§ 4. Regional pilot projects for the uninsured. 1. The commissioner,
in consultation with the subcommittee, is authorized to conduct regional
pilot projects, including one or more individual subsidy programs and
one or more employer incentive programs. The commissioner shall approve
at least one of each program in accordance with subdivision five of this
section. In the absence of applications which meet the approval criteria
for any one model, the commissioner may approve additional programs in
the other program category.

2. (a) An individual subsidy program shall assist individuals and
families in purchasing health care coverage under insurance or
equivalent coverage mechanisms. In order to be eligible for
participation in the program, and subject to annual recertification of
eligibility, individuals and families shall meet the following criteria:

(i) gross household income is at or below two hundred percent of the
non-farm federal poverty level; and

(ii) not receiving medical assistance without taking into account
costs incurred for medical care under the provisions of section three
hundred sixty-six of the social services law; and

(iii) ineligible for medicare as defined in subchapter XVIII of the
federal Social Security Act, 42 U.S.C. §1395 et seq., and

(iv) do not have equivalent health care coverage under insurance or
equivalent coverage mechanisms as defined by the commissioner, in
consultation with the superintendent. Individuals and families having
health care coverage within the six month period prior to application
shall not be eligible for the individual subsidy program. The limitation
shall not apply to persons who become ineligible for medical assistance
or whose insurance or equivalent coverage is terminated as a result of
loss of employment within such period.

(b) If individuals and families receiving benefits under the
individual subsidy program become eligible for medical assistance by
taking into account costs incurred for medical care, social services
districts may pay all or part of the premium in accordance with
department of social services regulations. For the purpose of this
paragraph, subsidy payments shall not be available to cover the costs of
the premium.

(c) For the purposes of the individual subsidy program, subsidy
payments shall be made, under subdivision eight of this section, to an
approved organization for the purpose of reducing premium payments,
deductibles or copayments for participants in the program. The
commissioner may establish and adjust schedules of payments to be made
under this program. In determining such schedules, the costs to be borne
by the individual or family shall take into account the household size
and gross annual income of the household and such other factors as the
commissioner may deem appropriate.

(d) Notwithstanding the provisions of paragraph (a) of this
subdivision, an individual who meets the criteria as established in
subparagraphs (ii) through (iv) of such paragraph may be enrolled in the
individual subsidy program, provided however, that an approved
organization shall not be eligible to receive a subsidy payment for
providing coverage to such an individual. Enrollment of such individuals
shall not exceed twenty-five percent of the total enrollment for
participants in the individual subsidy program.

(e) Applications for enrollment in the individual subsidy program will
not be accepted on and after January first, two thousand one; provided,
however, individuals and families who are otherwise eligible to receive
benefits under such program and are enrolled prior to January first, two
thousand one, may remain enrolled in such program until March
thirty-first, two thousand nine.

3. (a) An employer incentive program shall assist employers of twenty
or fewer employees in purchasing health care coverage for all full-time
employees and such other employees determined to be qualified for such
coverage by the employer based on employment status. In order to
participate in the program, an employer shall not have, within the six
month period prior to application, provided employer-financed group
health care coverage to any employee associated with the employer's
business.

(b) An employer incentive payment shall consist of payments to an
approved organization in the amount of no more than fifty percent of the
premium costs for group health care coverage for employees and their
dependents. Employees shall not be required to make contributions to the
payment of premium costs under this program. Premium costs incurred by
an employer for group health insurance coverage for officers and
directors of an employer and others with a proprietary or ownership
interest in the employer may be eligible for an incentive payment to
offset premium costs; provided, however, that the gross household income
of such officers and directors or others with a propriety or ownership
interest does not exceed the limits provided pursuant to subparagraph
(i) of paragraph (a) of subdivision two of this section and provided
further that one or more employees and their dependents proposed to be
covered by such group health care coverage are unrelated to such
officers, directors or other persons with a propriety or ownership
interest. If an employer participating in an employer incentive program
hires more than twenty employees after joining the program, the employer
may continue in the program but the premium costs attributable to the
additional employees or their families shall not be eligible for
incentive payments.

(c) Employers may be approved to participate in the program based upon
the average salaries of the employees who are to receive health care
coverage, with those employers with the lowest average employee salaries
to be selected first and other employers to be eligible for
participation as funding will allow.

(d) Notwithstanding the provisions of this subdivision, if the number
of employers who meet the criteria established in paragraph (a) of this
subdivision, and who are applying for participation in the employer
subsidy program, exceeds the amount of funds available to an approved
organization to provide health care coverage to employers under the
program, the approved organization may enroll additional employers. The
approved organization shall not receive incentive payments for such
employers. Enrollment of such employers shall not exceed twenty-five
percent of the total enrollment of employers and their dependents
participating in the employer incentive program.

(e) Employer incentive programs established pursuant to this section
shall expire upon implementation of the New York state small business
health insurance partnership program in accordance with the provisions
of article 9-A of the public health law.

4. The commissioner shall establish guidelines for the submission of
proposals by eligible organizations, including, but not limited to, the
following components:

(i) standards for premiums, copayments and deductibles which consider
the needs of program participants in obtaining health care;

(ii) insurance or equivalent coverage mechanisms to be utilized under
the project;

(iii) minimum standards for benefits under the requirements of the
insurance law and such additional benefits as may be identified;

(iv) health care provider payment methodologies;

(v) appropriate utilization review and quality assurance mechanisms;
and

(vi) such other criteria which may be deemed necessary.

5. (a) A proposal submitted by an eligible organization shall meet the
following criteria:

(i) estimate the number of participants who would be eligible for the
program and the estimated number of actual participants in the program
location;

(ii) designate the geographic area to be served by the program;

(iii) assure access to and delivery of high quality, appropriate
medical services and include a network of health care providers in
sufficient numbers and geographically accessible to service program
participants;

(iv) describe the procedures for marketing and determining eligibility
for the health care coverage plan in the program location, including the
designation of other entities which may perform such functions under
contract with the organization;

(v) describe any arrangements for negotiated special payment rate
methodologies for inpatient and outpatient services;

(vi) describe in detail the estimated expenses, including the proposed
use of subsidy or incentive payments, personnel costs and other types of
administrative expenses which will be incurred in the development and
implementation of the program;

(vii) describe the quality assurance mechanisms and utilization review
mechanisms to be implemented;

(viii) demonstrate that the applicant has sought public participation
and local involvement in the development of the program plan;

(ix) demonstrate the applicant's ability to meet the data analysis and
reporting requirements for program evaluation;

(x) describe the extent to which the program may be replicated in
other geographic areas or on a statewide basis;

(xi) describe the benefit package to be offered in the program and the
cost of such benefit package;

(xii) comply with or demonstrate an acceptable arrangement or contract
with an organization which can meet the requirements of section eleven
hundred eighteen and other applicable provisions of the insurance law;

(xiii) demonstrate the financial feasibility of the program;

(xiv) describe the premium, copayments and deductibles to be paid by
program participants; and

(xv) include any other information the commissioner and the
superintendent shall deem appropriate.

(b) The commissioner, within forty-five days of receiving a proposal
from an eligible entity, shall make a determination whether to approve,
disapprove or recommend modification of the proposal. In order for a
proposal to be approved by the commissioner, the proposal must also be
approved by the superintendent with respect to the provisions of
subparagraphs (xii) through (xiv) of paragraph (a) of this subdivision.
Upon receiving a proposal, the commissioner shall provide a copy of the
proposal to the chairman of the subcommittee, consult with the
subcommittee and receive its recommendation with regard to such
application.

6. The commissioner, in consultation with the subcommittee, may
approve a supplemental grant program, in addition to those programs
authorized under subdivision five of this section, to provide grants for
public education, outreach and marketing of health care coverage
targeted at uninsured individuals and families and employers not
providing coverage to their employees in any geographic area which is
not designated for regional pilot project implementation. Grants may be
used for the following:

(i) public education concerning the availability of health care
coverage;

(ii) promotion of community awareness of the benefits of health care
coverage; and

(iii) outreach and direct recruitment of potential enrollees.

7. The commissioner is authorized to approve contracts between an
approved organization and any other organization for the purposes
including, but not limited to, outreach, marketing and eligibility
determination.

8. The commissioner shall determine the amount of funds to be
allocated to an approved organization for the purposes described in
subdivision one of this section from any funds available pursuant to
subparagraph (i) of paragraph (f) of subdivision nineteen of section
twenty-eight hundred seven-c of the public health law.

8-a. The commissioner, in consultation with the superintendent, may
adjust subsidy payments and incentive payments for approved programs for
any of the following circumstances: (a) for new programs; (b) for new
coverage under existing programs; and (c) to be effective on the next
annual renewal date of the affected coverage for existing coverage.

9. Notwithstanding the provisions of paragraph (c) of subdivision two
of section two thousand eight hundred seven-c of the public health law,
approved organizations may enter into agreements for negotiated payment
rate methodologies with general hospitals for inpatient and outpatient
hospital services. Such negotiated payment rate methodologies in the
case of inpatient services or outpatient services shall be subject to
the approval of the commissioner, and shall not adversely affect quality
of care outcomes or result in the shifting of costs of providing
services to beneficiaries of a program to any other payor.

10. An approved organization shall submit reports to the commissioner
in such form and at times as may be required in order to evaluate the
operations and results of such program.

11. The commissioner, in consultation with the subcommittee, shall
enter into agreements with one or more persons, not-for-profit
corporations, or other organizations, other than a state employee,
official or agency, for the performance of a comprehensive evaluation of
the implementation and effectiveness of the regional pilot projects
authorized pursuant to this act. The evaluation shall assess factors
including, but not limited to:

(i) the overall effect of the regional pilot projects on access to and
utilization of health care services;

(ii) the impact of the regional pilot projects on the health status of
program participants;

(iii) the impact of using a negotiated special payment rate
methodology on access to and quality of inpatient and outpatient
services delivered by general hospitals and on the functioning of such
hospitals;

(iv) the impact of using alternative insurance, financing, health care
delivery and provider payment models on the costs of health care
coverage;

(v) the impact of the regional pilot projects on the bad debt and
charity care system and on other insurers, employment and health care
delivery systems in the regional pilot project location;

(vi) the feasibility and appropriateness of implementing the regional
pilot projects in other locations and on a statewide basis; and

(vii) the impact on the regional pilot projects of any adjustment of
subsidy payments or incentive payments.

An evaluation required pursuant to this section shall be submitted to
the governor and the legislature by April 1, 1995.

12. Notwithstanding any inconsistent provision of section 112 or 163
of the state finance law or any other law, at the discretion of the
commissioner without a competitive bid or request for proposal process,
contractual arrangements with approved organizations in effect in 1993
may be extended through December 31, 1999 to provide an uninterrupted
continuation of services and may be amended as may be necessary.