2010 New York Code
PBH - Public Health
Article 28 - (2800 - 2822) HOSPITALS
2807 - Hospital reimbursement provisions; generally.

§   2807.  Hospital  reimbursement  provisions;  generally.  1.  Valid
  operating  certificate  requirement.  No  government   agency   and   no
  corporation   organized   and   operating  in  accordance  with  article
  forty-three of the insurance law and no health maintenance  organization
  organized  and  operating  in accordance with article forty-four of this
  chapter, shall purchase, pay for or make reimbursement or  grants-in-aid
  for  any  hospital  or  health-related  service, unless, at the time the
  service  was  provided,  the  hospital  possessed  a   valid   operating
  certificate   authorizing  such  service.  No  government  agency  shall
  purchase, pay  for  or  make  reimbursement  or  grants-in-aid  for  any
  hospital  or  health-related  service  that  has  been determined by the
  commissioner of health to be unauthorized for payment under the  medical
  assistance  program  pursuant  to  section twenty-eight hundred three of
  this article.
    2.  (a)  Rate   approvals.   Payments   for   hospital   service   and
  health-related  service  made  by  government  agencies  or for services
  provided prior  to  January  first,  nineteen  hundred  ninety-seven  by
  organizations  operating  in  accordance  with the provisions of article
  forty-four of this chapter shall be  at  rates  approved  by  the  state
  director  of  the budget in the case of government agencies and approved
  by the commissioner in the case of plans, organized and operating  under
  the  provisions  of article forty-four of this chapter, under which such
  payments  are  made  by  agencies  other  than  government  agencies  or
  corporations   organized   and  operating  in  accordance  with  article
  forty-three of the insurance law.   Payments for  hospital  service  and
  health-related  service  by  corporations  organized  and  operating  in
  accordance with article forty-three of the insurance  law  for  services
  provided  prior to January first, nineteen hundred ninety-seven shall be
  at rates approved by the commissioner of health.
    (a-1) Notwithstanding any inconsistent  provision  of  law,  rates  of
  payment  by  governmental  agencies  for the operating cost component of
  general  hospital  out-patient  and  emergency  services,  and  for  the
  operating  cost  component  of  treatment  or diagnostic center services
  shall not require a certification by  the  commissioner  that  they  are
  reasonably related to the costs of efficient production of such services
  nor  that  they are reasonable and adequate to meet the costs which must
  be incurred by efficiently and economically operated facilities.
    (b) During the period  October  first,  nineteen  hundred  ninety-four
  through  September  thirtieth, nineteen hundred ninety-five and for each
  twelve month rate period commencing on October first  thereafter,  rates
  of  payment by governmental agencies for the operating cost component of
  treatment or diagnostic center services  shall  be  based  on  operating
  costs in the base year cost report adjusted by a trend factor determined
  in  accordance  with  rules  and  regulations  promulgated  pursuant  to
  paragraph (b) of subdivision two of section twenty-eight  hundred  three
  of  this  article;  provided,  however,  that  prior to such adjustment,
  allowable operating costs shall be established by the commissioner after
  taking into account the cost of services provided in facilities offering
  similar services and regional economic factors, plus the addition of the
  capital cost per visit. The capital cost per visit shall be based on the
  base year cost report except that the capital  cost  per  visit  may  be
  adjusted  for major outpatient capital expenditures, incurred subsequent
  to  the  reporting  year,  when  such  expenditures  have  received  the
  requisite  approvals and the facility has provided the commissioner with
  a certified statement of expenditures. The base year for the rate period
  commencing on October  first,  nineteen  hundred  ninety-four  shall  be
  nineteen  hundred  ninety-two  and shall be advanced one year thereafter
  for each subsequent rate period.

* (e) Notwithstanding any inconsistent provisions of this  subdivision
  or  any other law, payments made by governmental agencies for ambulatory
  surgical services provided by a hospital,  including  general  hospitals
  and  diagnostic  and  treatment  centers,  during the period June first,
  nineteen  hundred  eighty-nine  through  December thirty-first, nineteen
  hundred eighty-nine and  the  period  January  first,  nineteen  hundred
  ninety  through December thirty-first, nineteen hundred ninety and every
  twelve month rate period thereafter shall be  at  case  based  rates  of
  reimbursement  established by the commissioner and approved by the state
  director of the budget. Ambulatory surgical services case based rates of
  payment shall be established prospectively and shall  include  operating
  costs  and  capital  costs. Factors considered in establishing such case
  based rates shall include, but not be limited to:  a  classification  of
  procedures  with  individual  or  combined  rates  established  for each
  services classification;  operating  and  capital  costs  of  ambulatory
  surgical  services  efficiently  and  economically provided, considering
  regional economic factors, trended to the rate period; and the need  for
  incentives to improve services and institute economies.
    * NB Expires April 1, 2011
    * (f)  (i)  During  the  period  July  first,  nineteen hundred ninety
  through  March  thirty-first,  nineteen  hundred  ninety-one,  the  rate
  periods  during  the  period  April  first,  nineteen hundred ninety-one
  through September thirtieth, nineteen hundred ninety-four and  for  each
  fiscal year period commencing on October first thereafter, comprehensive
  clinic   rates  of  payment  by  governmental  agencies  established  in
  accordance with  paragraph  (b)  of  this  subdivision,  applicable  for
  services   provided  to  individuals  eligible  for  medical  assistance
  pursuant to title eleven of article five of the social services law  for
  voluntary  non-profit  or  publicly  sponsored  diagnostic and treatment
  centers providing a comprehensive range of primary health care  services
  which  can  demonstrate,  on  forms provided by the commissioner, losses
  from a disproportionate share of bad debt and charity care during a base
  year  period  established  by  regulation  may  include   an   allowance
  determined in accordance with this paragraph to reflect the needs of the
  diagnostic  and  treatment  center for the financing of losses resulting
  from bad debt and the costs of charity care. Losses resulting  from  bad
  debt  and  the  costs  of  charity  care  shall  be  determined  by  the
  commissioner considering, but not limited to, such factors as the losses
  resulting from bad debt and the costs of charity care  provided  by  the
  diagnostic  and treatment center and the availability of other financial
  support, including state and local assistance public health aid, to meet
  the losses resulting from bad debt and the costs of charity care of  the
  diagnostic and treatment center. The bad debt and charity care allowance
  for  a  diagnostic  and  treatment  center  for  a  rate period shall be
  determined by the commissioner in accordance with rules and  regulations
  adopted  by  the  council and approved by the commissioner, and shall be
  consistent with the purposes for which such  allowances  are  authorized
  for general hospitals pursuant to the provisions of article twenty-eight
  of   this   chapter   and  rules  and  regulations  promulgated  by  the
  commissioner. A diagnostic and treatment center applying for a bad  debt
  and  charity  care  allowance  pursuant  to this paragraph shall provide
  assurances satisfactory to the  commissioner  that  it  shall  undertake
  reasonable  efforts  to  maintain  financial  support from community and
  public funding sources and reasonable efforts to  collect  payments  for
  services  from  third  party  insurance  payors, governmental payors and
  self-paying patients. To be eligible for an allowance pursuant  to  this
  paragraph,   a   diagnostic   and   treatment   center  must  provide  a
  comprehensive range of primary health care services and must demonstrate

that a minimum of fifteen percent of total clinic visits reported during
  the applicable base year  period  were  to  uninsured  individuals.  The
  commissioner  may  retrospectively  reduce the bad debt and charity care
  allowance  of a diagnostic and treatment center if it is determined that
  provider management actions  or  decisions  have  caused  a  significant
  reduction  for  the rate period in the delivery of comprehensive primary
  health care services to bad debt  and  charity  care  residents  of  the
  community.
    (ii) The total amount of funds to be allocated and distributed for bad
  debt  and  charity  care  allowances to eligible voluntary and nonprofit
  diagnostic and treatment centers for a rate period  in  accordance  with
  this  paragraph  shall be limited to an annual aggregate amount of seven
  million three hundred thousand dollars. The total amount of funds to  be
  allocated  and  distributed  for bad debt and charity care allowances to
  eligible publicly sponsored diagnostic and treatment centers for a  rate
  period  in  accordance with this paragraph shall be limited to an annual
  aggregate amount  of  seven  million  seven  hundred  thousand  dollars;
  provided,  however, that twenty percent of the amount of funds allocated
  for distribution to eligible publicly sponsored diagnostic and treatment
  centers shall be available for clinics operating under the  auspices  of
  the  Health and Hospitals Corporation. Notwithstanding the foregoing and
  any other provision of this chapter municipalities which received  state
  aid,  pursuant  to article two of the public health law and prior to the
  effective date  of  this  chapter,  in  support  of  non-hospital  based
  free-standing  or  local  health  department  operated  general  medical
  clinics, shall receive a bad debt and charity care allowance of not less
  than the amount received in the nineteen  hundred  eighty-nine--nineteen
  hundred  ninety  state fiscal year for general medical clinics, plus the
  applicable local share for medical assistance expenditures  under  title
  XIX of the federal social security act. Funds to be distributed pursuant
  to  this  subparagraph  shall  be  based  on  losses associated with the
  delivery of bad debt and charity  care  excluding  the  amount  of  such
  losses determined in accordance with subparagraph (ix) of this paragraph
  as  the  incremental  loss  basis  for  a  supplemental  allowance for a
  diagnostic and treatment center designated as a preferred  primary  care
  provider.
    (iii)  No  diagnostic  and treatment center may receive a bad debt and
  charity care allowance in accordance with this paragraph  in  an  amount
  which  exceeds  its need for the financing of losses associated with the
  delivery of bad debt and charity care.
    (iv) A nominal payment amount for the financing of  losses  associated
  with  the  delivery of bad debt and charity care will be established for
  each eligible diagnostic  and  treatment  center.  The  nominal  payment
  amount shall be calculated as the sum of the dollars attributable to the
  application  of  an incrementally increasing nominal coverage percentage
  of base year period losses associated with the delivery of bad debt  and
  charity  care  for percentage increases in the relationship between base
  year period eligible bad debt and charity care clinic  visits  and  base
  year period total clinic visits according to the following scale:
 
  % of eligible bad debt and charity care           % of nominal financial
    clinic visits to total visits                     loss coverage
                up to 15%                                   50%
                15 - 30%                                    75%
                30%+                                        100%
 
    If  the  sum of the nominal payment amounts for all eligible voluntary
  non-profit diagnostic and treatment centers or for all  eligible  public

diagnostic  and  treatment centers is less than the amount allocated for
  bad debt and charity care allowances pursuant to  subparagraph  (ii)  or
  (ix)  respectively  of  this paragraph for such diagnostic and treatment
  centers  respectively,  the  nominal  coverage  percentages of base year
  period losses associated with the delivery of bad debt and charity  care
  pursuant  to  this  scale  may be increased to not more than one hundred
  percent for voluntary non-profit diagnostic and treatment centers or for
  public diagnostic and treatment centers in  accordance  with  rules  and
  regulations adopted by the council and approved by the commissioner.
    (v)  The  bad  debt  and  charity  care  allowance  for  each eligible
  voluntary non-profit diagnostic and treatment center shall be  based  on
  the dollar value of the result of the ratio of total funds allocated for
  bad debt and charity care allowances for voluntary non-profit diagnostic
  and treatment centers pursuant to subparagraph (ii) of this paragraph to
  the  total  statewide nominal payment amounts for all eligible voluntary
  non-profit diagnostic and treatment  centers  determined  in  accordance
  with  subparagraph (iv) of this paragraph applied to the nominal payment
  amount for each such diagnostic and treatment center.
    (vi) The bad debt and charity care allowance for each eligible  public
  diagnostic  and  treatment  center shall be based on the dollar value of
  the result of the ratio of  total  funds  allocated  for  bad  debt  and
  charity  care  allowances  for  public  diagnostic and treatment centers
  pursuant to subparagraph (ii) of this paragraph to the  total  statewide
  nominal payment amounts for all eligible public diagnostic and treatment
  centers   determined  in  accordance  with  subparagraph  (iv)  of  this
  paragraph applied to the nominal payment amount for each such diagnostic
  and treatment center.
    (vii) Diagnostic and treatment centers shall furnish to the department
  such reports and information as may be required by the  commissioner  to
  assess the cost, quality, access to, effectiveness and efficiency of bad
  debt  and  charity  care  provided.  The  council  shall adopt rules and
  regulations, subject to the approval of the commissioner,  to  establish
  uniform   reporting   and   accounting  principles  designed  to  enable
  diagnostic and treatment centers to fairly and accurately determine  and
  report  bad  debt  and charity care visits and the costs of bad debt and
  charity care. In order to be eligible for an allowance pursuant to  this
  paragraph,  a diagnostic and treatment center must be in compliance with
  bad debt and charity care reporting requirements.
    (viii) Of the funds allocated and distributed for bad debt and charity
  care allowances to eligible  voluntary  and  non-profit  diagnostic  and
  treatment centers for a rate period in accordance with subparagraph (ii)
  of  this  paragraph,  an  annual  aggregate  amount  not to exceed three
  million eight hundred thousand dollars within a  rate  period  shall  be
  paid  by or on behalf of diagnostic and treatment centers into a primary
  care initiative pool established by the commissioner. Such  funds  shall
  be  distributed  to  diagnostic and treatment centers in accordance with
  the provisions of subdivisions one through six of  section  twenty-eight
  hundred seven-b of this article.
    (ix)  During  the  period  January first, nineteen hundred ninety-four
  through September thirtieth, nineteen hundred ninety-four and  for  each
  twelve  month rate period commencing on October first thereafter, to the
  extent of funds available therefor, a diagnostic  and  treatment  center
  which  is  approved  as  a  preferred  primary care provider pursuant to
  subdivision twelve of section twenty-eight hundred seven of this article
  and meets the requirements of this  paragraph  may  be  eligible  for  a
  supplemental allowance determined in accordance with this paragraph. The
  supplemental  allowance  shall  be  based  on losses associated with the
  delivery of bad debt and charity care incurred by  a  preferred  primary

care  provider  to  the  extent such losses exceed any losses associated
  with the delivery of bad debt and charity  care  incurred  for  nineteen
  hundred  ninety-three  or,  if later, the year immediately preceding the
  year  in which the diagnostic and treatment center is first designated a
  preferred primary care provider.
    (x) This paragraph shall be effective if,  and  as  long  as,  federal
  financial   participation   is   available  for  expenditures  made  for
  beneficiaries eligible for medical assistance under  title  XIX  of  the
  federal  social  security  act  based  upon the allowances determined in
  accordance with this paragraph.
    (xi) Notwithstanding any inconsistent  provision  of  this  paragraph,
  adjustments  to  rates  of  payment for diagnostic and treatment centers
  determined in accordance with subparagraphs  (i)  through  (x)  of  this
  paragraph  shall  apply only for services provided on or before December
  thirty-first, nineteen hundred ninety-six.
    * NB Expired December 31, 1996
    (g)(i) During the period April  first,  nineteen  hundred  ninety-four
  through December thirty-first, nineteen hundred ninety-four and for each
  calendar  year rate period commencing on January first thereafter, rates
  of payment by governmental agencies for the operating cost component  of
  general  hospital  outpatient  services  shall be based on the operating
  costs reported in the base year cost report adjusted by the trend factor
  applicable to the general hospital in which the services were  provided;
  provided,  however,  that  the  maximum  payment  for the operating cost
  component of outpatient services shall be sixty-seven dollars and  fifty
  cents  plus the addition of the capital cost per visit. The capital cost
  per visit shall be based on the base year cost report  except  that  the
  capital  cost  per  visit  may  be adjusted for major outpatient capital
  expenditures incurred  subsequent  to  the  reporting  year,  when  such
  expenditures  have received the requisite approvals and the facility has
  provided  the  commissioner  with   a   certified   statement   of   the
  expenditures. The base year for the period April first, nineteen hundred
  ninety-four  through December thirty-first, nineteen hundred ninety-four
  shall be nineteen hundred ninety-two and  shall  be  advanced  one  year
  thereafter  for  each subsequent calendar year rate period. Further, the
  provisions of subdivision seven of this section  shall  not  apply.  The
  commissioner  may waive the maximum allowable payment and limitations on
  the  rate  of  payment  as  prescribed  herein  to   provide   for   the
  reimbursement  of  offering  and  arranging services eligible for ninety
  percent federal funds as set forth in section nineteen hundred three  of
  the federal social security act, and to provide for the reimbursement of
  specialized   services   having   separately   identifiable   costs  and
  statistics, including but  not  limited  to  hemodialysis  services  and
  surgical  services provided on an outpatient basis. Such waiver shall be
  granted only when the commissioner finds that  the  services  are  being
  provided  efficiently  and  at  minimum  cost.  The  commissioner  shall
  promptly promulgate rules and regulations  necessary  to  identify  such
  services.  Among  the  criteria which the commissioner shall consider in
  the case of specialized services are whether the services require highly
  specialized staff, equipment or facilities, thereby  generating  a  cost
  that  substantially exceeds that of more routine diagnostic or treatment
  services; whether the facility in which the  services  are  provided  is
  presently providing the services to the population in need; and, whether
  the  services  may  be  provided safely and effectively on an outpatient
  basis at a lower cost than through inpatient admission. In addition  the
  commissioner shall provide for a waiver of the maximum allowable payment
  for those outpatient services medically necessary which include surgical
  procedures  where  delay  in  surgical  intervention would substantially

increase the medical risk associated with  such  surgical  intervention.
  Where  the  commissioner  waives  the  maximum allowable payment for any
  specified service he may, in accordance with the foregoing criteria  and
  such  other  criteria  as  he  deems  appropriate,  establish  a maximum
  allowable payment for such specified service.
    (ii) During the  period  April  first,  nineteen  hundred  ninety-four
  through December thirty-first, nineteen hundred ninety-four and for each
  calendar  year rate period commencing on January first thereafter, rates
  of payment by governmental agencies for the operating cost component  of
  general  hospital  emergency  services  shall  be based on the operating
  costs reported in the base year cost report adjusted by the trend factor
  applicable to the general hospital in which the services were  provided,
  and in addition shall include that portion of the reasonable incremental
  emergency service operating costs incurred by such hospital in excess of
  emergency  service  costs  reported in the nineteen hundred eighty-eight
  cost report, after application of  the  trend  factor,  attributable  to
  meeting additional quality of care standards for emergency services that
  became   effective   on   or   after  January  first,  nineteen  hundred
  eighty-nine;  provided,  however,  that  the  maximum  payment  for  the
  operating  component  shall  be  ninety-five  dollars, provided further,
  however, that for the period January first, two thousand  seven  through
  December  thirty-first,  two  thousand seven the maximum payment for the
  operating component shall be one hundred twenty-five dollars, and during
  the  period  January  first,  two  thousand   eight   through   December
  thirty-first,  two thousand eight, the maximum payment for the operating
  component shall be one hundred forty  dollars;  and  during  the  period
  January  first,  two  thousand  nine  through December thirty-first, two
  thousand nine and for each calendar year thereafter, the maximum payment
  for the operating component  shall  be  one  hundred  fifty  dollars.  A
  capital  cost  per  visit  shall  be  based on the base year cost report
  except that the capital cost per visit may be  adjusted  for  the  major
  outpatient  capital expenditures incurred subsequent to the report year,
  when such expenditures have received the  requisite  approvals  and  the
  facility  has  provided  the  commissioner with a certified statement of
  expenditures. The base year for the period April first, nineteen hundred
  ninety-four through December thirty-first, nineteen hundred  ninety-four
  shall  be  nineteen  hundred  ninety-two  and shall be advanced one year
  thereafter for each subsequent calendar year rate period.  Further,  the
  provisions of subdivision seven of this section shall not apply prior to
  January first, two thousand seven.
    (h) Notwithstanding any inconsistent provisions of this subdivision or
  any other law, except as provided in section 43.02 of the mental hygiene
  law,  the  commissioner  may,  in  accordance with rules and regulations
  adopted by the council and approved by the commissioner, establish rates
  of reimbursement for payments made by governmental agencies, subject  to
  the  approval of the state director of the budget, for services provided
  on an outpatient basis by a general hospital or diagnostic and treatment
  center designated as a  preferred  primary  care  provider  pursuant  to
  subdivision  twelve  of  this  section  or  providing specialty services
  including hemo and peritoneal dialysis,  outpatient  rehabilitative  and
  psychiatric   services,   methadone  maintenance,  and  other  organized
  outpatient or clinic services which are structured to address  extensive
  and  complex  medical  needs  for  patients  with  chronic or infectious
  medical conditions based on  factors  other  than  those  prescribed  by
  paragraph  (b)  or subparagraph (i) of paragraph (g) of this subdivision
  or subdivision three of this section provided, however, that the use  of
  such  an  alternative  approach will not result in any increase to other
  rates of reimbursement established pursuant to this article. During  the

initial  rate  period  such  rates of payment for preferred primary care
  providers shall be at least equal to the average  rate  of  payment  per
  visit  which would otherwise be provided pursuant to subparagraph (i) of
  paragraph  (g)  or  paragraph  (b)  of this subdivision. Factors used to
  establish rates shall include a  reasonable  classification  of  medical
  procedures  with  individual  or  combined  rates  established  for each
  service classification group  which  will  be  prospectively  determined
  based  upon  an  estimate  of  the  costs  of  such  outpatient services
  efficiently  and  economically  provided  by   general   hospitals   and
  diagnostic  and treatment centers, considering regional economic factors
  and the need for incentives to improve services and institute economies.
  Notwithstanding any inconsistent provisions of law, rates of payment  by
  governmental  agencies  for  outpatient  services  provided by a general
  hospital or  diagnostic  and  treatment  center,  shall  not  require  a
  certification  by the commissioner that they are reasonable and adequate
  to meet the costs which must be incurred by efficiently and economically
  operated facilities.
    2-a. Notwithstanding any provision of which is  inconsistent  with  or
  contrary   to   the   structure  established  by  this  subdivision  and
  subdivision thirty-three of section twenty-eight hundred seven-c of this
  article,  and  subject  to  the  availability   of   federal   financial
  participation,  rates  of  payment by governmental agencies, established
  pursuant to this article,  for  general  hospital  outpatient  services,
  general   hospital  emergency  services,  ambulatory  surgical  services
  provided by  a  hospital  as  defined  by  subdivision  one  of  section
  twenty-eight  hundred  one of this article, and diagnostic and treatment
  center services, but  excepting  any  facility  whose  reimbursement  is
  governed  by  subdivision  eight of this section or any payments made on
  behalf of persons enrolled in Medicaid managed care  or  in  the  family
  health plus program, shall be in accordance with the following:
    (a)(i)  for  the  period  December  first,  two thousand eight through
  November thirtieth, two thousand  nine,  seventy-five  percent  of  such
  rates  of  payment for each general hospital's outpatient services shall
  reflect the average Medicaid payment per claim,  as  determined  by  the
  commissioner, for services provided by that facility in the two thousand
  seven  calendar year, but excluding any payments for services covered by
  the facility's licensure, if any, under  the  mental  hygiene  law,  and
  twenty-five  percent  of  such rates of payment shall, for the operating
  cost component, reflect the utilization of the ambulatory patient groups
  reimbursement  methodology  described   in   paragraph   (e)   of   this
  subdivision;
    (ii) for the period December first, two thousand nine through December
  thirty-first,  two  thousand  ten,  fifty percent of such rates for each
  facility shall reflect  the  average  Medicaid  payment  per  claim,  as
  determined  by  the commissioner, for services provided by that facility
  in the two thousand seven calendar year, but excluding any payments  for
  services  covered  by the facility's licensure, if any, under the mental
  hygiene law, and fifty percent of such rates of payment shall,  for  the
  operating  cost  component,  reflect  the  utilization of the ambulatory
  patient groups reimbursement methodology described in paragraph  (e)  of
  this subdivision;
    (iii)  for  the  period  January  first,  two  thousand eleven through
  December thirty-first, two thousand eleven, twenty-five percent of  such
  rates   shall  reflect  the  average  Medicaid  payment  per  claim,  as
  determined by the commissioner, for services provided by  that  facility
  for the two thousand seven calendar year, but excluding any payments for
  services  covered  by the facility's licensure, if any, under the mental
  hygiene law, and seventy-five percent of such rates  of  payment  shall,

for  the  operating  cost  component,  reflect  the  utilization  of the
  ambulatory  patient  groups  reimbursement  methodology   described   in
  paragraph (e) of this subdivision; and
    (iv)  for periods on and after January first, two thousand twelve, one
  hundred percent of such rates of payment shall reflect  the  utilization
  of  the ambulatory patient groups reimbursement methodology described in
  paragraph (e) of this subdivision.
    (v) This paragraph shall be  effective  the  later  of:  (i)  December
  first, two thousand eight, or (ii) after the commissioner receives final
  approval  of  federal  financial  participation  in  payments  made  for
  beneficiaries eligible for medical assistance under  title  XIX  of  the
  federal  social  security  act  for  the  rate  methodology  established
  pursuant  to  subparagraph  (i)  of   paragraph   (a)   of   subdivision
  thirty-three of section twenty-eight hundred seven-c of this article.
    (b)  (i)  for  the  period  September first, two thousand nine through
  November thirtieth, two thousand  nine,  seventy-five  percent  of  such
  rates  of payment for services provided by each diagnostic and treatment
  center and each free-standing ambulatory surgery  center  shall  reflect
  the   average   Medicaid   payment  per  claim,  as  determined  by  the
  commissioner, for services provided by that facility in the two thousand
  seven calendar year, but excluding any payments for services covered  by
  the  facility's  licensure,  if  any,  under the mental hygiene law, and
  twenty-five percent of such rates of payment shall,  for  the  operating
  cost component, reflect the utilization of the ambulatory patient groups
  reimbursement   methodology   described   in   paragraph   (e)  of  this
  subdivision;
    (ii) for the period December first, two thousand nine through December
  thirty-first, two thousand ten, fifty percent of  such  rates  for  each
  facility  shall  reflect  the  average  Medicaid  payment  per claim, as
  determined by the commissioner, for services provided by  that  facility
  in  the two thousand seven calendar year, but excluding any payments for
  services covered by the facility's licensure, if any, under  the  mental
  hygiene  law,  and fifty percent of such rates of payment shall, for the
  operating cost component, reflect  the  utilization  of  the  ambulatory
  patient  groups  reimbursement methodology described in paragraph (e) of
  this subdivision;
    (iii) for the  period  January  first,  two  thousand  eleven  through
  December  thirty-first, two thousand eleven, twenty-five percent of such
  rates for each facility shall reflect the average Medicaid  payment  per
  claim,  as determined by the commissioner, for services provided by that
  facility in the two thousand seven  calendar  year,  but  excluding  any
  payments for services covered by the facility's licensure, if any, under
  the  mental  hygiene  law,  and  seventy-five  percent  of such rates of
  payment shall, for the operating cost component, reflect the utilization
  of the ambulatory patient groups reimbursement methodology described  in
  paragraph (e) of this subdivision; and
    (iv)  for periods on and after January first, two thousand twelve, one
  hundred percent of such rates of payment shall reflect  the  utilization
  of  the ambulatory patient groups reimbursement methodology described in
  paragraph (e) of this subdivision.
    (c) for periods on and after December first, two thousand eight,  such
  rates  of  payment  for ambulatory surgical services provided by general
  hospitals shall reflect the utilization of the ambulatory patient groups
  reimbursement  methodology  described   in   paragraph   (e)   of   this
  subdivision,  provided however, that the capital cost component for such
  rates shall  be  separately  computed  in  accordance  with  regulations
  promulgated in accordance with paragraph (e) of this subdivision.

(d)  for  periods  on  and after January first, two thousand nine, the
  operating cost component of such rates of payment for  general  hospital
  emergency  services  shall  reflect  the  utilization  of the ambulatory
  patient groups reimbursement methodology described in paragraph  (e)  of
  this  subdivision  and  shall  not reflect any maximum payment amount as
  otherwise  provided  for  in  subparagraph  (ii)  of  paragraph  (g)  of
  subdivision two of this section.
    (e)   (i)   notwithstanding   any   inconsistent  provisions  of  this
  subdivision, the commissioner shall promulgate regulations establishing,
  subject  to  the  approval  of  the  state  director  of   the   budget,
  methodologies   for  determining  rates  of  payment  for  the  services
  described  in  this  subdivision.   Such   regulations   shall   reflect
  utilization  of the ambulatory patient group (APG) methodology, in which
  patients are grouped based on their  diagnosis,  the  intensity  of  the
  services  provided  and  the medical procedures performed, and with each
  APG assigned a weight reflecting the projected utilization of resources.
  Such regulations shall provide for the development of one or  more  base
  rates  and  the multiplication of such base rates by the assigned weight
  for each APG to establish the appropriate payment level  for  each  such
  APG.    Such  regulations  may  also  utilize  bundling,  packaging  and
  discounting mechanisms.
    If the commissioner determines that the use of the APG methodology  is
  not, or is not yet, appropriate or practical for specified services, the
  commissioner   may  utilize  existing  payment  methodologies  for  such
  services or may promulgate regulations,  and  may  promulgate  emergency
  regulations,  establishing  alternative  payment  methodologies for such
  services.
    (ii) Notwithstanding this subdivision and any other contrary provision
  of law, the commissioner may incorporate within the payment  methodology
  described  in  subparagraph  (i)  of this paragraph payment for services
  provided by facilities pursuant to licensure under  the  mental  hygiene
  law,  provided, however, that such APG payment methodology may be phased
  into effect in accordance  with  a  schedule  or  schedules  as  jointly
  determined  by  the commissioner, the commissioner of mental health, the
  commissioner  of  alcoholism  and  substance  abuse  services,  and  the
  commissioner of mental retardation and developmental disabilities.
    (f)(i) The commissioner shall periodically measure the utilization and
  intensity  of  services  provided  to  medical  assistance recipients in
  ambulatory settings. Such analysis shall include, but not be limited to:
  measurement of the shift  of  surgical  procedures  from  the  inpatient
  hospital  setting to the ambulatory setting including measurement of the
  impact of any such shift on quality of care and outcomes; changes in the
  utilization  and  intensity  of  services  provided  in  the  outpatient
  hospital  department  and  in  diagnostic and treatment centers; and the
  change in the utilization and intensity  of  services  provided  in  the
  emergency department.
    (ii)  notwithstanding the provisions of paragraphs (a) and (b) of this
  subdivision, for periods on and after January first, two thousand  nine,
  the   following   services   provided  by  general  hospital  outpatient
  departments and diagnostic and treatment  centers  shall  be  reimbursed
  with  rates  of payment based entirely upon the ambulatory patient group
  methodology as described in paragraph (e) of this subdivision, provided,
  however,  that   the   commissioner   may   utilize   existing   payment
  methodologies  or  may  promulgate  regulations establishing alternative
  payment methodologies for one or more of the services specified in  this
  subparagraph,  effective  for  periods  on  and  after  March first, two
  thousand nine:

(A) services provided in accordance with the provisions of  paragraphs
  (q)  and (r) of subdivision two of section three hundred sixty-five-a of
  the social services law; and
    (B)  all services, but only with regard to additional payment amounts,
  as determined in accordance with regulations issued in  accordance  with
  paragraph  (e)  of  this subdivision, for the provision of such services
  during times outside  the  facility's  normal  hours  of  operation,  as
  determined  in  accordance  with criteria set forth in such regulations;
  and
    (C) individual psychotherapy  services  provided  by  licensed  social
  workers,  in  accordance with licensing criteria set forth in applicable
  regulations, to persons under the  age  of  twenty-one  and  to  persons
  requiring such services as a result of or related to pregnancy or giving
  birth; and
    (D)  individual  psychotherapy  services  provided  by licensed social
  workers, in accordance with licensing criteria set forth  in  applicable
  regulations,  at  diagnostic and treatment centers that provided, billed
  for, and received payment for these services between January first,  two
  thousand seven and December thirty-first, two thousand seven;
    (E)  services  provided to pregnant women pursuant to paragraph (s) of
  subdivision two of section three  hundred  sixty-five-a  of  the  social
  services  law  and, for periods on and after January first, two thousand
  ten, all other services provided pursuant  to  such  paragraph  (s)  and
  services  provided  pursuant  to  paragraph  (t)  of  subdivision two of
  section three hundred sixty-five-a of the social services law;
    (F) wheelchair evaluation services and eyeglass  dispensing  services;
  and
    (G)  immunization  services,  effective  for  services rendered on and
  after June tenth, two thousand nine.
    (f-1) Notwithstanding any inconsistent provision of  this  section  or
  any  other  contrary  provision  of  law,  the commissioner may with the
  approval of the director  of  the  budget,  for  periods  prior  to  two
  thousand  twelve,  establish  rates  of  payments  for  selected patient
  service categories that are based entirely upon the  ambulatory  patient
  groups  methodology  as  authorized  pursuant  to  paragraph (e) of this
  subdivision.
    (g) for the purposes set forth in  paragraphs  (a)  and  (b)  of  this
  subdivision,  rates  described  as  in effect for the two thousand seven
  calendar year shall mean those rates which are in effect for  that  year
  on  the date this subdivision becomes effective and such rates shall not
  thereafter, for the purposes set forth in such paragraphs (a)  and  (b),
  be subject to further adjustment.
    (h)(i) To the degree that rates of payment computed in accordance with
  paragraphs  (a)  and  (d) of this subdivision reflect utilization of the
  ambulatory  patient  groups  reimbursement  methodology   described   in
  paragraph  (e)  of  this  subdivision  for  purposes  of  computing  the
  operating component of such rates, the computation of the  capital  cost
  component  of  such  rates  shall  remain  subject  to the provisions of
  subparagraphs (i) and (ii) of paragraph (g) of subdivision two  of  this
  section,   provided,  however,  that  this  subparagraph  shall  not  be
  understood as applying to those portions of rates  of  payment  computed
  pursuant to paragraph (a) of this subdivision which are based on average
  Medicaid payments per claim.
    (ii)  To  the degree that rates of payment computed in accordance with
  paragraph (b) of this subdivision reflect utilization of the  ambulatory
  patient  groups  reimbursement methodology described in paragraph (e) of
  this subdivision for purposes of computing the  operating  component  of
  such  rates, the computation of the capital cost component of such rates

shall, for diagnostic and  treatment  centers,  remain  subject  to  the
  provisions  of  paragraph  (b)  of  subdivision  two of this section and
  shall, for  free-standing  ambulatory  surgery  centers,  be  separately
  computed  in  accordance with regulations promulgated in accordance with
  paragraph  (e)  of  this  subdivision,  provided,  however,  that   this
  subparagraph  shall  not  be understood as applying to those portions of
  rates of payment which are based on average Medicaid payments per claim.
    (i) Notwithstanding any provision of law to  the  contrary,  rates  of
  payment   by  governmental  agencies  for  general  hospital  outpatient
  services, general hospital emergency services  and  ambulatory  surgical
  services   provided  by  a  general  hospital  established  pursuant  to
  paragraphs (a), (c) and (d) of  this  subdivision  shall  result  in  an
  aggregate increase in such rates of payment of fifty-six million dollars
  for  the  period  December  first,  two  thousand  eight  through  March
  thirty-first, two thousand nine and one  hundred  seventy-eight  million
  dollars  for  periods  after  April  first, two thousand nine, provided,
  however, that for periods on and after April first, two  thousand  nine,
  such   amounts  may  be  adjusted  to  reflect  projected  decreases  in
  fee-for-service Medicaid utilization and changes in case-mix with regard
  to such services from the  two  thousand  seven  calendar  year  to  the
  applicable  rate  year,  and  provided further, however, that funds made
  available as a result of any such  decreases  may  be  utilized  by  the
  commissioner  to increase capitation rates paid to Medicaid managed care
  plans and family health plus plans to cover increased payments to health
  care providers for ambulatory care services and to increase  such  other
  ambulatory  care  payment rates as the commissioner determines necessary
  to facilitate access to quality ambulatory care services.
    3. Commissioner rate certification, governmental  payments.  Prior  to
  the  approval  of  such  rates,  as  provided in subdivision two of this
  section, the commissioner shall determine, and in the case of  approvals
  by  the  state director of the budget, certify to such official that the
  proposed rate schedules for  payments  to  hospitals  for  hospital  and
  health-related  services  are  reasonable and adequate to meet the costs
  which  must  be  incurred  by  efficiently  and  economically   operated
  facilities.  In  making  such certification, the commissioner shall take
  into consideration the elements of cost, geographical  differentials  in
  the  elements  of cost considered, economic factors in the area in which
  the hospital is located, the rate of increase or decrease of the economy
  in the area in which the hospital is  located,  costs  of  hospitals  of
  comparable  size,  and  the  need for incentives to improve services and
  institute  economies.     The  commissioner   shall   also   take   into
  consideration   the   economies   and  improvements  in  service  to  be
  anticipated from the operation  of  joint  central  service  or  use  of
  facilities  or  services  which may serve as alternatives or substitutes
  for the whole or any part of in-hospital  service,  including,  but  not
  limited  to,  obstetrical,  pediatric,  laboratory, training, radiology,
  pharmacy, laundry, purchasing, preadmission, nursing home, ambulatory or
  home care services. The commissioner shall exclude  costs  for  research
  and  those  parts  of  the  costs  for  educational  salaries  which the
  commissioner shall determine to be  not  directly  related  to  hospital
  service,  and allowances for costs which are not specifically identified
  except for allowances  authorized  under  section  twenty-eight  hundred
  seven-a  or twenty-eight hundred seven-c of this article. In determining
  and certifying to the state director of the  budget  rates  of  payment,
  including  rates  of payment for residential health care facilities, the
  commissioner shall take into consideration the different levels of  care
  authorized to be provided in such hospital or health-related service and
  determine  and  certify distinct rates of payment for each such level of

care. If the modification of an  operating  certificate  of  a  hospital
  pursuant  to subdivision six of section twenty-eight hundred six of this
  article requires the establishment of a rate for a level of service  not
  previously  provided in such hospital during the rate period existing at
  the time of such modification, a new rate period for that portion of the
  hospital  reclassified  as  a  result  of  such  modification   may   be
  established upon sixty days' prior notice.
    4.   Commissioner   rate  certifications,  payments  pursuant  to  the
  provisions of the workers' compensation law, the volunteer firefighters'
  benefit law, the  volunteer  ambulance  workers'  benefit  law  and  the
  comprehensive  motor  vehicle  insurance  reparations  act. For the rate
  years commencing January first, nineteen hundred eighty-six and  January
  first,  nineteen  hundred  eighty-seven the commissioner shall submit to
  the chairman of the workers' compensation board a schedule  of  hospital
  inpatient  reimbursement  rates  computed in accordance with subdivision
  two of section twenty-eight  hundred  seven-a  of  this  article  or  as
  revised   pursuant  to  subdivisions  eleven  and  fourteen  of  section
  twenty-eight hundred seven-a of this article. Beginning  with  the  rate
  period  commencing  January  first,  nineteen  hundred  eighty-eight the
  commissioner shall submit, and beginning with the  rate  period  January
  first, nineteen hundred ninety-seven and certify, to the chairman of the
  workers' compensation board for an established rate period a schedule of
  hospital  inpatient  reimbursement  rates  computed  in  accordance with
  subdivision one of section twenty-eight hundred seven-c of this  article
  for  payments  pursuant  to the workers' compensation law, the volunteer
  firefighters' benefit law and the comprehensive motor vehicle  insurance
  reparations  act  and  beginning  with  the rate year commencing January
  first, nineteen hundred ninety-one including payments  pursuant  to  the
  volunteer ambulance workers' benefit law.
    5.  Audit  authority.  The  commissioner  shall  make available to the
  commissioner of social services, in a mutually satisfactory manner,  all
  information  necessary  to  conduct or have conducted, on a cost sharing
  basis among payors, an appropriate review or audit  of  the  fiscal  and
  statistical  records of a hospital necessary to implement the provisions
  of this article.
    6. Consideration of economic status in certain cases.  Notwithstanding
  the  provisions  of  this  section, the commissioner, in determining and
  certifying rates of payment for  services  provided  by  a  party  to  a
  contract entered into pursuant to the provisions of subdivision three of
  section  twenty-eight  hundred  three  of  this article, shall take into
  consideration  the  economic  status  of  the  patients  receiving  such
  services.
    7. Reimbursement rate promulgation. The commissioner shall notify each
  hospital  and  health-related  service  of its approved rates of payment
  which shall be used in reimbursing  for  services  provided  to  persons
  eligible for payments made by state governmental agencies at least sixty
  days  prior to the beginning of an established rate period for which the
  rate is to become effective.  Notification  shall  be  made  only  after
  approval  of  rate  schedules  by  the state director of the budget. The
  sixty and thirty day notice provisions, herein, shall not apply to rates
  issued following judicial annulment or invalidation  of  any  previously
  issued  rates,  or  rates  issued pursuant to changes in the methodology
  used to compute  rates  which  changes  are  promulgated  following  the
  judicial   annulment   or   invalidation  of  previously  issued  rates.
  Notwithstanding any provision of law to the contrary,  nothing  in  this
  subdivision  shall  prohibit  the  recalculation  and  payment of rates,
  including  both  positive  and  negative   adjustments,   based   on   a
  reconciliation  of  amounts  paid  by residential health care facilities

beginning April first,  nineteen  hundred  ninety-seven  for  additional
  assessments  or  further  additional  assessments  pursuant  to  section
  twenty-eight hundred seven-d of this article with the amounts originally
  recognized for reimbursement purposes.
    7-a. Notwithstanding any inconsistent provision of law, with regard to
  a general hospital the provisions of subdivisions four and seven of this
  section  and  the  provisions  of section eighteen of chapter two of the
  laws of nineteen hundred eighty-eight relating  to  the  requirement  of
  prior  notice  and the time frames for notice, approval or certification
  of rates of payment, maximum rates of payment or maximum  charges  where
  not  otherwise  waived  pursuant to law shall be applicable only to such
  rates of payment or maximum charges  prospectively  established  for  an
  annual  rate  period  and  such  provisions shall not be applicable to a
  general hospital with regard to prospective adjustments or retrospective
  adjustments of established rates of payment or maximum  charges  for  or
  during  an annual rate period based on correction of errors or omissions
  of  data  or  in  computation,  rate  appeals,  audits  or  other   rate
  adjustments authorized by law or regulations adopted pursuant to section
  twenty-eight hundred three of this article.
    7-b.  Notification  of diagnostic and treatment center approved rates.
  (a) For rate periods or portions of rate periods beginning on  or  after
  October  first,  nineteen  hundred  ninety-four,  the commissioner shall
  notify each diagnostic and treatment center of  its  approved  rates  of
  payment,  which shall be used in the reimbursement for services provided
  to persons eligible for payments made by state governmental agencies  at
  least  thirty  days  prior to the beginning of the period for which such
  rates are to become effective.
    (b) Notwithstanding any contrary provision of law, all diagnostic  and
  treatment  centers  certified  on  or  before September second, nineteen
  hundred ninety-seven shall, not later than  September  second,  nineteen
  hundred  ninety-seven,  notify  the  commissioner whether they intend to
  maintain all books and records utilized by the diagnostic and  treatment
  center  for cost reporting and reimbursement purposes on a calendar year
  basis or, commencing on July first, nineteen hundred  ninety-six,  on  a
  July  first  through June thirtieth basis, and shall thereafter maintain
  all books and records  on  such  basis.  All  diagnostic  and  treatment
  centers  certified after September second, nineteen hundred ninety-seven
  shall notify the commissioner at the time of certification whether  they
  intend  to maintain all books and records on a calendar year basis or on
  or a July first through  June  thirtieth  basis,  and  shall  thereafter
  maintain all books and records on such a basis.
    (c) The books and records maintained pursuant to paragraph (b) of this
  subdivision  shall be utilized and made available to the commissioner in
  promulgating rates of payment for annual rate periods  beginning  on  or
  after October first, nineteen hundred ninety-seven.
    (d) Notwithstanding any provision of the law to the contrary, rates of
  payment  established  in  accordance  with paragraph (b) as amended, and
  paragraph (f) of subdivision two of this section  for  the  rate  period
  beginning  April  first, nineteen hundred ninety-three shall continue in
  effect through September thirtieth, nineteen  hundred  ninety-four,  and
  applicable  trend factors shall be applied to that portion of such rates
  of payment for the  rate  period  which  begins  April  first,  nineteen
  hundred ninety-four.
    8.  Rates  for  federally  qualified  health  centers and rural health
  centers. Notwithstanding section four of chapter eighty-one of the  laws
  of  nineteen  hundred ninety-five, as amended by section twenty-seven of
  chapter one of the laws of nineteen hundred ninety-nine, and  any  other
  law,  rule  or  regulation  to  the  contrary,  for periods on and after

January first, two thousand one, rates of payment made  by  governmental
  agencies  for  services  provided by diagnostic and treatment centers or
  general hospital outpatient  clinics  licensed  under  this  article  to
  individuals  eligible for medical assistance pursuant to title eleven of
  article five of the social services law which are  also  designated,  in
  accordance  with  42  USC  §  1396a(aa),  as  federally qualified health
  centers or rural health centers shall be established in accordance  with
  the following:
    (a)  For  periods  on  and  after January first, two thousand one, and
  prior to October first, two thousand one, such rates of payment shall be
  computed in accordance with paragraph (b) of  subdivision  two  of  this
  section,   provided,  however,  that  the  operating  and  capital  cost
  components of such  rates  and  the  applicable  ceilings  on  allowable
  operating costs shall reflect an average of nineteen hundred ninety-nine
  and two thousand base year costs as reported to the department.
    (b)  For  each  twelve month period following September thirtieth, two
  thousand one, the operating cost component  of  such  rates  of  payment
  shall  reflect  the  operating  cost  component  in  effect on September
  thirtieth of the prior period as increased by the percentage increase in
  the  Medicare  Economic  Index  as  computed  in  accordance  with   the
  requirements  of  42  USC  §  1396a(aa)(3)  and  as adjusted pursuant to
  applicable regulations to take into account any increase or decrease  in
  the scope of services furnished by the facility.
    (c)  Rates  of payments to facilities which first qualify as federally
  qualified health centers or rural health centers  on  or  after  October
  first,  two thousand shall be computed in accordance with the provisions
  of paragraph (b) of subdivision two of this section, provided,  however,
  that the operating cost component of such rates shall reflect an average
  of  the  operating  cost  component of rates of payments issued to other
  facilities subject to this subdivision  during  the  same  rate  period,
  located  in the same geographic region and with a similar case load, and
  further provided that the capital cost component  of  such  rates  shall
  reflect the most recently available capital cost data as reported to the
  department.  For  each  twelve month period following the rate period in
  which such facilities commence operation, the operating  cost  component
  of  rates of payment for such facilities shall be computed in accordance
  with paragraph (b) of this subdivision.
    (d) Subject to receipt of all necessary federal  approvals,  rates  of
  payment  computed  in  accordance  with  this subdivision may be further
  adjusted in accordance with the provisions of subdivision  seventeen  of
  this  section,  provided,  however,  that  such adjustments shall not be
  subject to trend adjustments  as  provided  in  paragraph  (b)  of  this
  subdivision.
    (e)  Diagnostic  and  treatment  centers eligible for rates of payment
  computed pursuant to paragraphs (a) and (b) of this  subdivision,  which
  were, on December thirty-first, two thousand, receiving rates of payment
  as  preferred  primary care providers computed pursuant to paragraph (h)
  of subdivision two of this section, may elect  to  continue  to  receive
  rates  of  payment  computed  in  accordance  with  such  paragraph (h),
  provided that in no event shall such rates of payment be less  than  the
  rates  of  payment  computed  pursuant to paragraphs (a) and (b) of this
  subdivision.
    (f) For any rate periods after March thirty-first, two thousand eight,
  subject to the availability  of  federal  financial  participation,  the
  commissioner  may  prospectively  adjust rates of payment for facilities
  otherwise  subject  to   this   subdivision   to   reflect   alternative
  rate-setting  methodologies,  provided,  however,  that such alternative
  rate-setting methodologies must: (i) be authorized by  applicable  state

law,  (ii)  be  agreed to by the commissioner and each facility to which
  they are applied and (iii) in no event result  in  rates  that  are,  in
  aggregate, less than the rates of payment otherwise provided for in this
  subdivision.
    9.  Payments under this section not to preclude other lawful payments.
  Any payments made  under  the  authority  of  this  section  or  section
  twenty-eight hundred seven-c of this article shall not preclude payments
  under any other section of law.
    10.  Notwithstanding  the provisions of this article, the commissioner
  may waive, subject to the approval of the state director of the  budget,
  the requirements of any provisions of this section, section twenty-eight
  hundred  seven-a  or  twenty-eight  hundred  seven-c  of this article to
  permit  the   development   and/or   continuation   of   limited   pilot
  reimbursement programs to provide additional knowledge and experience in
  different types of reimbursement mechanisms for general hospitals.
    * 11. Notwithstanding the provisions of this article, the commissioner
  may  waive, subject to the approval of the state director of the budget,
  the requirements of any provision of this section, section  twenty-eight
  hundred  seven-a  or  twenty-eight  hundred  seven-c  of this article to
  permit the development, implementation and operation  of  limited  pilot
  reimbursement  programs  for  general  hospital  outpatient services and
  diagnostic and treatment center services that would be  prospective  and
  associated  to  the  resource  use patterns in rendering ambulatory care
  services.
    * NB Expires April 1, 2011
    12. (a) Notwithstanding any inconsistent provision of this article  or
  any  other  law, for the purpose of improving access to and availability
  of comprehensive  primary  health  care  to  persons  receiving  medical
  assistance  pursuant  to  title  eleven  of  article  five of the social
  services law, the  commissioner,  upon  application  by  a  health  care
  provider,  may  designate  such  provider  as  a  preferred primary care
  provider in accordance with the provisions of this subdivision.
    (b)  Health  care  providers  designated  as  preferred  primary  care
  providers  pursuant  to this subdivision shall meet such requirements as
  may be established by the commissioner in regulation, including, but not
  limited to:
    (i)  access  by  the  medically  indigent  and  medicaid  eligible  to
  ambulatory services;
    (ii)  provision,  to  the maximum extent practicable, of continuity of
  care;
    (iii)  arrangements  for  specialty  physician  care   and   necessary
  ancillary services;
    (iv) reasonably accessible hours of operation;
    (v) services which are accessible to medically underserved populations
  and communities including, to the maximum extent feasible, offering such
  services within the medically underserved community; and
    (vi)  participation  in  local  social  services district managed care
  programs established pursuant to section three hundred  sixty-four-j  of
  the social services law, provided that the commissioner, in consultation
  with  the  commissioner  of  social  services,  may exempt a health care
  provider from such  participation  for  good  cause.  Good  cause  shall
  include but not be limited to geographic inaccessibility to managed care
  programs,  inability to coordinate services of managed care programs, or
  that participation in  the  managed  care  program  would  significantly
  affect the provider's financial ability to provide services.
    (c)  For  the  purposes  of  this  subdivision, a health care provider
  eligible to be designated as a preferred  primary  care  provider  shall
  mean  a  general  hospital, a diagnostic and treatment center, a private

physician, a nurse practitioner, a midwife, a  professional  corporation
  or  a group of physicians or nurse practitioners. The designation of any
  general hospital or a diagnostic and treatment  center  as  a  preferred
  primary  care  provider  shall apply only to the specific site where the
  entity provides comprehensive primary health care services.
    * 13. Subject to the availability of  funds,  the  commissioner  shall
  authorize  health  occupation  development  and  workplace demonstration
  programs pursuant to  the  provisions  of  section  two  thousand  eight
  hundred  seven-h  of  this article for diagnostic and treatment centers,
  and the commissioner is hereby directed  to  make  rate  adjustments  to
  cover the cost of such programs.
    * NB Expires July 1, 2011
    * 14. Notwithstanding any inconsistent provision of law or regulation,
  for  purposes  of establishing rates of payment by governmental agencies
  for diagnostic and treatment centers for services provided on  or  after
  April  first,  nineteen  hundred ninety-five, the reimbursable base year
  administrative and general costs of a  provider,  excluding  a  provider
  reimbursed  on  an  initial budget basis, shall not exceed the statewide
  average of total reimbursable base year administrative and general costs
  of  diagnostic  and  treatment  centers.  For  the  purposes   of   this
  subdivision,  reimbursable  base  year  administrative and general costs
  shall mean those base year administrative and  general  costs  remaining
  after  application of all other efficiency standards, including, but not
  limited to, peer group cost ceilings or guidelines.  The  limitation  on
  reimbursement  for provider administrative and general expenses provided
  by this subdivision shall be expressed as a percentage reduction of  the
  operating cost component of the rate promulgated by the commissioner for
  each  diagnostic  and treatment center with base year administrative and
  general costs exceeding the average.
    * NB Effective through March 31, 2011
    15. Notwithstanding  any  inconsistent  provision  of  law,  including
  subdivision  fourteen  of  this section, the facility-specific impact of
  eliminating the statewide cap on administrative and  general  costs,  as
  imposed pursuant to subdivision fourteen of this section, for the period
  April  first,  nineteen  hundred  ninety-nine  through  June  thirtieth,
  nineteen hundred ninety-nine pursuant  to  a  chapter  of  the  laws  of
  nineteen  hundred ninety-nine, shall be included in rates of payment for
  facilities affected by such elimination for the  period  October  first,
  nineteen  hundred  ninety-nine  through  December thirty-first, nineteen
  hundred ninety-nine. In addition, rates  for  diagnostic  and  treatment
  centers  for  the  period  October  first,  nineteen hundred ninety-nine
  through  December  thirty-first,  nineteen  hundred  ninety-nine   shall
  include,  in  the  aggregate,  the sum of fourteen million dollars which
  shall be added to  rates  of  payment  established  in  accordance  with
  paragraphs  (b)  and  (h) of subdivision two of this section based on an
  apportionment of such amount using a ratio of each individual provider's
  estimated medicaid expenditures to total estimated medicaid expenditures
  for diagnostic and treatment centers, as determined by the commissioner,
  for the October first, nineteen hundred  ninety-nine  through  September
  thirtieth, two thousand rate period.
    16.  Notwithstanding  any  inconsistent  provision of law, payment for
  drugs which may not be dispensed without a prescription as  required  by
  section sixty-eight hundred ten of the education law provided to persons
  receiving medical assistance pursuant to title eleven of article five of
  the  social  services  law  by  any  non-hospital  based  diagnostic and
  treatment center  licensed  under  this  article  in  existence  on  the
  effective  date  of  this  subdivision  providing  comprehensive primary
  medical care services and registered by  the  state  board  of  pharmacy

pursuant to section sixty-eight hundred eight of the education law shall
  be  on  a  fee-for-service  basis  and  shall  not  be  included  in any
  comprehensive clinic rate paid to such facility by governmental agencies
  established  in accordance with paragraph (b) of subdivision two of this
  section.
    17. (a) Notwithstanding any contrary provision of law  or  regulation,
  the commissioner shall, subject to the availability of federal financial
  participation,  adjust  medical  assistance rates of payment established
  pursuant to paragraph  (b)  of  subdivision  two  of  this  section  for
  free-standing diagnostic and treatment centers licensed pursuant to this
  article  and  which  are: a "covered provider" as defined in subdivision
  one of section three hundred sixty-four-j-two  of  the  social  services
  law;  or eligible for an allocation under paragraph (a-1) of subdivision
  two of section three hundred sixty-four-j-two  of  the  social  services
  law;  or  which  provides  services  to  individuals  with developmental
  disabilities as their principal mission, in accordance  with  paragraphs
  (b)  and  (c)  of this subdivision for purposes of improving recruitment
  and retention of non-supervisory workers at health  care  facilities  or
  any  worker  with  direct  patient  care responsibility in the following
  aggregate amounts for the following periods:
    (i) for the period April first,  two  thousand  two  through  December
  thirty-first, two thousand two, thirteen million dollars;
    (ii) for the period January first, two thousand three through December
  thirty-first, two thousand three, thirteen million dollars;
    (iii) for the period January first, two thousand four through December
  thirty-first, two thousand four, thirteen million dollars;
    (iv)  for the period January first, two thousand five through December
  thirty-first, two thousand five, thirteen million dollars;
    (v) for the period January first, two thousand  six  through  December
  thirty-first, two thousand six, thirteen million dollars;
    (vi)  for  the  period  January first, two thousand seven through June
  thirtieth,  two  thousand  seven,  six  million  five  hundred  thousand
  dollars;
    (vii)  for  the  period  July  first, two thousand seven through March
  thirty-first, two thousand  eight,  nine  million  seven  hundred  fifty
  thousand dollars; and
    (viii)  thirteen  million  dollars  for  the  period  April first, two
  thousand eight through March thirty-first, two thousand nine;
    (ix) thirteen million dollars for the period April first, two thousand
  nine through March thirty-first, two thousand ten; and
    (x) thirteen million dollars for the period April first, two  thousand
  ten through March thirty-first, two thousand eleven.
    (b)   Such  adjustments  to  rates  of  payments  shall  be  allocated
  proportionally based on each diagnostic  and  treatment  center's  total
  annual  gross  salary and fringe benefit costs, as reported in each such
  diagnostic and treatment  center's  nineteen  hundred  ninety-nine  cost
  report  as  submitted  to  the  department  prior to November first, two
  thousand one, provided, however, that for  periods  on  and  after  July
  first, two thousand seven, such adjustments to rates of payment shall be
  allocated  proportionally,  based  on each such diagnostic and treatment
  center's total reported  medicaid  visits,  as  reported  in  each  such
  diagnostic  and  treatment  center's  two  thousand  four cost report as
  submitted to the department prior to January thirty-first, two  thousand
  seven,  to  the  total  of  such  medicaid visits for all diagnostic and
  treatment centers.
    (c) Rate adjustments made pursuant to this subdivision  shall  not  be
  subject to subsequent adjustment or reconciliation.

(d)  Diagnostic  and treatment centers which have their rates adjusted
  pursuant to this subdivision shall use such funds  for  the  purpose  of
  recruitment  and  retention  of  non-supervisory  workers at health care
  facilities or any worker with direct patient care responsibility and are
  prohibited  from  using  such  funds  for  any  other purpose. Each such
  diagnostic and treatment center shall submit, at a time and in a  manner
  to  be determined by the commissioner, a written certification attesting
  that such funds will be used solely for the purpose of  recruitment  and
  retention  of  non-supervisory  workers at health care facilities or any
  worker with direct patient  care  responsibility.  The  commissioner  is
  authorized  to audit each such diagnostic and treatment center to ensure
  compliance with the written certification required by this paragraph and
  shall recoup any funds determined to have been used for  purposes  other
  than recruitment and retention of non-supervisory workers at health care
  facilities  or  any worker with direct patient care responsibility. Such
  recoupment shall be in addition to any other penalties provided by law.
    18. (a) Notwithstanding any contrary provision of law  or  regulation,
  the  commissioner  shall,  subject to the provisions of paragraph (c) of
  this  subdivision  and  to  the  availability   of   federal   financial
  participation,  increase medical assistance rates of payment established
  pursuant to paragraph  (b)  of  subdivision  two  of  this  section  for
  eligible  diagnostic and treatment centers by three percent for services
  provided on and after December first, two thousand two for  purposes  of
  improving  recruitment  and  retention of non-supervisory workers or any
  worker with direct patient care responsibility.
    (b) For the purposes of this  subdivision,  "eligible  diagnostic  and
  treatment  center" shall mean a voluntary, not-for-profit diagnostic and
  treatment center licensed  under  this  article  that  received  medical
  assistance  rates  of  payment  reflecting assignment to limited primary
  care or drug free peer groups  as  established  pursuant  to  applicable
  rate-setting  regulations and that provides primary health care services
  to a patient population primarily comprised of substance abuse  patients
  and  that is ineligible for an adjustment to medical assistance rates of
  payment under subdivision seventeen of this section.
    (c) Diagnostic and treatment centers which have their  rates  adjusted
  pursuant to this subdivision shall use such funds solely for the purpose
  of  recruitment  and  retention of non-supervisory workers or any worker
  with direct patient care responsibility and are  prohibited  from  using
  such  funds  for  any  other purpose. Each such diagnostic and treatment
  center shall submit, at a time and in a manner to be determined  by  the
  commissioner,  a written certification attesting that such funds will be
  used  solely  for  the  purpose  of   recruitment   and   retention   of
  non-supervisory   workers   or  any  worker  with  direct  patient  care
  responsibility. The  commissioner  is  authorized  to  audit  each  such
  diagnostic  and  treatment  center to ensure compliance with the written
  certification required by this paragraph  and  shall  recoup  any  funds
  determined  to  have  been  used for purposes other than recruitment and
  retention of non-supervisory workers or any worker with  direct  patient
  care  responsibility.  Such recoupment shall be in addition to any other
  penalties provided by law.
    19. (a) Notwithstanding any provision of law, rule  or  regulation  to
  the  contrary  and  subject  to  the provisions of paragraph (b) of this
  subdivision and to the availability of federal financial  participation,
  the  commissioner  shall increase medical assistance rates of payment by
  three percent for services provided on and  after  December  first,  two
  thousand  two  by freestanding methadone maintenance service and program
  providers issued operating certificates pursuant  to  this  article  and

section  32.09  of  the mental hygiene law for the purposes of improving
  recruitment and retention of methadone maintenance workers.
    (b)  Freestanding methadone maintenance services and program providers
  which are eligible for rate adjustments pursuant to this subdivision and
  which are also eligible for rate  adjustments  pursuant  to  subdivision
  seventeen  of this section, shall, on or before July first, two thousand
  two, submit, in a  form  and  manner  determined  by  the  commissioner,
  amendments   to   designated   sections  of  their  AHCF-1  cost  report
  segregating wages and fringe benefit  costs  associated  with  methadone
  maintenance  services  from  all  other  services  for  the  purposes of
  determining awards  made  pursuant  to  subdivision  seventeen  of  this
  section  for  rate  periods  ending  in  two  thousand  three and in two
  thousand four.
    (c) Freestanding methadone maintenance service and  program  providers
  which  have  their rates adjusted pursuant to this subdivision shall use
  such funds solely for  the  purpose  of  recruitment  and  retention  of
  non-supervisory   workers   or  any  worker  with  direct  patient  care
  responsibility and are prohibited from using such funds  for  any  other
  purpose.  Each  such  methadone maintenance service and program provider
  shall submit, at a time  and  in  a  manner  to  be  determined  by  the
  commissioner,  a written certification attesting that such funds will be
  used  solely  for  the  purpose  of   recruitment   and   retention   of
  non-supervisory  workers  at  such  programs  or  any worker with direct
  patient care responsibility. The commissioner  is  authorized  to  audit
  each  such  methadone maintenance service and program provider to ensure
  compliance with the written certification required by this paragraph and
  shall recoup any funds determined to have been used for  purposes  other
  than  recruitment and retention of non-supervisory workers or any worker
  with direct patient care responsibility. Such  recoupment  shall  be  in
  addition to any other penalties provided by law.

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