective for institutional cost reports filed for report periods ending on and after December 31, 2010, the Department shall establish a fee schedule for the purpose of funding audit activities authorized pursuant to this section. Such fee schedule shall be published on the New York State Department of Health website at: http://www.health.state.ny.us. The amount of such fees shall be proportional to the amount of the total costs reported by each facility, provided, however, that minimum and maximum fee levels may be established. (2) Additional fee obligations shall be established for facilities filing more than two institutional costs reports for a reporting period. The Department may, upon written application submitted prior to the submission of such additional institutional cost reports, waive or reduce such additional fees based on a showing of financial hardship or a showing that the additional submission is necessitated by Department error or other factors beyond the facility’s control. Such a waiver must be in writing. (3) Fees shall be submitted at the time of the submission of the institutional costs reports. A failure to pay such fees may be deemed by the Department as constituting the non-filing of the institutional cost report and subject the facility to the rate reduction authorized pursuant to section 86-1.2(c) of this Subpart. Failure to pay the additional fee associated with the filing of additional institutional cost reports as described in paragraph (2) of this subdivision shall result in the non-utilization of such revised cost reports by the Department. Delinquent fees may be collected by the Department in accordance with the provisions of paragraph (h) of subdivision 18 of section 2807-c of the Public Health law.

Effective Date: 
Wednesday, February 13, 2013
Doc Status: 
Complete

Section 86-1.5 - Effective period of reimbursement rates

86-1.5 Effective period of reimbursement rates.

Certification of reimbursement rates of payment shall be for a 12-month calendar year period or for such other period as may be prescribed by the Commissioner of Health.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.6 - Allowable costs

86-1.6 Allowable costs.

(a) To be considered as allowable in determining reimbursement rates, costs must be properly chargeable to necessary patient care. Except as otherwise provided in this Part, or in accordance with specific determination by the commissioner, allowable costs shall be determined by the application of the principles of reimbursement developed for determining payments under the title XVIII (Medicare) program.

(b) Allowable costs may not include costs for services that have not been approved by the commissioner.

(c) Allowable cost shall include a monetary value assigned to services provided by religious orders and for services rendered by an owner and operator of a facility.

(d) Allowable costs may not include amounts in excess of reasonable or maximum title XVIII (Medicare) costs or in excess of customary charges to the general public. This provision shall not apply to services furnished by public providers free of charge or at a nominal fee.

(e) Allowable costs shall not include expenses or portions of expenses reported by individual facilities which are determined by the commissioner not to be reasonably related to the efficient production of service because of either the nature or amount of the particular item.

(f) Any general ceilings applied by the commissioner, as to allowable costs in the computation of reimbursement rates, shall be published in a hospital memorandum or other appropriate manner. (g) Reserved

(h) Allowable costs shall not include costs which principally afford diversion, entertainment or amusement to their owners, operators or employees.

(i) Allowable costs shall not include any interest charged or penalty imposed by governmental agencies or courts, and the costs of policies obtained solely to insure against the imposition of such a penalty.

(j) Allowable costs shall not include the direct or indirect costs of advertising, public relations and promotion except in those instances where the advertising is specifically related to the operation of the facility and not for the purpose of attracting patients.

(k) Allowable costs shall not include costs of contributions or other payments to political parties, candidates or organizations.

(l) Allowable costs shall include only that portion of the dues paid to any professional association which has been demonstrated, to the satisfaction of the commissioner, to be allocable to expenditures other than for public relations, advertising and political contributions. Any such costs shall also be subject to any cost ceilings that may be promulgated by the commissioner pursuant to subdivision (f) of this section.

(m) Reserved

(n) Allowable costs shall not include any element of cost, as determined by the commissioner, to have been created by the sale of a medical facility.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.7 - Recoveries of expense

86-1.7 Recoveries of expense.

Operating costs shall be reduced by the cost of services and activities which are not properly chargeable to patient care. In the event that the State Commissioner of Health determines that it is not practical to establish the costs of such services and activities, the income derived therefrom may be substituted for costs of these services and activities. Examples of activities and services covered by this provision include:

(a) drugs and supplies sold for use outside the medical facility;

(b) telephone and telegraph services for which a charge is made;

(c) discount on purchases;

(d) living quarters rented to employees;

(e) employee cafeterias;

(f) meals provided to special nurses or patients' guests;

(g) operation of parking facilities for community convenience;

(h) lease of office and other space of concessionaires providing services not related to medical service;

(i) tuitions and other payments for educational service, room and board and other services not directly related to medical service.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.8 - Research and educational activities

86-1.8 Research and educational activities.

(a) All research costs shall be excluded from allowable costs in computing reimbursement rates. Research includes those studies and projects which have as their purpose the enlargement of general knowledge and understandings, are experimental in nature and hold no prospect of immediate benefit to the hospital or its patients.

(b) The costs of educational activities less tuition and supporting grants shall be included in the calculation of the basic rate, provided such activities are directly related to patient care services.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.9 - Compensation of operators and relatives of operators

86-1.9 Compensation of operators and relatives of operators.

(a) Reasonable compensation for operators or relatives of operators for services actually performed and required to be performed shall be considered as an allowable cost. The amount to be allowed shall be equal to the amount normally required to be paid for the same service provided by a nonrelated employee, as determined by the State Commissioner of Health. Compensation shall not be included in the rate computation for any services which the operator or relative of the operator is not authorized to perform under New York State law and regulation.

(b) Any amount reported as compensation for services rendered by an operator or relative of an operator shall not be allowed in excess of the maximum allowance for full time services in carrying out his primary function.

(c) For purposes of subdivision (a) of this section, in determining a reasonable level of compensation for operators or relatives of operators, the commissioner may consider the quality of care provided to patients by the facility during the year in question.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.10 - Related organizations

86-1.10 Related organizations.

(a) A related organization shall be defined as any entity which the medical facility is in control of or is controlled by, either directly or indirectly, or an organization or institution whose actions or policies the facility has the power, directly or indirectly, to significantly influence or direct, or a special purpose organization, or where an association of material interest exists in an entity which supplies goods and/or services to the medical facility, or any entity which is controlled directly or indirectly by the immediate family of the operator. Immediate family shall include each parent, child, spouse, brother, sister, first cousin, aunt and uncle, whether such relationship arises by reason of birth, marriage or adoption. A special purpose organization shall be defined as an organization which is established to conduct certain of the facility's patient-care-related or non-patient-care-related activities. The special purpose organization shall be considered to be related if:

(1) the facility controls the special purpose organization through contracts or other legal documents that allow direct authority over the organization's activities, management and policies; or

(2) the facility is, for all practical purposes, the sole beneficiary of the special organization's activities. The facility shall be considered the special purpose organization's sole beneficiary if one or more of the three following circumstances exist:

(i) a special purpose organization has solicited funds in the name of and with the expressed or implied approval of the facility, and substantially all the funds solicited by the organization were intended by the contributor or were otherwise required to be transferred to the facility or used at its discretion or direction;

(ii) the facility has transferred some of its resources to a special purpose organization, substantially all of whose resources are held for the benefit of the facility; or

(iii) the facility has assigned certain of its functions (such as the operation of a dormitory) to a special purpose organization that is operating primarily for the benefit of the facility.

(b) The costs of goods and/or services furnished to a medical facility by a related organization are includable in the computation of the basic rate at the lower of the cost to the related organization or the market price of comparable goods and/or services available in the medical facility's region within the course of normal business operations.

(c) If the medical facility has incurred any costs in connection with a related organization, the final payment rate shall include the costs of such goods and/or services.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.11 - Termination of service

86-1.11 Termination of service. The Division of Health Care Financing in the department shall be notified immediately of the deletion of any previously offered service or of the withholding of services from patients paid for by government agencies. Such notification shall include a statement indicating the date of the deletion or the withholding of such service and the cost impact on the medical facility of such action. Any overpayments by reason of such deletion of previously offered service shall bear interest and be subject to penalties both in the manner provided in section 86-1.4(f) of this Subpart.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.12 - Federal financial participation

86-1.12 Federal financial participation. The rates of payment made for inpatient hospital services rendered to title XIX recipients established in accordance with the methodology contained in this Subpart shall be contingent upon Federal financial participation (FFP) and approval.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.13 - Certified home health agency rates

86-1.13 Certified home health agency rates

(a) Effective January 1, 1988 reported costs and statistics for a facility's annual fiscal period ending two years prior to the rate period, trended pursuant to section 86-1.58 of this Subpart, shall be used in computing Medicaid rates for care provided by community-based home health agencies. No amount may be included in a rate that is in excess of the agency charges or in excess of 110 percent of the weighted average cost of all community-based agencies in their group. For hospital-based home health agencies, no amount may be included in a rate that is in excess of 110 percent of the weighted average cost of community-based agencies in their area.

(b) The Commissioner shall establish separate payment rates for home care nursing services provided by Certified Home Health Agencies (CHHAs) and Long Term Home Health Care Programs (LTHHCPs) to patients diagnosed with Acquired Immune Deficiency Syndrome (AIDS) as defined by ICD-9 codes 042, 043 and 044. Such rates shall be regional service prices increased by a case mix adjustment factor to reflect the additional resource utilization needed in home care treatment of AIDS patients in excess of resource utilization needed for an average mix of home care patients.

(1) Regional nursing service prices shall be computed based upon average nursing costs per visit calculated by aggregating the base year allowable costs and statistics reported by community based certified home health agencies located within each of four regions, provided however, that effective with rate periods commencing January 1, 1990, the calculation of regional nursing service prices pursuant to this paragraph shall also incorporate base year allowable costs and statistics for LTHHCPs. The regions shall be New York City Region which is comprised of New York, Kings, Queens, Richmond, Bronx, Westchester, Rockland and Putnam Counties; Nassau-Suffolk Region which is comprised of Nassau and Suffolk Counties; Rural Region which is comprised of all Non-Standard Metropolitan Statistical Area counties; All other Metropolitan Region which is comprised of all counties not included in the other regions.

(2) For agencies in the All Other Metropolitan Region group only, the base price will be adjusted by Wage Index Factors. Wage Index Factors shall be calculated for and applied to each of the Standard Metropolitan Statistical Areas (SMSA) within the All Other Metropolitan Region. The SMSA's are:

(i) Albany-Schenectady-Troy;

(ii) Syracuse;

(iii) Binghamton;

(iv) Buffalo;

(v) Elmira;

(vi) Glens Falls;

(vii) Niagara Falls;

(viii) Orange County

(ix) Poughkeepsie;

(x) Rochester;

(xi) Utica-Rome;

The Wage Index Factor shall be determined by weighting the Registered Nurse, Licensed Practical Nurse and Nurse's Aide salary categories based upon the proportion of skilled and Aide visits. The labor portion of the base price shall be multiplied by the respective wage index factor for each of the eleven SMSA's in the All Other Metropolitan Region group.

(3) The base regional service prices computed in accordance with this subdivision shall be increased by a trend factor developed in accordance with section 86-1.58 of this Subpart.

(4) The trended regional nursing service prices shall be increased by an AIDS case mix adjustment factor of 1.2988 to arrive at regional nursing service rates for home care services provided by CHHAs and LTHHCPs to patient diagnosed with AIDS.

(5) Adjustments to regional nursing service prices established by this subdivision shall be limited to annual adjustments made pursuant to paragraphs (1) and (3) of subdivision (b) of this section.

(c) The department shall establish a cap on reimbursable base year administrative and general costs equal to 30% of total reimbursable base year operational costs of a provider of services, excluding a provider of services reimbursed on an initial budget basis, and a new provider, excluding changes in ownership or changes in name, who begins operations in the year prior to the year which is used as a base year in determining rates of payment. The cap on administrative and general costs shall be applied after the application of the weighted average cost of all community-based agencies in their group or area, described in this section.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.14 - Allowance for certified home health agencies providing a disproportionate share of bad debt and charity care

86-1.14 Allowance for certified home health agencies providing a disproportionate share of bad debt and charity care.

(a) Basic rates of payment by governmental agencies for voluntary non-profit, private proprietary and publicly sponsored non-hospital based certified home health agencies which can demonstrate losses as a result of providing a disproportionate share of bad debt and charity care, shall include a bad debt and charity care allowance.

(b) The provisions of this section shall apply to rates of payment during the period July 1, 1990 through December 31, 1990, and for each calendar year period commencing on January first thereafter. The provisions of this section shall be effective if, and as long as, federal financial participation is available for expenditures made for the allowance for beneficiaries eligible for medical assistance under Title XIX of the Federal Social Security Act.

(c) Eligibility shall be limited to voluntary non-profit, private propriety and publicly sponsored non-hospital based certified home health agencies which meet the following criteria:

(1) the facility must ensure the availability of patient service 24 hours a day, 7 days a week as specified in section 763.3(d) of this Title;

(2) the facility must demonstrate compliance with minimum charity care service requirements specified in section 763.11(a)(11) of this Title;

(3) the facility must receive a cost-based Medicaid reimbursement rate pursuant to section 86-1.46 of this Title;

(4) the facility must be able to demonstrate upon request, that it has made reasonable efforts to maintain financial support from community and public funding sources;

(5) the facility must be able to demonstrate upon request, that it has made reasonable efforts to collect payments for services from third- party insurance payors, governmental payors and self-paying patients; and

(6) the facility must have no petition for bankruptcy filed under either Chapter 7 or Chapter 11 of Title 11 of the U.S. Code. The commissioner may waive this criteria if the facility demonstrates that it is financially viable or a potentially financially viable organization with a comprehensive plan to maintain fiscal integrity.

(d) An annual aggregate amount set forth in statute (see Public Health Law section 3614(5)) shall be allocated and distributed between public and non-public facilities. Publicly sponsored facilities shall receive an annual allocation of no more than thirty-five percent of total available funds. The commissioner may adjust the apportionment of funds to be distributed between public and non-public facilities. The commissioner shall consider, but not be limited to, the following factors in establishing the annual apportionment of funds to publicly sponsored facilities:

(1) the ratio of public to non-public base year period bad debt and charity care provided by eligible facilities as defined in subdivision (e)(2) of this section; and

(2) the differences between public and non-public facilities in the total allowable costs for delivering services.

(e) Allowances shall be established on a prospective basis and shall be computed on the basis of allowable fiscal and statistical data submitted by each facility for the base reporting period for the rate year for which allowances are being set. The bad debt and charity care allowance shall be paid as an addition to eligible nursing rates of payment. The amount to be paid will be calculated by dividing each eligible facility's bad debt and charity care loss by base year Medicaid nursing visits.

(1) Eligible losses will be calculated by applying a facility's Medicaid rate of payment for the rate period for which the allowance is being determined, to identified base year eligible visits or units of service.

(2) An eligible visit shall be defined as the unit of service upon which Title XIX payment is based provided, however, to an individual who after a reasonable period of time appears to be unable to pay all or a portion of the payment due for the service, except for those portions of the payment due which are covered by a government agency, insurer or third- party payor, including a payment made directly to the certified home health agency and indemnity or similar payment.

(3) All payments received in the base year directly for eligible visits and government and entitlement revenues obtained for the purpose of subsidizing the certified home health agency's general operating expenses shall be offset against eligible costs to arrive at an eligible loss under this section. For publicly sponsored facilities, the department shall offset all base year Article 6 Local Assistance revenues associated with home health care operations.

(4) An annual amount of loss coverage will be calculated by applying eligible losses against the following nominal loss coverage formula:
The nominal loss coverage percentages may be increased to not more than one hundred percent for non-public or publicly sponsored non-hospital based certified home health agencies, if the sum of the nominal payments for all eligible non-public or publicly sponsored facilities is less than the amounts allocated for either group.

(5) Separate coverage ratios shall be established for non-public and publicly sponsored non-hospital based certified home health agencies in order to make the allocation described in subdivision (d) of this section. These coverage ratios will consist of the aggregate nominal losses for non-public and publicly sponsored non-hospital based certified home health agencies divided into non-public and publicly sponsored disproportionate share allocations, as appropriate. These coverage ratios shall be applied to each non-public or publicly sponsored non-hospital based certified home health agency's annual amount of bad debt and charity care loss coverage to determine the level of bad debt and charity care losses to be incorporated into each facility's Medicaid rate of payment.

(6) The department may make periodic prospective adjustments to an eligible facility's Medicaid payment to ensure that each facility receives the full amount of the allowance for which it is eligible. In no instance shall a facility receive an allowance which exceeds the maximum amount for which it is eligible under this section. In no event shall a facility receive an allowance in an amount exceeding the facility's need for financing losses associated with the delivery of bad debt and charity care.

(f)(1) Eligible facilities shall submit to the department a supplement to the cost report used for Title XIX (Medicaid) reimbursement. This supplement shall be provided by the department and must be returned to the department within 45 days from the date it is received by facilities for the 1990 and 1991 rate years. Thereafter it shall be submitted to the department with the cost report used for purposes of Title XIX reimbursement. The supplement shall include but not be limited to data related to the number of eligible visits or units of service, the costs of eligible services, patient and third-party revenues associated with the eligible services, government and entitlement revenues and Article 6 Local Assistance funding associated with charity care.

(2) Eligible facilities shall maintain statistical and financial reporting systems which permit the collection and reporting of actual visits and revenues associated with the provision of bad debt and charity care services to their patient population. All reported data will be subject to audit. The allowance may be revised based upon audit findings.

(3) Facilities shall provide assurances that they will make and shall document upon request, the reasonable efforts made to maintain financial support from community and public funding sources and to collect payments from third-party payors, governmental payors and self-pay patients.

(4) The commissioner may reduce a current allowance if it is determined that actions or decisions by a facility's management have caused a significant reduction for the rate period in the delivery of home care services to bad debt and charity care patients.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.15 - Definitions

86-1.15 Definitions. As used in this Subpart, the following definitions shall apply:

(a)
Diagnosis related groups (DRGs)shall mean the All-Patient-Refined (APR) classification system which utilizes diagnostic related groups with assigned weights that incorporate differing levels of severity of a patient's condition and the associated risk of mortality, and reflects such factors as the patient's medical diagnosis, severity level, sex, age, and procedures performed.

(b)
DRG case-based payment per dischargeshall mean the payment to be received by a hospital for all inpatient services, except for physician services, rendered to each patient based on the DRG to which that patient has been assigned, as determined by multiplying the statewide base price by the applicable service intensity weight (SIW) and facility-specific wage equalization factor (WEF) and as further adjusted for teaching hospitals by the inclusion of reimbursement for direct and indirect graduate medical education (GME) costs and for all hospitals, the inclusion of non-comparable costs.

(c)
Service intensity weights (SlWs)are the cost weights established such that the SIW for any given DRG indicates the relative cost of the average cost of the patient in the DRG as compared to the average cost of all patients in all DRGs. Weights are developed using cost data from Medicaid fee-for-service, Medicaid managed care and commercial payors as reported to the Statewide Planning and Research Cooperative System (SPARCS).

(d)
Case mix index (CMI)shall mean the relative costliness of a hospital's case mix relative to the case mix of all other hospitals as reflected in the weighted aggregate SIW for the hospital.

(e)
Reimbursable operating costsshall mean reported operating costs which relate to the cost of providing inpatient hospital services to Medicaid patients, adjusted for inflation between the base period used to determine the statewide base price and the rate period in accordance with trend factors determined pursuant to the applicable provisions of section 2807-c(10) of the Public Health Law, but excluding the following costs:

(1) ALC costs;

(2) Exempt unit costs;

(3) Transfer costs; and

(4) High-cost outlier costs.

(f)
Graduate medical education (GME).(1)
Direct GME costsshall mean the reimbursable salaries, fringe benefits, non-salary costs and allocated overhead for residents, fellows, and supervising physicians trended to the rate year by the applicable provisions of section 2807-c(10) of the Public Health Law.

(2)
Indirect GME costsshall mean an estimate of the costs associated with additional ancillary intensiveness of medical care, more aggressive treatment regimens, and increased availability of state-of-the-art testing technologies resulting from the training of residents and fellows.

(g)
High-cost outlier costsfor payment purposes shall mean 100 percent of the hospital's charges converted to cost, using the hospital's most recent ratio of cost-to-charges that exceed the DRG specific high-cost thresholds calculated pursuant to section 86-1.21 of this Subpart.

(h)
Alternate level of care (ALC) servicesshall mean those services provided by a hospital to a patient for whom it has been determined that inpatient hospital services are not medically necessary, but that post-hospital extended care services are medically necessary, consistent with utilization review standards, and are being provided by the hospital and are not otherwise available.

(i)
Exempt hospitals and unitsshall mean those hospitals and units that are paid per diem rates of payment pursuant to the provisions of section 86-1.23 of this Subpart, rather than receiving per discharge case-based rates of payment.

(j)
The wage equalization factor (WEF)shall mean the mechanism to equalize hospital salary and fringe benefit costs to account for the differences in the price of labor among hospitals and groups of hospitals.

(k)
Statewide Base Priceshall mean the numeric value calculated pursuant to section 86-1.16 of this Subpart which shall be used to calculate DRG case-based payments per discharge as defined in subdivision (b) of this section.

(l)
Non-comparable adjustmentsshall mean those base year costs that are passed through the statewide base price calculation and applied to the case-based rate of payment as an add-on payment. The following shall be considered non-comparable adjustments:

(1) Medicaid costs associated with ambulance services operated by a facility and reported as inpatient costs in the institutional cost report; and

(2) Medicaid costs associated with hospital-based physicians at hospitals designated under the Medicare program as meeting the criteria set forth in section 1861(b)(7) of the federal Social Security Act; and

(3) Medicaid costs associated with schools of nursing operated by the facility and reported as inpatient costs in the Institutional Cost Report.

(m)
Transfers.For purposes of transfer per diem payments, a transfer patient shall mean a patient who is not discharged as defined in this section, is not transferred among two or more divisions of merged or consolidated facilities, is not assigned to a DRG specifically identified as a DRG for transferred patients only, and meets one of the following conditions:

(1) is transferred from an acute care facility reimbursed under the DRG case-based payment system to another acute care facility reimbursed under this system; or

(2) is transferred to an out-of-state acute care facility; or

(3) is a neonate who is being transferred to an exempt hospital for neonatal services.

(n)
Discharges,

as used in this Subpart, shall mean those inpatients whose admission to the facility occurred on or after December 1, 2009, and:

(1) the patient is released from the facility to a nonacute care setting;

(2) the patient dies in the facility; or

(3) the patient is transferred to a facility or unit that is exempt from the case-based payment system, except when the patient is a newborn transferred to an exempt hospital for neonatal services and thus classified as a transfer patient pursuant to this section; or

(4) the patient is a neonate being released from a hospital providing neonatal specialty services back to the community hospital of birth for weight gain.

(o)
Arithmetic Inlier Length of Stay (ALOS)shall mean the arithmetic average of the number of days a patient is in the hospital per admission as calculated by counting the number of days from and including the day of admission up to, but not including the day of discharge. The ALOS shall be calculated for each DRG on a statewide basis.

(p)
Hospital, as used in this Subpart, shall mean "general hospital" as defined in section 2801(10) of the Public Health Law.

(q)
Charge convertershall mean the ratio of cost to charges using total inpatient costs and total inpatient charges as reported by the hospital in its annual institutional cost reports submitted to the department.

(r)
IPROshall mean the Island Peer Review Organization, Inc., a New York not-for-profit corporation providing health related services.

(s)
Medicaid, for the purposes of this subpart, shall mean Medicaid Fee-for-Service and Medicaid Managed Care for the period beginning October 1, 2010.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.16 - Statewide base price

86-1.16 Statewide base price.

(a) For periods on and after December 1, 2009, a statewide base price per discharge shall be established based on targeted statewide Medicaid inpatient hospital expenditures and case-mix and wage neutral reimbursable Medicaid acute operating costs derived from the base period identified in subdivision (b) of this section, and as adjusted for inflation between the base period and the rate period in accordance with trend factors determined pursuant to applicable provisions of section 2807-c(10) of the Public Health Law, but excluding costs related to graduate medical education, exempt units, patient transfers, high-cost outliers, alternate level of care, and non-comparables. Such trended operating costs shall then be divided by Medicaid inpatient discharges in the base period identified in subdivision (b) of this section to establish the average statewide base price per discharge for the applicable rate period.

(b) For periods on and after December 1, 2009, the "base period" shall be the 2005 calendar year and "operating costs" shall be those reported by each facility to the department prior to July 1, 2009.

(1) For those hospitals operated by the New York City Health and Hospitals Corporation, the base period shall be for the period which ended June 30, 2005, and for those hospitals operated by New York State, excluding the hospitals operated by the State University of New York, the base period shall be the 12-month period which ended March 31, 2006.

(2) Discharges, as defined in section 86-1.15(n) of this Subpart, used for direct graduate medical education adjustments shall be based on reported 2007 data.

(3) Discharges, as defined in subdivision (n) of section 86-1.15, but excluding the factors set forth in paragraph (3) of such subdivision (n), as used for non-comparable adjustments shall be based on reported 2007 data.

(c) (1) For the period effective July 1, 2011 through March 31, 2012, the statewide base price shall be adjusted such that total Medicaid payments are decreased by $24,200,000.

(2) For the period May 1, 2012 through March 31, 2013 and for state fiscal year periods on and after April 1, 2013, the statewide base price shall be adjusted such that total Medicaid payments are decreased for such period and for each such state fiscal year period by $19,200,000.

Effective Date: 
Wednesday, February 19, 2014
Doc Status: 
Complete

Section 86-1.17 - Exclusion of outlier and transfer costs

86-1.17 Exclusion of outlier and transfer costs.

(a) In calculating rates pursuant to this Subpart, high-cost outlier costs from hospitals with ancillary and routine charges schedules shall be excluded from the statewide base price and shall equal 100 percent of the excess costs above the high cost outlier threshold which shall be developed using acute Medicaid operating costs derived from the base period used to calculate the statewide base price. The Medicaid discharges to be applied to the high-cost outlier thresholds shall be those that occurred in the base period used to calculate the statewide base price.

(b) In calculating rates pursuant to this Subpart, transfer case costs shall be excluded from the statewide base price by excluding the transfer discharges that occurred in the base period used to calculate the statewide base price, except for those transfer cases that are assigned to a DRG specifically identified as a DRG for transferred patients only.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.18 - Service Intensity Weights (SIW) and average length-of-stay (LOS)

86-1.18 Service Intensity Weights (SIW) and average length-of-stay (LOS).

(a) The table of SIWs and statewide average LOS for each effective period is published on the New York State Department of Health website at:

http://www.health.state.ny.us/
and reflects the cost weights and LOS assigned to each All-Patient Refined (APR) diagnosis related group (DRG) patient classification category. The SIWs assigned to each APR/DRG indicates the relative cost variance of that APR/DRG classification from the average cost of all inpatients in all APR/DRGs. Such SIWs are developed using three years of Medicaid fee-for-service cost data, Medicaid managed care data and commercial third party payor data as reported to the Statewide Planning and Research Cooperative System (SPARCS) for the years set forth in subdivision (b) of this section. Costs associated with hospitals that do not have an ancillary charge structure or associated with hospitals and services exempt from the case payment methodology, and costs associated with statistical outliers are excluded from the SIW calculations.

(b) For periods on and after December 1, 2009, the SIW and statewide average LOS table shall be computed using SPARCS and reported cost data from the 2005, 2006 and 2007 calendar years as submitted to the department by September 30, 2009.

(c) For periods on and after January 1, 2011, the SIW and statewide average LOS table shall be computed using SPARCS and reported cost data from the 2006, 2007 and 2008 calendar years as submitted to the department by June 30, 2010.

(d) For each calendar year thereafter, the SIW and statewide average LOS table shall be updated by dropping the earliest year of SPARCS data and including the next subsequent calendar year data as submitted to the department by September 30 of the year prior to the rate year.

(e) For the period beginning January 1, 2014 and ending, at the discretion of the commissioner, no sooner than April 1, 2014, but no later than July 1, 2014, the SIWs and statewide average LOS utilized for the 2013 calendar year will be utilized by the Department.

Effective Date: 
Wednesday, July 9, 2014
Doc Status: 
Complete

Section 86-1.19 - Wage Equalization Factor (WEF)

86-1.19 Wage Equalization Factor (WEF).

(a) The statewide base price per discharge shall be adjusted by a facility-specific wage equalization factor (WEF) to reflect differences in labor costs between hospitals. Such WEF adjustment shall be used to adjust for the level of wage and fringe benefit costs for each hospital in accordance with the following:

(1) The WEF shall be based on each hospital's occupational mix and wages for registered nurses, licensed practical nurses, surgical technologists, nursing aides, orderlies, attendants and medical assistants as reported and approved by the federal Medicare program, and the hospital's proportion of salaries and fringe benefit costs to total operating costs as reported to the Institutional Cost Report. The WEF shall be computed as follows:

(i) For each occupation described in this paragraph, a statewide average salary shall be calculated by dividing the statewide sum of hospitals' total dollars paid by the statewide sum of hospitals' hours paid; and

(ii) For each hospital an actual weighted average salary shall be calculated by dividing the total dollars paid for such occupations by the total hours paid for such occupations; and

(iii) An initial WEF shall be calculated for each hospital by dividing the hospital-specific actual weighted average salary as calculated pursuant to subparagraph (ii) of this paragraph by the statewide average salary calculated pursuant to subparagraph (i) of this paragraph; and

(iv) The final WEF shall be calculated using the following formula:

(1 / ((Labor Share/initial WEF) + Non-Labor Share))

where "Labor Share" is calculated by dividing the hospital's total salary cost plus the hospital's total fringe benefits by the hospital's total operating costs as reported in the institutional cost report for the same calendar year used to calculate the statewide base price for the applicable rate period. The "Non-Labor Share" equals total operating costs less the "Labor Share" of costs.

(2) A hospital may submit updated occupational service data as approved by the federal Department of Health and Human Services prior to January 1 of a rate year for use in calculating the WEF in accordance with this section.

(3) For those hospitals that are in bankruptcy proceedings in the base year and that have subrogated their labor contracts, the commissioner shall use the higher of the hospital-specific or regional average WEF. These regions will be consistent with those used in the development of the exempt unit cost ceilings.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.20 - Add-ons to the case payment rate per discharge

86-1.20 Add-ons to the case payment rate per discharge. Rates of payment computed pursuant to this Subpart shall be further adjusted in accordance with the following:

(a) A direct graduate medical education (GME) payment per discharge shall be added to the case payment rates of teaching general hospitals after the application of SIW and WEF adjustments to the statewide base price and shall be calculated for each hospital by dividing the facility's total reported Medicaid direct GME costs by its total reported Medicaid discharges pursuant to section 86-1.16(b)(2) of this Subpart. Direct GME costs shall be those costs defined in section 86-1.15(f)(1) of this Subpart, derived from the same base period used to calculate the statewide base price for the applicable rate period and trended forward to such rate period in accordance with applicable provisions of section 2807-c(10) of the Public Health Law, and shall be excluded from the cost included in the statewide base price.

(b)(1) An indirect GME payment per discharge shall be added to the case payment rates of teaching general hospitals after the application of SIW and WEF adjustments to the statewide base price and shall be calculated by multiplying such rates by the indirect teaching cost percentage determined by the following formula:

(1 – (1 / (1 + 1.03(((1 + r) ^0.0405) – 1))))

where "r" equals the ratio of residents and fellows to beds based on the medical education statistics for the hospital for the period ended June 30, 2005 as contained in the survey document submitted by the hospital to the department as of June 30, 2009 and the staffed beds for the general hospital reported in the 2005 institutional cost report and submitted to the department no later than June 30, 2009, but excluding exempt unit beds and nursery bassinettes.

(2) Indirect GME costs are those costs defined in section 86-1.15(f)(2) of this Subpart, derived from the same base period used to calculate the statewide base price for the applicable rate period and trended forward to such rate period in accordance with applicable provisions of section 2807-c(10) of the Public Health Law, and shall be excluded from computation of the statewide base price. The amount of such exclusion shall be determined by multiplying the total reported Medicaid costs less reported direct GME costs by the following formula:

1.03(((1 + r) ^0.0405) – 1)

where "r" equals the ratio of residents and fellows to beds as determined in accordance with paragraph (1) of this subdivision.

(c) A non-comparable payment per discharge shall be added to case payment rates after the application of SIW and WEF adjustments to the statewide base price and shall be calculated for each hospital by dividing the facility's total reported Medicaid costs for qualifying non-comparable cost categories by its total reported Medicaid discharges pursuant to section 86-1.16(b)(2) of this Subpart. Non-comparable hospital costs are those costs defined in section 86-1.15(l) of this Subpart, derived from the same base period used to calculate the statewide base price for the applicable rate period and trended forward to such rate period in accordance with applicable provisions of section 2807-c(10) of the Public Health Law, and shall be excluded from the cost included in the statewide base price.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.21 - Outlier and transfer cases rates of payment

86-1.21 Outlier and transfer cases rates of payment

(a)(1) High cost outlier rates of payment shall be calculated by reducing total billed patient charges, as approved by IPRO, to cost, as determined based on the hospital's ratio of cost to charges. Such calculation shall use the most recent data available as subsequently updated to reflect the data from the year in which the discharge occurred, and shall equal 100 percent of the excess costs above the high cost outlier threshold. High cost outlier thresholds shall be developed for each individual DRG and adjusted by hospital-specific wage equalization factors (WEF) and increased by the Consumer Price Index from the base period used to determine the statewide base price and the rate period.

(2) A non-public, not-for-profit general hospital which has not established an ancillary and routine charges schedule shall be eligible to receive high-cost outlier payments equal to the average of high-cost outlier payments received by comparable hospitals, as determined using the following criteria:

(i) downstate hospitals;

(ii) hospitals with a Medicaid fee for service case mix greater than 1.75;

(iii) hospitals with Medicaid fee for service revenue greater than $30 million of total revenue; and

(iv) hospitals with a proportion of Medicaid fee for service outlier to inlier cases greater than 3.0 percent.

(b) Rates of payment to non-exempt hospitals for inpatients who are transferred to another non-exempt hospital shall be calculated on the basis of a per diem rate for each day of the patient's stay in the transferring hospital, subject to the exceptions set forth in paragraphs (1), (2) and (3) of this subdivision. The total payment to the transferring facility shall not exceed the amount that would have been paid if the patient had been discharged. The per diem rate shall be determined by dividing the DRG case-based payment per discharge as defined in section 86-1.15(b) of this Subpart by the arithmetic inlier length of stay (LOS) for that DRG, as defined in section 86-1.15(o) of this Subpart, and multiplying by the transfer case's actual length of stay and by the transfer adjustment factor of 120 percent. In transfer cases where the arithmetic inlier LOS for the DRG is equal to one, the transfer adjustment factor shall not be applied.

(1) Transfers among more than two hospitals that are not part of a merged facility shall be reimbursed as follows:

(i) the facility which discharges the patient shall receive the full DRG payment; and

(ii) all other facilities in which the patient has received care shall receive a per diem rate unless the patient is in a transfer DRG.

(2) A transferring facility shall be paid the full DRG rate for those patients in DRGs specifically identified as transfer DRGs.

(3) Transfers among non-exempt hospitals or divisions that are part of a merged or consolidated facility shall be reimbursed as if the hospital that first admitted the patient had also discharged the patient.

(4) Services provided to neonates discharged from a hospital providing neonatal specialty services to a hospital reimbursed under the case payment system for purposes of weight gain shall be reimbursed and assigned to the applicable APR-DRG upon admission or readmission.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.22 - Alternate level of care payments

86-1.22 Alternate level of care payments.

(a) Hospitals shall be reimbursed for ALC days at the appropriate 1987 group average operating cost component of rates of payment for hospital-based residential health care facilities established pursuant to Subpart 86-2 of this Part trended to the rate year. The determination of the group average operating rate for hospital-based residential health care facilities shall be based on the combination of residential health care facilities as follows:

(1) The downstate group consisting of residential health care facilities located in the five boroughs of New York City and Nassau, Suffolk, Westchester and Rockland Counties.

(2) The upstate group consisting of all other residential health care facilities in the state.

(b) Hospitals that convert medical/surgical beds to residential health care beds shall be reimbursed for services provided in the converted beds in accordance with Subpart 86-2 of this Part.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.23 - Exempt units and hospitals

86-1.23 Exempt units and hospitals.

(a)
Physical medical rehabilitation inpatient servicesshall qualify for reimbursement pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such services are provided in a hospital specializing in such services or in a distinct unit within a general hospital designated for such services and only if:

(1) Such hospital or such unit qualified for exempt unit status for purposes of reimbursement under the federal Medicare prospective payment system as of December 31, 2001; or

(2) On or before July 1, 2009, the hospital submitted a written request to the department for exempt status providing assurances acceptable to the department that the hospital or unit within the hospital meets the exempt status criteria set forth in section 2807-c(4)(e) of the Public Health Law for 2009 for periods prior to December 1, 2009.

(i) For periods on and after January 1, 2010, a hospital seeking exempt status for a hospital or a distinct unit within the hospital not previously recognized by the department as exempt for reimbursement purposes shall submit a written request to the department for such exempt status and shall provide assurances and supporting documentation acceptable to the department that the hospital or unit meets qualifying exempt status criteria in effect at the time such written request is submitted. Approval by the department of such exempt status shall, for reimbursement purposes, be effective on the January 1 following such approval, provided that the request for such exempt unit status was received at least 120 days prior to such date.

(ii) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009, not including reported direct medical education costs and physician costs, and held to a ceiling of 110% of the average of such costs in the region in which the facility is located, as described in subdivision (i) of this section. Such rates shall reflect trend adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(b)
Chemical dependency rehabilitation inpatient servicesshall qualify for reimbursement pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such services are provided in a hospital specializing in such services or in a distinct unit within a general hospital designated for such services and only if:

(1) The services provided in such hospital or unit are limited to chemical dependency rehabilitation care and do not include chemical dependency related inpatient detoxification and/or withdrawal services; or

(2) Such hospital or unit is licensed to provide such services pursuant to both the Public Health Law and the Mental Hygiene Law and meets the applicable alcohol and/or substance abuse rehabilitation standards set forth in regulations.

(i) Any such unit within a hospital must be in a designated area and consist of designated beds providing only chemical dependency rehabilitation inpatient services with adequate adjoining supporting spaces and assigned personnel qualified by training and/or by experience to provide such services and in accordance with any applicable criteria regarding the provision of such services issued by the New York State Office of Alcohol and Substance Abuse Services.

(ii) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services,

for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009, not including reported direct medical education costs and physician costs, and held to a ceiling of 110% of the average of such costs in the region in which the facility is located, as described in subdivision (i) of this section. Such rates shall reflect trend adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(c)
Critical access hospitals. (1) Rural hospitals shall qualify for inpatient reimbursement as critical access hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such hospitals are designated as critical access hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act.

(2) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009, and held to a ceiling of 110% of the average of such costs for all such designated hospitals statewide. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(d)
Cancer hospitals.(1)

Hospitals shall qualify for inpatient reimbursement as cancer hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such hospitals were, as of December 31, 2008, designated as comprehensive cancer hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act.

(2) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(e)
Specialty long term acute care hospital.(1) Hospitals shall qualify for inpatient reimbursement as specialty long term acute care hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such hospitals were, as of December 31, 2008, designated as specialty long term acute care hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act.

(2) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(f)
Acute care children's hospitals. Hospitals shall qualify for inpatient and outpatient reimbursement as acute care children's hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if:

(1) Such hospitals were, as of December 31, 2008, designated as acute care children's hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act; and

(2) Such hospitals filed a discrete 2007 institutional cost report reflecting reported Medicaid discharges of greater than 50 percent of total discharges.

(i) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2007 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(g)
Substance abuse detoxification inpatient services.For patients discharged on and after December 1, 2008, rates of payment for general hospitals which are certified by the Office of Alcoholism and Substance Abuse Services (OASAS) to provide services to patients determined to be in the diagnostic category of substance abuse (MDC 20, DRGs 743 through 751) will be made on a per diem basis. This includes inpatient detoxification, withdrawal, and observation services.

Medically managed detoxification services are for patients who are acutely ill from alcohol and/or substance related addictions or dependence, including the need or risk for the need of medical management of severe withdrawal, and/or are at risk of acute physical or psychiatric co-morbid conditions. Medically supervised withdrawal services are for patients at a mild or moderate level of withdrawal, or are at risk for such, as well as patients with sub-acute physical or psychiatric complications related to alcohol and/or substance related dependence, are intoxicated, or have mild withdrawal with a situational crisis, or are unable to abstain yet have no past withdrawal complications.

The per diem rates for inpatient detoxification, withdrawal, and observation services will be determined as follows:

(1) The operating cost component of the per diem rates will be computed using 2006 costs and statistics, excluding physician costs, as reported to the department by general hospitals prior to 2008, adjusted for inflation. The inflation factor will be calculated in accordance with the trend factor methodology described in this Attachment. The average operating cost per diem for the region in which the hospital is located will be calculated using costs incurred for patients requiring detoxification services. The operating cost component of the per diem rates will be transitioned to 2006 as follows:

(i) For the period December 1, 2008 through March 31, 2009, 75% of the operating cost component will reflect the operating cost component of rates effective for December 31, 2007, adjusted for inflation, and 25% will reflect 2006 operating costs in accordance with paragraphs (2) through (6).

(ii) For April 1, 2009 through March 31, 2010, 37.5% of the operating cost component will reflect the December 31, 2007 operating cost component, adjusted for inflation, and 62.5% will reflect 2006 operating costs in accordance with paragraphs (2) through (6).

(iii) For periods on and after April 1, 2010, 100% of the operating cost component will reflect 2006 operating costs in accordance with paragraphs (2) through (6).

(2) For purposes of establishing the average operating cost per diem by region for medically managed detoxification and medically supervised withdrawal services, the regions of the state are defined as follows:

(i) New York City - Bronx, New York, Kings, Queens and Richmond Counties;

(ii) Long Island - Nassau and Suffolk Counties;

(iii) Northern Metropolitan - Columbia, Delaware, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester Counties;

(iv) Northeast - Albany, Clinton, Essex, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, Warren and Washington Counties;

(v) Utica/Watertown - Franklin, Herkimer, Lewis, Oswego, Otsego, St. Lawrence, Jefferson, Chenango, Madison and Oneida Counties;

(vi) Central - Broome, Cayuga, Chemung, Cortland, Onondaga, Schuyler, Seneca, Steuben, Tioga and Tompkins Counties;

(vii) Rochester - Monroe, Ontario, Livingston, Wayne and Yates Counties; and

(viii) Western - Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans and Wyoming Counties.

(3) For each of the regions, the 2006 operating costs incurred by general hospitals in such region for providing care to inpatients requiring detoxification services, as defined by OASAS, and reported in the 2006 ICR submitted to the department prior to 2008, are adjusted by a length of stay (LOS) factor. This LOS factor reflects the loss of revenue due to the reduction of payments for services over the 5th day of stay. The total adjusted operating costs for each region, divided by the total regional days, is the average operating cost per diem for the region.

(4) The per diem rates for inpatients requiring medically managed detoxification services will reflect 100% of the average operating cost per diem for the region in which the hospital is located, adjusted for inflation, for the first 5 days of service. However, such payments will be reduced by 50% for services provided on the 6th through 10th day of service. No payments will be made for any services provided on and after the 11th day.

(5) Per diem rates for inpatients requiring medically supervised withdrawal services, will reflect 100% of the average operating cost per diem for the region in which the hospital is located, adjusted for inflation, for the period January 1, 2009 through December 31, 2009. For periods on and after January 1, 2010, the per diem rates for withdrawal services will reflect 75% of the average operating cost per diem for the region, adjusted for inflation, and will be reduced by 50% for care provided on the 6th through 10th day of service. No payments will be made for any services provided on and after the 11th day.

(6) Per diem rates for inpatients placed in observation beds, as defined by OASAS, will reflect 100% of the average operating cost per diem for the region in which the hospital is located, adjusted for inflation, and will be paid for no more than 2 days of care. After 2 days of care the payments will reflect the patient's diagnosis as requiring either detoxification or withdrawal services. The days of care in the observation beds will be included in the determination of days of care for either detoxification or withdrawal services. Furthermore, days of care provided in observation beds will, for reimbursement purposes, be fully reflected in the computation of the initial five days of care.

(7) Capital cost reimbursement for the general hospitals which are certified by OASAS to provide substance abuse services will be based on the current reimbursement methodology for determining allowable capital for exempt unit per diem rates. Such capital cost will be added to the applicable operating cost component as a per diem amount to establish the per diem rate for each service.

(h) Hospitals or distinct units of hospitals that fail to maintain qualifying criteria for exempt status for reimbursement purposes, as set forth in this section or in section 2807-c(4)(e-2) of the Public Health Law, shall continue to be reimbursed in accordance with such exempt status until the commencement of the next rate period, as determined by the department.

(i) Rates of payment for inpatient services for exempt distinct units of hospitals described in subdivisions (a), (b), (c), (d) and (e) of this section, for which separately identifiable 2005 reported costs data are not available, shall reflect the average reported 2005 operating cost per day for comparable exempt units, as determined by the department.

(j) Rates of payment for inpatient services described in subdivisions (a) and (b) of this section which utilize regional averages for determining a cost ceiling shall utilize regions of the State set forth in section 2807-c(4)(l)(iii)(E) of the Public Health Law and this subdivision, except that if the otherwise applicable region has less than five exempt hospitals or units in the service, facilities located in the nearest regions will be used to establish a minimum of five hospital or units for the purpose of determining ceilings. Such regions are as follows:

(1) New York City, consisting of the counties of Bronx, New York, Kings, Queens and Richmond;

(2) Long Island, consisting of the counties of Nassau and Suffolk;

(3) Northern Metropolitan, consisting of the counties of Columbia, Delaware, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester;

(4) Northeast, consisting of the counties of Albany, Clinton, Essex, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, Warren and Washington;

(5) Utica / Watertown, consisting of the counties of Franklin, Herkimer, Lewis, Oswego, Otsego, St. Lawrence, Jefferson, Chenango, Madison and Oneida;

(6) Central, consisting of the counties of Broome, Cayuga, Chemung, Cortland, Onondaga, Schuyler, Seneca, Steuben, Tioga and Tompkins;

(7) Rochester, consisting of the counties of Monroe, Ontario, Livingston, Wayne and Yates;

(8) Western, consisting of the counties of Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans and Wyoming.

(k) Capital cost components of per diem rates determined pursuant to this section shall be computed on the basis of budgeted capital costs allocated to the exempt hospital or distinct unit of a hospital pursuant to the provisions of section 86-1.25 of this Subpart divided by exempt hospital or unit patient days reconciled to actual total expense.

(l)
New hospitals and new hospital units. The operating cost component of rates of payment for new hospitals, or hospital units, without adequate cost experience shall be computed based on either budgeted cost projections, subsequently reconciled to actual reported cost data, or the regional ceiling calculated in accordance with subdivision (i) of this section, whichever is lower. The capital cost component of such rates shall be calculated in accordance with section 86-1.25 of this Subpart.

(m)
Inpatient psychiatric services.Per diem rates of payment for a general hospital or a distinct unit of a general hospital for inpatient psychiatric services shall be continue to be determined in accordance with the reimbursement methodology set forth in section 86-1.57 of this Subpart which was in effect for periods prior to December 1, 2009.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.24 - Trend factor

86-1.24 Trend factor. The commissioner shall establish trend factors for hospitals to project the effects of price movements on historical operating costs. Rates of payment excluding capital, as calculated pursuant to the provisions of this Subpart, shall be trended to the applicable rate year by the trend factors developed in accordance with the provisions of subdivision 10 of section 2807-c of the Public Health Law.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.25 - Capital expense reimbursement

86-1.25 Capital expense reimbursement

(a) The allowable costs of fixed capital (including but not limited to depreciation, rentals and interest on capital debt), and major movable equipment shall be reimbursed based on budgeted data and shall be reconciled to total actual expense for the rate year and shall be determined and computed in accordance with the provisions of subdivisions (f), (g), and (h) of this section.

(b) General hospitals shall submit a schedule of anticipated inpatient capital-related expenses for the forthcoming year to the commissioner at least 120 days prior to the beginning of the rate year.

(c) The following principles shall apply to budgets for inpatient capital-related expenses:

(1) The basis for determining capital-related inpatient expenses shall be the lesser of actual cost or the final amount specifically approved for construction of the capital asset.

(2) Any capital-related inpatient expense generated by a capital expenditure which requires or required approval pursuant to article 28 of the Public Health Law, must have received such approval for the capital-related expense to be included in the rate calculation.

(3) The submitted budget may include the capital-related inpatient expense of all existing capital assets, as well as estimates of capital-related inpatient expenses for capital assets to be acquired or placed in use prior to the commencement of the rate year.

(4) Any capital-related expense generated by a capital expenditure acquired or placed in use during a rate year shall be carried forward to the subsequent rate year, provided all required approvals have been obtained. In instances where such approvals have been obtained or where approval is not required and such assets are acquired or placed in use during a rate year, the budget may include estimates for capital-related expenses relating to these assets.

(d) Allocation of budgeted capital costs. In each rate year budgeted capital costs shall be allocated to exempt units and hospitals (including certified substance abuse detoxification services) to DRG case payment rates based on reported capital traceback statistics for the two years prior to the rate year.

(e) Payment for budgeted allocated capital costs.

(1) Capital per diems for exempt units and hospitals shall be calculated by dividing the budgeted capital costs allocated to such rates in paragraph (d) of this section by the exempt unit days, reconciled to rate year days and actual rate year exempt unit or hospital-approved capital expense.

(2) Capital payments for DRG case rates shall be determined by dividing the budgeted capital allocated to such rates in paragraph (d) of this section by the hospital's budgeted non-exempt unit discharges, reconciled to rate year discharges and actual rate year non-exempt unit or hospital-approved capital expense.

(3) Capital payments for transferred patients shall be determined by dividing the budgeted capital allocated to the DRG case payment rates by the budgeted nonexempt hospital's unit days, reconciled to rate year days and actual rate year nonexempt unit or hospital approved capital expense.

(f) Depreciation.

(1) Reported depreciation based on historical cost is recognized as a proper element of cost. Useful lives shall be the higher of the reported useful life or those useful lives from the Estimated Useful Lives of Depreciable Hospital Assets, American Hospital Association, consistent with title XVIII provisions. Copies of this publication are available from the American Hospital Association, One North Franklin, Chicago, IL 60606-3421, and a copy is available for inspection and copying at the offices of the records access officer of the Department of Health, Corning Tower, Empire State Plaza, Albany, NY 12237.

(2) In the computation of rates for voluntary facilities, depreciation shall be included on a straight line method on plant and nonmovable equipment. Depreciation on movable equipment may be computed on a straight line method or accelerated under a double declining balance or sum-of-the-years' digit method. Depreciation shall be funded unless the commissioner determines, upon application by the facility, and after inviting written comments from interested parties, that the requested waiver of the requirements for funding is a matter of public interest and necessity. In instances where funding is required, such fund may be used only for capital expenditures with approval as required for the amortization of capital indebtedness. Funding for plant and fixed equipment shall mean that the transfer of monies to the funded accounts shall occur by the end of the fiscal period in which the depreciation is recorded. Board-designated funds and the accrual of liabilities to the funded depreciation accounts (due to/from accounts) shall not be recognized as funding of depreciation. Deposits to the funded depreciation accounts must remain in such accounts to be considered as valid funding transactions unless expended for the purpose for which it was funded.

(3) In the computation of rates for public facilities, depreciation is to be included on a straight-line method on plant and nonmovable equipment. Depreciation on movable equipment may be computed on a straight-line method or accelerated under a double declining balance or sum-of-the-years' digits method.

(4) Medical facilities financed by mortgage loans pursuant to the Nursing Home Companies Law or the Hospital Mortgage Loan Construction Law shall conform to the requirements of this Subpart. In lieu of depreciation and interest, on the loan-financed portion of the facilities, the commissioner shall allow level debt service on the mortgage loan, for all loans approved for financing prior to January 1, 1990, together with such required fixed charges, sinking funds and reserves as may be determined by the commissioner as necessary to assure repayment of the mortgage indebtedness. For loans approved for financing on or after January 1, 1990, medical facilities shall receive reimbursement in the form of interest and depreciation in accordance with the remainder of this Subpart.

(5) Article IX-C corporations may elect to include in their reimbursement rates depreciation computed by a method other than that used in paragraphs (2) and (3) of this subdivision, subject to approval by the commissioner.

(6) With respect to outpatient facilities, capital cost reimbursement may include an amount for rent, provided the following conditions are met:

(i) the lease is reviewed and approved by the department or any other appropriate State agency;

(ii) the space rented is in a multi-purpose, multi-use building not specifically constructed for the purpose of housing an outpatient facility;

(iii) the rental, if the lease is a sublease, is the same or less than comparable leases in the geographic area;

(iv) the applicant has no interest, direct or indirect, beneficial or of record, in the ownership of the building or any overlease; and

(v) the rental per square foot, in the judgment of the department, is the same as or is comparable to other rentals in the building in which the outpatient service is to be located, and the rental per square foot is comparable to the rental of similar space in other comparable buildings in the area when such comparisons can be made.

(g) Interest.

(1) Necessary interest on both current and capital indebtedness is an allowable cost for all medical facilities.

(2) To be considered as an allowable cost, interest shall be incurred to satisfy a financial need, and at a rate not in excess of what a prudent borrower would have had to pay in the money market at the time the loan was made and exclude costs and fees incurred as a result of an interest rate swap agreement. Also, the interest shall be paid to a lender not related through control, ownership, affiliation or personal relationship to the borrower, except in instances where the prior approval of the commissioner has been obtained. Financial need for capital indebtedness relating to a specific project shall exist when all available restricted funds designated for capital acquisition of that type have been considered for equity purposes.

(3) Interest expense shall be reduced by investment income with the exception of income from funded depreciation, qualified pension funds, trusteed malpractice insurance funds, or in instances where income from gifts or grants is restricted by donors. Interest on funds borrowed from a donor restricted fund or funded depreciation is an allowable expense. Investment income shall be defined as the aggregate net amount realized from dividends, interest, rental income, interest earned on temporary investment of withholding taxes, as well as all gains and losses. If the aggregate net amount realized is a loss, the loss shall not be allowable. Rate year investment income shall reduce rate year interest expense allowed for reimbursement as follows:

(i) for all medical facilities, investment income shall first be used to reduce operating interest expense for that year;

(ii) any remaining amount of investment income, after application of paragraph (i), shall be used to reduce capital interest expense reimbursed that year for medical facilities; and

(iii) any remaining amount of investment income after application of paragraph (ii) shall not be considered in the determination of allowable costs.

(4) Interest on current indebtedness shall be treated and reported as an operating, administrative expense.

(5) Interest on capital indebtedness is an allowable cost if the debt generating the interest is approved by the commissioner, incurred for authorized purposes, and the principal of the debt does not exceed either the approval of the commissioner or the cost of the authorized purposes. Capital indebtedness shall mean all debt obligations of a facility that are:

(i) evidenced by a mortgage note or bond and secured by a mortgage on the land, building or nonmovable equipment; a note payable secured by the nonmovable equipment of a facility; a capital lease;

(ii) incurred for the purpose of financing the acquisition, construction or renovation of land, building or nonmovable equipment;

(iii) found by the commissioner to be reasonable, necessary and in the public interest with respect to the facility. Interest related to refinancing indebtedness shall be considered an allowable cost only to the extent that it is payable with respect to an amount equal to the unpaid principal of the indebtedness then being refinanced. However, interest incurred on refinanced debt in excess of the previously unpaid balance of the refinanced indebtedness will be allowable on acceptable demonstration to the commissioner that such refinancing will result in a debt service savings over the life of the indebtedness; or

(iv) incurred for the purpose of advance refunding of debt. Gains and losses resulting from the advanced refunding of debt shall be treated and reported as a deferred charge or asset. This deferred charge or asset is to be amortized on a straight-line basis over the period to the scheduled maturity date of the refunding debt.

(6) Where a public finance authority has established a mortgage rate of interest such that sufficient cash flows exist to retire the mortgage prior to the stated maturity, the amount of the mortgage to be forgiven, at the time of such forgiveness, shall be capitalized as a deferred asset and amortized over the remaining mortgage life, as a reduction to the facility's capital expense.

(7) Voluntary facilities shall report mortgage obligations financed by public finance authorities for their benefit and which they are responsible to repay, as liabilities in the general fund, when such mortgage obligations are incurred.

(h) Sales, leases and realty transactions.

(1) If a medical facility is sold or leased or is the subject of any other realty transaction before a rate for the facility has been determined and certified by the commissioner, the capital cost component of such rate shall be determined in accordance with the provisions of this section.

(2) If a medical facility is sold or leased or is the subject of any other realty transaction after a rate for the facility has been determined and certified by the commissioner, the capital cost component of such rate shall be considered to be continuing with the same force and effect as though such sale, lease or other realty transaction had not occurred. This subdivision shall not be construed as limiting the powers and rights of the commissioner to change rate computations generally or specifically when based upon previous error, deceit or any other misrepresentation or misstatement that has led the commissioner to determine and certify a rate which he would otherwise not have determined or certified. Further, this subdivision shall not be construed as limiting the powers and rights of the commissioner to reduce rates when one or more of the original property right aspects related to such a facility is terminated.

(3) An arms length lease purchase agreement with a nonrelated lessor involving plant facilities or equipment which meets any one of the four following conditions, establishes the lease as a virtual purchase.

(i) The lease transfers title of the facilities or equipment to the lessee during the lease term.

(ii) The lease contains a bargain purchase option.

(iii) The lease term is at least 75 percent of the useful life of the facilities or equipment. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment.

(iv) The present value of the minimum lease payments (payments to be made during the lease term including bargain purchase option, guaranteed residual value and penalties for failure to renew) equals at least 90 percent of the fair market value of the leased property. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment. Present value is computed using the lessee's incremental borrowing rate, unless the interest rate implicit in the lease is known and is less than the lessee's incremental borrowing rate, in which case the interest rate implicit in the lease is used.

(4) If a lease is established as a virtual purchase under subdivision (d) of this section, the rental charge may be included in capital-related costs to the extent that it does not exceed the amount that the provider would have included in capital-related costs if it had legal title to the asset (the cost of ownership). The cost of ownership shall be limited to depreciation and interest. Further, the amounts to be included in capital-related costs are determined as follows:

(i) The difference between the amount of rent paid and the amount of rent allowed as capital-related costs is considered a deferred charge and is capitalized as part of the historical cost of the asset when the asset is purchased.

(ii) If an asset is returned to the owner instead of being purchased, the deferred charge may be included in capital-related costs in the year the asset is returned.

(iii) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase still exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to an amount not in excess of the cost of ownership.

(iv) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase no longer exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to a fair rental value.

(v) If the lessee becomes the owner of the leased asset (either by operation of the lease or by other means), the amount considered as depreciation for the purpose of having computed the limitation on rental charges under subdivision (e) of this section, must be used in calculating the limitation on adjustments for the purpose of determining any gain or loss upon disposal of an asset.

(vi) In the aggregate, the amount of rental or lease costs included in capital-related costs may not exceed the amount of the costs of ownership that the provider could have included in capital-related costs had the provider legal title to the asset.

(5) If a facility enters into a sale and leaseback agreement involving plant facilities or equipment, the amounts to be included in capital-related costs both on an annual basis and over the useful life of the asset shall not exceed the costs of ownership which shall be limited to depreciation and interest, and shall be determined as follows:

(i) If the annual rental or lease costs in the early years of the lease are less than the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are more than the annual costs of ownership, in the years that the annual rental or lease costs are more than the annual costs of ownership, the facility may include in capital-related costs annually the actual amount of rental or lease costs, except that in any given year, the amount included in capital related costs is limited to an amount which would not cause the aggregate rental or lease costs included up to that year in capital-related costs to exceed the costs of ownership that would have been included in capital-related costs up to that year if the provider had retained legal title to the asset.

(ii) If the annual rental or lease costs in the early years of the lease exceed the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are less than the annual costs of ownership, the facility may carry forward amounts of rental or lease costs that were not included in capital-related costs in the early years of the lease due to the costs of ownership limitation, and include these amounts in capital-related costs in the years of the lease when the annual rental or lease costs are less than the annual costs of ownership, provided, however, in any given year the amount of actual annual rental or lease costs plus the amount carried forward to that year may not exceed the amount of the costs of ownership for that year.

(iii) In the aggregate, the amount of rental or lease costs included in capital-related costs may not exceed the amount of the costs of ownership that the provider could have included in capital-related costs if the provider had retained legal title to the asset.

(iv) If a facility enters into a sale and leaseback agreement involving land, the incurred rental for the cost of land may not be included in allowable costs.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.26 - Statewide Planning and Research Cooperative System (SPARCS)

86-1.26 Statewide Planning and Research Cooperative System (SPARCS).

Each general hospital shall be assessed an annual fee calculated on the basis of the hospital's proportionate share of the sum of total costs reported by all general hospitals in the most recent calendar year for which certified data are available. Such amount shall not exceed one tenth of one percent of the total certified cost of the hospital. The commissioner shall inform each such hospital of its actual fee to support the statewide planning and research cooperative system and each hospital shall submit such fee on a quarterly basis to be received by the commissioner not later than the 15th of February, May, August and November of each year. Failure to submit such fees in accordance with this schedule may result in a two-percent reduction in the affected hospital's rate beginning on the first day following the due date and continuing until the last day of the calendar month in which said fees are submitted. These funds shall be pooled on a statewide basis and will be restricted and used to support the costs of the statewide planning and research cooperative systems.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.27 - Federal upper limit compliance

86-1.27 Federal upper limit compliance.

In the event the State cannot provide assurances satisfactory to the secretary of the Department of Health and Human Services related to a comparison of rates of payment for general hospital inpatient services to beneficiaries of the title XIX program determined in accordance with this Subpart in the aggregate to maximum reimbursement payments provided in Federal law and regulation which are substantially the same as such assurances in effect on October 26, 1987 for purposes of securing Federal financial participation in such payments, such rates of payments shall be adjusted proportionally as necessary to meet Federal requirements for securing Federal financial participation.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.28 - Adding or deleting hospital services or units

86-1.28 Adding or deleting hospital services or units.

(a) Notification of the elimination of a general hospital inpatient service or identifiable unit of such a service in instances in which the costs of such service are reflected in the rate calculated pursuant to this Subpart shall be submitted in writing by the facility to the department within 60 days of the elimination of such service or unit. If a rate is modified by the department as a result of such service or unit elimination, such rate shall be effective as of the date of the elimination of the service or unit.

(b) Notification of the establishment of a new hospital or of a new exempt unit of an existing hospital shall be submitted in writing by the facility to the department within 60 days of the establishment of such new hospital or such new unit. Thereafter the department shall establish inpatient rates for such new hospital or such new exempt unit in accordance with section 86-1.29 of this Subpart. Such rates shall be effective the first day of the month following 30 days after such notification or the date of the approved certificate of need (CON) certification, whichever is later.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.29 - New hospitals and hospitals on budgeted rates

86-1.29 New hospitals and hospitals on budgeted rates.

(a)
New hospitals. Payments to new hospitals without adequate cost experience for inpatient acute care services that are not exempt from DRG case-based rates of payment shall be computed in accordance with this Subpart except as follows:

(1) Rates of payment shall be computed on the basis of 100 percent of the statewide base price determined pursuant to section 86-1.16 of this Subpart multiplied by the service intensity weight for each DRG set forth in section 86-1.18 of this Subpart.

(2) The WEF used to adjust the statewide base price shall be equal to 1.0 until adequate data becomes available.

(3) The indirect teaching adjustment shall be determined pursuant to the provisions of section 86-1.20 of this Subpart.

(4) The noncomparable operating costs of new facilities as defined in section 86-1.15 of this Subpart and direct graduate medical education costs shall consist of the hospital's budgeted operating costs for these services.

(b)
Hospitals on budgeted rates.Payments to hospitals without adequate cost experience whose rates are based on budgeted cost projections for inpatient acute care services that are not exempt from DRG case-based rates of payment shall be computed in accordance with this Subpart except as follows:
(1) Reimbursement for the costs of graduate medical education and non comparable services shall be calculated pursuant to the provisions of paragraphs (a)(3) and (4) of this section.
(2) The WEF used shall be calculated for the facility based on available historical data.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.30 - Swing bed reimbursement

86-1.30 Swing bed reimbursement. (a) Definitions. (1) For purposes of this section, eligible hospitals shall mean those hospitals defined as rural hospitals and meeting the swing bed program requirements in Part 406 of this Title.

(2) Rate shall mean the aggregate governmental payment made to eligible facilities per patient day as defined in section 86-2.8 of this Part for the care of patients receiving care pursuant to Title XIX of the federal Social Security Act (Medicaid).

(b) Rates of payment. Payments to eligible hospitals for patient days resulting from the usage of swing beds in caring for patients for whom it has been determined that inpatient hospital care is not medically necessary, but that skilled nursing or health related care is required, shall be determined as follows:

(1) The operating component of the rate shall consist of the following:

(i) a direct component which shall be equivalent to the 1988 statewide average direct case mix neutral cost per day for hospital-based residential health care facilities, after application of the Regional Direct Input Price Adjustment Factor (RDIPAF) as determined pursuant to Subpart 86-2 of this Part, trended to the appropriate rate year;

(ii) an indirect component which shall be equivalent to the 1988 statewide average indirect cost per day for hospital-based residential health care facilities, after application of the RDIPAF pursuant to Subpart 86-2 of this Part, trended to the appropriate rate year;

(iii) a non-comparable component which shall be equivalent to the 1988 statewide average non-comparable cost per day for hospital-based residential health care facilities, trended to the appropriate rate year.

(2) For general hospitals with more than 49 beds, the maximum number of days for which the operating component of the rate as defined in paragraph (1) of this subdivision shall be paid shall be equivalent to fifteen (15) percent of a hospital's total annual patient days for acute, exempt unit, and alternate level of care services, excluding swing bed days.

(3) The operating component of the rate as defined in paragraph (1) of this subdivision shall be paid for the first sixty (60) days per year during which a patient is receiving care as a participant in the swinged program. Any patient stay in excess of sixty (60) days per year shall be reimbursed at the prevailing average rate paid for the care of Alternate Level of ALC) patients pursuant to the provisions of Section 86-1.56 of this Subpart. The sixty-day period shall begin the first day on which the patient receives care as a participant in the swing bed program.

(4) A capital cost per diem shall be paid on the basis of budgeted capital costs allocated to the swing bed program, pursuant to the provisions of section 86-1.59 of this Subpart, divided by patient days associated with the swing bed program, reconciled to actual total capital expense.

(c) Payments from all other payors. Payments to eligible hospitals for care provided to patients under the swing bed program by any non-governmental payor shall be at a per diem rate as established by such eligible hospital.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.31 - Mergers, acquisitions and consolidations

86-1.31 Mergers, acquisitions and consolidations.

(a)
Rates of Payment.As used in this section, the terms merger, acquisition and consolidation shall mean the combining of two or more general hospitals licensed under Article 28 of the Public Health Law, where such combination is consistent with the public need, would create a new, more economical entity, reduce the costs of operation, result in the reduction of beds and/or improve service delivery.

Payments for hospitals subject to a merger, acquisition or consolidation for inpatient acute care services that are not otherwise exempt from DRG case-based rates of payment will be effective on the date the transaction is effected and shall be computed in accordance with this Subpart except as follows:
(1) The WEF used to adjust the statewide base price shall be calculated by combining all components used in the calculation pursuant to section 86-1.19 of this Subpart for all hospitals subject to the merger, acquisition or consolidation.
(2) The direct GME payment per discharge added to the case payment rates of teaching hospitals shall be calculated by dividing the total reported Medicaid direct GME costs for all teaching hospitals subject to the merger, acquisition, or consolidation by the total reported Medicaid discharges reported by such hospitals in the applicable base period.
(3) The indirect GME payment per discharge added to the case payment rates of teaching hospitals shall be calculated in accordance with section 86-1.20 of this Subpart, except the ratio of residents to beds used in the calculation shall be based on the total residents and beds of all such hospitals subject to the merger, acquisition, or consolidation.
(4) The non-comparable payment per discharge added to the case payment rates shall be calculated by dividing the total reported Medicaid costs for qualifying non-comparable cost categories for all hospitals subject to the merger, acquisition, or consolidation by the total reported Medicaid discharges reported by such hospitals in the applicable base period.

(b)
Closures, mergers, acquisitions, consolidations and restructurings.

(1) The commissioner may grant approval of a temporary adjustment to the non-capital components of rates calculated pursuant to this subpart for eligible general hospitals.

(2) Eligible facilities shall include:

(i) facilities undergoing closure;

(ii) facilities impacted by the closure of other health care providers;

(iii) facilities subject to mergers, acquisitions, consolidations or restructuring; or

(iv) facilities impacted by the merger, acquisition, consolidation or restructuring of other health care providers.

(3) Facilities seeking rate adjustments under this section shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:

(i) protect or enhance access to care;

(ii) protect or enhance quality of care;

(iii) improve the cost effectiveness of the delivery of health care services; or

(iv) otherwise protect or enhance the health care delivery system, as determined by the commissioner.

(4) (i) Such written proposal shall be submitted to the commissioner at least sixty days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this section shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the facility shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the facility’s written proposal as approved by the commissioner and may also require that the facility submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the facility’s temporary rate adjustment prior to the end of the specified timeframe.

(ii) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a Request For Applications or a Request For Proposals issued by the commissioner.

Effective Date: 
Tuesday, July 3, 2012
Doc Status: 
Complete

Section 86-1.32 - Administrative rate appeals

86-1.32 Administrative rate appeals.

(a) Administrative rate appeals of rates of payment issued pursuant to this Subpart must be submitted to the department in writing within 120 days of the date such rates are issued by the department to the facility. Such rate appeals must set forth in detail the basis for such appeal and be accompanied by any relevant documentation. Thereafter the department shall respond to such rate appeals in writing and shall either affirm the original rates, revise such rates or request additional information. A failure to respond to the department's request for additional information within 30 days shall be deemed to constitute the withdrawal, with prejudice, of the facility's rate appeal, provided, however, that the department may extend that time period upon a request by the facility and for good cause shown. Upon its receipt of the requested additional information the department shall issue a written determination of such rate appeal.

(b) The department's written determination of a facility's rate appeal shall be deemed final unless the facility submits a written request for further consideration of the rate appeal within 30 days of the date the department issued such written determination, provided, however, that if such written determination advises the facility that its rate appeal is being denied on the ground that the appeal constitutes a challenge to the rate-setting methodology set forth in this Subpart, such denial shall be deemed to be the department's final administrative determination with regard to such appeal and there shall be no further administrative review available. The department shall otherwise respond in writing to such further appeal and either affirm or revise its original rate appeal determination and this response by the department shall be deemed its final administrative determination with regard to such rate appeal.

(c) Rate appeals which are rejected or precluded on the grounds of being untimely may be considered in connection with subsequent audits conducted pursuant to section 86-1.4 of this Subpart.

(d) The department shall consider only those rate appeals that reflect one or more of the following bases.

(1) Mathematical or clerical errors in the financial and/or statistical data originally submitted by the medical facility, including information reported to the New York State Statewide Planning and Research Cooperate System (SPARCS) in accordance with section 400.18 of this Title, or mathematical or clerical errors made by the department. Revised data submitted by a facility must meet the same certification requirements as the original data and the department may require verification of revised SPARCS data by an independent review agent at the cost of the facility; and

(2) Any errors regarding a medical facility's capital cost reimbursement.

(3)(i) Direct medical education (DME) and indirect medical education (IME) costs, as defined in sections 86-1.15(f)(1) and (f)(2) of this Subpart, for hospitals where the teaching status has changed from non-teaching to teaching.

(ii) The effective date of the initial rate adjustment shall be the later of the first of the month following 60 days from the department's receipt of the written notification with documentation requesting a rate adjustment or July 1st of the program year.

(e) The department may refuse to accept or consider a rate appeal from a facility that:

(1) is providing an unacceptable level of care as determined after review by the State Hospital Review and Planning Council; or

(2) is operated by the same management that operates a facility with regard to which a determination of an unacceptable level of care has been made in accordance with paragraph (1) of this subdivision; or

(3) has been determined by the department as being operated by a person or persons not properly established or licensed pursuant the Public Health Law; or

(4) is delinquent in the payment of a fine or penalty imposed on the facility pursuant to the Public Health Law.

Effective Date: 
Wednesday, July 9, 2014
Doc Status: 
Complete

Section 86-1.33 - Out-of-state providers

86-1.33 Out-of-state providers.

(a) For discharges occurring on and after December 1, 2009, rates of payment for inpatient hospital services provided by out-of-state providers in accordance with the prior approval requirements set forth in section 365-a(4)(d) of the Social Services Law shall be as follows:

(1) (i) The weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the downstate region of New York State shall apply with regard to services provided by out-of-state providers located in the New Jersey counties of Sussex, Passaic, Bergin, Hudson, Essex, Union, Middlesex and Monmouth, in the Pennsylvania county of Pike, and in the Connecticut counties of Fairfield and Litchfield.

(ii) For rates effective beginning January 1, 2014, the weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the downstate region of New York State shall also apply with regard to services provided by out-of-state providers located in cities where the city's population census is 500,000 or greater based on the U.S. Department of Commerce United States Census Bureau; and

(2) The weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the upstate region of New York State shall apply with regard to all other out-of-state providers.

(3) High cost outlier rates of payment shall be calculated in accordance with 86-1.21 with the exception of the wage equalization factor (WEF) being based upon the weighted average of the upstate or downstate region.

(4) The weighted average of the capital component of the inpatient rates in effect for similar services for hospitals located in New York State shall apply with regard to services provided by out-of-state providers.

(b) Notwithstanding any inconsistent provision of this section, in the event the department determines that an out-of-state provider is providing services that are not available within New York State, the department may negotiate payment rates and conditions with such provider; provided however, such payments shall not exceed the provider’s usual and customary charges for such services.

(c) For purposes of this section, the downstate region of New York State shall consist of the New York counties of Bronx, New York, Kings, Queens, Richmond, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam and Dutchess, and the upstate region of New York State shall consist of all other New York counties.

Effective Date: 
Wednesday, July 9, 2014
Doc Status: 
Complete

Section 86-1.34 - Supplemental indigent care distributions

86-1.34 Supplemental indigent care distributions.

(a) For the period prior to December 31, 2009:

(i) $307 million shall be distributed to facilities designated by the department as teaching hospitals as of December 31, 2008, to compensate such facilities for Medicaid and self-pay losses pursuant to the following schedule of payments:

(ii) $25 million shall be distributed to non-major public hospitals having Medicaid discharges of 40 percent or greater as determined by the commissioner from data reported in each hospital's 2007 annual cost report, to compensate each hospital's decrease in Medicaid revenue resulting from the trend factor reductions and the inpatient reimbursement methodology changes reflected in this Subpart pursuant to the following schedule of payments:

(b) For annual periods beginning on and after January 1, 2010:

(i) From regional allotments specified below, $269.5 million shall be distributed to non-major public teaching hospitals on a regional basis to cover each eligible facility's proportional regional share of 2007 uncompensated care, as defined in section 2807-k(5-a)(c) of the Public Health Law and offset by disproportionate share payments received by each facility during calendar year 2010 in accordance with sections 2807-k and 2807-w of the Public Health Law and subdivision (a) of this section:

(ii) $25 million shall be distributed to non-major public hospitals having Medicaid discharges of 40 percent or greater as determined by the commissioner from data reported in each hospital's 2007 annual cost report in accordance with the methodology and schedule of payments set forth in paragraph (ii) of subdivision (a) of this section.

(iii) $24.5 million shall be distributed as non-Medicaid grants to non-major public academic medical centers pursuant to the following schedule of payments:

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.35 - Disproportionate share limitations

86-1.35 Disproportionate share limitations.

(a) Disproportionate share payment distributions made to general hospitals pursuant to Article 28 of the Public Health Law shall be limited in accordance with the provisions of this section. The latest available annual cost report submitted by a hospital prior to the disproportionate share distribution period shall be used to determine eligibility pursuant to subdivision (b) of this section and for projected limits pursuant to subdivision (e) of this section. Annual cost reports having an end date in the applicable annual disproportionate share distribution period, or for certain State-operated general hospitals, annual cost reports having an end date in the subsequent annual disproportionate share distribution period, shall be used to reconcile limits pursuant to subdivision (f) of this section.

(b) General hospitals whose inpatient Medicaid eligible patient days are less than one percent of total inpatient patient days shall not be eligible to receive disproportionate share distributions.
(c) No general hospital shall receive in total from disproportionate share payment distributions an amount which exceeds the costs incurred during the periods described in subdivision (a) of this section for furnishing inpatient and ambulatory hospital services to individuals who are eligible for medical assistance benefits pursuant to Title XIX of the Federal Social Security Act (hereinafter referred to as "Medicaid cost") or to individuals who have no health insurance for the services provided or other source of third party coverage (hereinafter referred to as "self- pay cost"), reduced by medical assistance payments made pursuant to Title XIX of the Federal Social Security Act (hereinafter referred to as "Medicaid revenue"), other than disproportionate share payments, and payments by uninsured patients. For purposes of this section, payments to a general hospital for services provided to indigent patients made by the State or a unit of local government within the State shall not be considered a source of third party payment.

(d) In order to ensure the continued flow of disproportionate share payments to hospitals, the commissioner shall make projections of each hospital's disproportionate share limitation based on the most current data available from the hospital's annual cost reports. The commissioner shall use annual cost reports in accordance with the provisions of subdivision (e) of this section to estimate Medicaid and self-pay costs in the projection methodology for a particular rate year. This shall be referred to as the "projection methodology". Subsequent to the receipt of a hospital's annual cost report having an end date in the applicable annual disproportionate share distribution period, or for certain state- operated general hospitals whose annual cost reports have an end date within the subsequent annual period, each hospital's disproportionate share limitation shall be reconciled to the actual rate year data. This shall be referred to as the "reconciliation methodology".
(e)
Projection methodology. Each hospital's projected disproportionate share limitation for each rate year shall be the sum of its inpatient and outpatient Medicaid and uninsured gains/(losses) as calculated using reported base year data and statistics from the year two years immediately preceding the rate year and as used for projection methodology purposes for that prior year.
(f)
Reconciliation methodology.The commissioner shall revise the projected limitation based on actual data reported to the commissioner for such rate year in accordance with the following and in accordance with final regulations issued by the federal Department of Health and Human Services implementing 42 USC section 1396r-4. The commissioner shall revise the projected limitations for each hospital within eight months from the date required reports are submitted to the department, except if such reports are determined to be unacceptable by the department. For hospitals which have submitted unacceptable reports, the commissioner shall revise the projected limitations within eight months from the date acceptable reports have been resubmitted to the department.
(1) Each hospital shall submit, by the same date the annual cost reports are required to be filed pursuant to section 86-1.2 of this Subpart, a disproportionate share limitation schedule in a form and manner prescribed by the commissioner within which the hospital shall calculate, in accordance with the instructions, its inpatient and outpatient Medicaid and self-pay gains/(losses) during the cost reporting year. The disproportionate share limitation schedule shall be accompanied by a certification by the hospital's independent public accountant which provides the commissioner sufficient assurance as to the accuracy of the information contained in such schedule.
(i) The final limit shall be calculated by excluding inpatient and outpatient Medicaid revenue impacts resulting from prospective adjustments to rates for periods prior to the implementation of the Federal hospital specific disproportionate share payment limits from the inpatient and outpatient Medicaid and self-pay gains/(losses) reported on the disproportionate share payment limitation schedule.
(2) Failure of a hospital to submit the information required by this section in a form acceptable to the commissioner shall result in the immediate withholding of all subsequent disproportionate share distributions. Such withholding shall continue until the hospital complies with the reporting requirements of this subdivision.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.36 - Hospital physician billing

86-1.36 Hospital physician billing.

(a) With the exception of hospitals designated under the Medicare program as meeting the criteria set forth in section 1861(b)(7) of the federal Social Security Act, for discharges occurring on and after February 1, 2010, hospitals may bill for physician services in accordance with the applicable Medicaid physician fee schedule in addition to billing the applicable DRG.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.37 - Readmissions

86-1.37 Readmissions
(a) For discharges occurring on and after July 1, 2010, Medicaid rates of payment to hospitals that have an excess number of readmissions as defined in accordance with the criteria set forth in subdivision (c), as determined by a risk adjusted comparison of the actual and expected number of readmissions in a hospital as described by subdivision (d), shall be reduced in accordance with subdivision (e).
(b) Definitions. For purposes applicable to this section the following terms shall be defined as follows:
(1) Potentially Preventable Readmission (PPR) shall mean a readmission to a hospital that follows a prior discharge from a hospital within 14 days, and that is clinically-related to the prior hospital admission.
(2) Hospital shall mean a general hospital as defined pursuant to section 2801 of the Public Health Law.
(3) Observed Rate of Readmission shall mean the number of admissions in each hospital that were actually followed by at least one PPR divided by the total number of admissions.
(4) Expected Rate of Readmission shall mean a risk adjusted rate for each hospital that accounts for the severity of illness, APR-DRG, and age of patients at the time of discharge preceding the readmission.
(5) Excess Rate of Readmission shall mean the difference between the observed rates of potentially preventable readmissions and the expected rate of potentially preventable readmissions for each hospital.
(6) Behavioral Health shall mean an admission that includes a primary or secondary diagnosis of a major mental health related condition, including, but not limited to, chemical dependency and substance abuse.
(7) Managed Care Encounter Data shall mean claims-like data that describes services provided by managed care plans to their enrollees.
(c) Readmission Criteria.
(1) A readmission is a return hospitalization following a prior discharge that meets all of the following criteria:
(i) The readmission could reasonably have been prevented by the provision of appropriate care consistent with accepted standards in the prior discharge or during the post discharge follow-up period.
(ii) The readmission is for a condition or procedure related to the care during the prior discharge or the care during the period immediately following the prior discharge and including, but not limited to:

(a) The same or closely related condition or procedure as the prior discharge.

(b)An infection or other complication of care.

(c)A condition or procedure indicative of a failed surgical intervention.

(d)An acute decompensation of a coexisting chronic disease.
(iii) The readmission is back to the same or to any other hospital.
(2) Readmissions, for the purposes of determining PPRs, excludes the following circumstances:
(i) The original discharge was a patient initiated discharge and was Against Medical Advice (AMA) and the circumstances of such discharge and readmission are documented in the patient's medical record.
(ii) The original discharge was for the purpose of securing treatment of a major or metastatic malignancy, multiple trauma, burns, neonatal and obstetrical admissions.
(iii) The readmission was a planned readmission or one that occurred on or after 15 days following an initial admission.
(iv) For readmissions occurring during the period up through March 31, 2012, the readmission involves an original discharge determined to be behavioral health related.
(d) Methodology.
(1) Rate adjustments for each hospital shall be based on such hospital's 2007 Medicaid paid claims data and managed care encounter data for discharges that occurred between January 1, 2007 and December 31, 2007.
(2) The expected rate of readmissions shall be reduced by 24% for each hospital for periods prior to September 30, 2010; 38.5% for the period October 1, 2010 through December 31, 2010; and 33.3% on and after January 1, 2011.
(3) Excess readmission rates are calculated based on the difference between the observed rate of PPRs and the expected rate of PPRs for each hospital.
(4) In the event the observed rate of PPRs for a hospital is lower than the expected rate of PPRs, the excess number of readmissions shall be set at zero.
(e) Payment Calculation.
(1) For the excess readmissions identified in paragraph (3) of subdivision (d) of this section, each hospital's projected payment rate for the 2010 rate period, as otherwise computed in accordance with this subpart, will be used to compute the relative aggregate payments, excluding behavioral health, associated with the risk adjusted excess readmissions in each hospital.
(2) For each hospital, a hospital specific readmission adjustment factor shall be computed as one minus the ratio of the hospital's relative aggregate payments associated with the excess readmissions from paragraph (3) of subdivision (d) of this section and the hospital's relative aggregate payments for all non-behavioral health Medicaid discharges as determined pursuant to this subdivision.
(3) Non-behavioral health related payments to hospitals shall be reduced by applying the hospital readmission adjustment factor from paragraph (2) of this subdivision to the applicable case payment or per-diem payment amount for all non-behavioral health related Medicaid discharges to the hospital.

Effective Date: 
Wednesday, February 23, 2011
Doc Status: 
Complete

Section 86-1.38 - Transition pool for 2010-2013 period

86-1.38 Transition pool for 2010-2013 period.

(a) Subject to the availability of federal financial participation, the commissioner may, for rate periods effective on and after October 20, 2010, increase inpatient Medicaid fee-for-service rates subject to this Subpart for the following periods and in the following amounts:

(1) for the period October 20, 2010 through March 31, 2011, up to thirty-seven million five hundred thousand dollars;

(2) for the period April 1, 2011 through March 31, 2012, up to seventy-five million dollars;

(3) for the period April 1, 2012 through March 31, 2013, up to fifty million dollars;

(4) for the period April 1, 2013 through March 31, 2014, up to twenty-five million dollars.

(b) The distributions authorized pursuant to this section shall be made available through a reduction, as determined by the commissioner, in the state-wide base price as otherwise computed in accordance with this Subpart.

(c) Hospitals eligible for distributions pursuant to this section shall be public and non-public general hospitals with Medicaid inpatient discharges equal to or greater than seventeen and one-half percent as reported for the 2007 period.

(d) Funds allocated pursuant to this section shall be allocated to eligible hospitals pursuant to a formula, as determined by the commissioner, such that, to the extent of funds available, no hospital’s reduction in total Medicaid fee-for-service inpatient revenue for the corresponding rate periods, as a result of the application of otherwise applicable rate-setting methodologies in effect for such periods, exceeds a percentage reduction as determined by the commissioner.

(e) Hospitals receiving funds pursuant to this section that did not previously receive funds to facilitate improvements in hospital operations and finances beginning on December 1, 2009, shall, as a condition for eligibility for such funds, adopt a resolution of the Board of Directors of each such hospital setting forth its current financial condition, including ongoing board oversight, and shall, after two years, issue a report as adopted by each such Board of Directors setting forth what progress has been achieved regarding such improvement, provided, however, if such report fails to set forth adequate progress, as determined by the Commissioner, the Commissioner will deem such facility ineligible for further distributions pursuant to this section and will redistribute such further distributions to other eligible facilities in accordance with the provisions of this section. The Commissioner shall be provided with copies of all such resolutions and reports.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.39 - Inpatient psychiatric services

86-1.39 Inpatient psychiatric services. Inpatient psychiatric services provided in general hospitals, or distinct units of general hospitals, specializing in such inpatient psychiatric services, with regard to patients admitted on and after October 20, 2010, shall be reimbursed on a per diem basis in accordance with the following, provided, however, that such rates applicable to inpatients otherwise subject to the provisions of public health law section 2807-c(1)(a-2)(i) shall be effective with regard to patients admitted on and after January 1, 2011:

(a) Such reimbursement shall be based on the All Patient Refined Diagnostic Related Group (APR-DRG) patient classification system as defined in section 86-1.15(a) of this Subpart.

(b) The operating component of the rate shall be based on a statewide price, utilizing 2005 Medicaid fee-for-service (FFS) inpatient costs adjusted for case mix and the Wage Equalization Factor (WEF) and excluding costs for Direct GME, Electroconvulsive Therapy, and capital costs.

(c) The capital cost components of rates computed pursuant to this section shall be computed on the basis of budgeted capital costs allocated to the hospital, or to the distinct unit of a hospital, in accordance with the provisions of section 86-1.25 of this Subpart divided by the hospital or distinct unit patient days and reconciled to actual total expenses.

(d) The non-operating component of the rate shall reflect 2005 Medicaid fee-for-service Direct GME costs.

(e) The statewide price shall be adjusted for each patient to reflect the following factors:

(1) a service intensity weight (SIW) associated with the case based on the grouper assigned APR-DRG, as described in subdivision (f) of this section, will be applied to the adjusted operating per diem;

(2) a rural adjustment factor of 1.2309 will be applied to the operating per diem for those hospitals designated as rural hospitals. For dates of service beginning on or after July 1, 2014, rural designation shall apply to hospitals located in an upstate region, as defined in subdivision (o) of this section, with population densities of 225 persons or fewer per square mile, based on the New York State 2010 Vital Statistics table of estimated population, land area, and population density;

(3) an age adjustment payment factor of 1.0872 will be applied to the per diem operating component for adolescents ages 17 and under;

(4) a payment adjustment factor of 1.0599 will be applied to the operating component for the presence of a mental retardation diagnosis;

(5) the payment methodology shall include one co-morbidity factor per stay and if more than one co-morbidity is presented, the co-morbidity that reflects the highest payment factor shall be used to adjust the per diem operating component;

(6) a variable payment factor will be applied to the operating per diem for each day of the stay, with the factor for days 1 through 4 established at 1.2, the factor for days 5 through 11 established at 1.0, the factor for days 12 through 22 established at 0.96 and the factor for stays longer than 22 days established at 0.92; and

(7) for dates of service beginning on or after July 1, 2014, a ten percent increase will be applied for hospitals located in an upstate region, as defined in subdivision (o) of this section.

(f) (1) The table of service intensity weights (SlW's) applicable to rates set pursuant to this section for each effective period is published on the New York State Department of Health website at http://www.health.ny.gov/nysdoh/hospital/drg/index.htm and reflects the cost weights assigned to each All Patient Refined (APR) diagnosis related group (DRG) patient classification category. The SIWs assigned to each DRG/APR indicates the relative cost variance of that DRG/APR classification from the average cost of all inpatients in all DRG/APRs. Such SIWs are developed using two years of Medicaid fee-for-service cost data as reported to the Statewide Planning and Research Cooperative System (SPARCS) for the years set forth in paragraph (2) of this subdivision. Costs associated with hospitals that do not have an ancillary charge structure and costs associated with statistical outliers shall be excluded from the SIW calculations.

(2) For rate periods on and after the effective date of this section the SIW shall be computed using SPARCS and reported cost data from the 2005 and 2006 calendar years, as submitted to the department by September 30, 2009.

(g) The table of co-morbidity factors applicable to the rate adjustments described in paragraph (5) of subdivision (e) of this section is published on the New York State Department of Health website at http://www.health.state.ny.us/.

(h) The first day of a patient's readmissions to the same hospital within thirty days of discharge will be treated as day four for purposes of the variable payment factor computed pursuant to paragraph (6) of subdivision (d) of this section, with subsequent days treated in a conforming manner with the provisions of such paragraph.

(i) Reimbursement for physician services shall not be included in rates set pursuant to this section and such services may be billed on a fee-for-services basis as otherwise provided by applicable provisions of law.

(j) Reimbursement for Electroconvulsive Therapy shall be established at a statewide fee of $281, as adjusted for each facility's WEF, for each treatment during a patient's stay.

(k) Reimbursement for days of alternative level of care for patients whose reimbursement is otherwise subject to this section shall be in accordance with section 86-1.22 of this Subpart.

(l) New inpatient psychiatric exempt hospitals or units established pursuant to article 28 of the public health law shall be reimbursed at the statewide price plus budgeted capital and Direct GME.

(m) For rate periods through December 31, 2014, reimbursement pursuant to this section shall include transition payments of up to twenty-five million dollars on an annualized basis, which shall be distributed in accordance with the following:

(1)(i) Fifty percent of such payments shall be allocated to facilities that experience a reduction in Medicaid operating revenue in excess of threshold percentage set forth in subparagraph (ii) of this paragraph as a result of the implementation of rates set pursuant to this section. Such payments shall be allocated proportionally, based on each eligible facility's relative Medicaid operating revenue loss in excess of the threshold, as determined by the commissioner.

(ii) The threshold percentage described in subparagraph (i) of this paragraph shall be 6.02%.

(2)(i) Fifty percent of such payments shall be allocated to facilities with regard to which it is determined by the commissioner that rates otherwise set pursuant to this section result in Medicaid revenue that is less than the facility's Medicaid costs by a threshold percentage in excess of the threshold percentage set forth in subparagraph (ii) of this paragraph. Such payments shall be allocated proportionally, based on the degree each facility Medicaid operating revenue shortfall exceeds such threshold percentage. For those facilities without available Medicaid fee-for-service cost data, computations pursuant to this paragraph shall be based on each such facility's total operating costs as determined by the commissioner.

(ii) The threshold percentage described in subparagraph (i) of this paragraph shall be 1.20%.

(n) For rate period after October 20, 2010 through March 31, 2011, reimbursement pursuant to this paragraph may include transition payments totaling, in aggregate, up to twelve million dollars and distributed to eligible hospitals in accordance with the following, provided, however, that if less than twelve million dollars is distributed in such rate period, then additional distributions of up to such twelve million dollars may be made in accordance with the provisions of this subdivision in subsequent rate periods:

(1) Eligible hospitals shall be those general hospitals which receive approval for certificate-of-need applications submitted to the Department of Health between April 1, 2010 and March 31, 2011 for adding new behavioral health beds to their certified bed capacity as a direct result of the decertification of other general hospital behavioral health inpatient beds in the same service area, or which the Commissioner of Health, in consultation with the Commissioner of Mental Health, has determined have complied with Department of Health requests to make other significant behavioral health service delivery adjustments in direct response to such decertification.

(2) Eligible hospitals shall, as a condition of their receipt of such rate adjustments, submit to the Department of Health proposed budgets for the expenditure of such additional Medicaid payments for the purpose of providing behavioral health services and such budgets must be approved by the Department of Health, in consultation with the Office of Mental Health, prior to such rate adjustments being issued.

(3) Distributions made pursuant to this paragraph shall be made as add-ons to each eligible facility's inpatient Medicaid rate and shall be allocated proportionally, based on the proportion of each approved hospital budget to the total amount of all approved hospital budgets and such distributions shall be subsequently reconciled to ensure that actual aggregate expenditures are within available aggregate funding.

(o) For purposes of this section, the downstate region of New York State shall consist of the counties of Bronx, New York, Kings, Queens, Richmond, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam and Dutchess, and the upstate region of New York State shall consist of all other counties.

 

Effective Date: 
Wednesday, January 30, 2019
Doc Status: 
Complete

Section 86-1.41 - Hospital Quality Contribution

86-1.41 - Hospital Quality Contribution.

(a) For the period July 1, 2011 through March 31, 2012 a quality contribution shall be imposed on the inpatient revenue of each general hospital that is received for the provision of inpatient obstetrical patient care services in an amount equal to 2.4% of such revenue, as defined in Section 2807-d(3)(a) of the Public Health Law.

(b) For the period on and after April 1, 2012, a quality contribution shall be imposed on the inpatient revenue of each general hospital that is received for the provision of inpatient obstetrical patient care services in an amount equal to 1.6% of such revenue, as defined in Section 2807-d(3)(a) of the Public Health Law.

(c) For the purposes of computing revenue subject to this section, inpatient obstetrical patient care services shall also include services related to the care of newborns, but shall exclude neonatal intensive care services.

(d) The funds collected pursuant to this section shall be subject to and administered in accordance with the provisions of Section 2807-d-1 of the Public Health Law.

Effective Date: 
Wednesday, February 15, 2012
Doc Status: 
Complete

Section 86-1.42 - Potentially preventable negative outcomes

86-1.42 Potentially preventable negative outcomes.

(a) Effective for discharges occurring on or after July 1, 2011, payments pursuant to this Subpart shall be denied with regard to the following potentially preventable negative outcomes if they are acquired during a patient's inpatient stay at the hospital seeking such payments:

(1) A foreign object retained within a patient's body after surgery.

(2) The development of an air embolism within a patient's body.

(3) A patient blood transfusion with incompatible blood.

(4) A patient's development of stage III or stage IV pressure ulcers.

(5) Patient injuries resulting from accidental falls and other trauma, including, but not limited to:

i. Fractures

ii. Dislocations

iii. Intracranial injuries

iv. Crushing injuries

v. Burns

vi. Electric shock

(6) A patient's manifestations of poor glycemic control, including, but not limited to:

i. Diabetic ketoacidosis

ii. Nonketotic hyperosmolar coma

iii. Hypoglycemic coma

iv. Secondary diabetes with ketoacidosis

v. Secondary diabetes with hyperosmolarity

(7) A patient's development of a catheter-associated urinary tract infection.

(8) A patient's development of a vascular catheter-associated infection.

(9) A patient's development of a surgical site infection following:

i. a coronary artery bypass graft – mediastinitis;

ii. bariatric surgery, including, but not limited to, laparoscopic gastric bypass, gastroenterostomy, and laparoscopic gastric restrictive surgery; or

iii. orthopedic procedures, including, but not limited to, such procedures performed on the spine, neck, shoulder and elbow.

10. A patient's development of deep vein thrombosis or a pulmonary embolism in connection with a total knee replacement or a hip replacement, excluding pediatric patients, defined as patients under eighteen years of age, and also excluding obstetric patients, defined as patients with at least one primary or secondary diagnosis code that includes an indication of pregnancy.

Effective Date: 
Wednesday, February 1, 2012
Doc Status: 
Complete

Section 86-1.43 - Certified home health care agency ceilings

86-1.43 Certified home health care agency ceilings

(a) Effective for services provided on and after April 1, 2011 through March 31, 2012, Medicaid payments for certified home health care agencies (agencies), except for such services provided to children under eighteen years of age, shall reflect ceiling limitations determined in accordance with this section. Ceilings for each agency shall be based on a blend of:

(1) the agency's 2009 average per patient Medicaid claim, weighted at 51 percent, and

(2) the 2009 statewide average per patient Medicaid claim for all agencies, as adjusted by the regional wage index factor and by each agency's patient case mix index, and weighted at 49 percent.

(b) Effective for rate periods on and after April 1, 2011, the Department shall determine, based on 2009 claims data, each agency's projected average per patient Medicaid claim for the period April 1, 2011 through March 31, 2012, as compared to the applicable ceiling computed pursuant to subdivision (a) of this section. To the extent that each agency's projected average claim is in excess of such ceiling, the Department shall reduce such agency's payments for periods on and after April 1, 2011 by an amount reflecting the degree that such agency's projected average claim is in excess of such ceiling.

(c) The regional wage index factor (WIF) will be computed in accordance with the following and applied to the portion of the statewide average per patient Medicaid claim attributable to labor costs:

(1) Average wages will be determined for agency service occupations for each of the 10 labor market regions as defined by the New York State Department of Labor.

(2) The average wages in each region will be assigned relative weights in proportion to the Medicaid utilization for each of the agency service categories as reported in the most recently available agency cost report submissions.

(3) Based on the average wages as determined pursuant to paragraph (1) of this subdivision, as weighted pursuant to paragraph (2) of this subdivision, an index will be determined for each region, based on a comparison of the weighted average regional wages to the statewide average wages.

(4) The Department may adjust the regional WIFs proportionately, if necessary, to assure that the application of the WIFs is revenue-neutral on a statewide basis.

(d) Agency specific case mix indexes (CMIs) will be calculated for each agency and applied to the statewide average CMI. Computation of such CMIs shall utilize the episodic payment system grouper and shall reflect:

(1) 2009 adjusted agency Medicaid claims as grouped into 60 day episodes of patient care;

(2) data for each agency patient as derived from the federal Outcome Assessment Information Set (OASIS) and as reflecting the assignment of such patients to OASIS resource groups;

(3) the assignment of a relative weight to each OASIS resource group;

(4) the assignment of each agency's CMI index based on the sum of the weights for all of its grouped episodes of care divided by the number of episodes.

(e) Ceiling limitations determined pursuant to this section shall be subject to retroactive adjustment and reconciliation. In determining payment adjustments based on such reconciliation, adjusted agency ceilings shall be established. Such adjusted ceilings shall be based on a blend of: (i) an agency's 2009 average per patient Medicaid claim adjusted by the percentage of increase or decrease in such agency's patient case mix from the 2009 calendar year to the annual period April 1, 2011 through March 31, 2012, weighted at 51 percent, and; (ii), the 2009 statewide average per patient Medicaid claim adjusted by a regional wage index factor and the agency's patient case mix index for the annual period April 1, 2011 through March 31, 2012, weighted at 49 percent. Such adjusted agency ceiling shall be compared to actual Medicaid paid claims for the period April 1, 2011 through March 31, 2012. In those instances when an agency's actual average per patient Medicaid claim is determined to exceed the agency's adjusted ceiling, the amount of such excess shall be due from each such agency to the state and may be recouped by the Department in a lump sum amount or through reductions in the Medicaid payments due to the agency. In those instances where an interim payment or rate of payment adjustment was applied to an agency in accordance with subdivision (a) and such agency's actual average per patient Medicaid claim is determined to be less than the agency's adjusted ceiling, the amount by which such Medicaid claims are less than the agency's adjusted ceiling shall be remitted to each such agency by the Department in a lump sum amount or through an increase in the Medicaid payments due to the agency.

(f) Projected payment adjustments computed pursuant to subdivision (b) of this section shall be based on Medicaid paid claims, as determined by the Department, for services provided by agencies in the base year 2009. Amounts due or owed from reconciling projected payment adjustments pursuant to subdivision (e) of this section shall be based on Medicaid paid claims, as determined by the Department, for services provided by agencies in 2009 and Medicaid paid claims, as determined by the Department, for services provided by agencies in the reconciliation period April 1, 2011 through March 31, 2012.

(g) The Department may require agencies to collect and submit any data deemed by the Department to be required to implement the provisions of this section.

Effective Date: 
Wednesday, October 5, 2011
Doc Status: 
Complete

Section 86-1.44 - Episodic Payments for Certified Home Health Agency Services

86-1.44 Episodic Payments for Certified Home Health Agency Services

(a) Effective for services provided on and after May 2, 2012, Medicaid payments for certified home health care agencies ("CHHA"), except for such services provided to children under eighteen years of age and except for services provided to a special needs population of medically complex and fragile children, adolescents and young disabled adults by a CHHA operating under a pilot program approved by the Department, shall be based on payment amounts calculated for 60-day episodes of care.

(b) An initial statewide episodic base price, to be effective May 2, 2012, will be calculated based on paid Medicaid claims, as determined by the Department, for services provided by all certified home health agencies in New York State during the base period of January 1, 2009 through December 31, 2009.

(1) Such base price shall be calculated by grouping all Medicaid paid CHHA claims for dates of services in 2009 into 60 day episodes of care. All such 2009 episodes which include dates of service beginning in November or December of 2008 or ending in January or February of 2010 shall be included in such base price calculation. Low utilization episodes of care, as defined in subdivision (d) of this section, shall be excluded from such calculation. With regard to high utilization episodes of care, costs in excess of outlier thresholds, as determined in accordance with subdivision (e) of this section, shall be excluded from such calculation. The resulting base price shall be subject to such further adjustment as is required to comply with the aggregate savings mandated by paragraph (b) of subdivision 13 of section 3614 of the Public Health Law ("PHL").

(2) The episodic base price for periods beginning on or after April 1, 2013, may be based on paid Medicaid claims for services provided by all certified home health agencies during a base year period subsequent to 2009, as determined by the Department.

(3) The applicable base year for determining the base price shall be updated not less frequently than every three years.

(c) The base price paid for 60-day episodes of care shall be adjusted by an individual patient case mix index as determined pursuant to subdivision (f) of this section; and also by a regional wage index factor as determined pursuant to subdivision (h) of this section. Such case mix adjustments shall include an adjustment factor for CHHAs providing care primarily to a special needs patient population coming under the jurisdiction of the Office of People With Developmental Disabilities (OPWDD) and consisting of no fewer than two hundred such patients.

(d) Notwithstanding any inconsistent provision of this section, payments for low utilization cases shall be based on the statewide weighted average of fee-for-service rates for such services, as determined by the Department and as adjusted by the applicable regional wage index factor as described in subdivision (h) of this section. For purposes of this section, low utilization cases will be defined as 60 day episodes of care with a total cost of $500 or less, based on statewide weighted average fee-for-service rates paid on a per-visit, per-hour, or other appropriate historical basis.

(e) (1) Payments for 60-day episodes of care shall be adjusted for high-utilization cases in which total costs, based on statewide weighted average fee-for-service rates as determined by the Department and as paid on a per-visit, per-hour, or other appropriate historical basis, exceed outlier cost thresholds determined by the Department for each case mix group. In such cases the provider will receive the adjusted episodic base payment pursuant to subdivisions (b) and (c) of this section, plus a percentage, to be determined by the Department, of the cost which exceeds the outlier threshold, as adjusted by the regional wage index factor, provided, however, that such adjustment percentage is subject to such further adjustment as may be necessary to comply with the aggregate savings mandated by PHL section 3614(13)(b).

(2) The outlier threshold for each resource group, as described in subdivision (f) of this section, shall be equal to a specified percentile of all episodic claims totals for the resource group during the base period, excluding low utilization episodes. Such percentiles shall range from the seventieth percentile for groups with the lowest case mix index to the ninetieth percentile for groups with the highest case mix index.

(f) The case mix index to be applied to each episodic claim, excluding low utilization claims, shall be based on patient information contained in the federal Outcome Assessment Information Set (OASIS) for the episode. The patient shall be assigned to a resource group based on data that includes, but is not limited to, clinical and functional information, age group, and the reason for the assessment. A case mix index shall be calculated for each resource group based on the relative cost of paid claims during the base period.

(g) Reimbursement for maternity patients, defined as patients who are currently or were recently pregnant and are receiving treatment as a direct result of such pregnancy, may be made pursuant to this section without the submission of an OASIS form, provided that providers billing for such patients must bill in accordance with such special billing instructions as may be established by the commissioner and such patients shall be grouped in a case mix designation based on the lowest acuity resource group.

(h) The regional wage index factor (WIF) shall be computed in accordance with the following and applied to the portion of the episodic base price attributable to labor costs:

(1) Average wages shall be determined for agency health care service occupations for each of the 10 labor market regions in New York, as defined by the New York State Department of Labor.

(2) The average wages in each region shall be assigned relative weights in proportion to the Medicaid utilization for each of the agency service categories as reported in the most recently available agency cost report submissions.

(3) Based on the average wages as determined pursuant to paragraph (1) of this subdivision, as weighted pursuant to paragraph (2) of this subdivision, an index shall be determined for each region, based on a comparison of the weighted average regional wages to the statewide average wages.

(4) The Department may adjust the regional WIFs proportionately, if necessary, to assure that the application of the WIFs is revenue-neutral on a statewide basis.

(i) Payments for episodes of care shall be proportionally reduced to reflect episodes of care totaling less than 60 days, provided, however, that CHHAs providing episodes of care totaling less than 60 days as a result of the following circumstances shall be reimbursed for a full 60 day episode:

(1) discharges from the CHHA resulting from a determination that the patient no longer requires CHHA care and may remain at home;

(2) transfer to a general hospital to receive acute care services;

(3) transfer to a hospice for end-of-life care; or

(4) the patient's death.

The commissioner shall monitor cases for which full payments are made for episodes of care of less than 60 days pursuant to the provisions of this subdivision and may require the CHHA to provide such information and documentation as the commissioner deems necessary to ensure quality of care.

(j) The Department may require agencies to collect and submit any data deemed by the Department to be required to implement the provisions of this section.

(k) Closures, mergers, acquisitions, consolidations, and restructurings.

(1) The commissioner may grant approval of a temporary adjustment to rates calculated pursuant to this section for eligible certified home health agencies.

(2) Eligible certified home health agency providers shall include:

(i) providers undergoing closure;

(ii) providers impacted by the closure of other health care providers;

(iii) providers subject to mergers, acquisitions, consolidations or restructuring; or

(iv) providers impacted by the merger, acquisition, consolidation or restructuring of other health care facilities.

(3) Providers seeking rate adjustments under this subdivision shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:

(i) protect or enhance access to care;

(ii) protect or enhance quality of care;

(iii) improve the cost effectiveness of the delivery of health care services; or

(iv) otherwise protect or enhance the health care delivery system, as determined by the commissioner.

(4) (i) Such written proposal shall be submitted to the commissioner at least sixty days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this subdivision shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the provider shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and applicable provisions of this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the provider’s written proposal as approved by the commissioner and may also require that the provider submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the provider’s temporary rate adjustment prior to the end of the specified timeframe.

(ii) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a Request For Applications or a Request For Proposals issued by the commissioner.

Effective Date: 
Wednesday, February 19, 2014
Doc Status: 
Complete

Section 86-1.45 - Reimbursement for language assistance services in hospital inpatient settings

86-1.45 - Reimbursement for language assistance services in hospital inpatient settings. For hospital inpatient services, in addition to the inpatient rates of payment computed in accordance with this Subpart, a separately billable rate of payment shall be available for providing language assistance services, if applicable, in accordance with the following:

(a) A discrete rate of payment for language interpretation services provided to patients with limited English proficiency (LEP) and communication services provided for patients who are deaf and hard of hearing will be established as follows:

(1) Payment will be established on a per unit basis with the unit of payment determined based on the number of minutes of language assistance service provided.

(2) A maximum of two billable units of language assistance services will be allowable per patient per day with the billable units defined as follows:

(i) 1st billable unit – for encounters providing up to and including the first 22 minutes of language assistance service.

(ii) 2nd billable unit – for encounters providing additional minutes (23+) beyond the initial 22 minutes of language assistance services during the given patient day.

(b) The rate of payment will be established at $11.00 per unit of language assistance service provided, with a maximum allowable payment per inpatient day of care of $22.00.

(c) To be reimbursable, the language assistance service must be provided by an independent third party, a dedicated hospital employee or a third party vendor (e.g., telephonic interpretation service) whose sole function is to provide interpretation services for individuals with LEP and communication services for people who are deaf and hard of hearing.

Effective Date: 
Wednesday, October 7, 2015

Section 86-1.46 - Empire Clinical Research Investigator Program (ECRIP)

86-1.46 Empire Clinical Research Investigator Program (ECRIP)

(a) Definitions. For purposes of this section, the following definitions shall apply:

(1)
Clinical researchmeans patient-oriented research, epidemiologic and behavioral studies, or outcomes research and health services research that are approved by an institutional review board by the time the research fellow position is filled.

(2)
Clinical research planmeans a plan submitted by a consortium or teaching general hospital for a research fellow position which demonstrates, in a form to be provided by the commissioner, the following:

(i) experience the sponsor-mentor, and for center distributions the director, has in clinical research and the medical field of the study;

(ii) methods, data collection and anticipated measurable outcomes of the clinical research to be performed;

(iii) training goals, objectives and experience the research fellow will be provided to assess a future career in clinical research;

(iv) scientific relevance, merit and health implications of the research to be performed;

(v) clear and comprehensive details on the research fellow position;

(vi) non-duplication with other clinical research positions from the same teaching general hospital or consortium;

(vii) methods to track the career of the research fellow once the term of the position is complete;

(viii) for center distributions, a budget including matching funds; and

(ix) any other information required by the commissioner to implement subparagraph (i) of paragraph (b) of subdivision five-a of section 2807-m of the public health law. The clinical research plan submitted in accordance with this paragraph may be reviewed by the commissioner in consultation with experts outside the department of health.

(3)
Clinical research positionmeans a post-graduate residency position which:

(i) shall not be required in order for the research fellow to complete a graduate medical education program;

(ii) may be reimbursed by other sources but only for costs in excess of the funding distributed in accordance with subparagraph (i) of paragraph (b) of subdivision five-a of section 2807-m of the public health law;

(iii) shall exceed the minimum standards that are required by the residency review committee in the specialty the research fellow has trained or is currently training;

(iv) shall not be previously funded by the teaching general hospital or supported by another funding source at the teaching general hospital in the past three years from the date the clinical research plan is submitted to the commissioner;

(v) may supplement an existing research project;

(vi) shall be equivalent to a full-time position comprising of no less than thirty-five hours per week;

(vii) shall provide, or be filled by a research fellow who has formalized instruction in clinical research, including biostatistics, clinical trial design, grant writing and research ethics; and further provides that

(viii) (a) for individual distributions, shall be supervised by a sponsor-mentor who must have been a principal investigator, co-principal investigator or co-investigator of a federal research grant in the past five years from the date the clinical research plan is submitted to the commissioner; or (b) for center distributions, shall be a member of a research team directed by a current principal investigator or co-principal investigator for an active grant from the National Institutes of Health and be supervised by a sponsor-mentor who must have been a principal investigator or co-principal investigator of a federal research grant within one year from the date the clinical research plan is submitted to the commissioner; and

(ix) shall be filled by a research fellow who is

(a) enrolled or has completed a graduate medical education program, as defined in paragraph (11) of this subdivision;

(b) a United States or Canadian citizen, national, or permanent resident of the United States or Canada; and

(c) a graduate of a medical, dental or podiatric school located in New York State, a graduate or resident in a graduate medical education program, as defined in paragraph (11) of this subdivision, where the sponsoring institution, as defined in paragraph (16) of this subdivision, is located in New York State, or resides in New York State at the time the clinical research plan is submitted to the commissioner.

(4)
Co-Investigatorshall mean a person who collaborates with the principal investigator or co-principal investigators in a grant proposal approved and awarded by a federal agency. Such person is responsible for certain aspects of the grant work but has no budget control.

(5)
Consortiummeans an organization or association, approved by the commissioner in consultation with the council, of general hospitals which provide graduate medical education, together with any affiliated site; provided that such organization or association may also include other providers of health care services, medical schools, payors or consumers, and which meet other criteria pursuant to subdivision six of section 2807-m of the public health law.

(6)
Co-Principal investigatorshall mean one of two people, if applicable, who conceived of and submitted a grant proposal approved and awarded by a federal agency. Such person is typically responsible for different aspects of the grant work with a separate budget from the second co-principal investigator.

(7)
Councilmeans the New York State Council on Graduate Medical Education.

(8)
Direct medical educationmeans the direct costs of residents, interns and supervising physicians.

(9)
Distribution periodmeans each calendar year set forth in subdivision two of section 2807-m of the public health law.

(10)
Facultymeans persons who are employed by or under contract for employment with a teaching general hospital or are paid through a teaching general hospital's affiliated faculty practice plan and maintain a faculty appointment at a medical school. Such persons shall not be limited to persons with a degree in medicine.

(11)
Graduate medical education programmeans a post-graduate medical education residency in the United States or Canada which has received accreditation from a nationally recognized accreditation body or has been approved by a nationally recognized organization for medical, osteopathic, podiatric or dental residency programs including, but not limited to, specialty boards.

(12)
Indirect medical educationmeans the estimate of costs, other than direct costs, of educational activities in teaching hospitals as determined in accordance with the methodology applicable for purposes of determining an estimate of indirect medical education costs for reimbursement for inpatient hospital service pursuant to title XVIII of the federal social security act (medicare).

(13)
Principal investigatorshall mean the person who conceived of and submitted a grant proposal approved and awarded by a federal agency. Such person directs the work and controls the budget of such a grant.

(14)
Research thememeans a clinical research topic that represents a strategically important growth area for the consortium or teaching general hospital. Such theme shall be in a field of study suitable to train a resident or residents and cannot be one that currently has federal research funding in the form of one or more National Institutes of Health program project grant, specialized center grant, or research program cooperative agreement at the consortium or teaching general hospital.

(15)
Residentmeans a person in a graduate medical education program that has received accreditation from a nationally recognized accreditation body or in a program approved by any other nationally recognized organization for medical, osteopathic or dental residency programs including, but not limited to, specialty boards.

(16)
Sponsoring institutionmeans the entity that has the overall responsibility for a program of graduate medical education. Such institutions shall include teaching general hospitals, medical schools, consortia and diagnostic and treatment centers.

(b) Within funding amounts set forth in paragraph (b) of subdivision (5-a) of section 2807-m of the public health law and appropriated to ECRIP, and with the objective of securing federal funding for biomedical research, training research fellows, recruiting national leaders as faculty to act as mentors, and training residents and fellows in biomedical research skills, the following distribution methodology shall apply:

(1) Distributions shall first be made to consortia and teaching general hospitals to fund individual ECRIP projects in accordance with subparagraph (i) of this paragraph with remaining funds being divided equally to fund center ECRIP distributions in accordance with subparagraph (ii) of this paragraph as follows:

(i) Individual distributions shall be made in the amount of seventy-five thousand dollars per research fellow position for up to two such positions within a two year period subject to a funding cap of one hundred fifty thousand dollars. Consortia and teaching general hospitals may fund such positions in consecutive or concurrent years.

(ii) Center distributions shall be made by dividing the remaining funds equally amongst all consortia and teaching general hospitals eligible for such distributions; provided that the consortia and teaching general hospitals are required to fund and train one research fellow position per one hundred thousand dollars received and shall provide a one hundred thousand dollar match in each distribution period regardless of the dollar amount distributed pursuant to this subparagraph. If a consortium or teaching general hospital receives a distribution of four hundred thousand dollars or more, excluding matching funds, in any distribution period then it may implement a secondary research theme in addition to the primary research theme. Distributions shall be made in increments determined by the commissioner.

(2) In order to be eligible for center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, each consortium and teaching general hospital shall provide a letter of intent to the commissioner indicating a primary research theme and may indicate a secondary research theme and a list of institutions collaborating in the clinical research plan. In addition, in order to be eligible for individual and center distributions pursuant to this section, each consortium and teaching general hospital shall provide to the commissioner by July first of each distribution period, the following data and information on a hospital-specific basis. Such data and information shall be certified as to accuracy and completeness by the chief executive officer, chief financial officer or chair of the consortium governing body of each consortium or teaching general hospital and shall be maintained by each consortium and teaching general hospital for five years from the date of submission. Such data and information shall only be submitted by teaching general hospitals currently receiving Medicaid reimbursement for direct or indirect graduate medical education and such submission is limited to either an individual distribution pursuant to subparagraph (i) of paragraph (1) of this subdivision or a center distribution pursuant to subparagraph (ii) of paragraph (1) of this subdivision, provided however, that a teaching general hospital with two or more campuses where one campus is the major teaching affiliate with one medical school and the other campus is the major teaching affiliate with another medical school each of which provides clinical services and research facilities at their respective campuses associated with the medical school, shall be eligible for a separate ECRIP distribution at each campus.

(i) For each research fellow position, information on the type, scope, training objectives, institutional support, clinical research experience of the sponsor-mentor, the name of a principal contact person responsible for tracking the career development of researchers placed in clinical research positions, as defined in paragraph (3) of subdivision (a) of this section, and who is authorized to certify to the commissioner that all the requirements of the clinical research training objectives set forth in this subparagraph shall be met.

(ii) General information on all institutions collaborating on the clinical research plan, including each institution’s role in the research and specific budget information;

(iii) Information for each sponsor/mentor, including experience in mentoring and current and pending federal research funding distribution;

(iv) Tracking information for all current and past research fellows, including but not limited to

(a) background information,

(b) employment history,

(c) research status,

(d) current research activities,

(e) research grants and support

(f) publications and presentations, and

(g) any other information necessary to track and obtain outcome data for all research fellows;

(v) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, a description of the primary research theme and secondary research theme, if applicable, and how such themes build upon the existing research activities within the consortium or teaching general hospital;

(vi) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, a description of relevant federal research funding opportunities (if any) and how the research team plans to target such funding;

(vii) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, identification of the research team director who must be a principal investigator or co- principal investigator of an active National Institutes of Health research grant;

(viii) Identification of all sponsor/mentors who: for center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, must have been principal investigators or co- principal investigators of a federal research grant within one year of submission of data pursuant to this subparagraph; and, for individual distributions pursuant to subparagraph (i) of paragraph (1) of this subdivision, must have been principal investigators, co- principal investigators or co-investigators of a federal research grant within five years of submission of data pursuant to this subparagraph;

(ix) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, a letter from the chief executive officer, chief financial officer or chair of the consortium governing body of each consortium or teaching general hospital attesting to the one hundred thousand dollar match required pursuant to subparagraph (ii) of paragraph (1) of this subdivision;

(x) Information on collaborations with entities located within New York State, including but not limited to, teaching general hospitals, universities, local health departments, government laboratories, and federally qualified health centers if applicable; and

(xi) For each research fellow position, information on the name, citizenship status, medical education and training, and medical license number of the research fellow, if applicable, shall be provided by December thirty-first of the calendar year in which the distribution is made;

(xii) Information on the status of the clinical research plan, accomplishments, changes in research activities, progress, and performance of the research fellow shall be provided upon completion of one-half of the award term;

(xiii) A final report detailing training experiences, accomplishments, activities and performance of the research fellow, and data, methods, results and analyses of the clinical research plan shall be provided three months after the research fellow position ends;

(xiv) Any other data or information required by the commissioner to implement this section.

Effective Date: 
Wednesday, February 19, 2014
Doc Status: 
Complete

Section 86-1.47 - Hospital indigent care pool payments

86-1.47 Hospital indigent care pool payments.

(a) Effective for periods on and after January 1, 2013, payments pursuant to subdivision 5-d of section 2807-k of the Public Health Law shall be made in accordance with the provisions of this section.

(b) For the purposes of distributions in accordance with this section, each hospital's relative uncompensated care need amount shall be determined in accordance with the following:

(1) All uninsured inpatient units of service as reported in Exhibit 32 of the Institutional Cost Report from the cost reporting year two years prior to the distribution year, but excluding hospital-based residential health care facility ("RHCF") and hospice units of service, shall be multiplied by the average applicable Medicaid inpatient rate in effect for January 1 of the distribution year.

(2) All uninsured outpatient units of service as reported in Exhibit 33 of the Institutional Cost Report from the cost reporting year two years prior to the distribution year, but excluding referred ambulatory and home health services, shall be multiplied by the average applicable Medicaid outpatient rate in effect for January 1 of the distribution year.

(3) The inpatient amounts determined pursuant to paragraph (1) of this subdivision for each hospital shall be summed and adjusted by a statewide inpatient cost adjustment factor equivalent to the aggregate sum of the inpatient uninsured units multiplied by the step-down cost per unit for each applicable inpatient service , excluding hospital-based RHCF and hospice services, for all hospitals statewide, divided by the aggregate sum of the amounts determined pursuant to paragraph (1) of this subdivision for all hospitals statewide.

(4) The outpatient amounts determined pursuant to paragraph (2) of this subdivision for each hospital shall be summed and adjusted by a statewide outpatient cost adjustment factor equivalent to the aggregate sum of the outpatient uninsured units multiplied by the step-down cost per unit for each applicable outpatient service, excluding referred ambulatory and home health services, for all hospitals statewide, divided by the aggregate sum of the amounts determined pursuant to paragraph (2) of this subdivision for all hospitals statewide.

(5) The adjusted inpatient and outpatient amounts determined pursuant to paragraphs (1) through (4) of this subdivision for each hospital shall be summed and reduced by the sum of all of the cash payments collected from such uninsured patients as reported in the Institutional Cost Report from the cost reporting year two years prior to the distribution year to determine each hospital's net adjusted uncompensated care need.

(6) The uncompensated care nominal need for each hospital shall be calculated as the net adjusted uncompensated care need multiplied by the sum of: (i) 0.40, and (ii) the Medicaid inpatient utilization rate multiplied by 0.60. The Medicaid inpatient utilization rate shall be calculated based on discharge data reported in Exhibit 32 of the Institutional Cost Report from the cost reporting year two years prior to the distribution year and shall include fee-for-service and managed care discharges for acute and exempt services.

(c) For the 2013 calendar year, payments shall be made as follows:

(1) One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be distributed as Medicaid disproportionate share hospital ("DSH") payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital's uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than two and a half percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2) Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital's uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than two and a half percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(d) For the 2014 calendar year, payments shall be made as follows:

(1) One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be distributed as Medicaid disproportionate share hospital ("DSH") payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital's uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than five percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2) Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital's uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than five percent less than the average distributions such hospitals received pursuant to §2807-k and 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(e) For the 2015 calendar year, payments shall be made as follows:

(1) One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be distributed as Medicaid disproportionate share hospital ("DSH") payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital's uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than seven and a half percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2) Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital's uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than seven and a half percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(f)  For the 2016 calendar year, payments shall be made as follows:

(1)  One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be  distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than ten percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2)   Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than ten percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3)   Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(g)  For the 2017 calendar year, payments shall be made as follows:

(1)  One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be  distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than twelve and a half percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2)  Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than twelve and a half percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3)  Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision. 

(h)  For the 2018 calendar year, payments shall be made as follows:

(1)  One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be  distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than fifteen percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2)  Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than fifteen percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3)  Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(i)(1) Funds reserved in the Financial Assistance Compliance Pool ("FACP") pursuant to §2807-k(5-d)(b)(iv) of the Public Health Law for the calendar years 2014 through 2018 shall be distributed to hospitals which demonstrate substantial compliance, as determined by the Commissioner, with the provisions of §2807-k(9-a) of the Public Health Law (the "financial assistance law" or "FAL").

(2) Hospitals which are determined to be in substantial FAL compliance by the end of the 2013 calendar year shall receive their 2014 FACP payments as soon as practical in 2014 in accordance with subdivision (b) of this section. Hospitals which are determined to be in substantial FAL compliance by the end of the 2014 calendar year shall receive their 2015 FACP funds as soon as practical in 2015 in accordance with subdivision (b) of this section.  Hospitals which are determined to be in substantial FAL compliance by the end of the 2015 calendar year shall receive their 2016 FACP payments as soon as practical in 2016 in accordance with subdivision (b) of this section. Hospitals which are determined to be in substantial FAL compliance by the end of the 2016 calendar year shall receive their 2017 FACP payments as soon as practical in 2017 in accordance with subdivision (b) of this section. Hospitals which are determined to be in substantial FAL compliance by the end of the 2017 calendar year shall receive their 2018 FACP payments as soon as practical in 2018 in accordance with subdivision (b) of this section provided, however, that those hospitals which were determined to be not in such substantial compliance by the end of 2015 and 2016, but which are determined to be in such substantial compliance by the end of 2017, shall receive their 2015, 2016 and 2017 FACP payments as soon as practical in 2018.

Effective Date: 
Wednesday, October 11, 2017
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Section 2807-k (5-d)

Section 86-1.50 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.51 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.52 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.53 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.54 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.55 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.57 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.60 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.61 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.62 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.63 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.64 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.65 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.66 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.70 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.71 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.74 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.75 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.80 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.81 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.82 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.83 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.84 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.86 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.88 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.89 Repealed

Effective Date: 
Wednesday, March 16, 2011