Section 2807-J. Patient services payments

1.  Payments to designated
  providers of services, as defined in paragraph (a) of subdivision  one-a
  of  this  section,  by  all  payors,  including  the  state governmental
  agencies,  corporations  organized  and  operating  in  accordance  with
  article  forty-three  of  the  insurance law, organizations operating in
  accordance with the provisions of article forty-four  of  this  chapter,
  local  governmental  agencies,  self-insured funds, commercial insurers,
  payors pursuant to the comprehensive motor vehicle insurance reparations
  act, the workers' compensation law, the volunteer firefighters'  benefit
  law  and  the  volunteer  ambulance  workers' benefit law, and any other
  rate, charge, or negotiated payment payor, for patient services provided
  to persons who are not eligible for payments as beneficiaries  of  title
  XVIII  of  the  federal  social  security act (medicare) shall include a
  surcharge for an allowance  on  net  patient  service  revenues  in  the
  percentage  amount  and  for the periods specified in subdivision two of
  this section. Any such allowance shall be submitted by or on  behalf  of
  designated   providers   of   services   to   the  commissioner  or  the
  commissioner's designee in accordance  with  subdivision  five  of  this
  section.
    1-a. Definitions. (a) "Designated providers of services", for purposes
  of  this  section,  shall  mean  providers  of services in the following
  classes:
    (i) general hospitals;
    (ii) diagnostic and treatment centers that provide:
    (A) a comprehensive range of primary health care services; or
    (B) ambulatory surgical services; and
    (iii) for periods prior to October first, two thousand, subject to the
  provisions of paragraph  (d)  of  subdivision  three  of  this  section,
  free-standing  clinical  laboratories  issued a permit pursuant to title
  five of article five of this chapter.
    (b) "Third-party  coverage",  for  purposes  of  this  section,  shall
  include,  but  not  be  limited  to:  payments by a governmental agency,
  insurer, health maintenance organization, self-insured  fund,  or  other
  third-party  entity making payments on behalf of a patient; whether made
  directly to a designated provider of services or indirectly as indemnity
  or similar payments made to the  patient  (or  patient's  representative
  such  as  parent or family member) for services provided by a designated
  provider of services, or through the use of  payments  made  payable  to
  both  the  designated  provider of services and the patient or patient's
  representative, or similar devices.
    (c) "Third-party payors", for purposes of this section, shall include,
  but not be limited to: governmental agencies; corporations organized and
  operating in accordance with article forty-three of the  insurance  law;
  organizations  operating  in  accordance  with the provisions of article
  forty-four of this  chapter;  providers  of  coverage  pursuant  to  the
  comprehensive  motor  vehicle  insurance  reparations  act, the workers'
  compensation law, the  volunteer  firefighters'  benefit  law,  and  the
  volunteer   ambulance  workers'  benefit  law;  self-insured  funds  and
  administrators acting on behalf of self-insured  funds;  and  commercial
  insurers  licensed  to do business in this state and authorized to write
  accident and health insurance and whose policy provides coverage  on  an
  expense incurred basis.
    2. (a) The total percentage allowance for any period during the period
  January   first,   nineteen   hundred   ninety-seven   through  December
  thirty-first, nineteen hundred ninety-nine  and  on  and  after  January
  first, two thousand, for a designated provider of services applicable to
  a  payor  shall  be  determined  in accordance with this subdivision and
  applied to net patient service revenues.

    (b)  The  total  percentage  allowance  for  each  payor,  other  than
  governmental  agencies, or health maintenance organizations for services
  provided to subscribers eligible  for  medical  assistance  pursuant  to
  title  eleven  of  article  five of the social services law, or approved
  organizations  for  services  provided  to  subscribers eligible for the
  family health plus program pursuant to title eleven-D of article five of
  the social services law, and other than payments for a patient that  has
  no  third-party  coverage in whole or in part for services provided by a
  designated provider of services, shall be:
    (i) the sum of (A) eight and  eighteen-hundredths  percent,  provided,
  however,  that  for  services  provided  on  and  after  July first, two
  thousand three, the percentage shall be eight and eighty-five hundredths
  percent, and further provided that for services provided  on  and  after
  January  first,  two  thousand  six,  the  percentage shall be eight and
  ninety-five hundredths percent, and further provided that  for  services
  provided  on  and  after  April first, two thousand nine, the percentage
  shall be nine and sixty-three hundredths percent, plus  (B)  twenty-four
  percent, provided, however, that for services provided on and after July
  first,  two  thousand  three,  the  percentage  shall be twenty-five and
  ninety-seven hundredths percent, and further provided that for  services
  provided  on  and  after January first, two thousand six, the percentage
  shall be twenty-six  and  twenty-six  hundredths  percent,  and  further
  provided  that  for  services  provided  on  and  after April first, two
  thousand nine, the percentage shall  be  twenty-eight  and  twenty-seven
  hundredths  percent,  and  plus (C) for a specified third-party payor as
  defined in subdivision one-a of section twenty-eight hundred seven-s  of
  this  article the percentage allowance applicable for a general hospital
  for inpatient hospital services pursuant to subdivision two  of  section
  twenty-eight hundred seven-s of this article;
    (ii)  unless  (A)  an  election  in  accordance  with paragraph (a) of
  subdivision five of this section to pay the allowance  directly  to  the
  commissioner   or  the  commissioner's  designee  is  in  effect  for  a
  third-party payor, and in addition (B) for a specified third-party payor
  an  election  to  pay  the  assessment  in   accordance   with   section
  twenty-eight hundred seven-t of this article is in effect.
    (c) If an election in accordance with subdivision five of this section
  is  in effect for a third-party payor and in addition in accordance with
  section twenty-eight hundred seven-t of this  article  for  a  specified
  third-party  payor,  the  total  percentage  allowance  factor  shall be
  reduced to eight and  eighteen-hundredths  percent,  provided,  however,
  that  for  services provided on and after July first, two thousand three
  the total percentage allowance factor shall  be  reduced  to  eight  and
  eighty-five  hundredths  percent, and further provided that for services
  provided on and  after  January  first,  two  thousand  six,  the  total
  percentage  allowance  factor  shall be reduced to eight and ninety-five
  hundredths percent, and further provided that for services  provided  on
  and after April first, two thousand nine, the total percentage allowance
  factor shall be reduced to nine and sixty-three hundredths percent.
    (d)  The  total  percentage  allowance  for  payments  by governmental
  agencies, as determined in accordance with paragraphs (a) and  (a-1)  of
  subdivision  one of section twenty-eight hundred seven-c of this article
  as in effect on December thirty-first, nineteen hundred  ninety-six,  or
  health  maintenance  organizations  for services provided to subscribers
  eligible for medical assistance pursuant to title eleven of article five
  of the social services  law,  or  approved  organizations  for  services
  provided  to  subscribers  eligible  for  the family health plus program
  pursuant to title eleven-D of article five of the social  services  law,
  shall  be  five  and ninety-eight-hundredths percent, provided, however,

  that for services provided on and after July first, two  thousand  three
  the  total  percentage allowance shall be six and forty-seven hundredths
  percent, and further provided that for services provided  on  and  after
  January first, two thousand six, the total percentage allowance shall be
  six  and  fifty-four  hundredths  percent, and further provided that for
  services provided on and after April first, two thousand nine, the total
  percentage allowance shall be seven and four hundredths percent.
    (e) The total percentage allowance for payments for services  provided
  by  designated  providers  of services for which there is no third-party
  coverage in whole or in part  shall  be  eight  and  eighteen-hundredths
  percent, provided, however, that for services provided on and after July
  first,  two thousand three the total percentage allowance shall be eight
  and eighty-five  hundredths  percent,  and  further  provided  that  for
  services  provided  on  and  after  January first, two thousand six, the
  total percentage allowance shall be  eight  and  ninety-five  hundredths
  percent,  and  further  provided that for services provided on and after
  April first, two thousand nine, the total percentage allowance shall  be
  nine  and sixty-three hundredths percent. This paragraph shall not apply
  to patient deductibles and coinsurance amounts.
    (f)  The  total  percentage  allowance  for  patient  deductibles  and
  coinsurance amounts shall be the same percentage allowance applicable to
  payments  by  the primary third-party payor covering the patient in each
  case determined in accordance with paragraphs (a), (b) and (c)  of  this
  subdivision.
    (g)  The  total  percentage allowance for secondary third-party payors
  under coordination of benefits principles shall be the  same  percentage
  allowance applicable to payments by the primary third-party payor in the
  case  determined  in accordance with paragraphs (a), (b) and (c) of this
  subdivision.
    3. Net patient service revenues, for purposes of this  section,  shall
  mean:
    (a)  for  general  hospitals  all moneys received for or on account of
  inpatient hospital services,  outpatient  services  (including  referred
  ambulatory  services), emergency services, ambulatory surgical services,
  and other hospital  or  health-related  services,  including  capitation
  payments  allocable to inpatient hospital services,  outpatient services
  (including referred ambulatory services), emergency services, ambulatory
  surgical  services  and  other  hospital  or   health-related   services
  excluding  services listed below, less refunds, for discharges occurring
  or for visits made or services performed  on  or  after  January  first,
  nineteen  hundred  ninety-seven,  or  contracted service obligations for
  periods  on  or  after  January  first,  nineteen  hundred  ninety-seven
  excluding  the following subject to the provisions of subdivision eleven
  of this section:
    (i) revenue received for services provided to beneficiaries  of  title
  XVIII of the federal social security act (medicare);
    (ii)  revenue  received  by  a general hospital for residential health
  care facility services, adult day care services, hospice  services,  and
  home care services;
    (iii)  revenue  received  from the allowances pursuant to this section
  and section twenty-eight hundred seven-s of this article;
    (iv) revenue received from bad debt and charity care and indigent care
  rate adjustments and pool distributions pursuant to section twenty-eight
  hundred seven-c of this article, general  hospital  indigent  care  pool
  distributions  pursuant  to section twenty-eight hundred seven-k of this
  article, health care services pool  distributions  pursuant  to  section
  twenty-eight  hundred  seven-c  of this article, health care initiatives
  pool distributions pursuant to section twenty-eight hundred  seven-l  of

  this  article,  professional  education  pool  distributions pursuant to
  section twenty-eight hundred seven-m of this  article,  tobacco  control
  and   insurance  initiatives  pool  distributions  pursuant  to  section
  twenty-eight  hundred  seven-v  of  this article, and high need indigent
  care adjustment pool  distributions  pursuant  to  section  twenty-eight
  hundred  seven-w of this article, provided, however, that funds received
  as  medical  assistance  payments  which  include  state  share  amounts
  authorized  pursuant  to  section  twenty-eight  hundred seven-v of this
  article that are not disproportionate share hospital payments  shall  be
  included  within  the  meaning  of  net  patient service revenue for the
  purposes of this section;
    (v) revenue received from physician practice or faculty practice  plan
  discrete billings for private practicing physician services;
    (vi)  revenue  received  by  a general hospital from a public hospital
  pursuant to an affiliation agreement contract for the delivery of health
  care services to such public hospital;
    (vii) revenue received from governmental deficit financing;
    (viii) subject to the provisions of paragraph (d) of this subdivision,
  revenue received for or  on  account  of  referred  ambulatory  clinical
  laboratory visits made or services performed on and after October first,
  two thousand.
    (b) for diagnostic and treatment centers providing services designated
  in  subparagraph  (ii)  of  paragraph  (a)  of subdivision one-a of this
  section all moneys received, including capitation payments allocable  to
  diagnostic  and  treatment  center  services  otherwise  covered  by the
  assessment, less refunds, for or on account of visits made  or  services
  performed  on  or  after January first, nineteen hundred ninety-seven or
  contracted service obligations for periods on or  after  January  first,
  nineteen hundred ninety-seven:
    (i) for the following services:
    (A)  for  diagnostic  and  treatment centers providing a comprehensive
  range of primary health care services, for all services;
    (B) for diagnostic and treatment centers providing ambulatory surgical
  services, for all ambulatory surgical services;
    (ii) excluding the following subject to the provisions of  subdivision
  eleven of this section:
    (A)  revenue  received for services provided to beneficiaries of title
  XVIII of the federal social security act (medicare);
    (B) revenue received from the allowances pursuant to this section;
    (C) revenue received from bad debt and charity care  rate  adjustments
  pursuant  to  paragraph  (f)  of subdivision two of section twenty-eight
  hundred seven of this article, health care services  pool  distributions
  pursuant to section twenty-eight hundred seven-c of this article, health
  care  initiatives  pool  distributions  pursuant to section twenty-eight
  hundred  seven-l  of   this   article,   professional   education   pool
  distributions  pursuant  to section twenty-eight hundred seven-m of this
  article, tobacco control and insurance  initiatives  pool  distributions
  pursuant  to  section  twenty-eight hundred seven-v of this article, and
  high need  indigent  care  adjustment  pool  distributions  pursuant  to
  section twenty-eight hundred seven-w of this article;
    (D)  revenue received from physician practice or faculty practice plan
  discrete billings for private practicing physician services;
    (E) for a  diagnostic  and  treatment  center  operated  by  a  health
  maintenance  organization operating in accordance with the provisions of
  article forty-four  of  this  chapter  or  article  forty-three  of  the
  insurance  law,  revenue received for or on account of services provided
  to subscribers of such health maintenance organization;
    (F) revenue received from governmental deficit financing; and

    (G) subject to the provisions of paragraph (d)  of  this  subdivision,
  revenue  received  for  or  on  account  of referred clinical laboratory
  visits made or services  performed  on  and  after  October  first,  two
  thousand.
    (c)  for  free-standing  clinical  laboratories,  all moneys received,
  including capitation payments, less refunds, for or on account of visits
  made or services performed on or after January first,  nineteen  hundred
  ninety-seven  and  prior  to October first, two thousand, subject to the
  provisions of paragraph (d) of this subdivision, or  contracted  service
  obligations  for  periods  on  or  after January first, nineteen hundred
  ninety-seven and prior to October first, two thousand,  subject  to  the
  provisions of paragraph (d) of this subdivision, for clinical laboratory
  services,  excluding, subject to the provisions of subdivision eleven of
  this section:
    (i) revenue received for services provided to beneficiaries  of  title
  XVIII of the federal social security act (medicare);
    (ii) revenue received from the allowances pursuant to this section;
    (iii)  for  a  clinical  laboratory  operated  by a health maintenance
  organization operating in accordance  with  the  provisions  of  article
  forty-four  of this chapter or article forty-three of the insurance law,
  revenue received for or on account of services provided  to  subscribers
  of such health maintenance organization; and
    (iv) revenue received from governmental deficit financing.
    (d)  Provided, however, that if either the provisions of clause (G) of
  subparagraph (ii) of paragraph (b) of this subdivision  or  subparagraph
  (viii)  of  paragraph  (a)  of  this  subdivision  which exclude certain
  revenues from the definition of net patient  service  revenues  for  the
  purpose  of  imposing  surcharges  pursuant to this section, result in a
  determination of an impermissible provider tax by the secretary  of  the
  U.S.  department  of  health  and human services under the provisions of
  section 1903(w) of the federal social security act, then clause  (G)  of
  subparagraph  (ii)  of  paragraph  (b) of this subdivision, subparagraph
  (viii) of paragraph (a) of this subdivision,  and  sections  forty-eight
  and   forty-nine  of  chapter  one  of  the  laws  of  nineteen  hundred
  ninety-nine are  rendered  null  and  void  as  of  October  first,  two
  thousand. The commissioner will collect any retroactive amounts due as a
  result  of  surcharges  imposed  on  such  services on and after October
  first, two thousand, without interest or penalty.
    4. (a) For periods prior to January  first,  two  thousand  five,  the
  commissioner  is  authorized  to  contract  with the article forty-three
  insurance law plans, or such other contractors as the commissioner shall
  designate,  to  receive  and  distribute  funds  from   the   allowances
  established  pursuant  to  this  section, and funds from the assessments
  established pursuant to subdivision  eighteen  of  section  twenty-eight
  hundred seven-c of this article. In the event contracts with the article
  forty-three  insurance  law  plans or other commissioner's designees are
  effectuated, the commissioner shall conduct annual audits of the receipt
  and distribution of the funds. The reasonable costs and expenses  of  an
  administrator  as  approved  by  the  commissioner,  not  to  exceed for
  personnel services on an annual basis two million two  hundred  thousand
  dollars  for  collection  and distribution of allowances and assessments
  established pursuant to this section and subdivision eighteen of section
  twenty-eight hundred seven-c of this article, shall  be  paid  from  the
  allowance and assessment funds.
    (b)  Notwithstanding any inconsistent provision of section one hundred
  twelve or one hundred sixty-three of the state finance law or any  other
  law,  at the discretion of the commissioner without a competitive bid or
  request for proposal process, contracts in effect for administration  of

  bad  debt  and charity care pools for the period January first, nineteen
  hundred  ninety-six  through  December  thirty-first,  nineteen  hundred
  ninety-six  pursuant  to  section  twenty-eight  hundred seven-c of this
  article  may  be extended to provide for administration pursuant to this
  section and distributions of allowance and assessment funds pursuant  to
  this article and may be amended as may be necessary.
    (c)  The  commissioner  shall  contract  with an independent certified
  public accountant to conduct an annual independent audit, in conformance
  with  generally  accepted   auditing   standards,   of   the   receipts,
  disbursements,  revenues, expenditures and cash flows of funds, for each
  calendar year beginning with nineteen hundred eighty-three, through  the
  most recent calendar year. As used in this section, "funds" shall mean:
    (i)  Funds  accumulated and pooled pursuant to this section, paragraph
  (a) of subdivision eighteen of section twenty-eight hundred  seven-c  of
  this article, and sections twenty-eight hundred seven-s and twenty-eight
  hundred seven-t of this article; and
    (ii)  Funds  accumulated  and pooled pursuant to chapters five hundred
  thirty-six, five hundred thirty-seven and five hundred  thirty-eight  of
  the  laws  of  nineteen hundred eighty-two, chapters eight hundred seven
  and nine hundred six  of  the  laws  of  nineteen  hundred  eighty-five,
  chapters  two  and  six  hundred  five  of  the laws of nineteen hundred
  eighty-eight,  chapters  nine  hundred  twenty-two  and   nine   hundred
  twenty-three  of  the  laws  of  nineteen  hundred ninety, chapter seven
  hundred thirty-one of the laws  of  nineteen  hundred  ninety-three  and
  chapter eighty-one of the laws of nineteen hundred ninety-five.
    Such  annual  independent  audit shall be submitted to the director of
  the budget, the temporary president of the senate and the speaker of the
  assembly no later than April fifteenth of each year.
    5. (a) Any third-party payor for services  provided  by  a  designated
  provider  of  services  may  make  an  election  to  make payments on an
  aggregated basis of funds due from the allowance determined pursuant  to
  subdivision  two  of  this  section  directly to the commissioner or the
  commissioner's designee on behalf of designated providers of services.
    (i) The election pursuant to this paragraph to be effective must be in
  writing, filed with the commissioner or the commissioner's  designee  on
  such  forms  and  in  such  manner as the commissioner shall require. An
  election must apply to all classes of designated  providers  of  service
  and  to  all  providers  within each class. An election by a payor shall
  take effect for nineteen hundred ninety-seven,  on  the  next  following
  January  first,  April first, July first, or October first, and for each
  calendar year thereafter on the next following January first,  not  less
  than  thirty days after the election is filed. Beginning December first,
  nineteen hundred ninety-seven, an election pursuant  to  this  paragraph
  must  be  made  no  later  than  December first of the year prior to the
  assessment year. However, any payor licensed pursuant to  the  insurance
  law  or certified pursuant to article forty-four of this chapter between
  December first of the year prior to the  assessment  year  and  December
  thirty-first  of  the assessment year may make an election subsequent to
  such licensure, and during said time period, to take effect on the  next
  following  January  first,  April first, July first or October first not
  less than thirty days after such election is filed.  Payors  other  than
  those  licensed  pursuant  to the insurance law or certified pursuant to
  this chapter which have  not  provided  third-party  coverage  prior  to
  December  first  of  the  year  prior to the assessment year may make an
  election at any time from December first  of  the  year  prior  to  said
  assessment year to December thirty-first of the assessment year, to take
  effect  on  the next following January first, April first, July first or
  October first not less than thirty days after  the  election  is  filed.

  Beginning  June  first,  two  thousand three an election by any payor or
  organization shall begin on the first day of  the  month  following  the
  date it was received by the commissioner.
    (ii) An election shall remain in effect unless revoked in writing by a
  specified  third-party payor, which revocation shall be effective on the
  first day of the next calendar year quarter, provided  that  such  payor
  has  provided  notice of its intention to so revoke at least thirty days
  prior to the beginning of such calendar quarter.
    (iii) A payor filing an  election  pursuant  to  this  paragraph  must
  agree:
    (A)  to provide reports in accordance with the provisions of paragraph
  (b) of subdivision seven of this section;
    (B) to provide such certification of  data  and  access  to  allowance
  expenditure  data  for  audit  verification purposes as the commissioner
  shall require for purposes of this section; and
    (C) to the jurisdiction of the state to  maintain  an  action  in  the
  courts of the state of New York to enforce any provision of this section
  related to payment of the allowances.
    (D)  for  periods  on  and  after January first, two thousand nine, to
  provide the commissioner or  the  commissioner's  designee  the  payor's
  federal  tax  identification  number  and  agree  to  the  use  of  such
  identification  number  in  connection  with  identifying  the   payor's
  election  status  to  designated  providers  of  services, including the
  posting of such identification numbers on secure websites maintained  by
  the  commissioner  or  the commissioner's designee in furtherance of the
  purposes of this section. The commissioner shall include for periods  on
  and  after January first, two thousand nine on such secure websites, the
  date such payor was first posted.
    (iv) If a payor is acting in an administrative  services  capacity  on
  behalf  of  an organization, such as a self-insured fund, the consent of
  the  organization  to  the  election  and  the  conditions  pursuant  to
  subparagraph  (iii)  of  this  paragraph  must  be  submitted  with  the
  election. Such consent may be set forth  in  writing  in  the  agreement
  between  the  payor and the organization and a photocopy of that portion
  of the agreement submitted by the payor, together with  a  photocopy  of
  the signatures of the organization and the payor on the agreement, shall
  be  accepted  in lieu of a separate election form from the organization.
  On and after January first, two thousand four,  the  commissioner  shall
  have discretion to accept payments made on a timely basis if the reports
  and  information  reports  are  routinely submitted, notwithstanding the
  fact that the full and complete election form by  or  on  behalf  of  an
  organization  was  not  filed  on  a  timely  basis.  In  the  event the
  commissioner accepts payments pursuant to this section where an election
  form is missing or incomplete but the payments and  information  reports
  were  routinely  submitted  as if the election forms had been filed, the
  election form from the payor and organization shall be  deemed  to  have
  been filed (and the organization and the payor shall be as legally bound
  by  the  terms  of  the  election form as if it had signed and filed the
  election) and neither the payor nor the organization shall  subsequently
  refuse  to abide by the terms of the election form for any year in which
  payments were submitted and accepted pursuant to this section.
    (v) If a payor, including a payor operating  in  accordance  with  the
  insurance  law or article forty-four of this chapter, making an election
  pursuant to this paragraph  is  acting  in  an  administrative  services
  capacity  on behalf of an organization or organizations, such payor must
  specify whether such election applies to payments on behalf of all  such
  organizations  and  establish, in accordance with guidelines established
  by the superintendent of insurance, a system  through  which  designated

  providers  of services and the commissioner can identify the status of a
  patient as a patient for whom the election does not apply.
    (b)  The  commissioner  may  deny  a  payor  the  opportunity to remit
  directly to the commissioner or the  commissioner's  designee  based  on
  repeated  late payments, failure to remit correct amounts, or failure to
  provide  adequate  verification  of  the  accuracy  of   payments.   The
  percentage  allowance  for  any  such  payor  shall  be  the  percentage
  determined in accordance with paragraph (b) of subdivision two  of  this
  section.
    (c)  The  commissioner  or  the  commissioner's  designee  shall  make
  available to all designated providers of services a list of  the  payors
  which  have  elected  pursuant  to  this  paragraph  to  remit  payments
  directly.
    5-a. (a) Payments by or on behalf of designated providers of  services
  to the commissioner or the commissioner's designee of funds due from the
  allowances  pursuant  to  subdivision two of this section or pursuant to
  payment obligations incurred pursuant to  section  twenty-eight  hundred
  seven-s  of this article or section twenty-eight hundred seven-t of this
  article shall be made on a monthly basis, provided,  however,  that  for
  reporting periods relating to payments for services provided or dates of
  inpatient  discharge  or  contracted service obligations occurring on or
  after January first, two  thousand  one,  the  commissioner  may  permit
  certain  third-party  payors  which  have at least one full year of pool
  payment experience to submit such payments on an annual basis, based  on
  an annual demonstration by a payor through its prior year's pool payment
  experience  that  total pool obligations under this section and sections
  twenty-eight hundred seven-s and twenty-eight hundred  seven-t  of  this
  article  are  not  expected  to  exceed  ten thousand dollars for annual
  periods prior to January  first,  two  thousand  four,  and  twenty-five
  thousand  dollars  for  annual  periods  on and after January first, two
  thousand four. Payments due  by  designated  providers  of  services  on
  account of payors in accordance with paragraph (b) of subdivision two of
  this  section  shall  be  two percentage points less than the percentage
  specified in such paragraph. The designated provider of  services  shall
  retain    for    compensation   for   such   provider's   administrative
  responsibilities the amount that represents the difference. Payments due
  by designated providers of services on account of all other payors shall
  be calculated on the basis of the  percentage  allowance  applicable  to
  such  payor  pursuant to paragraphs (d), (e), (f) and (g) of subdivision
  two of this section. Payments shall be due on or  before  the  thirtieth
  day following the end of a calendar month to which an allowance applies.
    (b)  Notwithstanding  any  inconsistent  provision of this section, as
  shall be necessary to obtain federal financial participation in  medical
  assistance  expenditures  in  accordance  with  title XIX of the federal
  social security  act,  the  allowances  included  in  rates  of  payment
  pursuant  to  this  section  on  behalf of patients eligible for medical
  assistance pursuant to title  eleven  of  article  five  of  the  social
  services  law  shall  be  withheld  from  medical assistance payments to
  designated providers of services and paid to  pools  on  behalf  of  the
  designated provider of services where a designated  provider of services
  elects  such  withholding  in  such  time and manner as specified by the
  commissioner, and in the event a designated provider  of  services  does
  not  elect  such  withholding,  payments  by such designated provider of
  services to a pool based on an allowance received for medical assistance
  patients shall be due within five days of receipt of such  funds.  Funds
  withheld  by  a  payor  and  paid  to  a  pool on behalf of a designated
  provider of services shall be considered  received  by  such  designated

  provider of services and paid to the pool by such designated provider of
  services for all purposes.
    6.  (a)  If  a payment made by a designated provider of services for a
  month to which an allowance applies is less than seventy percent of  the
  amount  due  or  which  the  commissioner  estimates  is  due,  based on
  available financial and statistical data, the commissioner  may  collect
  the deficiency pursuant to paragraph (c) of this subdivision.
    (b) If a payment made by a designated provider of services for a month
  to  which an allowance applies is less than ninety percent of the amount
  due or which the commissioner  estimates  is  due,  based  on  available
  financial  and  statistical  data,  and  at  least two previous payments
  within the preceding six months were less than  ninety  percent  of  the
  amount  due, based on similar evidence, the commissioner may collect the
  deficiency pursuant to paragraph (c) of this subdivision.
    (c) Upon receipt of notification from the commissioner of a designated
  provider of services' deficiency under this section, the comptroller  or
  a  fiscal  intermediary designated by the director of the budget, or the
  commissioner of the office of temporary and disability assistance, or  a
  corporation   organized   and   operating  in  accordance  with  article
  forty-three of the  insurance  law,  or  an  organization  operating  in
  accordance  with  article forty-four of this chapter shall withhold from
  the amount of any payment to be made by the state  or  by  such  article
  forty-three  corporation  or  article  forty-four  organization  to  the
  designated provider of services the amount of the deficiency  determined
  under  paragraph (a), (b) or (e) of this subdivision or paragraph (d) of
  subdivision eight-a of this section. Upon withholding such  amount,  the
  comptroller  or a designated fiscal intermediary, or the commissioner of
  the office  of  temporary  and  disability  assistance,  or  corporation
  organized  and  operating  in accordance with article forty-three of the
  insurance law or  organization  operating  in  accordance  with  article
  forty-four   of   this  chapter  shall  pay  the  commissioner,  or  the
  commissioner's  designee,  such  amount  withheld  on  behalf   of   the
  designated  provider  of services. Such amount shall represent, in whole
  or in part, the amounts due from the designated provider of services.
    (d) The commissioner shall provide a designated provider  of  services
  with  notice  of any estimate of an amount due for an allowance pursuant
  to paragraph (a)  or  (b)  of  this  subdivision  or  paragraph  (d)  of
  subdivision  eight-a  of  this  section  at  least  three  days prior to
  collection of such amount by the commissioner. Such notice shall contain
  the financial basis for the commissioner's estimate.
    (e) In the event a designated  provider  of  services  objects  to  an
  estimate  by  the  commissioner pursuant to paragraph (a) or (b) of this
  subdivision or paragraph (d) of subdivision eight-a of this  section  of
  the  amount  due  for an allowance, the designated provider of services,
  within sixty days of notice of an  amount  due,  may  request  a  public
  hearing.  If  a hearing is requested, the commissioner shall provide the
  designated provider of services  an  opportunity  to  be  heard  and  to
  present  evidence  bearing  on  the  amount  due for an allowance within
  thirty days after collection of an amount due or receipt  of  a  request
  for  a  hearing,  whichever is later. An administrative hearing is not a
  prerequisite to seeking judicial relief.
    (f) The commissioner may direct that a hearing  be  held  without  any
  request by a designated provider of services.
    (g)  In  the  event  a  hearing  pursuant  to  paragraph  (e)  of this
  subdivision is not requested and the delinquent amounts in question have
  been referred for recoupment or offset pursuant to paragraph (c) of this
  subdivision, or have been referred to the office of the attorney general
  for collection, the amount of such delinquencies shall be  deemed  final

  and   not   subject   to  further  revision  or  reconciliation  by  the
  commissioner based  on  any  additional  reports  or  other  information
  submitted  by  the  designated  provider of services, provided, however,
  that such delinquencies shall not be referred for such recoupment or for
  such  collection  based  on  estimated  amounts  unless the hospital has
  received written notification of such delinquencies and has  been  given
  no less than thirty days in which to submit delinquent reports.
    7.  (a) (i) Every designated provider of services shall submit reports
  of net patient service revenues received for or on  account  of  patient
  services for each month which shall be in such form as may be prescribed
  by  the  commissioner  to  accurately  disclose  information required to
  implement this section. For periods on  and  after  January  first,  two
  thousand  five,  reports  by  designated  providers of services shall be
  submitted  electronically  in  a  form  as  may  be  required   by   the
  commissioner;  provided, however, any designated provider of services is
  not prohibited from submitting reports  electronically  on  a  voluntary
  basis prior to such date.
    (ii)  For periods on and after January first, two thousand nine, every
  designated provider  of  services  shall  provide  the  commissioner  or
  commissioner's  designee  with its federal tax identification number and
  such identification number shall be used in connection with  identifying
  such  providers  for  purposes  pursuant  to this section, including the
  posting of such identification numbers on secure websites maintained  by
  the  commissioner  or  the commissioner's designee in furtherance of the
  purposes of this section. The commissioner shall include for periods  on
  and  after January first, two thousand nine on such secure websites, the
  date such designated provider of services was first posted. In addition,
  the commissioner shall, as a part of a  final  resolution  of  an  audit
  conducted pursuant to subdivision eight-a of this section, waive payment
  of  interest  and penalties otherwise applicable pursuant to subdivision
  eight of this section, when the  audit  findings  conclusively  indicate
  that  the  liability for such interest and penalties are the result of a
  delay in the listing of a new designated provider  of  services  on  the
  secure website maintained by the department.
    (b)  (i) Every third-party payor making an election in accordance with
  paragraph (a) of subdivision five of this section shall  submit  reports
  of  patient  service  expenditures  for  services provided by designated
  providers of services for each month which shall be in such form as  may
  be  prescribed  by  the  commissioner to accurately disclose information
  required  to  implement  this  section,  provided,  however,  that   for
  reporting periods relating to payments for services provided or dates of
  inpatient  discharge  or  contracted service obligations occurring on or
  after January first, two  thousand  one,  the  commissioner  may  permit
  certain  third-party  payors  which  have at least one full year of pool
  payment experience to submit such reports on an annual basis,  based  on
  an annual demonstration by a payor through its prior year's pool payment
  experience  that  total pool obligations under this section and sections
  twenty-eight hundred seven-s and twenty-eight hundred  seven-t  of  this
  article  are  not  expected  to  exceed  ten thousand dollars for annual
  periods prior to January  first,  two  thousand  four,  and  twenty-five
  thousand  dollars  for  annual  periods  on and after January first, two
  thousand four.
    (ii) For periods on and after July first, two thousand  four,  reports
  submitted  on  a  monthly basis by third-party payors in accordance with
  subparagraph (i) of this paragraph and reports submitted on a monthly or
  annual basis by payors acting in an administrative services capacity  on
  behalf  of  electing  third-party payors in accordance with subparagraph
  (i) of this paragraph shall be made electronically in a form as  may  be

  required  by the commissioner; provided, however, any third-party payor,
  except payors acting in an administrative services capacity on behalf of
  electing third-party payors, which,  on  or  after  January  first,  two
  thousand  four,  elects to make payments directly to the commissioner or
  the  commissioner's  designee  pursuant  to  subdivision  five  of  this
  section,  shall be subject to this subparagraph only after one full year
  of pool payment experience which results in reports being submitted on a
  monthly basis. This subparagraph shall not be  interpreted  to  prohibit
  any  third-party  payor  from  submitting  reports  electronically  on a
  voluntary basis.
    (c) If a designated provider of services or a third-party payor  fails
  to  file  reports  required  pursuant  to  paragraph  (a) or (b) of this
  subdivision and which are due on and after January first, two  thousand,
  within   sixty  days  of  the  date  such  reports  are  due  and  after
  notification of such reporting delinquency, the commissioner may  assess
  a  civil  penalty  of  up to ten thousand dollars for each such failure,
  provided, however, that such civil penalty shall not be imposed  if  the
  payor or provider demonstrates good cause for the failure to timely file
  such  reports.  Such  penalties  shall  be  subject to the provisions of
  section twelve-a of this chapter.
    8. (a) If a payment made  pursuant  to  this  section  or  to  section
  twenty-eight  hundred  seven-s  or  twenty-eight hundred seven-t of this
  article for a month to which an allowance 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 payable to the commissioner by a designated
  provider of services, or by a third-party  payor,  other  than  a  state
  governmental  agency,  that has elected to pay an allowance 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.
    (b) If a payment made for a month to which  an  allowance  applies  is
  less  than  seventy  percent of the amount due or which the commissioner
  estimates, based on available financial and statistical data, is due for
  such month, a penalty shall be due and payable to the commissioner by  a
  designated provider of services, or by a third-party payor, other than a
  state  governmental  agency,  that  has  elected  to  pay  an  allowance
  directly, of five percent of the difference between the amount paid  and
  the amount due or estimated to be due for such month when the failure to
  pay  is  for a duration of not more than one month after the due date of
  the payment with an additional five percent for each additional month or
  fraction thereof during which  such  failure  continues,  not  exceeding
  twenty-five  percent  in  the aggregate. A penalty due from a designated
  provider of services 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.
    (c) Overpayment by or on behalf of a designated provider  of  services
  of  a  payment  shall  be  applied  to  any  other  payment due from the
  designated provider of services pursuant to  this  section,  or,  if  no

  payment  is  due, at the election of the designated provider of services
  shall be applied to  future  payments  or  refunded  to  the  designated
  provider  of services.   Interest shall be paid on overpayments from the
  date  of  overpayment  to  the  date  of crediting or refund at the rate
  determined in accordance with paragraph (a) of this subdivision only  if
  the  overpayment was made at the direction of the commissioner. Interest
  under this paragraph shall not be paid if the  amount  thereof  is  less
  than one dollar.
    8-a. (a) Payments and reports submitted or required to be submitted to
  the  commissioner  or  to  the  commissioner's designee pursuant to this
  section and section twenty-eight hundred  seven-s  of  this  article  by
  designated  providers  of  services and by third-party payors which have
  elected to  make  payments  directly  to  the  commissioner  or  to  the
  commissioner's  designee  in  accordance with subdivision five-a of this
  section, shall be subject to audit by the commissioner for a  period  of
  six  years  following  the  close  of  the  calendar  year in which such
  payments and reports are due, after which such payments shall be  deemed
  final and not subject to further adjustment or reconciliation, provided,
  however,  that  nothing  herein  shall  be  construed  as precluding the
  commissioner from pursuing collection of any  such  payments  which  are
  identified  as  delinquent  within  such  six  year period, or which are
  identified as delinquent as a result of an audit commenced  within  such
  six  year  period,  or  from  conducting  an  audit of any adjustment or
  reconciliation made by a designated provider of services or by  a  third
  party  payor  which  has  elected  to make such payments directly to the
  commissioner or the commissioner's designee.
    (b) Designated providers of services or third-party payors  which,  in
  the  course of an audit pursuant to this section or section twenty-eight
  hundred seven-s of this article, fail to produce data  or  documentation
  requested  in  furtherance  of such an audit, within thirty days of such
  request, may be assessed a civil penalty of up to ten  thousand  dollars
  for  each such failure, provided, however, that such civil penalty shall
  not be imposed if the audited entity demonstrates good  cause  for  such
  failure.  The  imposition  of  civil  penalties pursuant to this section
  shall be subject to the provisions of section twelve-a of this chapter.
    (c) Records required to be retained for audit verification purposes by
  designated providers of services and third-party  payors  in  accordance
  with  this  section  and  section  twenty-eight  hundred seven-s of this
  article shall include, but not be limited to, on a  monthly  basis,  the
  source  records  generated  by  supporting information systems, detailed
  claims information, detailed  patient  revenue  information,  capitation
  arrangements,  financial accounting records, relevant correspondence and
  such other records as may be required to prove compliance with,  and  to
  support  the  reports  submitted  in  accordance  with, this section and
  section twenty-eight hundred seven-s of this article.
    (d) If a designated provider of services or a third party payor  fails
  to  produce  data  or documentation requested in furtherance of an audit
  pursuant to this section or pursuant  to  section  twenty-eight  hundred
  seven-s  of this article, for a month to which an allowance applies, the
  commissioner may estimate, based on available financial and  statistical
  data  as  determined by the commissioner, the amount due for such month.
  If the impact of  the  patient  services  revenue  exemptions  specified
  pursuant  to  this  section, or pursuant to section twenty-eight hundred
  seven-s of this  article,  cannot  be  determined  from  such  available
  financial  and statistical data, the amount due may be calculated on the
  basis of the aggregate total of patient services  revenue  derived  from
  such data for the year subject to audit. The commissioner shall take all
  necessary  steps  to  collect amounts due as determined pursuant to this

  paragraph, including directing the  state  comptroller  to  offset  such
  amounts due from any payments made by the state pursuant to this article
  to  a  designated  provider of services or a third party payor. Interest
  and  penalties  shall  be applied to such amounts due in accordance with
  the provisions of subdivision eight of this section.
    (e) The commissioner may, as part of a final resolution  of  an  audit
  conducted  pursuant  to  this subdivision, waive payment of interest and
  penalties otherwise applicable pursuant to  subdivision  eight  of  this
  section  when  amounts  due  as  a result of such audit, other than such
  waived penalties and interest, are paid in full to the  commissioner  or
  the commissioner's designee within sixty days of the issuance of a final
  audit report that is mutually agreed to by the commissioner and auditee,
  provided,  however,  that  if such final audit report is not so mutually
  agreed upon, then neither the commissioner nor the  auditee  shall  have
  any obligations pursuant to this paragraph.
    (f)  The  commissioner  may  enter  into  agreements  with  designated
  providers of services, and with third-party payors, in regard  to  which
  audit  findings  have  been  made  pursuant  to  this section or section
  twenty-eight hundred seven-s of this  article,  extending  and  applying
  such  audit findings or a portion thereof in settlement and satisfaction
  of potential audit liabilities for subsequent un-audited periods through
  the two thousand five calendar year. The commissioner may waive  payment
  of  interest  and  penalties  otherwise  applicable  to  such subsequent
  unaudited periods when such amounts due as a result of  such  agreement,
  other  than  waived  penalties  and  interest,  are  paid in full to the
  commissioner  or  the  commissioner's  designee  within  sixty  days  of
  execution of such agreement by all parties to the agreement.
    9.  Funds  accumulated, including income from invested funds, from the
  allowances specified in this section, and the  assessments  pursuant  to
  subdivision  eighteen  of  section  twenty-eight hundred seven-c of this
  article, and the assessments pursuant to paragraph  (c)  of  subdivision
  nine  of section twenty-eight hundred seven-d of this article, plus such
  funds as may  be  allocated  in  accordance  with  section  twenty-eight
  hundred seven-s of this article, including interest and penalties, shall
  be  deposited  by  the  commissioner  or  the commissioner's designee as
  follows:
    (a) funds shall be deposited and credited to a  special  revenue-other
  fund  to  be established by the comptroller or to the health care reform
  act (HCRA) resources fund established pursuant to section  ninety-two-dd
  of  the  state  finance  law,  whichever is applicable. To the extent of
  funds appropriated therefore, the commissioner shall  make  payments  to
  general  hospitals  related  to  bad  debt  and charity care pursuant to
  section twenty-eight hundred seven-k of this  article.  Funds  shall  be
  deposited in the following amounts:
    (i)  fifty-seven  and  thirty-three-hundredths  percent  of  the funds
  accumulated for the period January first, nineteen hundred  ninety-seven
  through December thirty-first, nineteen hundred ninety-seven,
    (ii)  fifty-seven  and one-hundredths percent of the funds accumulated
  for the period January  first,  nineteen  hundred  ninety-eight  through
  December thirty-first, nineteen hundred ninety-eight,
    (iii)  fifty-five  and  thirty-two-hundredths  percent  of  the  funds
  accumulated for the period January first, nineteen  hundred  ninety-nine
  through December thirty-first, nineteen hundred ninety-nine, and
    (iv)  seven  hundred  sixty-five million dollars annually of the funds
  accumulated for the periods January first, two thousand through December
  thirty-first, two thousand ten, and

    (v) one hundred ninety-one million two hundred fifty thousand  dollars
  of  the  funds  accumulated  for  the period January first, two thousand
  eleven through March thirty-first, two thousand eleven.
    (b)  funds  shall  be  accumulated  in  a health care initiatives pool
  established by the commissioner, for  distribution  in  accordance  with
  section  twenty-eight  hundred seven-l of this article, in the following
  amounts:
    (i)  forty-two  and  sixty-seven-hundredths  percent  of   the   funds
  accumulated  for the period January first, nineteen hundred ninety-seven
  through December thirty-first, nineteen hundred ninety-seven,
    (ii)  forty-two  and  ninety-nine-hundredths  percent  of  the   funds
  accumulated  for the period January first, nineteen hundred ninety-eight
  through December thirty-first, nineteen hundred ninety-eight,
    (iii) forty-four  and  sixty-eight-hundredths  percent  of  the  funds
  accumulated  for  the period January first, nineteen hundred ninety-nine
  through December thirty-first, nineteen hundred ninety-nine, and
    (iv) the remaining balance of the funds accumulated for each period on
  and after January first, two thousand.
    10. Notwithstanding any inconsistent provision of law or regulation to
  the  contrary,  the  allowances  applicable   to   payments   by   state
  governmental  agencies pursuant to subdivision two of this section shall
  be reflected in the determination of  reimbursement  rates  pursuant  to
  sections  twenty-eight hundred seven and twenty-eight hundred seven-c of
  this article and fees for clinical laboratory services under the medical
  assistance program.
    11. Each exclusion from the allowances effective on or  after  January
  first,  nineteen  hundred  ninety-seven  established  pursuant  to  this
  section shall be  contingent  upon  either:  (a)  qualification  of  the
  allowances  for  waiver  pursuant  to federal law and regulation; or (b)
  consistent with federal law and regulation, not requiring  a  waiver  by
  the  secretary of the department of health and human services related to
  such exclusion; in order for the allowances under  this  section  to  be
  qualified  as  a broad-based health care related tax for purposes of the
  revenues received by the state pursuant to the allowances  not  reducing
  the  amount  expended by the state as medical assistance for purposes of
  federal financial participation.  The  commissioner  shall  collect  the
  allowances  relying  on  such exclusions, pending any contrary action by
  the secretary of the department of health and  human  services.  In  the
  event  the  secretary  of  the  department  of health and human services
  determines that the allowances do not  so  qualify  based  on  any  such
  exclusion, then the exclusion shall be deemed to have been null and void
  as of January first, nineteen hundred ninety-seven, and the commissioner
  shall  collect  any retroactive amount due as a result, without interest
  or penalty provided the designated provider of services  or  third-party
  payor  that  has elected to pay directly pays the retroactive amount due
  within ninety days of notice from the  commissioner  to  the  designated
  provider  of  services  or  third-party  payor  that  has elected to pay
  directly that an exclusion is null  and  void.  Interest  and  penalties
  shall be measured from the due date of ninety days following notice from
  the  commissioner  or  the  commissioner's  designee  to  the designated
  provider of services or  third-party  payor  that  has  elected  to  pay
  directly.
    12.  Revenue from the allowances pursuant to this section shall not be
  included in gross revenue  received  for  purposes  of  the  assessments
  pursuant to subdivision eighteen of section twenty-eight hundred seven-c
  of  this  article,  subject  to  the  provisions  of  paragraph  (e)  of
  subdivision eighteen of section twenty-eight  hundred  seven-c  of  this
  article,  and  shall  not  be  included  in  gross  revenue received for

  purposes of the assessments pursuant  to  section  twenty-eight  hundred
  seven-d of this article, subject to the provisions of subdivision twelve
  of section twenty-eight hundred seven-d of this article.
    * NB Expires December 31, 2011