BILL NUMBER:  S2813A

 TITLE OF BILL :

An act in relation to exempting monthly assessments due from
residential health facilities located in any area designated as a
Health Professional Shortage Area or serving a medically underserved
population and experiencing a medical assistance utilization rate of
eighty-five percent or greater from interest or penalties for any
period prior to October 1, 2017

 PURPOSE OR GENERAL IDEA OF BILL :

This bill would provide an opportunity for residential health
facilities which are otherwise unable to satisfy their obligations to
New York State to fulfill their responsibility.

 SUMMARY OF SPECIFIC PROVISIONS :

This bill would allow a residential health facility which is located
in a federally designated Health Professional Shortage Area or a
medically underserved population area and which is paid by Medicaid or
Medicare for more than 85% of its patients, to negotiate an agreement
with the Commissioner of Health to enter into reasonable payment
schedule on allowed taxes and fees, including all accumulated interest
and penalties.
              

 JUSTIFICATION :

The Health Facilities Cash Receipts Assessment requires hospitals and
nursing homes to pay an assessment on gross receipts on a monthly
basis. This assessment was enacted in 2002 in order to close gaps in
the State spending plan.

Under this tax, nursing homes and hospitals pay 6% of their gross
revenue to the State, including revenue from Medicaid and Medicare
patients. Those facilities then apply to the federal government to be
compensated for the tax, a process which takes months. Health
facilities which have a high proportion of Medicaid and Medicare
patients have found it especially difficult to balance their books
because of the delay inherent in this system.

This difficulty has been exacerbated by a state policy which is
designed to encourage prompt payment of the tax by assessing a 25%
penalty on overdue payments. There is no exception made for the delay
caused by the reimbursement from the federal health care programs. As
a result there are nursing homes and hospitals, particularly those
with high Medicare and Medicaid caseloads, which owe as much in
penalties and fees as they do under the original Cash Receipts
Assessment.

Each month, as the penalties and fees compound, it becomes less
feasible to make the payment to the State while providing health care
services to the community. The recession has caused costs for medical
supplies and the like to escalate, which consumes a greater share of
the gross revenues which the Cash Receipts Assessment is based upon.
The situation is untenable. If current trends continue, and there is
no reason to expect that they will not, these facilities will be
forced to enter receivership or bankruptcy within months, the State's
prospects at collecting these, funds will dim, and the people of New
York will suffer.

This bill gets at the heart of the problem by requiring these
facilities to pay their tax bill in full, including all interest and
other penalties, which brings needed revenue into the state, but it
also allows the Department of Health to negotiate with these
facilities to come up with a payment plan which prevents these
facilities from having to shutter their doors. The bill is narrowly
tailored to those facilities which a) receive more than 85% of their
revenue from Medicaid and Medicare, b) are in a health professional
shortage or medically underserved area, which means that their costs
are likely substantially higher. These are the facilities that are, at
this instant, on the precipice of disaster, unless this legislature
steps in and addresses this problem.

 PRIOR LEGISLATIVE HISTORY :

A3626 of 2014
A318 of 2012
A9232 of 2010

 FISCAL IMPLICATIONS :

This bill, if enacted will earn money for the State, which will
collect the cash receipts tax from hospitals which cannot currently
meet their obligation.

 EFFECTIVE DATE :
Immediately.