S T A T E   O F   N E W   Y O R K
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                                  2748

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 21, 2009
                               ___________

Introduced by M. of A. PAULIN, BRADLEY, GALEF, LATIMER, PRETLOW, FIELDS,
  SPANO -- read once and referred to the Committee on Health

AN  ACT  to  amend  the public health law, in relation to establishing a
  healthcare reinvestment fund suburban demonstration project

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Statement of legislative intent. The legislature finds that
hospitals in the suburbs of New York city face challenges that result in
a significant competitive disadvantage when compared to nearby hospitals
in  New  Jersey  and Connecticut. In particular, reimbursement rates for
these New York state suburban  hospitals  are  significantly  lower.  In
addition, while hospitals in the suburbs of New York city are struggling
financially,  in general the for-profit health insurers and health main-
tenance organizations operating in the suburban area incur profits.
  The legislature finds that there needs to be  a  balance  between  the
financial health of hospitals and that of for-profit health insurers and
health maintenance organizations. While the state of New York is invest-
ing  in the health care infrastructure of New York state in an amount of
two hundred fifty million dollars a year  for  four  years  through  the
health  care  efficiency  and affordability law of New Yorkers (HEAL-NY)
capital grant program, health insurers should likewise  provide  invest-
ment  in  the health care infrastructure of communities, particularly in
the area of health information technology  as  health  insurers  are  an
immediate benefactor of health information technology. Strengthening the
financial  health of the suburban hospitals will also improve quality of
care and help retain and attract businesses.
  The legislature finds that requiring for-profit insurers and  for-pro-
fit  health  maintenance organizations to provide funds for reinvestment
in health information technology in the suburban area  around  New  York
city  will  provide  a  benefit to payors, patients, hospitals and busi-
nesses.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01932-02-9
              

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  S 2. The public health law is amended by adding a new  section  2807-z
to read as follows:
  S 2807-Z. HEALTHCARE REINVESTMENT FUND SUBURBAN DEMONSTRATION PROJECT.
1.  DEFINITIONS.  FOR  THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  (A) "DEMONSTRATION PROJECT" SHALL  MEAN  THE  HEALTHCARE  REINVESTMENT
FUND   SUBURBAN  DEMONSTRATION  PROJECT  ESTABLISHED  PURSUANT  TO  THIS
SECTION.
  (B) "DESIGNATED THIRD-PARTY PAYORS" SHALL  MEAN  FOR-PROFIT  ORGANIZA-
TIONS  OPERATING  IN ACCORDANCE WITH ARTICLE FORTY-FOUR OF THIS CHAPTER,
AND FOR-PROFIT COMMERCIAL INSURERS LICENSED TO DO BUSINESS IN THIS STATE
AND AUTHORIZED TO WRITE ACCIDENT AND HEALTH INSURANCE AND WHOSE POLICIES
PROVIDE COVERAGE ON AN EXPENSE INCURRED BASIS.  DESIGNATED  THIRD  PARTY
PAYORS SHALL NOT INCLUDE SELF-INSURED FUNDS AND ADMINISTRATORS ACTING ON
BEHALF  OF  SELF-INSURED  FUNDS,  GOVERNMENTAL  AGENCIES OR PROVIDERS OF
COVERAGE PURSUANT TO THE COMPREHENSIVE MOTOR  VEHICLE  REPARATIONS  ACT,
THE  WORKERS' COMPENSATION LAW, THE VOLUNTEER FIREFIGHTERS' BENEFIT LAW,
OR THE VOLUNTEER AMBULANCE WORKERS' BENEFIT LAW.
  (C) "FAMILY UNIT" SHALL HAVE THE SAME MEANING AS SET  FORTH  IN  PARA-
GRAPH  (B) OF SUBDIVISION ONE OF SECTION TWENTY-EIGHT HUNDRED SEVEN-T OF
THIS ARTICLE.
  (D) "INDIVIDUAL" SHALL HAVE THE SAME MEANING AS SET FORTH IN PARAGRAPH
(A) OF SUBDIVISION ONE OF SECTION TWENTY-EIGHT HUNDRED SEVEN-T  OF  THIS
ARTICLE.
  (E)  "REGIONAL HOSPITAL ASSOCIATIONS" SHALL MEAN THE REGIONAL HOSPITAL
ASSOCIATION WITH THE MAJORITY OF  ITS  MEMBERS  LOCATED  IN  NASSAU  AND
SUFFOLK COUNTIES AND THE REGIONAL HOSPITAL ASSOCIATION WITH THE MAJORITY
OF  ITS  MEMBERS  LOCATED  IN  WESTCHESTER,  ROCKLAND, PUTNAM, DUTCHESS,
ORANGE, ULSTER AND SULLIVAN COUNTIES.
  (F) "REINVESTMENT FUNDS" SHALL MEAN THE FUNDS  AVAILABLE  PURSUANT  TO
THE DEMONSTRATION PROJECT.
  (G)  "SUBURBAN  REGION"  SHALL  MEAN  THE COUNTIES OF NASSAU, SUFFOLK,
WESTCHESTER, ROCKLAND, PUTNAM, DUTCHESS, ORANGE, ULSTER AND SULLIVAN.
  2. HEALTHCARE REINVESTMENT  FUND  SUBURBAN  DEMONSTRATION  PROJECT.  A
HEALTHCARE  REINVESTMENT  FUND  SUBURBAN DEMONSTRATION PROJECT EFFECTIVE
JULY FIRST, TWO THOUSAND NINE THROUGH JUNE THIRTIETH, TWO THOUSAND THIR-
TEEN, TO FUND THE INFORMATION  TECHNOLOGY  NEEDS  OF  GENERAL  HOSPITALS
LOCATED IN THE SUBURBAN REGION SHALL BE ESTABLISHED BY THE COMMISSIONER.
A  TOTAL  OF SIXTY-SEVEN MILLION DOLLARS FROM THE FUNDS ACCUMULATED FROM
THE PAYMENTS MADE IN ACCORDANCE WITH SUBDIVISION SEVEN OF  THIS  SECTION
SHALL  BE  PROVIDED  ANNUALLY DURING THE PERIOD JULY FIRST, TWO THOUSAND
NINE THROUGH JUNE THIRTIETH, TWO THOUSAND THIRTEEN, TO FUND  THE  DEMON-
STRATION PROJECT.
  3.    HEALTHCARE  REINVESTMENT  FUND OVERSIGHT COMMITTEE. A HEALTHCARE
REINVESTMENT  FUND  OVERSIGHT  COMMITTEE  OF  TWELVE  MEMBERS  SHALL  BE
APPOINTED TO OVERSEE THE DISTRIBUTION OF REINVESTMENT FUNDS. SIX MEMBERS
SHALL  BE  APPOINTED BY EACH OF THE REGIONAL HOSPITAL ASSOCIATIONS. FOUR
MEMBERS SHALL REPRESENT GENERAL HOSPITALS, FOUR MEMBERS SHALL  REPRESENT
DESIGNATED THIRD-PARTY PAYORS AND FOUR MEMBERS SHALL REPRESENT THE BUSI-
NESS COMMUNITY. THE HEALTHCARE REINVESTMENT OVERSIGHT COMMITTEE SHALL:
  (A)  MAKE  RECOMMENDATIONS ON USES OF THE REINVESTMENT FUNDS THAT WILL
RESULT IN IMPROVED SHARING OF CLINICAL INFORMATION IN A  COST  EFFECTIVE
MANNER  AMONG  (I) GENERAL HOSPITALS AND PHYSICIANS, (II) GENERAL HOSPI-
TALS AND OTHER PROVIDERS INCLUDING OTHER GENERAL  HOSPITALS,  AND  (III)
GENERAL HOSPITALS AND PAYORS;

A. 2748                             3

  (B)  DEVELOP  A PROCESS TO ENSURE THAT GENERAL HOSPITALS USE THE REIN-
VESTMENT FUNDS IN ACCORDANCE WITH THE RECOMMENDATIONS MADE  PURSUANT  TO
PARAGRAPH (A) OF THIS SUBDIVISION; AND
  (C)  PROVIDE  A REPORT TO THE COMMISSIONER ON OR BEFORE JANUARY FIRST,
TWO THOUSAND THIRTEEN, EVALUATING WHETHER THE DEMONSTRATION PROJECT  HAS
ACHIEVED  THE GOAL OF IMPROVING THE SHARING OF CLINICAL INFORMATION IN A
COST EFFECTIVE MANNER, AND MAKING RECOMMENDATIONS ON WHETHER THE  DEMON-
STRATION  PROJECT  SHOULD  BE CONTINUED AND ON POTENTIAL IMPROVEMENTS TO
THE DEMONSTRATION PROJECT.
  4. DISTRIBUTION OF REINVESTMENT FUNDS.  THE REINVESTMENT  FUNDS  SHALL
BE  DISTRIBUTED  TO EACH GENERAL HOSPITAL LOCATED IN THE SUBURBAN REGION
PROPORTIONALLY BASED  ON  EACH  GENERAL  HOSPITAL'S  REPORTED  INPATIENT
DISCHARGES  TO  THE  TOTAL  OF SUCH INPATIENT DISCHARGES FOR ALL GENERAL
HOSPITALS LOCATED IN THE SUBURBAN REGION.   FOR THE PERIOD  JULY  FIRST,
TWO  THOUSAND  NINE  THROUGH  JUNE  THIRTIETH,  TWO THOUSAND ELEVEN, THE
DISTRIBUTIONS SHALL BE BASED ON DISCHARGES REPORTED THROUGH  THE  STATE-
WIDE  PLANNING  AND  RESEARCH COOPERATIVE SYSTEM FOR TWO THOUSAND SEVEN,
AND FOR THE PERIOD JULY FIRST, TWO THOUSAND ELEVEN THROUGH JUNE  THIRTI-
ETH,  TWO  THOUSAND  THIRTEEN,  THE  DISTRIBUTIONS  SHALL  BE  BASED  ON
DISCHARGES REPORTED THROUGH THE STATEWIDE PLANNING AND RESEARCH  COOPER-
ATIVE SYSTEM FOR TWO THOUSAND NINE.
  5.  COLLECTION  OF  FUNDS.    THE COMMISSIONER SHALL CONTRACT WITH THE
REGIONAL ASSOCIATIONS TO COLLECT AND DISTRIBUTE  FUNDS  FOR  THE  DEMON-
STRATION PROJECT IN ACCORDANCE WITH THIS SECTION.
  6.  CALCULATION OF REINVESTMENT FUND PAYMENTS. (A) BASED ON THE NUMBER
OF INDIVIDUALS AND THE NUMBER OF FAMILY UNITS REPORTED  TO  THE  COMMIS-
SIONER  OR  THE  COMMISSIONER'S DESIGNEE PURSUANT TO SUBDIVISION FOUR OF
SECTION TWENTY-EIGHT HUNDRED SEVEN-T OF THIS ARTICLE,  THE  COMMISSIONER
SHALL  CALCULATE  THE TOTAL NUMBER OF "INDIVIDUAL MEMBER MONTHS" FOR THE
SUBURBAN REGION FOR  ALL  DESIGNATED  THIRD-PARTY  PAYORS  TO  DETERMINE
"AGGREGATE  INDIVIDUAL  MEMBER  MONTHS"  FOR  THE SUBURBAN REGION.   THE
COMMISSIONER SHALL ALSO CALCULATE THE TOTAL  NUMBER  OF  "FAMILY  MEMBER
MONTHS" FOR THE SUBURBAN REGION FOR ALL DESIGNATED THIRD-PARTY PAYORS TO
DETERMINE  THE "AGGREGATE FAMILY MEMBER MONTHS" FOR THE SUBURBAN REGION.
THE COMMISSIONER SHALL MULTIPLY THE AVERAGE NUMBER  OF  PERSONS  COVERED
UNDER FAMILY INSURANCE CONTRACTS, AS REPORTED TO THE COMMISSIONER BY THE
SUPERINTENDENT  OF  INSURANCE  PURSUANT  TO  SUBDIVISION FOUR OF SECTION
TWENTY-EIGHT HUNDRED SEVEN-T OF THIS ARTICLE BY  THE  "AGGREGATE  FAMILY
MEMBER  MONTHS"  TO  DETERMINE "ADJUSTED AGGREGATE FAMILY MEMBER MONTHS"
FOR THE SUBURBAN REGION.   THE COMMISSIONER  SHALL  ADD  THE  NUMBER  OF
"ADJUSTED  FAMILY  MEMBER  MONTHS"  FOR THE SUBURBAN REGION TO THE TOTAL
NUMBER OF "AGGREGATE INDIVIDUAL MEMBER MONTHS" FOR THE SUBURBAN  REGION.
THIS  AMOUNT  SHALL  BE  KNOWN  AS "TOTAL COVERED MEMBER MONTHS" FOR THE
SUBURBAN REGION.
  (B) AN ANNUAL AMOUNT OF SIXTY-SEVEN MILLION DOLLARS SHALL  BE  DIVIDED
BY  AN  ESTIMATE DERIVED FROM POPULATION BASED DATA SOURCES OF THE TOTAL
COVERED MEMBER MONTHS DETERMINED CONSISTENT WITH THE PROVISIONS OF PARA-
GRAPH (A) OF THIS SUBDIVISION IN THE SUBURBAN REGION  TO  ESTABLISH  THE
"INDIVIDUAL  ANNUAL  PAYMENT  AMOUNT"  FOR JULY FIRST, TWO THOUSAND NINE
THROUGH JUNE THIRTIETH, TWO THOUSAND TEN; JULY FIRST, TWO  THOUSAND  TEN
THROUGH  JUNE  THIRTIETH,  TWO THOUSAND ELEVEN; JULY FIRST, TWO THOUSAND
ELEVEN THROUGH JUNE THIRTIETH, TWO THOUSAND TWELVE; AND JULY FIRST,  TWO
THOUSAND  TWELVE  THROUGH JUNE THIRTIETH, TWO THOUSAND THIRTEEN, RESPEC-
TIVELY.  THE INDIVIDUAL ANNUAL PAYMENT AMOUNT SHALL BE MULTIPLIED BY THE
AVERAGE FAMILY SIZE REPORTED TO THE COMMISSIONER BY  THE  SUPERINTENDENT
OF INSURANCE TO ESTABLISH THE "FAMILY UNIT ANNUAL PAYMENT AMOUNT" IN THE

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SUBURBAN  REGION  FOR JULY FIRST, TWO THOUSAND NINE THROUGH JUNE THIRTI-
ETH, TWO THOUSAND TEN; JULY FIRST, TWO THOUSAND TEN THROUGH JUNE THIRTI-
ETH, TWO THOUSAND ELEVEN; JULY FIRST, TWO THOUSAND ELEVEN  THROUGH  JUNE
THIRTIETH,  TWO  THOUSAND  TWELVE;  AND  JULY FIRST, TWO THOUSAND TWELVE
THROUGH JUNE THIRTIETH, TWO THOUSAND THIRTEEN, RESPECTIVELY.
  7. MONTHLY PAYMENTS.  WITHIN THIRTY DAYS AFTER THE END OF EACH  MONTH,
A  DESIGNATED  THIRD-PARTY  PAYOR SHALL REMIT TO THE COMMISSIONER OR THE
COMMISSIONER'S DESIGNEE ONE-TWELFTH OF  THE  INDIVIDUAL  ANNUAL  PAYMENT
AMOUNT FOR EACH OF THE INDIVIDUALS RESIDING IN THE SUBURBAN REGION WHICH
WERE  INCLUDED  IN  THE  MEMBERSHIP ROLLS OF THAT DESIGNATED THIRD-PARTY
PAYOR DURING ALL OR ANY PORTION OF THE PRIOR MONTH. WITHIN  THIRTY  DAYS
AFTER  THE END OF EACH MONTH, A DESIGNATED THIRD-PARTY PAYOR SHALL REMIT
TO THE COMMISSIONER OR THE COMMISSIONER'S DESIGNEE  ONE-TWELFTH  OF  THE
FAMILY  UNIT  ANNUAL  PAYMENT  AMOUNT FOR EACH FAMILY UNIT FOR WHICH THE
PRIMARY INSURED RESIDED IN THE SUBURBAN REGION WHICH  WERE  INCLUDED  IN
THE  MEMBERSHIP ROLLS OF THAT DESIGNATED THIRD-PARTY PAYOR DURING ALL OR
ANY PORTION OF THE PRIOR MONTH.
  8. PROSPECTIVE ADJUSTMENTS.  THE COMMISSIONER SHALL ANNUALLY RECONCILE
THE SUM OF THE ACTUAL PAYMENTS MADE TO THE COMMISSIONER OR  THE  COMMIS-
SIONER'S  DESIGNEE  PURSUANT  TO  THIS  SECTION WITH SIXTY-SEVEN MILLION
DOLLARS. THE DIFFERENCE BETWEEN  THE  ACTUAL  PAYMENTS  AND  SIXTY-SEVEN
MILLION  DOLLARS  SHALL  BE  APPLIED  AS A PROSPECTIVE ADJUSTMENT TO THE
TOTAL AMOUNT DUE 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.
  9. REPORTED DATA.   THE  COMMISSIONER  SHALL  HAVE  THE  AUTHORITY  TO
REQUIRE   THE   DESIGNATED  THIRD-PARTY  PAYORS  TO  PROVIDE  ADDITIONAL
GEOGRAPHIC BREAKDOWN OF THE INDIVIDUAL MEMBER MONTHS AND  FAMILY  MEMBER
MONTHS  REPORTED  PURSUANT  TO  SUBDIVISION FOUR OF SECTION TWENTY-EIGHT
HUNDRED SEVEN-T OF THIS ARTICLE IN ORDER FOR THE  COMMISSIONER  TO  HAVE
INDIVIDUAL  MEMBER  MONTHS  AND  FAMILY  MEMBER  MONTHS FOR THE SUBURBAN
REGION.
  S 3. Subdivision 8 of section 2807-t of  the  public  health  law,  as
added by chapter 639 of the laws of 1996, is amended to read as follows:
  8.  Liability  for  assessments.  (a)  The  assessments  determined in
accordance with this section AND THE PAYMENTS DETERMINED  IN  ACCORDANCE
WITH  SECTION  TWENTY-EIGHT  HUNDRED  SEVEN-Z OF THIS ARTICLE 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 AND THE PAYMENTS DETERMINED IN ACCORDANCE WITH SECTION
TWENTY-EIGHT HUNDRED SEVEN-Z OF THIS ARTICLE shall, for groups and enti-
ties  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  AND  DESIGNATED  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

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section  AND  THE  PAYMENTS  DETERMINED  IN  ACCORDANCE   WITH   SECTION
TWENTY-EIGHT  HUNDRED  SEVEN-Z  OF  THIS  ARTICLE. Specified third-party
payors AND DESIGNATED 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.
  S 4. Paragraph (a) of subdivision 8 of section 2807-j  of  the  public
health law, as amended by section 27 of part R of chapter 85 of the laws
of 2002, is amended to read as follows:
  (a)  If  a payment made pursuant to this section or to section twenty-
eight hundred seven-s or twenty-eight hundred seven-t OR  SECTION  TWEN-
TY-EIGHT  HUNDRED SEVEN-Z of this article for a month to which an allow-
ance OR PAYMENT applies is less than ninety percent of the amount due or
which the commissioner  estimates,  based  on  available  financial  and
statistical data, is due for such month, interest shall be due and paya-
ble  to  the  commissioner by a designated provider of services, or by a
third-party payor, other than a  state  governmental  agency,  that  has
elected  OR  IS REQUIRED to pay an allowance OR PAYMENT directly, on the
difference between the amount paid and the amount due or estimated to be
due from the day of the month the payment was  due  until  the  date  of
payment.  The  rate of interest shall be twelve percent per annum or, if
greater, at the rate of interest set by the commissioner of taxation and
finance with respect to underpayments of tax pursuant to subsection  (e)
of  section  one thousand ninety-six of the tax law minus two percentage
points. Interest under this paragraph shall not be paid  if  the  amount
thereof is less than one dollar. Interest due from a designated provider
of  services,  if  not  paid  by  the  due date of the following month's
payment, may be collected by the commissioner pursuant to paragraph  (c)
of  subdivision  six  of this section in the same manner as an allowance
pursuant to subdivision two of this section.
  S 5. Notwithstanding the expiration date of sections 2807-t and 2807-j
of the public health law, such sections shall remain in  effect  through
June  30, 2013 with regard to their application to section 2807-z of the
public health law.
  S 6. This act shall take effect July 1, 2009;  provided,  however,  if
this  act  shall become a law after such date it shall take effect imme-
diately and shall be deemed to have been in full force and effect on and
after July 1, 2009; provided, however, that the amendments  to  subdivi-
sion  8 of section 2807-t of the public health law made by section three
of this act shall not affect the expiration of such section and shall be
deemed to expire therewith; provided  further  that  the  amendments  to
paragraph  (a)  of  subdivision 8 of section 2807-j of the public health
law made by section four of this act shall not affect the expiration  of
such  section  and  shall be deemed to expire therewith. Effective imme-
diately, the addition, amendment and/or repeal of any rule or regulation
necessary for the implementation of this act on its effective  date  are
authorized  and  directed  to  be  made  and completed on or before such
effective date.