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A06677 Summary:

BILL NOA06677A
 
SAME ASSAME AS S05546
 
SPONSORGottfried
 
COSPNSRReyes, Dickens, Mosley, Weprin, Rodriguez, Santabarbara, Cruz, Barron
 
MLTSPNSR
 
Amd 2807-k, 2807 & 2807-c, Pub Health L; amd 211 & 212, Chap 474 of 1996
 
Relates to general hospital and safety net hospital reimbursement rates and Medicaid adjustments.
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A06677 Actions:

BILL NOA06677A
 
03/15/2019referred to health
05/08/2019amend and recommit to health
05/08/2019print number 6677a
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A06677 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6677A
 
SPONSOR: Gottfried
  TITLE OF BILL: An act to amend the public health law, in relation to the general hospital indigent care pool, hospital reimbursements and adjustments to medical assistance rates to enhanced safety net hospi- tals; and to amend chapter 474 of the laws of 1996 amending the educa- tion 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, 2019 through December 31, 2019 (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 defmition 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 on October 1, 2019.   PRIOR LEGISLATIVE HISTORY: New bill   FISCAL IMPLICATIONS: No impact on state general fund or Medicaid global cap.   EFFECTIVE DATE: Immediately
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A06677 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6677--A
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                     March 15, 2019
                                       ___________
 
        Introduced by M. of A. GOTTFRIED, REYES, DICKENS, MOSLEY, WEPRIN, RODRI-
          GUEZ,  SANTABARBARA  --  read  once  and  referred to the Committee on
          Health -- 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,] nineteen through [March] December thirty-first,
     9  two thousand [twenty] nineteen and each calendar  year  thereafter,  all
    10  funds  available  for distribution pursuant to this section, [except for
    11  funds distributed pursuant to  subparagraph  (v)  of  paragraph  (b)  of
    12  subdivision  five-b  of  this  section,]  and  all  funds  available for
    13  distribution pursuant to section twenty-eight hundred  seven-w  of  this
    14  article,  shall  be reserved and set aside and distributed in accordance
    15  with the provisions of this subdivision.
    16    (b) The commissioner shall promulgate regulations, and may  promulgate
    17  emergency  regulations,  establishing methodologies for the distribution
    18  of funds as described in paragraph (a)  of  this  subdivision  and  such
    19  regulations shall include, but not be limited to, the following:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10355-04-9

        A. 6677--A                          2
 
     1    (i)  Such  regulations  shall  establish methodologies for determining
     2  each facility's relative uncompensated care need amount based  on  unin-
     3  sured  inpatient and outpatient units of service from the cost reporting
     4  year two years prior to the distribution year, multiplied by the  appli-
     5  cable  medicaid  rates in effect January first of the distribution year,
     6  as summed and adjusted by a statewide cost adjustment factor and reduced
     7  by the  sum  of  all  payment  amounts  collected  from  such  uninsured
     8  patients,  and  as  further  adjusted  by  application of a nominal need
     9  computation that shall take into account each facility's medicaid  inpa-
    10  tient share.
    11    (ii)  Annual  distributions  pursuant to such regulations for [the two
    12  thousand thirteen through  two  thousand  twenty  calendar  years]  each
    13  calendar  year  beginning  with  the two thousand nineteen calendar year
    14  shall be in accord with the following:
    15    (A) [one hundred thirty-nine million four  hundred  thousand  dollars]
    16  one hundred one million seven hundred thousand dollars for each calendar
    17  year  (prorated,  as may be necessary, to reflect any period less than a
    18  year) shall be distributed as Medicaid Disproportionate  Share  Hospital
    19  ("DSH") payments to major public general hospitals; and
    20    (B)  [nine  hundred ninety-four million nine hundred thousand dollars]
    21  seven hundred seven million six hundred thousand dollars for each calen-
    22  dar year (prorated, as may be necessary, to reflect any period less than
    23  a year) as Medicaid DSH payments to eligible  general  hospitals,  other
    24  than major public general hospitals.
    25    (iii)[(A)  Such  regulations shall establish transition adjustments to
    26  the distributions made pursuant to clauses (A) and (B)  of  subparagraph
    27  (ii)  of this paragraph such that no facility experiences a reduction in
    28  indigent care pool payments pursuant to this subdivision that is greater
    29  than the percentages, as specified in clause (C) of this subparagraph as
    30  compared to the average distribution that each  such  facility  received
    31  for  the three calendar years prior to two thousand thirteen pursuant to
    32  this section and section twenty-eight hundred seven-w of this article.
    33    (B) Such regulations shall also  establish  adjustments  limiting  the
    34  increases  in  indigent  care  pool  payments  experienced by facilities
    35  pursuant to this subdivision by an amount that will be, as determined by
    36  the commissioner and in conjunction with such other funding  as  may  be
    37  available  for  this  purpose, sufficient to ensure full funding for the
    38  transition adjustment payments authorized by clause (A) of this subpara-
    39  graph.
    40    (C) No facility shall experience a reduction  in  indigent  care  pool
    41  payments pursuant to this subdivision that: for the calendar year begin-
    42  ning  January first, two thousand thirteen, is greater than two and one-
    43  half percent; for the calendar year beginning January first,  two  thou-
    44  sand  fourteen, is greater than five percent; and, for the calendar year
    45  beginning on January first, two thousand fifteen; is greater than  seven
    46  and  one-half  percent,  and  for the calendar year beginning on January
    47  first, two thousand sixteen, is greater than ten percent;  and  for  the
    48  calendar  year  beginning  on  January first, two thousand seventeen, is
    49  greater than twelve and one-half percent;  and  for  the  calendar  year
    50  beginning  on  January  first,  two  thousand  eighteen, is greater than
    51  fifteen percent; and for the calendar year beginning on  January  first,
    52  two  thousand  nineteen, is greater than seventeen and one-half percent;
    53  and for the calendar year beginning on January first, two thousand twen-
    54  ty, is greater than twenty percent.
    55    (iv)] Such regulations shall reserve one percent of the  funds  avail-
    56  able  for  distribution  in  the  two thousand fourteen and two thousand

        A. 6677--A                          3
 
     1  fifteen calendar years, and for calendar years thereafter,  pursuant  to
     2  this subdivision, subdivision fourteen-f of section twenty-eight hundred
     3  seven-c of this article, and sections two hundred eleven and two hundred
     4  twelve  of  chapter  four  hundred  seventy-four of the laws of nineteen
     5  hundred ninety-six, in a  "financial  assistance  compliance  pool"  and
     6  shall establish methodologies for the distribution of such pool funds to
     7  facilities  based  on  their  level  of compliance, as determined by the
     8  commissioner, with the provisions of subdivision nine-a of this section.
     9    (c) The commissioner shall annually report to  the  governor  and  the
    10  legislature  on the distribution of funds under this subdivision includ-
    11  ing, but not limited to:
    12    (i) the impact on safety net providers, including community providers,
    13  rural general hospitals and major public general hospitals;
    14    (ii) the provision of indigent care by units  of  services  and  funds
    15  distributed by general hospitals; and
    16    (iii) the extent to which access to care has been enhanced.
    17    §  2. Section 2807 of the public health law is amended by adding a new
    18  subdivision 23 to read follows:
    19    23. Adjustments to medicaid rates. (a) The commissioner is  authorized
    20  to  make adjustments to medical assistance rates in accordance with this
    21  subdivision to enhanced safety net hospitals, as  defined  in  paragraph
    22  (a)  of  subdivision thirty-four of section twenty-eight hundred seven-c
    23  of this article, and to qualified safety net hospitals,  as  defined  in
    24  paragraph  (b) of this subdivision, for the purposes of supporting crit-
    25  ically needed health care services and to ensure the  continued  mainte-
    26  nance and operation of such hospitals.
    27    (b)  For  the  purposes  of this subdivision, a "qualified safety net"
    28  hospital shall mean a hospital, other than an enhanced safety net hospi-
    29  tal, so designated by the commissioner pursuant to criteria developed by
    30  the commissioner that take into account: (i)  the  hospital's  financial
    31  hardship,  evidenced  by  the  operating  losses  of the hospital or the
    32  system of hospitals to which the hospital belongs  and/or  participation
    33  by  the  hospital  in programs established by the commissioner to enable
    34  hospitals  in  financial  distress  to  maintain  operations  and  vital
    35  services;  (ii)  the  volume  of  Medicaid  and/or  medically  uninsured
    36  patients served by the hospital  compared  to  other  hospitals  in  the
    37  hospital's  region;  and/or  (iii) the importance of the hospital in the
    38  hospital's  region  in  enabling  Medicaid  and/or  medically  uninsured
    39  patients'  access  to  health care services in inpatient, outpatient and
    40  community settings.
    41    (c) For the state fiscal year commencing  April  first,  two  thousand
    42  nineteen,  and each state fiscal year thereafter, the commissioner shall
    43  increase medical assistance  rates  of  payments  for  inpatient  and/or
    44  outpatient services made by either state governmental agencies or organ-
    45  izations  operating in accordance with article forty-three of the insur-
    46  ance law or article forty-four of this chapter by an aggregate of:
    47    (i) thirty-seven million seven hundred thousand dollars  for  enhanced
    48  safety net hospitals that are major public general hospitals;
    49    (ii)  two  hundred seventy-four million eight hundred thousand dollars
    50  for qualified safety net hospitals and  enhanced  safety  net  hospitals
    51  other  than  major  public  general  hospitals, of which at least twelve
    52  million five hundred thousand dollars shall  be  allocated  to  enhanced
    53  safety net hospitals that are federally designated as critical access or
    54  sole community hospitals; and
    55    (iii) twelve million five hundred thousand dollars for those hospitals
    56  eligible  under  subparagraph  (ii)  of  this  paragraph  for  which the

        A. 6677--A                          4
 
     1  combined payments made, or to be made, under subparagraph (ii)  of  this
     2  paragraph  and  subdivision  five-d  of  section  twenty-eight  thousand
     3  seven-k of this article for calendar year  two  thousand  nineteen,  and
     4  each  calendar  year thereafter, are projected by the commissioner to be
     5  less than payments made to such hospitals pursuant to subdivision five-d
     6  of section twenty-eight thousand seven-k of this  article  for  calendar
     7  year two thousand eighteen.
     8    (d)  Payments  made pursuant to this subdivision may be added to rates
     9  of payment, or made as aggregate payments of equal  amounts  on  October
    10  one and April one of each state fiscal year, to such enhanced safety net
    11  hospitals  and qualified safety net hospitals in accordance with a meth-
    12  odology to be established by the commissioner; provided, however,  that,
    13  the  commissioner  may  make  the  twelve  million five hundred thousand
    14  dollars in payments due to eligible hospitals under  subparagraph  (iii)
    15  of  paragraph  (c)  of this subdivision by instead increasing the amount
    16  otherwise awarded to such eligible hospitals under programs  established
    17  by  the  commissioner to enable hospitals in financial distress to main-
    18  tain operations and vital services while working to achieve  longer-term
    19  sustainability,  including,  but not limited to, the Value Based Payment
    20  Quality Improvement Program.
    21    § 3. Subparagraph (v) of paragraph (a) of  subdivision  1  of  section
    22  2807-c  of  the public health law, as amended by chapter 639 of the laws
    23  of 1996, is amended and a new subparagraph (vi)  is  added  to  read  as
    24  follows:
    25    (v)  adjustments for any modifications to the case payments determined
    26  in accordance with paragraph (a), (b), (c) or (d) of subdivision four of
    27  this section[.]; and
    28    (vi) adjustments for any modifications to the case payments determined
    29  in accordance with  subdivision  twenty-three  of  section  twenty-eight
    30  hundred seven of this article.
    31    §  4.  Subparagraph  (v)  of paragraph (a) of subdivision 1 of section
    32  2807-c of the public health law, as amended by chapter 731 of  the  laws
    33  of  1993,  is  amended  and  a new subparagraph (vi) is added to read as
    34  follows:
    35    (v) adjustments for any modifications to the case payments  determined
    36  in accordance with paragraph (a), (b), (c) or (d) of subdivision four of
    37  this section[.]; and
    38    (vi) adjustments for any modifications to the case payments determined
    39  in  accordance  with  subdivision  twenty-three  of section twenty-eight
    40  hundred seven of this article.
    41    § 5. Subdivision 34 of section 2807-c of  the  public  health  law  is
    42  amended by adding a new paragraph (d) to read as follows:
    43    (d) Notwithstanding any inconsistent provision of law or regulation to
    44  the  contrary, adjustments made pursuant to this subdivision shall be in
    45  addition to any adjustments made to medical assistance rates to enhanced
    46  safety net hospitals authorized by subdivision twenty-three  of  section
    47  twenty-eight hundred seven of this article.
    48    §  6.  Subdivision 1 of section 211 of chapter 474 of the laws of 1996
    49  amending the education law and other laws relating to rates for residen-
    50  tial health care facilities is amended by adding a new paragraph (g)  to
    51  read as follows:
    52    (g) Notwithstanding any inconsistent provision of law or regulation to
    53  the  contrary,  effective  for  the state fiscal year beginning April 1,
    54  2019, and annually thereafter, the department of health is authorized to
    55  pay public general hospitals, other than those operated by the state  of
    56  New  York or the state university of New York, as defined in subdivision

        A. 6677--A                          5
 
     1  10 of section 2801 of the public health law, located in a  city  with  a
     2  population of over one million, additional payments for inpatient hospi-
     3  tal  services  of  200  million  dollars annually, as medical assistance
     4  pursuant  to  title  11  of  article  5  of  the social services law for
     5  patients eligible for federal financial participation under title XIX of
     6  the federal social security act, pursuant  to  federal  laws  and  regu-
     7  lations governing disproportionate share payments to hospitals, based on
     8  the relative share of each such non-state operated public general hospi-
     9  tal medical assistance and uninsured patient losses. The payments may be
    10  added  to  rates of payment or made as aggregate payments to an eligible
    11  public general hospital.
    12    § 7. Subdivision 1 of section 212 of chapter 474 of the laws  of  1996
    13  amending the education law and other laws relating to rates for residen-
    14  tial health care facilities, is amended by adding a new paragraph (c) to
    15  read as follows:
    16    (c) Notwithstanding any inconsistent provision of law or regulation to
    17  the  contrary,  effective  for  the state fiscal year beginning April 1,
    18  2019, and annually thereafter, the department of health is authorized to
    19  pay public general hospitals, as defined in subdivision  10  of  section
    20  2801  of the public health law, operated by the state of New York or the
    21  state university of New York or by a county, which shall not  include  a
    22  city  with  a  population of over one million, of the state of New York,
    23  and those public general hospitals located in the county of Westchester,
    24  the county of Erie or the county  of  Nassau,  additional  payments  for
    25  inpatient  hospital services of 100 million dollars annually, as medical
    26  assistance payments pursuant to title 11 of  article  5  of  the  social
    27  services  law  for patients eligible for federal financial participation
    28  under title XIX of the federal social security act, pursuant to  federal
    29  laws and regulations governing disproportionate share payments to hospi-
    30  tals. The payments may be added to rates of payment or made as aggregate
    31  payments to an eligible public general hospital.
    32    §  8.  This  act shall take effect immediately; provided however, that
    33  the amendments made to paragraph (a) of subdivision 1 of section  2807-c
    34  of  the  public  health  law  made by section three of this act shall be
    35  subject to the expiration and reversion of such paragraph when upon such
    36  date the provisions of section four of this act shall take effect.
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