senate Bill S7081

2013-2014 Legislative Session

Relates to covered lives assessments in the Rochester region

download bill text pdf

Sponsored By

Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

do you support this bill?

Actions

view actions (1)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Apr 24, 2014 referred to health

Co-Sponsors

S7081 - Bill Details

Current Committee:
Law Section:
Public Health Law
Laws Affected:
Amd ยง2807-s, Pub Health L

S7081 - Bill Texts

view summary

Relates to covered lives assessments in the Rochester region.

view sponsor memo
BILL NUMBER:S7081

TITLE OF BILL: An act to amend the public health law, in relation to
covered lives assessments in the Rochester region

PURPOSE: This bill would facilitate health improvement in the
Rochester region by funding regional health improvement projects and
by providing a stable source of graduate medical education funding to
ensure and maintain the adequate supply of physicians to provide care
in the region.

SUMMARY OF PROVISIONS: All health insurers and self-insured employers
currently pay what are called "covered lives assessments" (CLA).
These are monthly payments based on the number of insured persons
residing within each region of the State. The existing CLA process
funds a number of important health financing objectives. This bill
would incorporate two additional program areas in the Rochester region
only that have been deemed by healthcare stakeholders in the region to
be a priority. The CLA assessments already vary in amount by region
and the proposed adjustment would affect only insurers and
self-insured plans for their covered persons in the Rochester region.
Most of the increased funding for graduate medical education would be
offset by decreases in hospital rates to the insurers and plans: the
increased costs to insurers would $17 per year for an individual and
$58 per year for a family. The bill is supported by a broad coalition
of business groups, the two largest health insurers and the hospitals
in the region.

JUSTIFICATION: Rochester's health care system has the unique advantage
of nearly a century of collaborative community planning. It has long
distinguished itself as a community able to develop innovative,
cooperative approaches to health care financing and delivery. It has
been done so by bringing together the interests of employers,
academia, providers, insurers, and consumers. The benefits of this
community approach - costs that are 20% below the national average
with excellent quality and access - have been highlighted by everyone
from President Clinton to the recently issued report by the Institute
of Medicine noting Rochester's annual cost-per-Medicare beneficiary
was the lowest in the country.

One key factor in Rochester's pre-eminence is a teaching program that
has provided a reliable pipeline of medical personnel across the
Rochester region. Currently, the three Rochester-based providers train
a total of 916 residents. On average, 42% of the graduating residents
and fellows who train in Rochester remain there for their first
professional position, which has enabled Rochester to avoid the severe
physician shortages experienced elsewhere. An equal number of doctors
who graduate from the University's School of Medicine and Dentistry
affiliate with the local non-University health systems as with the
Medical Center. The community's ability to attract and compete for the
best students, physicians, and faculty is dependent on the quality and
quantity of our academic research. Residents want to train at
prestigious institutions with groundbreaking research and have access
to the best physician mentors. These interrelated missions allow the
next generation of practitioners and academic leaders in education,
research, and community health to apply this knowledge to patient
care. This translational research, which enables patients early access


through clinical trials to emerging technology, drugs, and procedures,
also generates new jobs and companies for the region. Educating and
training physicians would not be possible without both public
(Medicaid and Medicare) and private health plan support. As a source
of medical innovation and discovery, academic medical centers and
teaching hospitals are inherently more expensive to operate.

This bill has two components:

* Approximately $100 million in GME support is currently generated
from the claims payment rates Rochester region hospitals have
negotiated with private payers, which covers additional expenses of
operating hospitals with residents and fellows. The CLA adjustment in
this bill will instead fund those costs through the CLA payments to
assure more stable, long term funding. This bill will replace that
existing support on a budget-neutral basis by reducing rates paid by
these insurers and health plans, to avoid any premium impact.

* Of the $10 million in new funding provided through the CLA
adjustment, $5 million will support associated research and
educational costs incurred by Medical Center faculty who teach
students and residents in the Rochester area hospitals and the
remaining $5 million will fund valuable shared community health
infrastructure (e.g. health planning, community-wide safety and
quality programs, community measurement, elimination of health
disparities, and information technology linkages) that improve
quality, affordability, and accessibility through collaborative
community efforts. A total of $2 million of the second $5 million
would be dedicated to the Finger Lakes Health Systems Agency (FLHSA)
and would serve as a local private sector match for recently enacted
state funding. The FLHSA would oversee investment in community health
initiatives through a transparent, fiscally accountable,
multi-stakeholder process.

Currently, the services above are funded by voluntary contributions,
with certain local health plans, hospitals and employers bearing a
disproportionate share of the expense. A formalized CLA assessment is
the only method to assure that all health plans and all employers pay
their fair share of community health improvement costs, rather than
asking only certain health plans and employers to shoulder this
expense for the benefit of the entire community.

In sum, although the region's CLA would be increased by $110 million
per year, hospitals and health plans have agreed to reduce the claims
payment rates that health plans pay to Rochester region hospitals by
an offsetting $100 million per year. A third party will be engaged to
assure that offsetting reduction occurs. The net impact of this bill
is an increase of only $10 million in health care spending in the
Rochester region, which is the equivalent of a 0.5% increase in
premiums. There is no impact on regions other than Rochester and no
impact on the State's general fund.

HISTORY: Similar proposal was in the Assembly one-house budget bill
for the March 31, 2014 Executive Budget (A 8558-C).

FISCAL IMPLICATIONS: There is no impact on the State Budget. The
Medicaid program does not pay the HCRA CLA and the bill has no impact


on Medicaid spending. The HCRA CLA increase will be implemented by the
Department of Health as the administrator of the HCRA collections
process, but all CLA payments as a result of this bill will be made by
private health insurers and self-insured employers in the Rochester
region.

EFFECTIVE DATE: January 1, 2015.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7081

                            I N  S E N A T E

                             April 24, 2014
                               ___________

Introduced  by  Sen.  ROBACH -- 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  covered  lives
  assessments in the Rochester region

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

  Section 1. Subdivision 6 of section 2807-s of the public health law is
amended by adding a new paragraph (g) to read as follows:
  (G) A FURTHER GROSS ANNUAL AMOUNT ALLOCATED TO  THE  ROCHESTER  REGION
BEGINNING  JANUARY  FIRST, TWO THOUSAND FIFTEEN SHALL BE ONE HUNDRED TEN
MILLION DOLLARS. FOR CALENDAR YEARS TWO THOUSAND SIXTEEN AND THEREAFTER,
THAT AMOUNT SHALL BE INDEXED FOR STATEWIDE HEALTH CARE INFLATION  IN  AN
AMOUNT  DETERMINED  BY  THE  COMMISSIONER. SUCH AMOUNT SHALL BE EXCLUDED
FROM ALL COMPUTATIONS AND ADJUSTMENTS MADE PURSUANT TO PARAGRAPH (B)  OF
SUBDIVISION SIX OF SECTION TWENTY-EIGHT HUNDRED SEVEN-T OF THIS ARTICLE.
  S  2.  Subdivision  7  of  section  2807-s of the public health law is
amended by adding a new paragraph (d) to read as follows:
  (D)(A) FIVE MILLION DOLLARS OF THE FUNDS ALLOCATED  TO  THE  ROCHESTER
REGION  PURSUANT  TO  PARAGRAPH  (G)  OF SUBDIVISION SIX OF THIS SECTION
SHALL BE DISTRIBUTED TO A ROCHESTER REGIONAL HEALTH  PLANNING  ORGANIZA-
TION  FOR  USE IN FUNDING REGIONAL HEALTH CARE IMPROVEMENT PROJECTS. THE
REGIONAL HEALTH PLANNING ORGANIZATION  SHALL  DISBURSE  THOSE  FUNDS  IN
ACCORDANCE WITH THIS PARAGRAPH, OR PURSUANT TO GRANTS MADE BY THE ORGAN-
IZATION  IN  ACCORDANCE  WITH  THIS PARAGRAPH. DISTRIBUTION OF ANY GRANT
FUNDS ADMINISTERED BY THE REGIONAL HEALTH PLANNING ORGANIZATION SHALL BE
PURSUANT TO  A  MULTI-STAKEHOLDER  PROCESS.  THE  REGIONAL  HEALTH  CARE
IMPROVEMENT  GRANT FUND PROJECTS SHALL INCLUDE THREE MILLION DOLLARS PER
YEAR FOR A SHARED COMMUNITY HEALTH INFRASTRUCTURE DESIGNED ON THE  BASIS
OF  COLLABORATIVE  COMMUNITY  EFFORTS,  INCLUDING COMMUNITY-WIDE PATIENT
SAFETY AND QUALITY IMPROVEMENT PROGRAMS, ELIMINATION OF HEALTH  DISPARI-
TIES, HEALTH INFORMATION TECHNOLOGY, AND TWO MILLION DOLLARS TO FUND THE
REGIONAL HEALTH PLANNING ORGANIZATION.  THE HEALTH PLANNING ORGANIZATION
SHALL  USE REASONABLE EFFORTS TO GENERATE MATCHING FUND CONTRIBUTIONS IN
THE FORM OF GRANTS, DONATIONS AND OTHER CONTRIBUTIONS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14809-01-4

S. 7081                             2

  (B) ONE HUNDRED FIVE MILLION DOLLARS OF THE  FUNDS  ALLOCATED  TO  THE
ROCHESTER  REGION  PURSUANT  TO PARAGRAPH (G) OF SUBDIVISION SIX OF THIS
SECTION SHALL BE ALLOCATED TO A NOT-FOR-PROFIT ORGANIZATION  OR  ASSOCI-
ATION  THAT  HAS  BEEN  DESIGNATED  THROUGH A MULTI-STAKEHOLDER PROCESS,
WHICH SHALL DISTRIBUTE THOSE FUNDS TO ALL OF THE HOSPITALS IN THE REGION
ENGAGED  IN GRADUATE MEDICAL EDUCATION IN ORDER TO FUND GRADUATE MEDICAL
EDUCATION. ONE HUNDRED MILLION DOLLARS OF SUCH FUNDING SHALL BE DISTRIB-
UTED PROPORTIONALLY TO EACH OF THE HOSPITALS IN  AMOUNTS  WHICH  REFLECT
EACH  HOSPITAL'S  CURRENT COSTS FOR GRADUATE MEDICAL EDUCATION, AND FIVE
MILLION  DOLLARS  OF  UNREIMBURSED  ADMINISTRATIVE  AND  OTHER  GRADUATE
MEDICAL   EDUCATION  RELATED  COSTS  SHALL  BE  ALLOCATED  IN  THE  SAME
PROPORTIONS. ONE HUNDRED MILLION DOLLARS OF THE DISTRIBUTED FUNDS  SHALL
BE  IN  LIEU  OF  CURRENT FUNDING OF SUCH COSTS AS CURRENTLY INCLUDED IN
CLAIMS PAYMENTS BY THE TWO LARGEST NON-GOVERNMENTAL THIRD  PARTY  PAYORS
RESULTING  IN  A REDUCTION IN THE AMOUNT PAID BY SUCH THIRD PARTY PAYORS
IN AN AMOUNT EQUAL TO THE ONE HUNDRED  MILLION  DOLLARS.  PRIOR  TO  THE
ALLOCATION  OF  FUNDS  PURSUANT  TO  THIS SUBDIVISION, THE PARTICIPATING
HOSPITALS AND SUCH THIRD PARTY PAYORS SHALL DEVELOP A  PROCESS  FOR  THE
DISTRIBUTION  OF  SUCH FUNDS AND A MECHANISM TO ENSURE THAT THE REQUIRED
REDUCTION OF PAYMENTS BY  SUCH  THIRD  PARTY  PAYORS  TO  THE  HOSPITALS
OCCURS.  THE  AFFECTED  HOSPITALS  AND  THE TWO LARGEST NON-GOVERNMENTAL
THIRD PARTY PAYORS IN THE ROCHESTER REGION SHALL JOINTLY SELECT AN INDE-
PENDENT THIRD PARTY TO DETERMINE THE REDUCTIONS WHICH SHALL  OCCUR  FROM
PREVIOUSLY  NEGOTIATED  RATES  FOR  CLAIMS PAYMENTS TO SUCH HOSPITALS BY
SPECIFIED THIRD PARTY PAYORS IN ORDER TO AVOID DUPLICATE FUNDING  PURSU-
ANT TO THIS PARAGRAPH.
  S  3.  This  act  shall take effect January 1, 2015; provided that the
amendments to section 2807-s of the public health law made  by  sections
one  and two of this act shall not affect the expiration of such section
and shall be deemed to expire therewith.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.