S T A T E O F N E W Y O R K
________________________________________________________________________
6367
I N S E N A T E
February 1, 2012
___________
Introduced by Sen. STEWART-COUSINS -- read twice and ordered printed,
and when printed to be committed 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.
S 2. The public health law is amended by adding a new section 2807-z
to read as follows:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02768-03-2
S. 6367 2
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 TWELVE THROUGH JUNE THIRTIETH, TWO THOUSAND
SIXTEEN, 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
TWELVE THROUGH JUNE THIRTIETH, TWO THOUSAND SIXTEEN, 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;
(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
S. 6367 3
(C) PROVIDE A REPORT TO THE COMMISSIONER ON OR BEFORE JANUARY FIRST,
TWO THOUSAND SIXTEEN, 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 TWELVE THROUGH JUNE THIRTIETH, TWO THOUSAND FOURTEEN, THE
DISTRIBUTIONS SHALL BE BASED ON DISCHARGES REPORTED THROUGH THE STATE-
WIDE PLANNING AND RESEARCH COOPERATIVE SYSTEM FOR TWO THOUSAND NINE, AND
FOR THE PERIOD JULY FIRST, TWO THOUSAND FOURTEEN THROUGH JUNE THIRTIETH,
TWO THOUSAND SIXTEEN, THE DISTRIBUTIONS SHALL BE BASED ON DISCHARGES
REPORTED THROUGH THE STATEWIDE PLANNING AND RESEARCH COOPERATIVE SYSTEM
FOR TWO THOUSAND ELEVEN.
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 TWELVE
THROUGH JUNE THIRTIETH, TWO THOUSAND THIRTEEN; JULY FIRST, TWO THOUSAND
THIRTEEN THROUGH JUNE THIRTIETH, TWO THOUSAND FOURTEEN; JULY FIRST, TWO
THOUSAND FOURTEEN THROUGH JUNE THIRTIETH, TWO THOUSAND FIFTEEN; AND JULY
FIRST, TWO THOUSAND FIFTEEN THROUGH JUNE THIRTIETH, TWO THOUSAND
SIXTEEN, RESPECTIVELY. 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 SUBURBAN REGION FOR JULY FIRST, TWO THOUSAND
TWELVE THROUGH JUNE THIRTIETH, TWO THOUSAND THIRTEEN; JULY FIRST, TWO
THOUSAND THIRTEEN THROUGH JUNE THIRTIETH, TWO THOUSAND FOURTEEN; JULY
S. 6367 4
FIRST, TWO THOUSAND FOURTEEN THROUGH JUNE THIRTIETH, TWO THOUSAND
FIFTEEN; AND JULY FIRST, TWO THOUSAND FIFTEEN THROUGH JUNE THIRTIETH,
TWO THOUSAND SIXTEEN, 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
section AND THE PAYMENTS DETERMINED IN ACCORDANCE WITH SECTION
TWENTY-EIGHT HUNDRED SEVEN-Z OF THIS ARTICLE. Specified third-party
S. 6367 5
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 26 of subpart D of part V-1 of chapter
57 of the laws of 2009, 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 four 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, 2016 with regard to their application to section 2807-z of the
public health law.
S 6. This act shall take effect July 1, 2012; 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, 2012; 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.
