NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1708
SPONSOR: Woerner (MS) TITLE OF BILL:
An act to amend the public health law, in relation to payments to rural
hospitals designated as critical access hospitals
PURPOSE:
To allow that on and after April 1, 2027, rural hospitals designated as
critical access hospitals are paid by Medicaid in the same manner that
Medicare pays critical access hospitals, which is on the basis of
reasonable costs.
SUMMARY OF PROVISIONS:
Section one: amends Subdivision 2-a of section 2807 of the Public Health
Law by adding a new paragraph (j) that on and after April 1, 2027,
subject to funds being appropriated therefore, a rural hospital desig-
nated as a critical access hospital shall have Medicaid payments for
emergency services, and all inpatient and outpatient services equal to
one hundred and one percent of the reasonable costs of such facility in
providing these services.
Section 2: states the enactment date and requires that the implementa-
tions of the provisions of the act be contingent upon moneys being
specifically appropriated for that purpose.
JUSTIFICATION:
Critical access hospitals serve medically underserved geographically
isolated communities. They provide limited stay special care, acute care
and swing bed services, as well as 24-hour emergency service capability.
The maintenance of critical access hospitals is critical for preserving
' access to basic health care services for rural New Yorkers.
Cost based Medicaid reimbursement would help ensure the long range
financial viability of primary care hospitals New York State Medicaid
reimbursement rates are presently capped at lower than operational
costs. The problem is exacerbated for critical access hospitals because
of the need to spread substantial fixed costs over a small number of
visits and admissions. Medicare reimburses such hospitals (called crit-
ical access hospitals under Medicare) on the basis of reasonable costs.
This line helped stabilize such hospitals and ensure that isolated
communities continue to have access to needed health care services.
Having Medicaid payments also equal reasonable costs will further ensure
the financial viability of such hospitals.
The provisions of the act cannot be implemented unless moneys are
specifically appropriated for that purpose.
LEGISLATIVE HISTORY:
A.3361 of 2023-24: Referred to Health
S.3445 of 2023-24: Referred to Health
A.2668 of 2021-22: Referred to Health
S.1327 of 2021-22: Referred to Health
A.4561 of 2020: Referred to Health
S.449 of 2020: Referred to Health
A.10572 of 2018: Referred to Health
S.4536A of 2018: Passed Senate
FISCAL IMPLICATIONS:
This legislation is expected to cost the state $1.24 million and will
ensure the financial viability of its thirteen critical access hospi-
tals.
EFFECTIVE DATE:
This act shall take effect immediately; provided however, that the
implementation of the provisions of this act shall be subject to the
appropriation of moneys specifically for the purposes thereof.
STATE OF NEW YORK
________________________________________________________________________
1708
2025-2026 Regular Sessions
IN ASSEMBLY
January 14, 2025
___________
Introduced by M. of A. WOERNER, SMULLEN -- Multi-Sponsored by -- M. of
A. SANTABARBARA -- read once and referred to the Committee on Health
AN ACT to amend the public health law, in relation to payments to rural
hospitals designated as critical access hospitals
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 2-a of section 2807 of the public health law is
2 amended by adding a new paragraph (j) to read as follows:
3 (j) Notwithstanding any other provision of this subdivision or any
4 other provision of law to the contrary and, subject to an appropriation
5 therefor, on and after April first, two thousand twenty-seven, rates of
6 payment for diagnostic and treatment center services, emergency
7 services, general hospital inpatient and outpatient services, ambulatory
8 surgical services and referred ambulatory services, provided by a rural
9 hospital designated as a critical access hospital in accordance with
10 title XVIII of the federal social security act shall be equal to one
11 hundred one percent of the reasonable costs of a facility in providing
12 such services to patients eligible for payments made in accordance with
13 this subdivision. Reasonable costs shall be determined in a manner
14 consistent with that used to determine payment for outpatient critical
15 access hospital services provided to beneficiaries of title XVIII of the
16 federal social security act. For facilities without adequate cost expe-
17 rience, such rates shall be based on budgeted costs subsequently
18 adjusted to one hundred one percent of reasonable actual costs.
19 § 2. This act shall take effect immediately; provided, however, that
20 the implementation of the provisions of this act shall be subject to the
21 appropriation of moneys specifically for the purposes thereof.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03971-01-5
