New York Laws
Article 28 - Hospitals
2807-J - Patient Services Payments.

(i) general hospitals;
(ii) diagnostic and treatment centers that provide:
(A) a comprehensive range of primary health care services; or
(B) ambulatory surgical services; and
(iii) for periods prior to October first, two thousand, subject to the
provisions of paragraph (d) of subdivision three of this section,
free-standing clinical laboratories issued a permit pursuant to title
five of article five of this chapter.
(b) "Third-party coverage", for purposes of this section, shall
include, but not be limited to: payments by a governmental agency,
insurer, health maintenance organization, self-insured fund, or other
third-party entity making payments on behalf of a patient; whether made
directly to a designated provider of services or indirectly as indemnity
or similar payments made to the patient (or patient's representative
such as parent or family member) for services provided by a designated
provider of services, or through the use of payments made payable to
both the designated provider of services and the patient or patient's
representative, or similar devices.
(c) "Third-party payors", for purposes of this section, shall include,
but not be limited to: governmental agencies; corporations organized and
operating in accordance with article forty-three of the insurance law;
organizations operating in accordance with the provisions of article
forty-four of this chapter; providers of coverage pursuant to the
comprehensive motor vehicle insurance reparations act, the workers'
compensation law, the volunteer firefighters' benefit law, and the
volunteer ambulance workers' benefit law; self-insured funds and
administrators acting on behalf of self-insured funds; and commercial
insurers licensed to do business in this state and authorized to write
accident and health insurance and whose policy provides coverage on an
expense incurred basis.
2. (a) The total percentage allowance for any period during the period
January first, nineteen hundred ninety-seven through December
thirty-first, nineteen hundred ninety-nine and on and after January
first, two thousand, for a designated provider of services applicable to
a payor shall be determined in accordance with this subdivision and
applied to net patient service revenues.
(b) The total percentage allowance for each payor, other than
governmental agencies, or health maintenance organizations for services
provided to subscribers eligible for medical assistance pursuant to
title eleven of article five of the social services law, or approved
organizations for services provided to subscribers eligible for the
family health plus program pursuant to title eleven-D of article five of
the social services law, and other than payments for a patient that has
no third-party coverage in whole or in part for services provided by a
designated provider of services, shall be:
(i) the sum of (A) eight and eighteen-hundredths percent, provided,
however, that for services provided on and after July first, two
thousand three, the percentage shall be eight and eighty-five hundredths
percent, and further provided that for services provided on and after
January first, two thousand six, the percentage shall be eight and
ninety-five hundredths percent, and further provided that for services
provided on and after April first, two thousand nine, the percentage
shall be nine and sixty-three hundredths percent, plus (B) twenty-four
percent, provided, however, that for services provided on and after July
first, two thousand three, the percentage shall be twenty-five and
ninety-seven hundredths percent, and further provided that for services
provided on and after January first, two thousand six, the percentage
shall be twenty-six and twenty-six hundredths percent, and further
provided that for services provided on and after April first, two
thousand nine, the percentage shall be twenty-eight and twenty-seven
hundredths percent, and plus (C) for a specified third-party payor as
defined in subdivision one-a of section twenty-eight hundred seven-s of
this article the percentage allowance applicable for a general hospital
for inpatient hospital services pursuant to subdivision two of section
twenty-eight hundred seven-s of this article;
(ii) unless (A) an election in accordance with paragraph (a) of
subdivision five of this section to pay the allowance directly to the
commissioner or the commissioner's designee is in effect for a
third-party payor, and in addition (B) for a specified third-party payor
an election to pay the assessment in accordance with section
twenty-eight hundred seven-t of this article is in effect.
(c) If an election in accordance with subdivision five of this section
is in effect for a third-party payor and in addition in accordance with
section twenty-eight hundred seven-t of this article for a specified
third-party payor, the total percentage allowance factor shall be
reduced to eight and eighteen-hundredths percent, provided, however,
that for services provided on and after July first, two thousand three
the total percentage allowance factor shall be reduced to eight and
eighty-five hundredths percent, and further provided that for services
provided on and after January first, two thousand six, the total
percentage allowance factor shall be reduced to eight and ninety-five
hundredths percent, and further provided that for services provided on
and after April first, two thousand nine, the total percentage allowance
factor shall be reduced to nine and sixty-three hundredths percent.
(d) The total percentage allowance for payments by governmental
agencies, as determined in accordance with paragraphs (a) and (a-1) of
subdivision one of section twenty-eight hundred seven-c of this article
as in effect on December thirty-first, nineteen hundred ninety-six, or
health maintenance organizations for services provided to subscribers
eligible for medical assistance pursuant to title eleven of article five
of the social services law, or approved organizations for services
provided to subscribers eligible for the family health plus program
pursuant to title eleven-D of article five of the social services law,
shall be five and ninety-eight-hundredths percent, provided, however,

that for services provided on and after July first, two thousand three
the total percentage allowance shall be six and forty-seven hundredths
percent, and further provided that for services provided on and after
January first, two thousand six, the total percentage allowance shall be
six and fifty-four hundredths percent, and further provided that for
services provided on and after April first, two thousand nine, the total
percentage allowance shall be seven and four hundredths percent.
(e) The total percentage allowance for payments for services provided
by designated providers of services for which there is no third-party
coverage in whole or in part shall be eight and eighteen-hundredths
percent, provided, however, that for services provided on and after July
first, two thousand three the total percentage allowance shall be eight
and eighty-five hundredths percent, and further provided that for
services provided on and after January first, two thousand six, the
total percentage allowance shall be eight and ninety-five hundredths
percent, and further provided that for services provided on and after
April first, two thousand nine, the total percentage allowance shall be
nine and sixty-three hundredths percent. This paragraph shall not apply
to patient deductibles and coinsurance amounts.
(f) The total percentage allowance for patient deductibles and
coinsurance amounts shall be the same percentage allowance applicable to
payments by the primary third-party payor covering the patient in each
case determined in accordance with paragraphs (a), (b) and (c) of this
subdivision.
(g) The total percentage allowance for secondary third-party payors
under coordination of benefits principles shall be the same percentage
allowance applicable to payments by the primary third-party payor in the
case determined in accordance with paragraphs (a), (b) and (c) of this
subdivision.
3. Net patient service revenues, for purposes of this section, shall
mean:
(a) for general hospitals all moneys received for or on account of
inpatient hospital services, outpatient services (including referred
ambulatory services), emergency services, ambulatory surgical services,
and other hospital or health-related services, including capitation
payments allocable to inpatient hospital services, outpatient services
(including referred ambulatory services), emergency services, ambulatory
surgical services and other hospital or health-related services
excluding services listed below, less refunds, for discharges occurring
or for visits made or services performed on or after January first,
nineteen hundred ninety-seven, or contracted service obligations for
periods on or after January first, nineteen hundred ninety-seven
excluding the following subject to the provisions of subdivision eleven
of this section:
(i) revenue received for services provided to beneficiaries of title
XVIII of the federal social security act (medicare);
(ii) revenue received by a general hospital for residential health
care facility services, adult day care services, hospice services, and
home care services;
(iii) revenue received from the allowances pursuant to this section
and section twenty-eight hundred seven-s of this article;
(iv) revenue received from bad debt and charity care and indigent care
rate adjustments and pool distributions pursuant to section twenty-eight
hundred seven-c of this article, general hospital indigent care pool
distributions pursuant to section twenty-eight hundred seven-k of this
article, health care services pool distributions pursuant to section
twenty-eight hundred seven-c of this article, health care initiatives
pool distributions pursuant to section twenty-eight hundred seven-l of

this article, professional education pool distributions pursuant to
section twenty-eight hundred seven-m of this article, tobacco control
and insurance initiatives pool distributions pursuant to section
twenty-eight hundred seven-v of this article, and high need indigent
care adjustment pool distributions pursuant to section twenty-eight
hundred seven-w of this article, provided, however, that funds received
as medical assistance payments which include state share amounts
authorized pursuant to section twenty-eight hundred seven-v of this
article that are not disproportionate share hospital payments shall be
included within the meaning of net patient service revenue for the
purposes of this section;
(v) revenue received from physician practice or faculty practice plan
discrete billings for physician services;
(vi) revenue received by a general hospital from a public hospital
pursuant to an affiliation agreement contract for the delivery of health
care services to such public hospital;
(vii) revenue received from governmental deficit financing;
(viii) subject to the provisions of paragraph (d) of this subdivision,
revenue received for or on account of referred ambulatory clinical
laboratory visits made or services performed on and after October first,
two thousand.
(b) for diagnostic and treatment centers providing services designated
in subparagraph (ii) of paragraph (a) of subdivision one-a of this
section all moneys received, including capitation payments allocable to
diagnostic and treatment center services otherwise covered by the
assessment, less refunds, for or on account of visits made or services
performed on or after January first, nineteen hundred ninety-seven or
contracted service obligations for periods on or after January first,
nineteen hundred ninety-seven:
(i) for the following services:
(A) for diagnostic and treatment centers providing a comprehensive
range of primary health care services, for all services;
(B) for diagnostic and treatment centers providing ambulatory surgical
services, for all ambulatory surgical services;
(ii) excluding the following subject to the provisions of subdivision
eleven of this section:
(A) revenue received for services provided to beneficiaries of title
XVIII of the federal social security act (medicare);
(B) revenue received from the allowances pursuant to this section;
(C) revenue received from bad debt and charity care rate adjustments
pursuant to paragraph (f) of subdivision two of section twenty-eight
hundred seven of this article, health care services pool distributions
pursuant to section twenty-eight hundred seven-c of this article, health
care initiatives pool distributions pursuant to section twenty-eight
hundred seven-l of this article, professional education pool
distributions pursuant to section twenty-eight hundred seven-m of this
article, tobacco control and insurance initiatives pool distributions
pursuant to section twenty-eight hundred seven-v of this article, and
high need indigent care adjustment pool distributions pursuant to
section twenty-eight hundred seven-w of this article;
(D) revenue received from physician practice or faculty practice plan
discrete billings for physician services;
(E) for a diagnostic and treatment center operated by a health
maintenance organization operating in accordance with the provisions of
article forty-four of this chapter or article forty-three of the
insurance law, revenue received for or on account of services provided
to subscribers of such health maintenance organization;
(F) revenue received from governmental deficit financing; and
(G) subject to the provisions of paragraph (d) of this subdivision,
revenue received for or on account of referred clinical laboratory
visits made or services performed on and after October first, two
thousand.
(c) for free-standing clinical laboratories, all moneys received,
including capitation payments, less refunds, for or on account of visits
made or services performed on or after January first, nineteen hundred
ninety-seven and prior to October first, two thousand, subject to the
provisions of paragraph (d) of this subdivision, or contracted service
obligations for periods on or after January first, nineteen hundred
ninety-seven and prior to October first, two thousand, subject to the
provisions of paragraph (d) of this subdivision, for clinical laboratory
services, excluding, subject to the provisions of subdivision eleven of
this section:
(i) revenue received for services provided to beneficiaries of title
XVIII of the federal social security act (medicare);
(ii) revenue received from the allowances pursuant to this section;
(iii) for a clinical laboratory operated by a health maintenance
organization operating in accordance with the provisions of article
forty-four of this chapter or article forty-three of the insurance law,
revenue received for or on account of services provided to subscribers
of such health maintenance organization; and
(iv) revenue received from governmental deficit financing.
(d) Provided, however, that if either the provisions of clause (G) of
subparagraph (ii) of paragraph (b) of this subdivision or subparagraph
(viii) of paragraph (a) of this subdivision which exclude certain
revenues from the definition of net patient service revenues for the
purpose of imposing surcharges pursuant to this section, result in a
determination of an impermissible provider tax by the secretary of the
U.S. department of health and human services under the provisions of
section 1903(w) of the federal social security act, then clause (G) of
subparagraph (ii) of paragraph (b) of this subdivision, subparagraph
(viii) of paragraph (a) of this subdivision, and sections forty-eight
and forty-nine of chapter one of the laws of nineteen hundred
ninety-nine are rendered null and void as of October first, two
thousand. The commissioner will collect any retroactive amounts due as a
result of surcharges imposed on such services on and after October
first, two thousand, without interest or penalty.
4. (a) For periods prior to January first, two thousand five, the
commissioner is authorized to contract with the article forty-three
insurance law plans, or such other contractors as the commissioner shall
designate, to receive and distribute funds from the allowances
established pursuant to this section, and funds from the assessments
established pursuant to subdivision eighteen of section twenty-eight
hundred seven-c of this article. In the event contracts with the article
forty-three insurance law plans or other commissioner's designees are
effectuated, the commissioner shall conduct annual audits of the receipt
and distribution of the funds. The reasonable costs and expenses of an
administrator as approved by the commissioner, not to exceed for
personnel services on an annual basis two million two hundred thousand
dollars for collection and distribution of allowances and assessments
established pursuant to this section and subdivision eighteen of section
twenty-eight hundred seven-c of this article, shall be paid from the
allowance and assessment funds.
(b) Notwithstanding any inconsistent provision of section one hundred
twelve or one hundred sixty-three of the state finance law or any other
law, at the discretion of the commissioner without a competitive bid or
request for proposal process, contracts in effect for administration of

bad debt and charity care pools for the period January first, nineteen
hundred ninety-six through December thirty-first, nineteen hundred
ninety-six pursuant to section twenty-eight hundred seven-c of this
article may be extended to provide for administration pursuant to this
section and distributions of allowance and assessment funds pursuant to
this article and may be amended as may be necessary.
(c) The commissioner shall contract with an independent certified
public accountant to conduct an annual independent audit, in conformance
with generally accepted auditing standards, of the receipts,
disbursements, revenues, expenditures and cash flows of funds, for each
calendar year beginning with nineteen hundred eighty-three, through the
most recent calendar year. As used in this section, "funds" shall mean:
(i) Funds accumulated and pooled pursuant to this section, paragraph
(a) of subdivision eighteen of section twenty-eight hundred seven-c of
this article, and sections twenty-eight hundred seven-s and twenty-eight
hundred seven-t of this article; and
(ii) Funds accumulated and pooled pursuant to chapters five hundred
thirty-six, five hundred thirty-seven and five hundred thirty-eight of
the laws of nineteen hundred eighty-two, chapters eight hundred seven
and nine hundred six of the laws of nineteen hundred eighty-five,
chapters two and six hundred five of the laws of nineteen hundred
eighty-eight, chapters nine hundred twenty-two and nine hundred
twenty-three of the laws of nineteen hundred ninety, chapter seven
hundred thirty-one of the laws of nineteen hundred ninety-three and
chapter eighty-one of the laws of nineteen hundred ninety-five.
Such annual independent audit shall be submitted to the director of
the budget, the temporary president of the senate and the speaker of the
assembly no later than April fifteenth of each year.
5. (a) Any third-party payor for services provided by a designated
provider of services may make an election to make payments on an
aggregated basis of funds due from the allowance determined pursuant to
subdivision two of this section directly to the commissioner or the
commissioner's designee on behalf of designated providers of services.
(i) The election pursuant to this paragraph to be effective must be in
writing, filed with the commissioner or the commissioner's designee on
such forms and in such manner as the commissioner shall require. An
election must apply to all classes of designated providers of service
and to all providers within each class. An election by a payor shall
take effect for nineteen hundred ninety-seven, on the next following
January first, April first, July first, or October first, and for each
calendar year thereafter on the next following January first, not less
than thirty days after the election is filed. Beginning December first,
nineteen hundred ninety-seven, an election pursuant to this paragraph
must be made no later than December first of the year prior to the
assessment year. However, any payor licensed pursuant to the insurance
law or certified pursuant to article forty-four of this chapter between
December first of the year prior to the assessment year and December
thirty-first of the assessment year may make an election subsequent to
such licensure, and during said time period, to take effect on the next
following January first, April first, July first or October first not
less than thirty days after such election is filed. Payors other than
those licensed pursuant to the insurance law or certified pursuant to
this chapter which have not provided third-party coverage prior to
December first of the year prior to the assessment year may make an
election at any time from December first of the year prior to said
assessment year to December thirty-first of the assessment year, to take
effect on the next following January first, April first, July first or
October first not less than thirty days after the election is filed.

Beginning June first, two thousand three an election by any payor or
organization shall begin on the first day of the month following the
date it was received by the commissioner.
(ii) An election shall remain in effect unless revoked in writing by a
specified third-party payor, which revocation shall be effective on the
first day of the next month, provided that such payor has provided
notice of its intention to so revoke at least twenty days prior to the
beginning of such month.
(iii) A payor filing an election pursuant to this paragraph must
agree:
(A) to provide reports in accordance with the provisions of paragraph
(b) of subdivision seven of this section;
(B) to provide such certification of data and access to allowance
expenditure data for audit verification purposes as the commissioner
shall require for purposes of this section; and
(C) to the jurisdiction of the state to maintain an action in the
courts of the state of New York to enforce any provision of this section
related to payment of the allowances.
(D) for periods on and after January first, two thousand nine, to
provide the commissioner or the commissioner's designee the payor's
federal tax identification number and agree to the use of such
identification number in connection with identifying the payor's
election status to designated providers of services, including the
posting of such identification numbers on secure websites maintained by
the commissioner or the commissioner's designee in furtherance of the
purposes of this section. The commissioner shall include for periods on
and after January first, two thousand nine on such secure websites, the
date such payor was first posted.
(iv) If a payor is acting in an administrative services capacity on
behalf of an organization, such as a self-insured fund, the consent of
the organization to the election and the conditions pursuant to
subparagraph (iii) of this paragraph must be submitted with the
election. Such consent may be set forth in writing in the agreement
between the payor and the organization and a photocopy of that portion
of the agreement submitted by the payor, together with a photocopy of
the signatures of the organization and the payor on the agreement, shall
be accepted in lieu of a separate election form from the organization.
On and after January first, two thousand four, the commissioner shall
have discretion to accept payments made on a timely basis if the reports
and information reports are routinely submitted, notwithstanding the
fact that the full and complete election form by or on behalf of an
organization was not filed on a timely basis. In the event the
commissioner accepts payments pursuant to this section where an election
form is missing or incomplete but the payments and information reports
were routinely submitted as if the election forms had been filed, the
election form from the payor and organization shall be deemed to have
been filed (and the organization and the payor shall be as legally bound
by the terms of the election form as if it had signed and filed the
election) and neither the payor nor the organization shall subsequently
refuse to abide by the terms of the election form for any year in which
payments were submitted and accepted pursuant to this section.
(v) If a payor, including a payor operating in accordance with the
insurance law or article forty-four of this chapter, making an election
pursuant to this paragraph is acting in an administrative services
capacity on behalf of an organization or organizations, such payor must
specify whether such election applies to payments on behalf of all such
organizations and establish, in accordance with guidelines established
by the superintendent of financial services, a system through which

designated providers of services and the commissioner can identify the
status of a patient as a patient for whom the election does not apply.
(b) The commissioner may deny a payor the opportunity to remit
directly to the commissioner or the commissioner's designee based on
repeated late payments, failure to remit correct amounts, or failure to
provide adequate verification of the accuracy of payments. The
percentage allowance for any such payor shall be the percentage
determined in accordance with paragraph (b) of subdivision two of this
section.
(c) The commissioner or the commissioner's designee shall make
available to all designated providers of services a list of the payors
which have elected pursuant to this paragraph to remit payments
directly.
5-a. (a) Payments by or on behalf of designated providers of services
to the commissioner or the commissioner's designee of funds due from the
allowances pursuant to subdivision two of this section or pursuant to
payment obligations incurred pursuant to section twenty-eight hundred
seven-s of this article or section twenty-eight hundred seven-t of this
article shall be made on a monthly basis, provided, however, that for
reporting periods relating to payments for services provided or dates of
inpatient discharge or contracted service obligations occurring on or
after January first, two thousand one, the commissioner may permit
certain third-party payors which have at least one full year of pool
payment experience to submit such payments on an annual basis, based on
an annual demonstration by a payor through its prior year's pool payment
experience that total pool obligations under this section and sections
twenty-eight hundred seven-s and twenty-eight hundred seven-t of this
article are not expected to exceed ten thousand dollars for annual
periods prior to January first, two thousand four, and twenty-five
thousand dollars for annual periods on and after January first, two
thousand four. Payments due by designated providers of services on
account of payors in accordance with paragraph (b) of subdivision two of
this section shall be two percentage points less than the percentage
specified in such paragraph. The designated provider of services shall
retain for compensation for such provider's administrative
responsibilities the amount that represents the difference. Payments due
by designated providers of services on account of all other payors shall
be calculated on the basis of the percentage allowance applicable to
such payor pursuant to paragraphs (d), (e), (f) and (g) of subdivision
two of this section. Payments shall be due on or before the thirtieth
day following the end of a calendar month to which an allowance applies.
(b) Notwithstanding any inconsistent provision of this section, as
shall be necessary to obtain federal financial participation in medical
assistance expenditures in accordance with title XIX of the federal
social security act, the allowances included in rates of payment
pursuant to this section on behalf of patients eligible for medical
assistance pursuant to title eleven of article five of the social
services law shall be withheld from medical assistance payments to
designated providers of services and paid to pools on behalf of the
designated provider of services where a designated provider of services
elects such withholding in such time and manner as specified by the
commissioner, and in the event a designated provider of services does
not elect such withholding, payments by such designated provider of
services to a pool based on an allowance received for medical assistance
patients shall be due within five days of receipt of such funds. Funds
withheld by a payor and paid to a pool on behalf of a designated
provider of services shall be considered received by such designated

provider of services and paid to the pool by such designated provider of
services for all purposes.
6. (a) If a payment made by a designated provider of services for a
month to which an allowance applies is less than seventy percent of the
amount due or which the commissioner estimates is due, based on
available financial and statistical data, the commissioner may collect
the deficiency pursuant to paragraph (c) of this subdivision.
(b) If a payment made by a designated provider of services for a month
to which an allowance applies is less than ninety percent of the amount
due or which the commissioner estimates is due, based on available
financial and statistical data, and at least two previous payments
within the preceding six months were less than ninety percent of the
amount due, based on similar evidence, the commissioner may collect the
deficiency pursuant to paragraph (c) of this subdivision.
(c) Upon receipt of notification from the commissioner of a designated
provider of services' deficiency under this section, the comptroller or
a fiscal intermediary designated by the director of the budget, or the
commissioner of the office of temporary and disability assistance, or a
corporation organized and operating in accordance with article
forty-three of the insurance law, or an organization operating in
accordance with article forty-four of this chapter shall withhold from
the amount of any payment to be made by the state or by such article
forty-three corporation or article forty-four organization to the
designated provider of services the amount of the deficiency determined
under paragraph (a), (b) or (e) of this subdivision or paragraph (d) of
subdivision eight-a of this section. Upon withholding such amount, the
comptroller or a designated fiscal intermediary, or the commissioner of
the office of temporary and disability assistance, or corporation
organized and operating in accordance with article forty-three of the
insurance law or organization operating in accordance with article
forty-four of this chapter shall pay the commissioner, or the
commissioner's designee, such amount withheld on behalf of the
designated provider of services. Such amount shall represent, in whole
or in part, the amounts due from the designated provider of services.
(d) The commissioner shall provide a designated provider of services
with notice of any estimate of an amount due for an allowance pursuant
to paragraph (a) or (b) of this subdivision or paragraph (d) of
subdivision eight-a of this section at least three days prior to
collection of such amount by the commissioner. Such notice shall contain
the financial basis for the commissioner's estimate.
(e) In the event a designated provider of services objects to an
estimate by the commissioner pursuant to paragraph (a) or (b) of this
subdivision or paragraph (d) of subdivision eight-a of this section of
the amount due for an allowance, the designated provider of services,
within sixty days of notice of an amount due, may request a public
hearing. If a hearing is requested, the commissioner shall provide the
designated provider of services an opportunity to be heard and to
present evidence bearing on the amount due for an allowance within
thirty days after collection of an amount due or receipt of a request
for a hearing, whichever is later. An administrative hearing is not a
prerequisite to seeking judicial relief.
(f) The commissioner may direct that a hearing be held without any
request by a designated provider of services.
(g) In the event a hearing pursuant to paragraph (e) of this
subdivision is not requested and the delinquent amounts in question have
been referred for recoupment or offset pursuant to paragraph (c) of this
subdivision, or have been referred to the office of the attorney general
for collection, the amount of such delinquencies shall be deemed final

and not subject to further revision or reconciliation by the
commissioner based on any additional reports or other information
submitted by the designated provider of services, provided, however,
that such delinquencies shall not be referred for such recoupment or for
such collection based on estimated amounts unless the hospital has
received written notification of such delinquencies and has been given
no less than thirty days in which to submit delinquent reports.
7. (a) (i) Every designated provider of services shall submit reports
of net patient service revenues received for or on account of patient
services for each month which shall be in such form as may be prescribed
by the commissioner to accurately disclose information required to
implement this section. For periods on and after January first, two
thousand five, reports by designated providers of services shall be
submitted electronically in a form as may be required by the
commissioner; provided, however, any designated provider of services is
not prohibited from submitting reports electronically on a voluntary
basis prior to such date, and provided further, however, that all such
electronic submissions submitted on and after July first, two thousand
twelve shall be verified with an electronic signature as prescribed by
the commissioner.
(ii) For periods on and after January first, two thousand nine, every
designated provider of services shall provide the commissioner or
commissioner's designee with its federal tax identification number and
such identification number shall be used in connection with identifying
such providers for purposes pursuant to this section, including the
posting of such identification numbers on secure websites maintained by
the commissioner or the commissioner's designee in furtherance of the
purposes of this section. The commissioner shall include for periods on
and after January first, two thousand nine on such secure websites, the
date such designated provider of services was first posted. In addition,
the commissioner shall, as a part of a final resolution of an audit
conducted pursuant to subdivision eight-a of this section, waive payment
of interest and penalties otherwise applicable pursuant to subdivision
eight of this section, when the audit findings conclusively indicate
that the liability for such interest and penalties are the result of a
delay in the listing of a new designated provider of services on the
secure website maintained by the department.
(b) (i) Every third-party payor making an election in accordance with
paragraph (a) of subdivision five of this section shall submit reports
of patient service expenditures for services provided by designated
providers of services for each month which shall be in such form as may
be prescribed by the commissioner to accurately disclose information
required to implement this section, provided, however, that for
reporting periods relating to payments for services provided or dates of
inpatient discharge or contracted service obligations occurring on or
after January first, two thousand one, the commissioner may permit
certain third-party payors which have at least one full year of pool
payment experience to submit such reports on an annual basis, based on
an annual demonstration by a payor through its prior year's pool payment
experience that total pool obligations under this section and sections
twenty-eight hundred seven-s and twenty-eight hundred seven-t of this
article are not expected to exceed ten thousand dollars for annual
periods prior to January first, two thousand four, and twenty-five
thousand dollars for annual periods on and after January first, two
thousand four.
(ii) For periods on and after July first, two thousand four, reports
submitted on a monthly basis by third-party payors in accordance with
subparagraph (i) of this paragraph and reports submitted on a monthly or

annual basis by payors acting in an administrative services capacity on
behalf of electing third-party payors in accordance with subparagraph
(i) of this paragraph shall be made electronically in a form as may be
required by the commissioner; provided, however, any third-party payor,
except payors acting in an administrative services capacity on behalf of
electing third-party payors, which, on or after January first, two
thousand four, elects to make payments directly to the commissioner or
the commissioner's designee pursuant to subdivision five of this
section, shall be subject to this subparagraph only after one full year
of pool payment experience which results in reports being submitted on a
monthly basis, and provided further, however, that all such electronic
submissions submitted on and after July first, two thousand twelve shall
be verified with an electronic signature as prescribed by the
commissioner. This subparagraph shall not be interpreted to prohibit any
third-party payor from submitting reports electronically on a voluntary
basis.
(c) If a designated provider of services or a third-party payor fails
to file reports required pursuant to paragraph (a) or (b) of this
subdivision and which are due on and after January first, two thousand,
within sixty days of the date such reports are due and after
notification of such reporting delinquency, the commissioner may assess
a civil penalty of up to ten thousand dollars for each such failure,
provided, however, that such civil penalty shall not be imposed if the
payor or provider demonstrates good cause for the failure to timely file
such reports. Such penalties shall be subject to the provisions of
section twelve-a of this chapter.
8. (a) If a payment made pursuant to this section or to section
twenty-eight hundred seven-s or twenty-eight hundred seven-t of this
article for a month to which an allowance applies is less than ninety
percent of the amount due or which the commissioner estimates, based on
available financial and statistical data, is due for such month,
interest shall be due and payable to the commissioner by a designated
provider of services, or by a third-party payor, other than a state
governmental agency, that has elected to pay an allowance directly, on
the difference between the amount paid and the amount due or estimated
to be due from the day of the month the payment was due until the date
of payment. The rate of interest shall be twelve percent per annum or,
if greater, at the rate of interest set by the commissioner of taxation
and finance with respect to underpayments of tax pursuant to subsection
(e) of section one thousand ninety-six of the tax law minus four
percentage points. Interest under this paragraph shall not be paid if
the amount thereof is less than one dollar. Interest due from a
designated provider of services, if not paid by the due date of the
following month's payment, may be collected by the commissioner pursuant
to paragraph (c) of subdivision six of this section in the same manner
as an allowance pursuant to subdivision two of this section.
(b) If a payment made for a month to which an allowance applies is
less than seventy percent of the amount due or which the commissioner
estimates, based on available financial and statistical data, is due for
such month, a penalty shall be due and payable to the commissioner by a
designated provider of services, or by a third-party payor, other than a
state governmental agency, that has elected to pay an allowance
directly, of five percent of the difference between the amount paid and
the amount due or estimated to be due for such month when the failure to
pay is for a duration of not more than one month after the due date of
the payment with an additional five percent for each additional month or
fraction thereof during which such failure continues, not exceeding
twenty-five percent in the aggregate. A penalty due from a designated

provider of services may be collected by the commissioner pursuant to
paragraph (c) of subdivision six of this section in the same manner as
an allowance pursuant to subdivision two of this section.
(c) Overpayment by or on behalf of a designated provider of services
of a payment shall be applied to any other payment due from the
designated provider of services pursuant to this section, or, if no
payment is due, at the election of the designated provider of services
shall be applied to future payments or refunded to the designated
provider of services. Interest shall be paid on overpayments from the
date of overpayment to the date of crediting or refund at the rate
determined in accordance with paragraph (a) of this subdivision only if
the overpayment was made at the direction of the commissioner. Interest
under this paragraph shall not be paid if the amount thereof is less
than one dollar.
8-a.
(a) Payments and reports submitted or required to be submitted
to the commissioner or to the commissioner's designee pursuant to this
section and section twenty-eight hundred seven-s of this article by
designated providers of services and by third-party payors which have
elected to make payments directly to the commissioner or to the
commissioner's designee in accordance with subdivision five-a of this
section, shall be subject to audit by the commissioner for a period of
six years following the close of the calendar year in which such
payments and reports are due, after which such payments shall be deemed
final and not subject to further adjustment or reconciliation, including
through offset adjustments or reconciliations made by designated
providers of services or by third-party payors with regard to subsequent
payments, provided, however, that nothing herein shall be construed as
precluding the commissioner from pursuing collection of any such
payments which are identified as delinquent within such six year period,
or which are identified as delinquent as a result of an audit commenced
within such six year period, or from conducting an audit of any
adjustment or reconciliation made by a designated provider of services
or by a third party payor which has elected to make such payments
directly to the commissioner or the commissioner's designee, or from
conducting an audit of payments made prior to such six year period which
are found to be commingled with payments which are otherwise subject to
timely audit pursuant to this section.
(b) Designated providers of services or third-party payors which, in
the course of an audit pursuant to this section or section twenty-eight
hundred seven-s of this article, fail to produce data or documentation
requested in furtherance of such an audit, within thirty days of such
request, may be assessed a civil penalty of up to ten thousand dollars
for each such failure, provided, however, that such civil penalty shall
not be imposed if the audited entity demonstrates good cause for such
failure. The imposition of civil penalties pursuant to this section
shall be subject to the provisions of section twelve-a of this chapter.
(c) Records required to be retained for audit verification purposes by
designated providers of services and third-party payors in accordance
with this section and section twenty-eight hundred seven-s of this
article shall include, but not be limited to, on a monthly basis, the
source records generated by supporting information systems, detailed
claims information, detailed patient revenue information, capitation
arrangements, financial accounting records, relevant correspondence and
such other records as may be required to prove compliance with, and to
support the reports submitted in accordance with, this section and
section twenty-eight hundred seven-s of this article.
(d) If a designated provider of services or a third party payor fails
to produce data or documentation requested in furtherance of an audit

pursuant to this section or pursuant to section twenty-eight hundred
seven-s of this article, for a month to which an allowance applies, the
commissioner may estimate, based on available financial and statistical
data as determined by the commissioner, the amount due for such month.
If the impact of the patient services revenue exemptions specified
pursuant to this section, or pursuant to section twenty-eight hundred
seven-s of this article, cannot be determined from such available
financial and statistical data, the amount due may be calculated on the
basis of the aggregate total of patient services revenue derived from
such data for the year subject to audit. The commissioner shall take all
necessary steps to collect amounts due as determined pursuant to this
paragraph, including directing the state comptroller to offset such
amounts due from any payments made by the state pursuant to this article
to a designated provider of services or a third party payor. Interest
and penalties shall be applied to such amounts due in accordance with
the provisions of subdivision eight of this section.
(e) The commissioner may, as part of a final resolution of an audit
conducted pursuant to this subdivision, waive payment of interest and
penalties otherwise applicable pursuant to subdivision eight of this
section when amounts due as a result of such audit, other than such
waived penalties and interest, are paid in full to the commissioner or
the commissioner's designee within sixty days of the issuance of a final
audit report that is mutually agreed to by the commissioner and auditee,
provided, however, that if such final audit report is not so mutually
agreed upon, then neither the commissioner nor the auditee shall have
any obligations pursuant to this paragraph.
(f) The commissioner may enter into agreements with designated
providers of services, and with third-party payors, in regard to which
audit findings or prior settlements have been made pursuant to this
section or section twenty-eight hundred seven-s of this article,
extending and applying such audit findings or prior settlements, or a
portion thereof, in settlement and satisfaction of potential audit
liabilities for subsequent un-audited periods. The commissioner may
reduce or waive payment of interest and penalties otherwise applicable
to such subsequent unaudited periods when such amounts due as a result
of such agreement, other than reduced or waived penalties and interest,
are paid in full to the commissioner or the commissioner's designee
within sixty days of execution of such agreement by all parties to the
agreement. Any payments made pursuant to agreements entered into in
accordance with this paragraph shall be deemed to be in full
satisfaction of any liability arising under this section and section
twenty-eight hundred seven-s of this article, as referenced in such
agreements and for the time periods covered by such agreements,
provided, however, that the commissioner may audit future retroactive
adjustments to payments made for such periods based on reports filed by
providers and payors subsequent to such agreements.
9. Funds accumulated, including income from invested funds, from the
allowances specified in this section, and the assessments pursuant to
subdivision eighteen of section twenty-eight hundred seven-c of this
article, and the assessments pursuant to paragraph (c) of subdivision
nine of section twenty-eight hundred seven-d of this article, plus such
funds as may be allocated in accordance with section twenty-eight
hundred seven-s of this article, including interest and penalties, shall
be deposited by the commissioner or the commissioner's designee as
follows:
(a) funds shall be deposited and credited to a special revenue-other
fund to be established by the comptroller or to the health care reform
act (HCRA) resources fund established pursuant to section ninety-two-dd

of the state finance law, whichever is applicable. To the extent of
funds appropriated therefore, the commissioner shall make payments to
general hospitals related to bad debt and charity care pursuant to
section twenty-eight hundred seven-k of this article. Funds shall be
deposited in the following amounts:
(i) fifty-seven and thirty-three-hundredths percent of the funds
accumulated for the period January first, nineteen hundred ninety-seven
through December thirty-first, nineteen hundred ninety-seven,
(ii) fifty-seven and one-hundredths percent of the funds accumulated
for the period January first, nineteen hundred ninety-eight through
December thirty-first, nineteen hundred ninety-eight,
(iii) fifty-five and thirty-two-hundredths percent of the funds
accumulated for the period January first, nineteen hundred ninety-nine
through December thirty-first, nineteen hundred ninety-nine, and
(iv) seven hundred sixty-five million dollars annually of the funds
accumulated for the periods January first, two thousand through December
thirty-first, two thousand twenty five, and
(v) one hundred ninety-one million two hundred fifty thousand dollars
of the funds accumulated for the period January first, two thousand
twenty-six through March thirty-first, two thousand twenty-six.
(b) funds shall be accumulated in a health care initiatives pool
established by the commissioner, for distribution in accordance with
section twenty-eight hundred seven-l of this article, in the following
amounts:
(i) forty-two and sixty-seven-hundredths percent of the funds
accumulated for the period January first, nineteen hundred ninety-seven
through December thirty-first, nineteen hundred ninety-seven,
(ii) forty-two and ninety-nine-hundredths percent of the funds
accumulated for the period January first, nineteen hundred ninety-eight
through December thirty-first, nineteen hundred ninety-eight,
(iii) forty-four and sixty-eight-hundredths percent of the funds
accumulated for the period January first, nineteen hundred ninety-nine
through December thirty-first, nineteen hundred ninety-nine, and
(iv) the remaining balance of the funds accumulated for each period on
and after January first, two thousand.
10. Notwithstanding any inconsistent provision of law or regulation to
the contrary, the allowances applicable to payments by state
governmental agencies pursuant to subdivision two of this section shall
be reflected in the determination of reimbursement rates pursuant to
sections twenty-eight hundred seven and twenty-eight hundred seven-c of
this article and fees for clinical laboratory services under the medical
assistance program.
11. Each exclusion from the allowances effective on or after January
first, nineteen hundred ninety-seven established pursuant to this
section shall be contingent upon either: (a) qualification of the
allowances for waiver pursuant to federal law and regulation; or (b)
consistent with federal law and regulation, not requiring a waiver by
the secretary of the department of health and human services related to
such exclusion; in order for the allowances under this section to be
qualified as a broad-based health care related tax for purposes of the
revenues received by the state pursuant to the allowances not reducing
the amount expended by the state as medical assistance for purposes of
federal financial participation. The commissioner shall collect the
allowances relying on such exclusions, pending any contrary action by
the secretary of the department of health and human services. In the
event the secretary of the department of health and human services
determines that the allowances do not so qualify based on any such
exclusion, then the exclusion shall be deemed to have been null and void

as of January first, nineteen hundred ninety-seven, and the commissioner
shall collect any retroactive amount due as a result, without interest
or penalty provided the designated provider of services or third-party
payor that has elected to pay directly pays the retroactive amount due
within ninety days of notice from the commissioner to the designated
provider of services or third-party payor that has elected to pay
directly that an exclusion is null and void. Interest and penalties
shall be measured from the due date of ninety days following notice from
the commissioner or the commissioner's designee to the designated
provider of services or third-party payor that has elected to pay
directly.
12. Revenue from the allowances pursuant to this section shall not be
included in gross revenue received for purposes of the assessments
pursuant to subdivision eighteen of section twenty-eight hundred seven-c
of this article, subject to the provisions of paragraph (e) of
subdivision eighteen of section twenty-eight hundred seven-c of this
article, and shall not be included in gross revenue received for
purposes of the assessments pursuant to section twenty-eight hundred
seven-d of this article, subject to the provisions of subdivision twelve
of section twenty-eight hundred seven-d of this article.
* NB Expires December 31, 2026

Structure New York Laws