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Title: Section 540.12 - Advance payments to hospitals.

540.12 Advance payments to hospitals. (a) Criteria for eligibility. The department is authorized to make advance payments to hospitals which meet the following criteria:

(1) The hospital is a voluntary not-for-profit hospital.

(2) Prior to January 1, 1978, the hospital received regular periodic advances from a local government unit, which advances were based on anticipated medical assistance claims payments.

(3) That, historically, 10 percent or 5,000 patient days of hospital inpatient services must have been provided to Medicaid recipients who reside in a district for which the Medicaid Management Information System (MMIS) has taken over payment responsibility.

(b) Methods of advances. Advance payments of medical assistance funds shall be made to hospitals in the following manner:

(1) Advance payments will be made for the period from June 1, 1978 to November 30, 1978, which period shall be known as the advance phase.

(2) Advance payments will be computed on the basis of a comparison of actual monthly payments for medical assistance to the hospital with the estimated normal monthly payments for medical assistance services. This estimate shall be prepared by the department. The department shall advance funds to account for a percentage of the difference between the actual payments made and the estimated monthly claim at the following rates:

Month Percent June 90% July 80%

August 70%

September 60%

October 50%

November 40%

These rates are subject to the discretion of the commissioner. In no case shall the percentage of monies advanced ever exceed 90 percent of the difference between the estimated claim and total payments received by the hospital.

(3) The only payments to be considered in developing the comparison referred to in paragraph (2) of this subdivision shall be payments for claims submitted to MMIS or to those local social services districts in whose behalf it is operating.

(4) The hospital shall certify as to the amount of inpatient services provided to Medicaid recipients, for which it has not yet billed, in the month for which advance payments are to be received. This certification must be sufficient to account for the entire difference between payments actually received and the estimate developed by the department of the normal month's payment. In the event that such unbilled services are less than this difference, the State will advance only a percentage of the lesser amount.

(5) In the event that at any time during the advance phase, the actual monthly payments to a hospital exceed 100 percent of its estimated normal month's payment, the department may:

(i) withhold from its next monthly advance to that hospital the amount by which the previous month's payment exceeded the estimated normal month's payment; or

(ii) withhold from the regular monthly payment the amount by which the actual payment exceeds the estimated normal month's payment. Monies withheld under this option shall be applied towards the liquidation of any outstanding advances.

(c) Performance criteria. In order for a facility to continue to qualify for advances, it must meet the following performance criteria:

(1) For any month during which an advance is sought, the facility's claim submissions must equal at least 90 percent of its average monthly submissions (trended). Of these, a reasonable percentage will have to pass MMIS edits.

(2) "Clean" claims must be submitted within 15 days of the discharge date in 95 percent of the cases. "Clean" claims are those which do not require submission to other third-party payors, and which do not require eligibility or disability determination.

(3) Where the hospital's claiming pattern clearly indicates that the facility has deliberately withheld claims in order to qualify for the advance, the State may recoup its advance by withholding any payments over 100 percent of the hospital's estimated claiming levels until the amount of the advance is recouped.

(d) Method of recoupment. The department shall recoup all advance payments under the following procedures:

(1) At the close of the last payment cycle of November, each hospital's outstanding advances shall be totalled.

(2) Advances shall be recouped in equal installments over a period of 12 months beginning with the month of December, 1978. The department shall deduct each month from payments made to hospitals participating in this advancing system an amount equal to one twelfth of all advance payments. The recoupment period may be extended to 18 months at the discretion of the commissioner.

(3) Notwithstanding any of the foregoing provisions of this section, the department shall be authorized to modify the schedule of recoupments set out in paragraph (2) of this subdivision upon certification by the State Commissioner of Health of the need for such modification made pursuant to 10 NYCRR 86-1.36 (e); provided, however, that any such modification shall not extend the total period of recoupment beyond 18 months.

(e) Notwithstanding any of the foregoing provisions of this section, the department may, in its discretion, make advances on either a monthly, semimonthly or weekly basis.



VOLUME C (Title 18)