NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6677b
SPONSOR: Gottfried TITLE OF BILL:
An act to amend the public health law, in relation to the general hospi-
tal indigent care pool, hospital reimbursements and adjustments to
medical assistance rates to enhanced safety net hospitals; and to amend
chapter 474 of the laws of 1996 amending the education law and other
laws relating to rates for residential health care facilities, in
relation to extending the effectiveness of such rates
PURPOSE OR GENERAL IDEA OF BILL:
Reform the distribution of indigent care pool (ICP) funds intended for
hospitals that are serving a disproportionate share of individuals on
Medicaid or uninsured.
SUMMARY OF SPECIFIC PROVISIONS:.
Section 1 amends Public Health Law 2807-k, subdiv. 5d, to proportionate-
ly reduce allocations to major public and voluntary hospitals by $300
million April 1, 2020 through December 31, 2020 (prorated accordingly),
and annually thereafter. The bill eliminates the ICP transition method-
ology, and the $25 million transition support for voluntary hospitals.
These funds are distributed under other provisions of the bill.
Section 2 of the bill adds a new Subdivision 23 to PHL 2807 to authorize
adjustments to Medicaid rates for Enhanced Safety Net hospitals as
defined in the PHL, and to a newly defined category of Qualified Safety
Net hospitals. The new definition of Qualified Safety Net hospital is
intended for hospitals that fall outside of the enhanced safety net
definition, but provide significant indigent care, such as those that
have received financial assistance through the existing VBPQIP/VAPAP
programs and hospitals on the state's financial watch list. This section
also requires the commissioner to increase Medicaid payments for inpa-
tient and outpatient services by $37.7 million to major public general
hospitals and $262.3 million to Enhanced Safety Net and Qualified Safety
Net hospitals other than major public general hospitals. An additional
$12.5 million is dedicated to federally designated critical access and
sole community hospitals. This section increases rates/lump sum payments
or using either VBP QIP or other supplemental programs to safety net
hospitals
(other than major public general hospitals) that lose funds compared to
the current ICP distribution.
Section 3 amends subdivision 1 of PHL 2807-c, which provides for hospi-
tal inpatient Medicaid payment rates, to allow adjustments under the
revised PHL 2807(23).
Section 4 adds a new paragraph (d) to subdivision - of PHL 2807-c to
make clear that payments to Enhanced Safety Net and Qualified Safety Net
hospitals do not supplant other funding streams to Enhanced Safety Net
hospitals.
Sections 5 and 6 amend Chapter 474 of the Laws of 1996, to allow addi-
tional $200 million in DSH payments to NYC Health + Hospitals, and addi-
tional $100M DSH to all other major public hospitals, including those
operated by the state, the State University of New York, or Erie, Nassau
or Westchester counties.
JUSTIFICATION:
This legislation is needed to fix inequities in distribution of ICP
funds for hospitals serving low income and at-risk communities under the
existing ICP funding and related Medicaid payments. The current law does
not allocate 100% of the funds to those hospitals providing high levels
of care to the uninsured or Medicaid enrollees. Approximately 15% of the
funds, referred to as a "transition collar," still go to hospitals that
are not providing significant care to the uninsured based on an old
formula.
This legislation would correct these inequities by eliminating the ICP
transition collar without hurting hospitals providing services to low
income and at risk communities; increasing Medicaid rates for safety net
and qualified safety net hospitals; optimizing new federal Medicaid
funds; and retaining all existing federal DSH funds to support these
essential services.
This legislation will rebalance the distribution of hospital indigent
care funding, while staying within the constraints of the State's Medi-
caid Global Cap and without additional financial impact to the State.
The bill removes ICP funding linked to historic bad debt and better
targets ICP funds to uninsured patient care. To address the Medicaid
rate issue, the bill would invest $300 million of ICP funds into Medi-
caid increases for enhanced and qualified safety net hospitals. The
investment by hospital ownership type is proportional to the current
pool funding with public shares of ICP at 12.6% and voluntary shares of
the ICP at 87%.
The bill builds on the Enhanced Safety Net Hospitals statute, and recog-
nizes that additional hospitals are providing essential services to
safety net communities and face serious financial jeopardy. Those hospi-
tals are defined as qualified safety net hospitals and may be identified
by criteria including having been awarded VAPAP or VBP QIP funds, or
placed on the DOH Financially Distressed Watch List; the volume of Medi-
caid or uninsured patients served; or the importance of the hospital in
the hospital's region in providing services to Medicaid and uninsured
patients. The bill would retain all existing federal DSH by allowing
public hospitals access to $150 million federal DSH formerly used for
ICP.
The bill would increase Medicaid reimbursement rates for safety net and
qualified safety net hospitals; dedicate funding for critical access
hospitals and sole community hospitals; expand existing programs for
financially distressed hospitals to ensure no harm to safety net or
qualified safety net hospitals. Leveraging public hospitals' access to
federal DSH will minimize federal DSH cuts to New York State which are
set to begin in federal fiscal year 2020.
PRIOR LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS:
No impact on state general fund or Medicaid global cap.
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
6677--B
2019-2020 Regular Sessions
IN ASSEMBLY
March 15, 2019
___________
Introduced by M. of A. GOTTFRIED, REYES, DICKENS, MOSLEY, WEPRIN, RODRI-
GUEZ, SANTABARBARA, CRUZ, BARRON, NIOU, CRESPO, PAULIN -- read once
and referred to the Committee on Health -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- recommitted to the Committee on Health in accordance with
Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the public health law, in relation to the general hospi-
tal indigent care pool, hospital reimbursements and adjustments to
medical assistance rates to enhanced safety net hospitals; and to
amend chapter 474 of the laws of 1996 amending the education law and
other laws relating to rates for residential health care facilities,
in relation to extending the effectiveness of such rates
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 5-d of section 2807-k of the public health law,
2 as amended by section 6 of part H of chapter 57 of the laws of 2019, is
3 amended to read as follows:
4 5-d. (a) Notwithstanding any inconsistent provision of this section,
5 section twenty-eight hundred seven-w of this article or any other
6 contrary provision of law, and subject to the availability of federal
7 financial participation, for periods [on and after January] April first,
8 two thousand [thirteen,] twenty through [March] December thirty-first,
9 two thousand twenty and each calendar year thereafter, all funds avail-
10 able for distribution pursuant to this section, [except for funds
11 distributed pursuant to subparagraph (v) of paragraph (b) of subdivision
12 five-b of this section,] and all funds available for distribution pursu-
13 ant to section twenty-eight hundred seven-w of this article, shall be
14 reserved and set aside and distributed in accordance with the provisions
15 of this subdivision.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10355-05-0
A. 6677--B 2
1 (b) The commissioner shall promulgate regulations, and may promulgate
2 emergency regulations, establishing methodologies for the distribution
3 of funds as described in paragraph (a) of this subdivision and such
4 regulations shall include, but not be limited to, the following:
5 (i) Such regulations shall establish methodologies for determining
6 each facility's relative uncompensated care need amount based on unin-
7 sured inpatient and outpatient units of service from the cost reporting
8 year two years prior to the distribution year, multiplied by the appli-
9 cable medicaid rates in effect January first of the distribution year,
10 as summed and adjusted by a statewide cost adjustment factor and reduced
11 by the sum of all payment amounts collected from such uninsured
12 patients, and as further adjusted by application of a nominal need
13 computation that shall take into account each facility's medicaid inpa-
14 tient share.
15 (ii) Annual distributions pursuant to such regulations for [the two
16 thousand thirteen through two thousand twenty calendar years] each
17 calendar year beginning with the two thousand twenty calendar year shall
18 be in accord with the following:
19 (A) [one hundred thirty-nine million four hundred thousand dollars]
20 one hundred one million seven hundred thousand dollars for each calendar
21 year (prorated, as may be necessary, to reflect any period less than a
22 year) shall be distributed as Medicaid Disproportionate Share Hospital
23 ("DSH") payments to major public general hospitals; and
24 (B) [nine hundred ninety-four million nine hundred thousand dollars]
25 seven hundred seven million six hundred thousand dollars for each calen-
26 dar year (prorated, as may be necessary, to reflect any period less than
27 a year) as Medicaid DSH payments to eligible general hospitals, other
28 than major public general hospitals.
29 (iii)[(A) Such regulations shall establish transition adjustments to
30 the distributions made pursuant to clauses (A) and (B) of subparagraph
31 (ii) of this paragraph such that no facility experiences a reduction in
32 indigent care pool payments pursuant to this subdivision that is greater
33 than the percentages, as specified in clause (C) of this subparagraph as
34 compared to the average distribution that each such facility received
35 for the three calendar years prior to two thousand thirteen pursuant to
36 this section and section twenty-eight hundred seven-w of this article.
37 (B) Such regulations shall also establish adjustments limiting the
38 increases in indigent care pool payments experienced by facilities
39 pursuant to this subdivision by an amount that will be, as determined by
40 the commissioner and in conjunction with such other funding as may be
41 available for this purpose, sufficient to ensure full funding for the
42 transition adjustment payments authorized by clause (A) of this subpara-
43 graph.
44 (C) No facility shall experience a reduction in indigent care pool
45 payments pursuant to this subdivision that: for the calendar year begin-
46 ning January first, two thousand thirteen, is greater than two and one-
47 half percent; for the calendar year beginning January first, two thou-
48 sand fourteen, is greater than five percent; and, for the calendar year
49 beginning on January first, two thousand fifteen; is greater than seven
50 and one-half percent, and for the calendar year beginning on January
51 first, two thousand sixteen, is greater than ten percent; and for the
52 calendar year beginning on January first, two thousand seventeen, is
53 greater than twelve and one-half percent; and for the calendar year
54 beginning on January first, two thousand eighteen, is greater than
55 fifteen percent; and for the calendar year beginning on January first,
56 two thousand nineteen, is greater than seventeen and one-half percent;
A. 6677--B 3
1 and for the calendar year beginning on January first, two thousand twen-
2 ty, is greater than twenty percent.
3 (iv)] Such regulations shall reserve one percent of the funds avail-
4 able for distribution in the two thousand fourteen and two thousand
5 fifteen calendar years, and for calendar years thereafter, pursuant to
6 this subdivision, subdivision fourteen-f of section twenty-eight hundred
7 seven-c of this article, and sections two hundred eleven and two hundred
8 twelve of chapter four hundred seventy-four of the laws of nineteen
9 hundred ninety-six, in a "financial assistance compliance pool" and
10 shall establish methodologies for the distribution of such pool funds to
11 facilities based on their level of compliance, as determined by the
12 commissioner, with the provisions of subdivision nine-a of this section.
13 (c) The commissioner shall annually report to the governor and the
14 legislature on the distribution of funds under this subdivision includ-
15 ing, but not limited to:
16 (i) the impact on safety net providers, including community providers,
17 rural general hospitals and major public general hospitals;
18 (ii) the provision of indigent care by units of services and funds
19 distributed by general hospitals; and
20 (iii) the extent to which access to care has been enhanced.
21 § 2. Section 2807 of the public health law is amended by adding a new
22 subdivision 23 to read follows:
23 23. Adjustments to medicaid rates. (a) The commissioner is authorized
24 to make adjustments to medical assistance rates in accordance with this
25 subdivision to enhanced safety net hospitals, as defined in paragraph
26 (a) of subdivision thirty-four of section twenty-eight hundred seven-c
27 of this article, and to qualified safety net hospitals, as defined in
28 paragraph (b) of this subdivision, for the purposes of supporting crit-
29 ically needed health care services and to ensure the continued mainte-
30 nance and operation of such hospitals.
31 (b) For the purposes of this subdivision, a "qualified safety net"
32 hospital shall mean a hospital, other than an enhanced safety net hospi-
33 tal, so designated by the commissioner pursuant to criteria developed by
34 the commissioner that take into account: (i) the hospital's financial
35 hardship, evidenced by the operating losses of the hospital or the
36 system of hospitals to which the hospital belongs and/or participation
37 by the hospital in programs established by the commissioner to enable
38 hospitals in financial distress to maintain operations and vital
39 services; (ii) the volume of Medicaid and/or medically uninsured
40 patients served by the hospital compared to other hospitals in the
41 hospital's region; and/or (iii) the importance of the hospital in the
42 hospital's region in enabling Medicaid and/or medically uninsured
43 patients' access to health care services in inpatient, outpatient and
44 community settings.
45 (c) For the state fiscal year commencing April first, two thousand
46 twenty, and each state fiscal year thereafter, the commissioner shall
47 increase medical assistance rates of payments for inpatient and/or
48 outpatient services made by either state governmental agencies or organ-
49 izations operating in accordance with article forty-three of the insur-
50 ance law or article forty-four of this chapter by an aggregate of:
51 (i) thirty-seven million seven hundred thousand dollars for enhanced
52 safety net hospitals that are major public general hospitals;
53 (ii) two hundred seventy-four million eight hundred thousand dollars
54 for qualified safety net hospitals and enhanced safety net hospitals
55 other than major public general hospitals, of which at least twelve
56 million five hundred thousand dollars shall be allocated to enhanced
A. 6677--B 4
1 safety net hospitals that are federally designated as critical access or
2 sole community hospitals; and
3 (iii) twelve million five hundred thousand dollars for those hospitals
4 eligible under subparagraph (ii) of this paragraph for which the
5 combined payments made, or to be made, under subparagraph (ii) of this
6 paragraph and subdivision five-d of section twenty-eight hundred seven-k
7 of this article for calendar year two thousand twenty, and each calendar
8 year thereafter, are projected by the commissioner to be less than
9 payments made to such hospitals pursuant to subdivision five-d of
10 section twenty-eight hundred seven-k of this article for calendar year
11 two thousand eighteen.
12 (d) Payments made pursuant to this subdivision may be added to rates
13 of payment, or made as aggregate payments of equal amounts on October
14 one and April one of each state fiscal year, to such enhanced safety net
15 hospitals and qualified safety net hospitals in accordance with a meth-
16 odology to be established by the commissioner; provided, however, that,
17 the commissioner may make the twelve million five hundred thousand
18 dollars in payments due to eligible hospitals under subparagraph (iii)
19 of paragraph (c) of this subdivision by instead increasing the amount
20 otherwise awarded to such eligible hospitals under programs established
21 by the commissioner to enable hospitals in financial distress to main-
22 tain operations and vital services while working to achieve longer-term
23 sustainability, including, but not limited to, the Value Based Payment
24 Quality Improvement Program.
25 § 3. Subparagraph (v) of paragraph (a) of subdivision 1 of section
26 2807-c of the public health law, as amended by chapter 639 of the laws
27 of 1996, is amended and a new subparagraph (vi) is added to read as
28 follows:
29 (v) adjustments for any modifications to the case payments determined
30 in accordance with paragraph (a), (b), (c) or (d) of subdivision four of
31 this section[.]; and
32 (vi) adjustments for any modifications to the case payments determined
33 in accordance with subdivision twenty-three of section twenty-eight
34 hundred seven of this article.
35 § 4. Subparagraph (v) of paragraph (a) of subdivision 1 of section
36 2807-c of the public health law, as amended by chapter 731 of the laws
37 of 1993, is amended and a new subparagraph (vi) is added to read as
38 follows:
39 (v) adjustments for any modifications to the case payments determined
40 in accordance with paragraph (a), (b), (c) or (d) of subdivision four of
41 this section[.]; and
42 (vi) adjustments for any modifications to the case payments determined
43 in accordance with subdivision twenty-three of section twenty-eight
44 hundred seven of this article.
45 § 5. Subdivision 34 of section 2807-c of the public health law is
46 amended by adding a new paragraph (d) to read as follows:
47 (d) Notwithstanding any inconsistent provision of law or regulation to
48 the contrary, adjustments made pursuant to this subdivision shall be in
49 addition to any adjustments made to medical assistance rates to enhanced
50 safety net hospitals authorized by subdivision twenty-three of section
51 twenty-eight hundred seven of this article.
52 § 6. Subdivision 1 of section 211 of chapter 474 of the laws of 1996
53 amending the education law and other laws relating to rates for residen-
54 tial health care facilities is amended by adding a new paragraph (g) to
55 read as follows:
A. 6677--B 5
1 (g) Notwithstanding any inconsistent provision of law or regulation to
2 the contrary, effective for the state fiscal year beginning April 1,
3 2020, and annually thereafter, the department of health is authorized to
4 pay public general hospitals, other than those operated by the state of
5 New York or the state university of New York, as defined in subdivision
6 10 of section 2801 of the public health law, located in a city with a
7 population of over one million, additional payments for inpatient hospi-
8 tal services of 200 million dollars annually, as medical assistance
9 pursuant to title 11 of article 5 of the social services law for
10 patients eligible for federal financial participation under title XIX of
11 the federal social security act, pursuant to federal laws and regu-
12 lations governing disproportionate share payments to hospitals, based on
13 the relative share of each such non-state operated public general hospi-
14 tal medical assistance and uninsured patient losses. The payments may be
15 added to rates of payment or made as aggregate payments to an eligible
16 public general hospital.
17 § 7. Subdivision 1 of section 212 of chapter 474 of the laws of 1996
18 amending the education law and other laws relating to rates for residen-
19 tial health care facilities, is amended by adding a new paragraph (c) to
20 read as follows:
21 (c) Notwithstanding any inconsistent provision of law or regulation to
22 the contrary, effective for the state fiscal year beginning April 1,
23 2020, and annually thereafter, the department of health is authorized to
24 pay public general hospitals, as defined in subdivision 10 of section
25 2801 of the public health law, operated by the state of New York or the
26 state university of New York or by a county, which shall not include a
27 city with a population of over one million, of the state of New York,
28 and those public general hospitals located in the county of Westchester,
29 the county of Erie or the county of Nassau, additional payments for
30 inpatient hospital services of 100 million dollars annually, as medical
31 assistance payments pursuant to title 11 of article 5 of the social
32 services law for patients eligible for federal financial participation
33 under title XIX of the federal social security act, pursuant to federal
34 laws and regulations governing disproportionate share payments to hospi-
35 tals. The payments may be added to rates of payment or made as aggregate
36 payments to an eligible public general hospital.
37 § 8. This act shall take effect immediately; provided however, that
38 the amendments made to paragraph (a) of subdivision 1 of section 2807-c
39 of the public health law made by section three of this act shall be
40 subject to the expiration and reversion of such paragraph when upon such
41 date the provisions of section four of this act shall take effect.
