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

                                  2962

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 22, 2009
                               ___________

Introduced  by  M.  of  A.  BARCLAY  --  Multi-Sponsored  by -- M. of A.
  BACALLES -- read once and referred to the Committee on Insurance

AN ACT to amend the insurance law and the public health law, in relation
  to creating a health care plan and facility restructuring and security
  program

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

  Section  1.  Subsection  (a)  of section 1109 of the insurance law, as
amended by chapter 246 of the laws  of  2005,  is  amended  to  read  as
follows:
  (a)  An  organization  complying with the provisions of article forty-
four of the public health law may operate without being  licensed  under
this  chapter  and without being subject to any provisions of this chap-
ter, except: (1) to the extent that such organization must  comply  with
the  provisions  of  this chapter by virtue of such article, and (2) the
provisions of sections three  hundred  eight,  three  hundred  thirteen,
three  hundred  thirty-two, one thousand three hundred one, one thousand
three hundred two, one thousand three hundred seven, ONE THOUSAND  THREE
HUNDRED  NINE,  two thousand one hundred three, two thousand one hundred
twelve, two thousand one hundred  fourteen,  two  thousand  one  hundred
fifteen,  two  thousand  one hundred seventeen, two thousand one hundred
twenty-three, two thousand six hundred eight-a, two thousand six hundred
twelve, three thousand two hundred twenty-four-a,  four  thousand  three
hundred  eight,  four  thousand  three  hundred seventeen, four thousand
three hundred eighteen, four thousand three hundred twenty,  four  thou-
sand  three  hundred  twenty-one, four thousand three hundred twenty-two
[and], four thousand three hundred twenty-three AND SEVEN THOUSAND  FOUR
HUNDRED ONE-A of this chapter.
  S  2.  Section  1309  of  the insurance law is amended by adding a new
subsection (c) to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03002-01-9

              

A. 2962                             2

  (C) WHEN THE SUPERINTENDENT DETERMINES THAT AN INSURER OR HEALTH  PLAN
ORGANIZED  PURSUANT  TO ARTICLE FORTY-TWO OR FORTY-THREE OF THIS CHAPTER
OR CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW  IS
AT  RISK  OF INSOLVENCY AS DETERMINED PURSUANT TO SUBSECTION (A) OF THIS
SECTION,  THE  SUPERINTENDENT  MAY  ENTER  INTO  AGREEMENTS  PURSUANT TO
SECTION TWENTY-EIGHT HUNDRED FIFTEEN OF THE PUBLIC HEALTH LAW.
  S 3. The insurance law is amended by adding a new  section  7401-a  to
read as follows:
  S  7401-A. SPECIAL FINANCIAL ASSISTANCE FOR INSURERS AND HEALTH PLANS.
UPON A DETERMINATION BY THE SUPERINTENDENT THAT  AN  INSURER  OR  HEALTH
PLAN  ORGANIZED  PURSUANT  TO  ARTICLE  FORTY-TWO OR FORTY-THREE OF THIS
CHAPTER, OR CERTIFIED PURSUANT  TO  ARTICLE  FORTY-FOUR  OF  THE  PUBLIC
HEALTH LAW, IS INSOLVENT OR AT RISK OF INSOLVENCY AS DETERMINED PURSUANT
TO  SECTION  ONE THOUSAND THREE HUNDRED NINE OF THIS CHAPTER, THE SUPER-
INTENDENT MAY ENTER INTO AGREEMENTS FOR FUNDS  AVAILABLE  UNDER  SECTION
TWENTY-EIGHT  HUNDRED  FIFTEEN  OF THE PUBLIC HEALTH LAW. THE PURPOSE OF
SUCH AGREEMENTS SHALL BE TO FACILITATE REHABILITATION IN ACCORDANCE WITH
THIS ARTICLE OR TO AVOID THE NEED FOR REHABILITATION BY FACILITATING THE
INSURER'S OR HEALTH PLAN'S LONG TERM FINANCIAL VIABILITY.
  S 4. Section 2815 of the public health law, as added by chapter 639 of
the laws of 1996, subdivision 3-a as added by chapter 1 of the  laws  of
1999, is amended to read as follows:
  S  2815.  Health  [facility  restructuring]  CARE  PLAN  AND  FACILITY
RESTRUCTURING AND SECURITY program. 1.   Definitions. As  used  in  this
section,  the following words and phrases shall have the following mean-
ings unless a different meaning is plainly required by the context:
  (a) "Agency" shall mean the New  York  state  housing  finance  agency
created by article three of the private housing finance law.
  (b) "Authority" shall mean the dormitory authority of the state of New
York  created  by  title four of article eight of the public authorities
law which has succeeded to the  powers,  functions  and  duties  of  the
medical  care facilities finance agency pursuant to chapter eighty-three
of the laws of nineteen hundred ninety-five.
  (c) "Participating  general  hospital"  shall  mean  a  not-for-profit
general hospital, organized under the laws of this state, which has been
approved for participation in this program by the commissioner.
  (d)  "PARTICIPATING  HEALTH PLAN" SHALL MEAN HEALTH INSURERS ORGANIZED
PURSUANT TO ARTICLE FORTY-TWO OR FORTY-THREE OF  THE  INSURANCE  LAW  OR
CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF THIS CHAPTER, WHICH HAS BEEN
APPROVED  FOR PARTICIPATION IN THE PROGRAM, ESTABLISHED BY THIS SECTION,
BY THE SUPERINTENDENT OF INSURANCE.
  (E) "Restructuring AND SECURITY pool" shall mean the  health  facility
restructuring  AND  SECURITY  pool  authorized  to be established by the
authority pursuant to this section.
  2. The authority shall establish the restructuring AND SECURITY  pool.
Funds  shall  be  transferred  by  the commissioner to the authority for
deposit in the restructuring AND SECURITY pool as authorized pursuant to
paragraph (d) of subdivision one of section twenty-eight hundred seven-l
and paragraph  (b)  of  subdivision  nineteen  of  section  twenty-eight
hundred seven-c of this article or any other provision of law.  Funds in
the  restructuring  AND  SECURITY  pool  shall  be held by the authority
pursuant to this section as custodian,  administered  by  the  authority
pursuant  to  an  agreement  with the commissioner AND SUPERINTENDENT OF
INSURANCE and invested by the authority in accordance with  the  invest-
ment guidelines of the authority. All investment income shall be credit-
ed  to,  and  any  repayments  of loans as hereinafter provided shall be

A. 2962                             3

deposited in, the restructuring AND SECURITY pool, and  spent  therefrom
only for the purposes set forth in this section.
  3.  The  commissioner,  THE SUPERINTENDENT OF INSURANCE, the authority
and the agency shall enter into [an agreement]  AGREEMENTS,  subject  to
the  approval of the director of the budget, for the purpose of adminis-
tering the funds in the restructuring AND SECURITY pool in a manner that
will benefit the public health by encouraging improvements in the health
care  delivery  system  in  the  state.  A  copy  of  such   [agreement]
AGREEMENTS, and any amendment thereto, shall be provided to the chair of
the  senate  finance  committee, the director of the division of budget,
and the chair of the assembly ways and means committee. Such [agreement]
AGREEMENTS  shall  include,  but  not  be  limited  to,  the   following
provisions:
  (a)  for  the receipt, management and expenditure of funds held in the
restructuring AND SECURITY pool by the authority;
  (b) for the development  and  implementation  of  business  plans  for
participating  general  hospitals, addressing the development of service
delivery strategies, including strategies for the formation or strength-
ening of networks, affiliations or other business combinations, designed
to provide long-term financial stability within and among  participating
general hospitals;
  (c)  for  the  expenditure  or loan of funds by the authority from the
restructuring AND SECURITY pool to reimburse the authority or the  agen-
cy,  where  appropriate,  for the costs of engaging management, legal or
accounting consultants to identify, develop and implement improved stra-
tegies for one or more participating general hospitals for  implementing
the  recommendations of such consultants, where appropriate, and for the
payment of debt service on bonds, notes or other obligations  issued  or
incurred  by  the  authority  or the agency to fund loans to one or more
participating general hospitals;
  (d) FOR THE EXPENDITURE OR  LOAN  OF  FUNDS  TO  ASSIST  PARTICIPATING
GENERAL  HOSPITALS  TO  OFFSET  DEBT CREATED BY THE FAILURE OF INSOLVENT
HEALTH PLANS OR HEALTH PLANS AT RISK OF INSOLVENCY, AS DETERMINED BY THE
SUPERINTENDENT OF INSURANCE PURSUANT TO SUBSECTION (A) OR (C) OF SECTION
ONE THOUSAND THREE HUNDRED NINE OF THE INSURANCE LAW, TO MAKE CONTRACTU-
AL PAYMENTS;
  (E) for assurances that participating general hospitals OR PARTICIPAT-
ING HEALTH PLANS will address the recommendations  of  such  consultants
and  furnish  the commissioner, the authority, and where applicable, THE
SUPERINTENDENT OF INSURANCE AND the agency, with such additional  finan-
cial,  management,  legal  and  operational information as each may deem
necessary to monitor the performance of a participating general hospital
OR PARTICIPATING HEALTH PLAN; [and
  (e)] (F)  for the agency to obtain funds from  the  restructuring  AND
SECURITY  pool to be used for the purposes set forth in this section[.];
AND
  (G) FOR THE EXPENDITURE OR LOAN OF FUNDS TO ASSIST HEALTH  PLANS  THAT
ARE  INSOLVENT  OR  AT  RISK  OF  INSOLVENCY,  AS DETERMINED PURSUANT TO
SECTION ONE THOUSAND THREE HUNDRED NINE OF THE INSURANCE LAW;  PROVIDED,
HOWEVER,  THAT  SUCH FUNDS SHALL BE USED TO FACILITATE REHABILITATION IN
ACCORDANCE WITH ARTICLE SEVENTY-FOUR OF THE INSURANCE LAW  OR  TO  AVOID
REHABILITATION  BY  FACILITATING  A  HEALTH  PLAN'S  LONG TERM FINANCIAL
VIABILITY; AND PROVIDED, FURTHER, THAT SUCH EXPENDITURES AND LOANS SHALL
ONLY BE MADE TO PARTICIPATING HEALTH PLANS PURSUANT TO A PLAN AGREED  TO
BY  THE  PARTICIPATING  HEALTH  PLAN AND THE SUPERINTENDENT OF INSURANCE
WHICH PROVIDES FOR THE LONG-TERM FINANCIAL VIABILITY OF THE  PARTICIPAT-

A. 2962                             4

ING  HEALTH  PLAN  EITHER  AS  AN INDEPENDENT ENTITY, OR THROUGH MERGER,
PURCHASE OR CONSOLIDATION.
  3-a.  Any  participating general hospital OR PARTICIPATING HEALTH PLAN
may apply for restructuring AND SECURITY pool funds to the  extent  such
funds are derived from deposits made pursuant to paragraph (d) of subdi-
vision  one  of  section  twenty-eight  hundred seven-l of this article,
provided, however, that, in reviewing such applications, the commission-
er and the authority shall consider the extent to  which  the  applicant
hospital  has alternative available sources of funds, including, but not
limited to, funds available through affiliation  agreements  with  other
hospitals.
  4.  THE  COMMISSIONER,  THE  AUTHORITY AND THE AGENCY SHALL ENTER INTO
AGREEMENTS RELATING TO PARTICIPATING GENERAL HOSPITALS. THE  SUPERINTEN-
DENT OF INSURANCE AND THE AUTHORITY SHALL ENTER INTO AGREEMENTS RELATING
TO  PARTICIPATING INSURERS OR HEALTH PLANS ORGANIZED PURSUANT TO ARTICLE
FORTY-TWO OR FORTY-THREE OF THE INSURANCE LAW OR CERTIFIED  PURSUANT  TO
ARTICLE FORTY-FOUR OF THIS CHAPTER.
  5.  To  the  extent  funds  are available from a participating general
hospital OR PARTICIPATING HEALTH PLAN therefor,  expenditures  from  the
restructuring AND SECURITY pool shall be repaid to the restructuring AND
SECURITY  pool  from repayments received by the authority, or the agency
where applicable, from a participating general hospital OR PARTICIPATING
HEALTH PLAN pursuant to the terms of any financing  agreement,  mortgage
or  loan document permitting the recovery from the participating general
hospital OR PARTICIPATING HEALTH PLAN of such expenditures. The authori-
ty shall record and account for all such payments, which shall be depos-
ited in the restructuring AND SECURITY pool.
  [5] 6.  Loans from the restructuring AND SECURITY pool shall  be  made
pursuant  to an agreement with the participating general hospital speci-
fying the terms thereof, including repayment terms. The authority  shall
record  and account for all such repayments, which shall be deposited in
the restructuring AND SECURITY pool.  The  authority  shall  notify  the
chair  of  the senate finance committee, the director of the division of
budget, the chair of the assembly ways and means  committee,  five  days
prior  to the making of a loan from the restructuring AND SECURITY pool.
The authority shall also report quarterly to such  chairpersons  on  the
transactions  in  the pool, including but not limited to deposits to the
pool, loans made from the pool, investment income, and  the  balance  on
hand as of the end of the month for each such quarter.
  [6]  7.  The commissioner is authorized, with the assistance and coop-
eration of the authority, to provide a program of  technical  assistance
to participating general hospitals.
  8.  THE SUPERINTENDENT OF INSURANCE IS AUTHORIZED, WITH THE ASSISTANCE
AND COOPERATION OF THE AUTHORITY, TO  PROVIDE  A  PROGRAM  OF  TECHNICAL
ASSISTANCE TO PARTICIPATING HEALTH PLANS.
  S  5.  This  act  shall take effect immediately; and any and all funds
allocated to the health facility restructuring program as established by
section 2815 of the public health law, as added by chapter  639  of  the
laws  of  1996, are hereby transferred to and authorized for use for the
purposes of the health care plan and facility restructuring and security
program pursuant to section 2815 of the public health law, as amended by
section four of this act.