2012 New York Consolidated Laws
PBH - Public Health
Article 28 - (2800 - 2823) HOSPITALS
2807-T - Assessments on covered lives.

 
    * §   2807-t.  Assessments  on  covered  lives.  1.  Definitions.  (a)
  "Individual" means a person for whom the specified third-party payor has
  agreed to provide reimbursement for inpatient hospital services  in  the
  period other than:
    (i)  any person who is eligible for payments as a beneficiary of title
  XVIII of the federal social security act (medicare);
    (ii) any person for whom the specified third-party payor has agreed to
  provide reimbursement for inpatient hospital  services  contingent  upon
  such  person's  relationship  to  an  "individual"  as  a spouse, child,
  stepchild, adopted child, family member, or dependent, as defined by the
  specified third-party payor, or as contingent  upon  any  other  similar
  relationship  to  an "individual" as such relationship is defined by the
  specified third-party payor;
    (iii) any person for whom the specified third-party payor  has  agreed
  to  provide  coverage  for hospital confinement on other than an expense
  incurred basis;
    (iv) any person for whom the specified third-party payor has agreed to
  provide reimbursement for inpatient hospital services  pursuant  to  the
  workers'  compensation  law, the volunteer firefighters' benefit law, or
  the volunteer ambulance workers' benefit law;
    (v) any person for whom the specified third-party payor has agreed  to
  provide  reimbursement  for  inpatient hospital services pursuant to the
  comprehensive motor vehicle insurance reparations act;
    (vi) any person (hereinafter referred to  as  the  "primary  insured")
  otherwise  meeting  the definition of an "individual" as set forth under
  this section if the specified third-party payor has  agreed  to  provide
  reimbursement for such person as part of a "family unit"; and
    (vii)  effective  on  and  after  April  first, two thousand five, any
  person covered  under  a  student  policy  issued  pursuant  to  article
  forty-three of the insurance law, or a blanket student accident, blanket
  student health, or blanket student accident and health insurance policy.
    (b)  "Family unit" means any person for whom the specified third-party
  payor  has  agreed  to  provide  reimbursement  for  inpatient  hospital
  services in the period, together with one or more additional persons for
  whom the specified third-party payor has agreed to provide reimbursement
  for  inpatient  hospital  services  in  the  period contingent upon such
  person's relationship to said person  as  a  spouse,  child,  stepchild,
  adopted  child, family member, or dependent, as defined by the specified
  third-party payor, or as contingent upon any other similar relationship,
  as such relationship is defined  by  the  specified  third-party  payor.
  Excluded  from  the  definition  is  any family unit where the specified
  third-party  payor  has  agreed  to  provide:  coverage   for   hospital
  confinement  on  other than an expense incurred basis; reimbursement for
  inpatient hospital services pursuant to the worker's  compensation  law,
  the  volunteer  firefighters'  benefit  law,  or the volunteer ambulance
  workers' benefit law; and reimbursement for inpatient hospital  services
  pursuant  to  the comprehensive motor vehicle insurance reparations act.
  If a family unit of two persons includes one person who is eligible  for
  payments  as  a  beneficiary  of  title XVIII of the social security act
  (medicare), that family unit shall be deemed an individual for  purposes
  of  this section. If a family unit of three or more persons includes one
  person who is not eligible for medicare and the remaining  two  or  more
  persons  are  eligible for medicare, that family unit shall be deemed an
  individual for purposes of this section. A family unit of  two  or  more
  persons,  all of whom are eligible for medicare, shall not be considered
  a family unit or an individual for purposes of this section.

    (c) "Specified third-party payor", for purposes of this section, shall
  have the same meaning as  set  forth  in  section  twenty-eight  hundred
  seven-s of this article.
    (d)  "Region",  for  purposes  of  this  section,  shall have the same
  meaning as set forth in section twenty-eight  hundred  seven-s  of  this
  article.
    2.  Determination  of annual regional payment amount. The sum total to
  be generated each year for each region  shall  be  referred  to  as  the
  annual  regional  payment  amount,  as  determined  in  accordance  with
  subdivision six of section twenty-eight hundred seven-s of this article.
    3. Election. Any specified third-party payor may make an  election  to
  make payments for the assessments required by this section, on behalf of
  the  liable  persons  or  entities pursuant to subdivision eight of this
  section, directly to the commissioner or  the  commissioner's  designee.
  The election pursuant to this subdivision 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  by  a
  specified  third-party  payor  shall  take  effect  for nineteen hundred
  ninety-seven on the next following  January  first,  April  first,  July
  first,  or October first not less than thirty days after the election is
  filed. Beginning  December  first,  nineteen  hundred  ninety-seven,  an
  election  pursuant  to  this section must be made no later than December
  first of the year prior to the assessment year. However,  any  specified
  third-party  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 or
  certification 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.   Specified
  third-party  payors  other than those licensed pursuant to the insurance
  law or certified pursuant  to  this  chapter  which  have  not  provided
  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  said
  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. 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 calendar year  quarter,  provided
  that  such  payor  has  provided notice of its intention to so revoke at
  least thirty days prior to the beginning of such calendar quarter.
    (a) A specified third-party payor filing an election pursuant to  this
  subdivision  must agree: to provide the data and information required by
  subdivision four of this section; to provide such certification of  data
  and  access  to  individual  and family unit data for audit verification
  purposes as the commissioner shall require for purposes of this section;
  and 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 assessments.
    (b)  If  a  specified third-party 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 paragraph (a) of this subdivision must be submitted with the
  election.  Such  consent  may  be  set forth in writing in the agreement
  between the specified third-party payor and the organization.
    (c) If a specified third-party payor, including a payor  operating  in
  accordance with the insurance law or article forty-four of this chapter,

  making  an  election  pursuant  to  this  subdivision  is  acting  in an
  administrative  services  capacity  on  behalf  of  an  organization  or
  organizations, such specified third-party payor must specify (i) whether
  such  election  applies to payments on behalf of all such organizations,
  and (ii) identify any organizations for which such specified third-party
  payor is acting to which the election does not apply and  establish,  in
  accordance   with   guidelines  established  by  the  superintendent  of
  financial services, a system through which  general  hospitals  and  the
  commissioner  can identify the status of a patient as a patient for whom
  the election does not apply.
    (d) The commissioner  may  deny  a  specified  third-party  payor  the
  opportunity  to  make  an election pursuant to this subdivision based on
  repeated late payments, failure to remit correct amounts, or failure  to
  provide adequate verification of the accuracy of payments.
    (e)  The  commissioner  or  the  commissioner's  designee  shall  make
  available to all general hospitals a list of the  specified  third-party
  payors which have elected pursuant to this subdivision to remit payments
  pursuant to this section.
    4.  Assessments  shall  be  calculated as follows: (a) Every specified
  third-party payor that has made an election  pursuant  to  this  section
  shall  report  to  the  commissioner  or the commissioner's designee the
  number of individuals for a period as  determined  by  the  commissioner
  during  the  calendar  year prior to the assessment year residing within
  each  region  ("individual  member  months").   Every   such   specified
  third-party   payor  shall  also  report  to  the  commissioner  or  the
  commissioner's designee the number of  family  units  for  a  period  as
  determined  by  the  commissioner  during the calendar year prior to the
  assessment year residing within each region  ("family  member  months").
  For purposes of this section, the family unit is considered to reside in
  the region in which the primary insured resides.
    (b)   The  superintendent  of  financial  services  shall  advise  the
  commissioner of the average  number  of  persons  covered  under  family
  insurance  contracts  providing  health  care  coverage  approved by the
  superintendent for the year two years prior to the assessment year.
    (c) The commissioner shall calculate the total number  of  "individual
  member  months"  for each region for all specified third-party payors to
  determine "aggregate individual member months" for each region.
    (d) The commissioner shall  calculate  the  total  number  of  "family
  member  months"  for each region for all specified third-party payors to
  determine  "aggregate  family  member  months"  for  each  region.   The
  commissioner  shall multiply the average number of persons covered under
  family insurance contracts, as  reported  to  the  commissioner  by  the
  superintendent  of  financial  services, by the "aggregate family member
  months" to determine "adjusted aggregate family member months" for  each
  region.  The  commissioner  shall  add the number of "adjusted aggregate
  family member months" for each region to the total number of  "aggregate
  individual member months" for each region. This amount shall be known as
  "total covered member months" for each region.
    (e)   The   annual   regional  payment  amount  for  nineteen  hundred
  ninety-seven,   nineteen   hundred   ninety-eight,   nineteen    hundred
  ninety-nine,  two  thousand  and  each year thereafter, respectively for
  each region determined pursuant to subdivision two of this section shall
  be divided by an estimate derived from population based data sources  of
  the   total   covered  member  months  determined  consistent  with  the
  provisions of paragraphs (a), (b), (c) and (d) of  this  subdivision  in
  that  region  to establish the individual annual assessment for nineteen
  hundred ninety-seven, nineteen hundred  ninety-eight,  nineteen  hundred
  ninety-nine,  two  thousand  and each year thereafter, respectively. The

  individual annual assessment shall be multiplied by the  average  family
  size  reported  to  the  commissioner by the superintendent of financial
  services to establish the family unit annual assessment in  that  region
  for   nineteen  hundred  ninety-seven,  nineteen  hundred  ninety-eight,
  nineteen hundred ninety-nine, two thousand  and  each  year  thereafter,
  respectively.
    (f)   Effective   January   first,  two  thousand  nine,  a  specified
  third-party payor that has made an election pursuant to this section may
  report to the commissioner or the commissioner's designee the number  of
  individuals  and  family units enrolled as of the last day of each month
  in fulfillment  of  the  monthly  reporting  requirement  set  forth  in
  paragraph  (a)  of  this  subdivision.  A  specified  third-party  payor
  choosing to  report  monthly  enrollment  counts  on  this  basis  shall
  indicate  its  choice  at the beginning of a calendar year in a form and
  manner specified by the commissioner and  such  reporting  method  shall
  remain in effect the entire calendar year.
    5.  Monthly  payments.  (a)  Within  thirty days after the end of each
  month, a specified third-party payor which made an election pursuant  to
  this  section  shall  remit  to  the  commissioner or the commissioner's
  designee one-twelfth of the individual annual assessment for each of the
  individuals residing in this state which were included on the membership
  rolls of that specified third-party payor during all or any  portion  of
  the  prior  month.  Within  thirty  days  after the end of each month, a
  specified third-party payor which made  an  election  pursuant  to  this
  section  shall  also  remit  to  the  commissioner or the commissioner's
  designee one-twelfth of the  family  unit  annual  assessment  for  each
  family  unit  for  which the primary insured resided in this state which
  were included on the membership  rolls  of  that  specified  third-party
  payor  during  all or any portion of the prior month. Provided, however,
  for  assessment  obligations  arising  out  of  individual  and   family
  assessments  established  pursuant  to  this section on or after January
  first, two thousand,  the  commissioner  may  permit  certain  specified
  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-j  and twenty-eight hundred seven-s of this
  article are not expected to exceed ten thousand dollars in  the  current
  pool  year. If a specified third-party payor fails to make such payments
  within sixty days of notification of a delinquency, the commissioner may
  assess a civil penalty of up to ten thousand dollars for  each  failure,
  provided,  however,  that such civil penalty shall not be imposed if the
  payor demonstrates good cause for  such  failure  to  timely  make  such
  payments, and further provided that the amount of such penalty shall not
  exceed the amount of the delinquent liability.
    (b)  The  specified third party-payor shall be entitled to rely on the
  residence location information provided to the  payor  by  an  employer,
  group  or  other party providing enrollment information to the specified
  third-party payor, provided  the  specified  third-party  payor  has  no
  reason to doubt the accuracy of the information.
    (c)   Specified  third-party  payors  shall  not  be  responsible  for
  remitting the monthly assessment for any individual or  for  any  family
  unit  for  any  month  in  which  it is subsequently determined that the
  specified third-party payor had no liability  to  provide  coverage  for
  inpatient hospital services for such individual or family unit.
    6.  Prospective adjustments. The commissioner shall annually reconcile
  the sum  of  the  actual  payments  made  to  the  commissioner  or  the
  commissioner's designee for each region pursuant to section twenty-eight

  hundred  seven-s  of  this  article and pursuant to this section for the
  prior year with the regional allocation of the  gross  annual  statewide
  amount  specified  in  subdivision  six  of section twenty-eight hundred
  seven-s  of this article for such prior year. The difference between the
  actual amount raised for a region and the  regional  allocation  of  the
  specified  gross annual amount for such prior year shall be applied as a
  prospective adjustment to the regional allocation of the specified gross
  annual payment amount for such region for the year  next  following  the
  calculation  of  the  reconciliation. The authorized dollar value of the
  adjustments shall be the same as if calculated retrospectively.
    7. (a) In the case two or more specified third-party payors covering a
  single contract holder where both  specified  third-party  payors  cover
  separate  components of the inpatient care benefits otherwise subject to
  the  assessment,  the  assessment  shall  be  apportioned  between   the
  insurers.
    (b)  With  regard  to assessment obligations arising out of individual
  and family assessments established pursuant to  this  section,  where  a
  single  contract  holder  has  separate components of the inpatient care
  benefits otherwise subject to the assessment  covered  by  two  or  more
  entities,  the  assessment  may  be  apportioned  between  the entities,
  provided that:
    (i) Apportionment agreements or arrangements may only be entered  into
  between or among specified third-party payers which have elected to make
  direct  payments  to  the  commissioner  or  the commissioner's designee
  pursuant to this subdivision; and
    (ii) The aggregate of apportioned covered  lives  assessment  payments
  must  result  in  the  payment  of one hundred percent of the applicable
  covered lives assessment; and
    (iii) Apportionment agreements between or  among  apportioning  payers
  and any modifications, amendments or termination of such agreements must
  be  in  writing  and  signed by all such payers, provided, however, that
  where one apportioning payor agrees to pay one hundred  percent  of  the
  applicable  covered  lives  assessment,  no  written  agreement shall be
  required, provided there is other written evidence  of  the  arrangement
  and any modifications, amendments and/or terminations thereof, emanating
  from the apportioning payor paying one hundred percent of the applicable
  covered lives assessment to the other apportioning payor or payors or to
  the  particular  group  to  which  the  arrangement relates, and further
  provided that such written evidence contains the name of the  particular
  group to which the arrangement relates; and
    (iv)  Copies  of  apportionment  agreements,  and  any  modifications,
  amendments  and/or  terminations  thereof,  and  written   evidence   of
  arrangements  by  which one apportioning payor agrees to pay one hundred
  percent  of  the  applicable   covered   lives   assessment,   and   any
  modifications,   amendments   and/or   terminations   thereof,  must  be
  maintained  in  the  files  of  each  apportioning   payor   while   the
  apportionment  is  in effect and for a period of not less than six years
  after termination thereof and shall be made available to the  department
  upon request for audit verification purposes.
    8.  Liability  for  assessments.  (a)  The  assessments  determined in
  accordance with this  section  shall,  for  individuals  who  have  paid
  premiums  directly to an insurer or to a health maintenance organization
  certified pursuant to article forty-four  of  this  chapter  or  article
  forty-three of the insurance law for health care coverage which includes
  coverage  of  inpatient  hospital  services,  be  the  liability of said
  individuals. The assessments determined in accordance with this  section
  shall,  for  groups and entities who have paid premiums to an insurer or
  to a health  maintenance  organization  certified  pursuant  to  article

  forty-four  of  this chapter or article forty-three of the insurance law
  for health care coverage which includes coverage of  inpatient  hospital
  services,  be the liability of said groups and entities. The assessments
  determined  in  accordance  with  this  section  shall, for individuals,
  groups and entities who have contributed  to  a  self-insured  fund  for
  health  care  coverage  which  includes  coverage  of inpatient hospital
  services, be the liability of said individuals, groups or entities.
    (b)  Specified  third-party  payors  shall  make   payments   to   the
  commissioner  or  the  commissioner's designee of the full amount of the
  assessments  determined  in  accordance  with  this  section.  Specified
  third-party  payors  may recover amounts due or paid to the commissioner
  or the commissioner's designee from the  parties  liable  in  accordance
  with paragraph (a) of this subdivision.
    9. A specified third-party payor must either:
    (a)  jointly  elect to pay the assessment pursuant to this section and
  the  allowance  pursuant  to  paragraph  (c)  of  subdivision  two   and
  subdivision  five  of  section  twenty-eight  hundred  seven-j  of  this
  article; or
    (b) pay the surcharge for an allowance determined in  accordance  with
  paragraph (b) of subdivision two of section twenty-eight hundred seven-j
  of  this  article, including the allowance determined in accordance with
  section twenty-eight hundred seven-s of this article.
    10.  (a) Payments and reports submitted or required to be submitted to
  the commissioner or to the  commissioner's  designee  pursuant  to  this
  section by specified third-party payors 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 such specified 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 adjustments and reconciliation made by a specified third party payor
  within  such  six  year  period, 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)  Specified  third-party  payors  which,  in the course of an audit
  pursuant to this section 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  such  specified  third-party  payor 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
  specified  third-party  payors  in  accordance  with  this section shall
  include, but not be limited to, on a monthly basis, the  source  records
  generated   by  supporting  information  systems,  financial  accounting
  records, relevant correspondence and the addresses and dates of coverage
  for all individuals and family units, as defined by paragraphs  (a)  and
  (b) of subdivision one of this section, and such other records as may be
  required  to  prove compliance with, and to support reports submitted in
  accordance with, this section.

    (d) If  a  specified  third-party  payor  fails  to  produce  data  or
  documentation  requested  in  furtherance  of  an audit pursuant to this
  section for a month to which an assessment 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 enrollment exemptions permitted pursuant to  this  section
  cannot be determined from such available financial and statistical data,
  the  estimated  amount  due  may be calculated on the basis of aggregate
  data derived from such available 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  to  the  third party payor pursuant to this article. Interest and
  penalties shall be applied to such amounts due in  accordance  with  the
  provisions  of subdivision eight of section twenty-eight hundred seven-j
  of this article.
    (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  section
  twenty-eight  hundred  seven-j  of  this  article, 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  specified
  third-party  payors  in  regard  to  which  audit  findings   or   prior
  settlements  have  been  made  pursuant  to  this section, 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 interest and penalties, 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, 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  payors
  subsequent to such agreements.
    * NB Expires December 31, 2014