BILL NUMBER: S7901

SPONSOR: BAILEY
 
TITLE OF BILL:

An act to amend the public health law, in relation to general hospital
cost reports

 
PURPOSE OR GENERAL IDEA OF BILL:

To require general hospitals to post their current year cost reports on
their website

 
SUMMARY OF SPECIFIC PROVISIONS:

This bill would require general hospitals to post their current year
institutional cost reports on their website within thirty days of
submitting such cost report to the Centers for Medicare and Medicaid
services (CMS) and provides for penalties for noncompliance.

 
JUSTIFICATION:
              

This bill would require general hospitals to post their current year
institutional cost reports on their website within thirty days of
submitting such cost report to the Centers for Medicare and Medicaid
services (CMS). Hospitals are required by federal regulation to submit
cost reports for the twelve-month period immediately preceding the date
such reports are due. These federal cost reports contain information
about hospital services to Medicare and Medicaid beneficiaries. They are
used by the federal government to develop Medicare rates. Such reports
are available through the healthcare cost report information system
managed by CMS; however, access to such cost reports requires special-
ized software and is generally only available through subscription
services.

New York also requires general hospitals to file institutional cost
reports that slightly differ from the cost report required by CMS, inso-
far as there are certain exhibits to the cost report required by New
York that are not required by CMS. Like the federal government, the New
York State Department of Health (DOH) uses such reports to develop Medi-
caid rates, assist in the formulation of reimbursement methodologies,
analyze trends, develop fiscals and pool allocation distributions. It is
also used for the Upper Payment Limit (UPL) calculation along with the
Disproportionate Share Hospital (DSH) payments.

Currently, New York requires general hospitals to submit institutional
cost reports two years after the cost reporting period. CMS generally
requires general hospitals to submit cost reports within five months of
the end of their fiscal year, with an exception that is also outlined in
this bill that recognizes that some general hospitals do not operate on
a calendar year basis. Along with the two-year lag, New York consistent-
ly fails to make New York cost reports available through the OpenNY data
system. The latest cost report year posted by the DOH is 2016, meaning
nearly a decade of hospital Medicaid spending is not publicly available.

General hospitals are the largest category of Medicaid spending by New
York State. Data collected by DOH is stale and does not reflect current
Medicaid or Medicare spending by such hospitals. This bill seeks to make
hospital spending more transparent and publicly available; it also seeks
to provide the public with more current information than is currently
provided to DOH. Hospitals are already required to prepare such reports
and must submit such reports to CMS on time or suffer withholding of
Medicare reimbursement. Hospitals have a strong incentive to comply with
this requirement, and this bill seeks to reflect the same incentive
under New York State law.

As the largest recipient of Medicaid funding, general hospitals have an
obligation to the public to disclose how such funds are being spent. The
reports by CMS also disclose how much charity care a hospital provides,
an important metric to determine whether hospitals are fulfilling their
charitable mission. General balance sheet information is required under
current reporting, which allows both policymakers and the public to
determine the overall fiscal health of critical health care institutions
and providers. Last, hospital spending, including costs and charges, is
among the least transparent sources of overall state spending. Requiring
general hospitals to disclose the information that they are already
required to disclose to the federal government provides the public with
critical insight into the largest driver of state spending.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
Immediately.