NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6883
SPONSOR: Gottfried TITLE OF BILL:
An act to amend the public health law, in relation to the general hospi-
tal indigent care pool and funding for safety net and 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 additional payments for certain inpa-
tient hospital services
PURPOSE OR GENERAL IDEA OF BILL:
Redistribute indigent care pool (ICP) funding to better target support
to safety net hospitals which provide services to persons who are unin-
sured, under insured or insured by Medicaid.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends Public Health Law 2807-k, subdiv. 5-d, to reduce allo-
cations to general hospitals other than major public general hospitals,
or qualified safety net general hospitals by $275 million. This section
also extends the removal of the transition collar enacted in 2020 and
retains the reduction of the $25 million associated with this provision.
These funds are distributed under other provisions of the bill.
Section 2 of the bill adds a new Subdivision 22 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 $34.1 million to major public general
hospitals and $228 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(22).
Section 4 and 5 adds a new sub-paragraph (vi) to paragraph (a) of subdi-
vision (1), and a new paragraph (d) to subdivision (34) 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 6 and 7 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 will fix inequities in the distribution of ICP funds
without hurting hospitals that provide services to low income and at
risk communities, by increasing Medicaid rates for enhanced 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
without additional financial impact to the State. The bill better
targets ICP funds to uninsured patient care. To address the Medicaid
rate issue, the bill would invest $275 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 13% and voluntary shares of
the ICP at 87%.
The bill builds on the Enhanced Safety Net Hospitals statute, and
reforms enacted in 2020. The bill also retains the reduction of $25
million related to the reforms enacted in 2020. It recognizes that addi-
tional hospitals are providing essential services to safety net communi-
ties and face serious financial jeopardy. Those hospitals are defined as
qualified safety net hospitals and may be identified by criteria includ-
ing having been awarded VAPAP or VBP QIP funds, or placed on the DOH
Financially Distressed Watch List; the volume of Medicaid 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 $300 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.
PRIOR LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
6883
2021-2022 Regular Sessions
IN ASSEMBLY
April 13, 2021
___________
Introduced by M. of A. GOTTFRIED -- read once and referred to the
Committee on Health
AN ACT to amend the public health law, in relation to the general hospi-
tal indigent care pool and funding for safety net and 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 additional payments for certain
inpatient hospital services
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraph (ii) of paragraph b of subdivision 5-d of
2 section 2807-k of the public health law, as amended by section 3 of part
3 KK of chapter 56 of the laws of 2020, is amended to read as follows:
4 (ii) Annual distributions pursuant to such regulations for the calen-
5 dar year two thousand [twenty through two thousand twenty-two calendar
6 years] twenty-one and each year thereafter shall be in accord with the
7 following:
8 (A) one hundred thirty-nine million four hundred thousand dollars
9 shall be distributed as Medicaid Disproportionate Share Hospital ("DSH")
10 payments to major public general hospitals; and
11 (B) nine hundred sixty-nine million nine hundred thousand dollars as
12 Medicaid DSH payments to eligible general hospitals, other than major
13 public general hospitals.
14 For the calendar years two thousand twenty through two thousand [twen-
15 ty-two,] twenty-one and each calendar year thereafter the total distrib-
16 utions to eligible general hospitals, other than major public general
17 hospitals, shall be subject to an aggregate reduction of [one hundred
18 fifty] two hundred seventy-five million dollars annually, provided that
19 eligible general hospitals, other than major public general hospitals,
20 that qualify as enhanced safety net hospitals under section two thousand
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10542-01-1
A. 6883 2
1 eight hundred seven-c of this article shall not be subject to such
2 reduction.
3 Such reduction shall be determined by a methodology to be established
4 by the commissioner. Such methodology may take into account the payor
5 mix of each non-public general hospital, including the percentage of
6 inpatient days paid by Medicaid.
7 § 2. Section 2807 of the public health law is amended by adding a new
8 subdivision 22 to read follows:
9 22. Adjustments to Medicaid rates. (a) The commissioner shall make
10 adjustments to medical assistance rates in accordance with this subdivi-
11 sion to enhanced safety net hospitals, as defined in paragraph (a) of
12 subdivision thirty-four of section twenty-eight hundred seven-c of this
13 article, and to qualified safety net hospitals, as defined in paragraph
14 (b) of this subdivision, for the purposes of supporting critically need-
15 ed health care services and to ensure the continued maintenance and
16 operation of such hospitals.
17 (b) For the purposes of this subdivision, a "qualified safety net
18 hospital" shall mean a general hospital, other than an enhanced safety
19 net hospital that in any of the previous three calendar years:
20 (i) has met four of the five criteria listed under subparagraph (i) of
21 paragraph (a) of subdivision thirty-four of section twenty-eight hundred
22 seven-c of this article; or
23 (ii) has met the following criteria:
24 (A) not less than forty-five percent of the patients it treats receive
25 medical assistance or are medically uninsured;
26 (B) not less than thirty-six percent of its inpatient discharges are
27 covered by Medicaid;
28 (C) twenty-eight percent or less of its discharged patients are
29 commercially insured;
30 (D) not less than two percent of the patients it provides services to
31 are attributed to the care of uninsured patients; and
32 (E) provides care to uninsured patients in its emergency room, hospi-
33 tal-based clinics and community based clinics, including the provision
34 of important community services, such as dental care and prenatal care;
35 or
36 (iii) is so designated by the commissioner pursuant to findings that
37 takes into account the following criteria:
38 (A) the hospital is operating under financial hardship, evidenced by
39 the operating losses of the hospital or the system of hospitals to which
40 the hospital belongs and/or participation by the hospital in programs
41 established by the commissioner to enable hospitals in financial
42 distress to maintain operations and vital services;
43 (B) the volume of Medicaid and/or medically uninsured patients served
44 by the hospital exceeds the average volume of such services provided by
45 other hospitals in the hospital's region; and
46 (C) the importance of the hospital in enabling Medicaid and/or
47 medically uninsured patients' access to health care services in inpa-
48 tient, outpatient and community settings within the hospital's region.
49 (c) For the state fiscal year commencing April first, two thousand
50 twenty-two and each state fiscal year thereafter, the commissioner shall
51 increase medical assistance rates of payments for inpatient and/or
52 outpatient services made by either state governmental agencies or organ-
53 izations operating in accordance with article forty-three of the insur-
54 ance law or article forty-four of this chapter by an aggregate of:
55 (i) thirty-four million one hundred twenty-five thousand dollars for
56 enhanced safety net hospitals that are major public general hospitals;
A. 6883 3
1 (ii) two hundred twenty-eight million three hundred seventy-five thou-
2 sand dollars for qualified safety net hospitals and enhanced safety net
3 hospitals other than major public general hospitals, of which at least
4 twelve million five hundred thousand dollars shall be allocated to
5 enhanced safety net hospitals that are federally designated as critical
6 access or sole community hospitals; and
7 (iii) twelve million five hundred thousand dollars for those hospitals
8 eligible under subparagraph (ii) of this paragraph for which the
9 combined payments made, or to be made, under subparagraph (ii) of this
10 paragraph and subdivision five-d of section twenty-eight hundred seven-k
11 of this article for calendar year two thousand twenty-two and each
12 calendar year thereafter, are projected by the commissioner to be less
13 than payments made to such hospitals pursuant to subdivision five-d of
14 section twenty-eight hundred seven-k of this article for calendar year
15 two thousand eighteen.
16 (d) Payments made pursuant to this subdivision may be added to rates
17 of payment, or made as aggregate payments of equal amounts on October
18 first and April first of each state fiscal year, to such enhanced safety
19 net hospitals and qualified safety net hospitals in accordance with a
20 methodology to be established by the commissioner; provided, however,
21 that, the commissioner may make the twelve million five hundred thousand
22 dollars in payments due to eligible hospitals under subparagraph (iii)
23 of paragraph (c) of this subdivision by instead increasing the amount
24 otherwise awarded to such eligible hospitals under programs established
25 by the commissioner to enable hospitals in financial distress to main-
26 tain operations and vital services while working to achieve longer-term
27 sustainability, including, but not limited to, the value based payment
28 quality improvement program.
29 § 3. Subparagraph (v) of paragraph (a) of subdivision 1 of section
30 2807-c of the public health law, as amended by chapter 639 of the laws
31 of 1996, is amended and a new subparagraph (vi) is added to read as
32 follows:
33 (v) adjustments for any modifications to the case payments determined
34 in accordance with paragraph (a), (b), (c) or (d) of subdivision four of
35 this section[.]; and
36 (vi) adjustments for any modifications to the case payments determined
37 in accordance with subdivision twenty-two of section twenty-eight
38 hundred seven of this article.
39 § 4. Subparagraph (v) of paragraph (a) of subdivision 1 of section
40 2807-c of the public health law, as amended by chapter 731 of the laws
41 of 1993, is amended and a new subparagraph (vi) is added to read as
42 follows:
43 (v) adjustments for any modifications to the case payments determined
44 in accordance with paragraph (a), (b), (c) or (d) of subdivision four of
45 this section[.]; and
46 (vi) adjustments for any modifications to the case payments determined
47 in accordance with subdivision twenty-two of section twenty-eight
48 hundred seven of this article.
49 § 5. Subdivision 34 of section 2807-c of the public health law is
50 amended by adding a new paragraph (d) to read as follows:
51 (d) Notwithstanding any inconsistent provision of law or regulation to
52 the contrary, adjustments made pursuant to this subdivision shall be in
53 addition to any adjustments made to medical assistance rates to enhanced
54 safety net hospitals authorized by subdivision twenty-two of section
55 twenty-eight hundred seven of this article.
A. 6883 4
1 § 6. Subdivision 1 of section 211 of chapter 474 of the laws of 1996
2 amending the education law and other laws relating to rates for residen-
3 tial health care facilities, is amended by adding a new paragraph (g) to
4 read as follows:
5 (g) Notwithstanding any inconsistent provision of law or regulation to
6 the contrary, effective for the state fiscal year beginning April 1,
7 2022, and annually thereafter, the department of health is authorized to
8 pay public general hospitals, other than those operated by the state of
9 New York or the state university of New York, as defined in subdivision
10 10 of section 2801 of the public health law, located in a city with a
11 population of over one million, additional payments for inpatient hospi-
12 tal services of 200 million dollars annually, as medical assistance
13 pursuant to title 11 of article 5 of the social services law for
14 patients eligible for federal financial participation under title XIX of
15 the federal social security act, pursuant to federal laws and regu-
16 lations governing disproportionate share payments to hospitals, based on
17 the relative share of each such non-state operated public general hospi-
18 tal medical assistance and uninsured patient losses. The payments may be
19 added to rates of payment or made as aggregate payments to an eligible
20 public general hospital.
21 § 7. Subdivision 1 of section 212 of chapter 474 of the laws of 1996
22 amending the education law and other laws relating to rates for residen-
23 tial health care facilities, is amended by adding a new paragraph (c) to
24 read as follows:
25 (c) Notwithstanding any inconsistent provision of law or regulation to
26 the contrary, effective for the state fiscal year beginning April 1,
27 2022, and annually thereafter, the department of health is authorized to
28 pay public general hospitals, as defined in subdivision 10 of section
29 2801 of the public health law, operated by the state of New York or the
30 state university of New York or by a county, which shall not include a
31 city with a population of over one million, of the state of New York,
32 and those public general hospitals located in the county of Westchester,
33 the county of Erie or the county of Nassau, additional payments for
34 inpatient hospital services of 100 million dollars annually, as medical
35 assistance payments pursuant to title 11 of article 5 of the social
36 services law for patients eligible for federal financial participation
37 under title XIX of the federal social security act, pursuant to federal
38 laws and regulations governing disproportionate share payments to hospi-
39 tals. The payments may be added to rates of payment or made as aggregate
40 payments to an eligible public general hospital.
41 § 8. This act shall take effect immediately; provided, however that
42 the amendments to subdivision 5-d of section 2807-k of the public health
43 law made by section one of this act shall not affect the expiration of
44 such subdivision and shall expire and be deemed repealed therewith; and
45 provided further that the amendments to paragraph (a) of subdivision 1
46 of section 2807-c of the public health law made by section three of this
47 act shall be subject to the expiration and reversion of such paragraph
48 when upon such date the provisions of section four of this act shall
49 take effect.
