Section 2807-T. Assessments on covered lives

1.  Definitions.  (a)
  "Individual" means a person for whom the specified third-party payor has
  agreed to provide reimbursement for inpatient hospital services  in  the
  period other than:
    (i)  any person who is eligible for payments as a beneficiary of title
  XVIII of the federal social security act (medicare);
    (ii) any person for whom the specified third-party payor has agreed to
  provide reimbursement for inpatient hospital  services  contingent  upon
  such  person's  relationship  to  an  "individual"  as  a spouse, child,
  stepchild, adopted child, family member, or dependent, as defined by the
  specified third-party payor, or as contingent  upon  any  other  similar
  relationship  to  an "individual" as such relationship is defined by the
  specified third-party payor;
    (iii) any person for whom the specified third-party payor  has  agreed
  to  provide  coverage  for hospital confinement on other than an expense
  incurred basis;
    (iv) any person for whom the specified third-party payor has agreed to
  provide reimbursement for inpatient hospital services  pursuant  to  the
  workers'  compensation  law, the volunteer firefighters' benefit law, or
  the volunteer ambulance workers' benefit law;
    (v) any person for whom the specified third-party payor has agreed  to
  provide  reimbursement  for  inpatient hospital services pursuant to the
  comprehensive motor vehicle insurance reparations act;
    (vi) any person (hereinafter referred to  as  the  "primary  insured")
  otherwise  meeting  the definition of an "individual" as set forth under
  this section if the specified third-party payor has  agreed  to  provide
  reimbursement for such person as part of a "family unit"; and
    (vii)  effective  on  and  after  April  first, two thousand five, any
  person covered  under  a  student  policy  issued  pursuant  to  article
  forty-three of the insurance law, or a blanket student accident, blanket
  student health, or blanket student accident and health insurance policy.
    (b)  "Family unit" means any person for whom the specified third-party
  payor  has  agreed  to  provide  reimbursement  for  inpatient  hospital
  services in the period, together with one or more additional persons for
  whom the specified third-party payor has agreed to provide reimbursement
  for  inpatient  hospital  services  in  the  period contingent upon such
  person's relationship to said person  as  a  spouse,  child,  stepchild,
  adopted  child, family member, or dependent, as defined by the specified
  third-party payor, or as contingent upon any other similar relationship,
  as such relationship is defined  by  the  specified  third-party  payor.
  Excluded  from  the  definition  is  any family unit where the specified
  third-party  payor  has  agreed  to  provide:  coverage   for   hospital
  confinement  on  other than an expense incurred basis; reimbursement for
  inpatient hospital services pursuant to the worker's  compensation  law,
  the  volunteer  firefighters'  benefit  law,  or the volunteer ambulance
  workers' benefit law; and reimbursement for inpatient hospital  services
  pursuant  to  the comprehensive motor vehicle insurance reparations act.
  If a family unit of two persons includes one person who is eligible  for
  payments  as  a  beneficiary  of  title XVIII of the social security act
  (medicare), that family unit shall be deemed an individual for  purposes
  of  this section. If a family unit of three or more persons includes one
  person who is not eligible for medicare and the remaining  two  or  more
  persons  are  eligible for medicare, that family unit shall be deemed an
  individual for purposes of this section. A family unit of  two  or  more
  persons,  all of whom are eligible for medicare, shall not be considered
  a family unit or an individual for purposes of this section.

    (c) "Specified third-party payor", for purposes of this section, shall
  have the same meaning as  set  forth  in  section  twenty-eight  hundred
  seven-s of this article.
    (d)  "Region",  for  purposes  of  this  section,  shall have the same
  meaning as set forth in section twenty-eight  hundred  seven-s  of  this
  article.
    2.  Determination  of annual regional payment amount. The sum total to
  be generated each year for each region  shall  be  referred  to  as  the
  annual  regional  payment  amount,  as  determined  in  accordance  with
  subdivision six of section twenty-eight hundred seven-s of this article.
    3. Election. Any specified third-party payor may make an  election  to
  make payments for the assessments required by this section, on behalf of
  the  liable  persons  or  entities pursuant to subdivision eight of this
  section, directly to the commissioner or  the  commissioner's  designee.
  The election pursuant to this subdivision 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  by  a
  specified  third-party  payor  shall  take  effect  for nineteen hundred
  ninety-seven on the next following  January  first,  April  first,  July
  first,  or October first not less than thirty days after the election is
  filed. Beginning  December  first,  nineteen  hundred  ninety-seven,  an
  election  pursuant  to  this section must be made no later than December
  first of the year prior to the assessment year. However,  any  specified
  third-party  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 or
  certification 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.   Specified
  third-party  payors  other than those licensed pursuant to the insurance
  law or certified pursuant  to  this  chapter  which  have  not  provided
  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  said
  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. 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.
    (a) A specified third-party payor filing an election pursuant to  this
  subdivision  must agree: to provide the data and information required by
  subdivision four of this section; to provide such certification of  data
  and  access  to  individual  and family unit data for audit verification
  purposes as the commissioner shall require for purposes of this section;
  and 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 assessments.
    (b)  If  a  specified third-party 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 paragraph (a) of this subdivision must be submitted with the
  election.  Such  consent  may  be  set forth in writing in the agreement
  between the specified third-party payor and the organization.
    (c) If a specified third-party payor, including a payor  operating  in
  accordance with the insurance law or article forty-four of this chapter,

  making  an  election  pursuant  to  this  subdivision  is  acting  in an
  administrative  services  capacity  on  behalf  of  an  organization  or
  organizations, such specified third-party payor must specify (i) whether
  such  election  applies to payments on behalf of all such organizations,
  and (ii) identify any organizations for which such specified third-party
  payor is acting to which the election does not apply and  establish,  in
  accordance   with   guidelines  established  by  the  superintendent  of
  insurance, a system through which general hospitals and the commissioner
  can identify the status of a patient as a patient for whom the  election
  does not apply.
    (d)  The  commissioner  may  deny  a  specified  third-party payor the
  opportunity to make an election pursuant to this  subdivision  based  on
  repeated  late payments, failure to remit correct amounts, or failure to
  provide adequate verification of the accuracy of payments.
    (e)  The  commissioner  or  the  commissioner's  designee  shall  make
  available  to  all general hospitals a list of the specified third-party
  payors which have elected pursuant to this subdivision to remit payments
  pursuant to this section.
    4. Assessments shall be calculated as  follows:  (a)  Every  specified
  third-party  payor  that  has  made an election pursuant to this section
  shall report to the commissioner  or  the  commissioner's  designee  the
  number  of  individuals  for  a period as determined by the commissioner
  during the calendar year prior to the assessment  year  residing  within
  each   region   ("individual   member  months").  Every  such  specified
  third-party  payor  shall  also  report  to  the  commissioner  or   the
  commissioner's  designee  the  number  of  family  units for a period as
  determined by the commissioner during the calendar  year  prior  to  the
  assessment  year  residing  within each region ("family member months").
  For purposes of this section, the family unit is considered to reside in
  the region in which the primary insured resides.
    (b) The superintendent of insurance shall advise the  commissioner  of
  the  average  number of persons covered under family insurance contracts
  providing health care coverage approved by the  superintendent  for  the
  year two years prior to the assessment year.
    (c)  The  commissioner shall calculate the total number of "individual
  member months" for each region for all specified third-party  payors  to
  determine "aggregate individual member months" for each region.
    (d)  The  commissioner  shall  calculate  the  total number of "family
  member months" for each region for all specified third-party  payors  to
  determine   "aggregate  family  member  months"  for  each  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, by the "aggregate family member months"  to
  determine "adjusted aggregate family member months" for each region. The
  commissioner  shall  add the number of "adjusted aggregate family member
  months" for each region to the total  number  of  "aggregate  individual
  member  months"  for  each  region. This amount shall be known as "total
  covered member months" for each region.
    (e)  The  annual  regional  payment  amount   for   nineteen   hundred
  ninety-seven,    nineteen   hundred   ninety-eight,   nineteen   hundred
  ninety-nine, two thousand and each  year  thereafter,  respectively  for
  each region determined pursuant to subdivision two of this section shall
  be  divided by an estimate derived from population based data sources of
  the  total  covered  member  months  determined  consistent   with   the
  provisions  of  paragraphs  (a), (b), (c) and (d) of this subdivision in
  that region to establish the individual annual assessment  for  nineteen
  hundred  ninety-seven,  nineteen  hundred ninety-eight, nineteen hundred
  ninety-nine, two thousand and each year  thereafter,  respectively.  The

  individual  annual  assessment shall be multiplied by the average family
  size reported to the commissioner by the superintendent of insurance  to
  establish  the family unit annual assessment in that region for nineteen
  hundred  ninety-seven,  nineteen  hundred ninety-eight, nineteen hundred
  ninety-nine, two thousand and each year thereafter, respectively.
    (f)  Effective  January  first,  two  thousand   nine,   a   specified
  third-party payor that has made an election pursuant to this section may
  report  to the commissioner or the commissioner's designee the number of
  individuals and family units enrolled as of the last day of  each  month
  in  fulfillment  of  the  monthly  reporting  requirement  set  forth in
  paragraph  (a)  of  this  subdivision.  A  specified  third-party  payor
  choosing  to  report  monthly  enrollment  counts  on  this  basis shall
  indicate its choice at the beginning of a calendar year in  a  form  and
  manner  specified  by  the  commissioner and such reporting method shall
  remain in effect the entire calendar year.
    5. Monthly payments. (a) Within thirty days  after  the  end  of  each
  month,  a specified third-party payor which made an election pursuant to
  this section shall remit  to  the  commissioner  or  the  commissioner's
  designee one-twelfth of the individual annual assessment for each of the
  individuals residing in this state which were included on the membership
  rolls  of  that specified third-party payor during all or any portion of
  the prior month. Within thirty days after  the  end  of  each  month,  a
  specified  third-party  payor  which  made  an election pursuant to this
  section shall also remit  to  the  commissioner  or  the  commissioner's
  designee  one-twelfth  of  the  family  unit  annual assessment for each
  family unit for which the primary insured resided in  this  state  which
  were  included  on  the  membership  rolls of that specified third-party
  payor during all or any portion of the prior month.  Provided,  however,
  for   assessment  obligations  arising  out  of  individual  and  family
  assessments established pursuant to this section  on  or  after  January
  first,  two  thousand,  the  commissioner  may  permit certain specified
  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-j and twenty-eight hundred  seven-s  of  this
  article  are  not expected to exceed ten thousand dollars in the current
  pool year. If a specified third-party payor fails to make such  payments
  within sixty days of notification of a delinquency, the commissioner may
  assess  a  civil penalty of up to ten thousand dollars for each failure,
  provided, however, that such civil penalty shall not be imposed  if  the
  payor  demonstrates  good  cause  for  such  failure to timely make such
  payments, and further provided that the amount of such penalty shall not
  exceed the amount of the delinquent liability.
    (b) The specified third party-payor shall be entitled to rely  on  the
  residence  location  information  provided  to the payor by an employer,
  group or other party providing enrollment information to  the  specified
  third-party  payor,  provided  the  specified  third-party  payor has no
  reason to doubt the accuracy of the information.
    (c)  Specified  third-party  payors  shall  not  be  responsible   for
  remitting  the  monthly  assessment for any individual or for any family
  unit for any month in which  it  is  subsequently  determined  that  the
  specified  third-party  payor  had  no liability to provide coverage for
  inpatient hospital services for such individual or family unit.
    6. Prospective adjustments. The commissioner shall annually  reconcile
  the  sum  of  the  actual  payments  made  to  the  commissioner  or the
  commissioner's designee for each region pursuant to section twenty-eight
  hundred seven-s of this article and pursuant to  this  section  for  the

  prior  year  with  the regional allocation of the gross annual statewide
  amount specified in subdivision  six  of  section  twenty-eight  hundred
  seven-s  of this article for such prior year. The difference between the
  actual  amount  raised  for  a region and the regional allocation of the
  specified gross annual amount for such prior year shall be applied as  a
  prospective adjustment to the regional allocation of the specified gross
  annual  payment  amount  for such region 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.
    7. (a) In the case two or more specified third-party payors covering a
  single  contract  holder  where  both specified third-party payors cover
  separate components of the inpatient care benefits otherwise subject  to
  the   assessment,  the  assessment  shall  be  apportioned  between  the
  insurers.
    (b) With regard to assessment obligations arising  out  of  individual
  and  family  assessments  established  pursuant to this section, where a
  single contract holder has separate components  of  the  inpatient  care
  benefits  otherwise  subject  to  the  assessment covered by two or more
  entities, the  assessment  may  be  apportioned  between  the  entities,
  provided that:
    (i)  Apportionment agreements or arrangements may only be entered into
  between or among specified third-party payers which have elected to make
  direct payments to  the  commissioner  or  the  commissioner's  designee
  pursuant to this subdivision; and
    (ii)  The  aggregate  of apportioned covered lives assessment payments
  must result in the payment of one  hundred  percent  of  the  applicable
  covered lives assessment; and
    (iii)  Apportionment  agreements  between or among apportioning payers
  and any modifications, amendments or termination of such agreements must
  be in writing and signed by all such  payers,  provided,  however,  that
  where  one  apportioning  payor agrees to pay one hundred percent of the
  applicable covered lives  assessment,  no  written  agreement  shall  be
  required,  provided  there  is other written evidence of the arrangement
  and any modifications, amendments and/or terminations thereof, emanating
  from the apportioning payor paying one hundred percent of the applicable
  covered lives assessment to the other apportioning payor or payors or to
  the particular group to  which  the  arrangement  relates,  and  further
  provided  that such written evidence contains the name of the particular
  group to which the arrangement relates; and
    (iv)  Copies  of  apportionment  agreements,  and  any  modifications,
  amendments   and/or   terminations  thereof,  and  written  evidence  of
  arrangements by which one apportioning payor agrees to pay  one  hundred
  percent   of   the   applicable   covered   lives  assessment,  and  any
  modifications,  amendments  and/or   terminations   thereof,   must   be
  maintained   in   the   files  of  each  apportioning  payor  while  the
  apportionment is in effect and for a period of not less than  six  years
  after  termination thereof and shall be made available to the department
  upon request for audit verification purposes.
    8. Liability  for  assessments.  (a)  The  assessments  determined  in
  accordance  with  this  section  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
  shall, for groups and entities 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  shall  make  payments  to  the
  commissioner or the commissioner's designee of the full  amount  of  the
  assessments  determined  in  accordance  with  this  section.  Specified
  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.
    9. A specified third-party payor must either:
    (a) jointly elect to pay the assessment pursuant to this  section  and
  the   allowance  pursuant  to  paragraph  (c)  of  subdivision  two  and
  subdivision  five  of  section  twenty-eight  hundred  seven-j  of  this
  article; or
    (b)  pay  the surcharge for an allowance determined in accordance with
  paragraph (b) of subdivision two of section twenty-eight hundred seven-j
  of this article, including the allowance determined in  accordance  with
  section twenty-eight hundred seven-s of this article.
    10.  (a) Payments and reports submitted or required to be submitted to
  the commissioner or to the  commissioner's  designee  pursuant  to  this
  section by specified third-party payors 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  adjustments and reconciliation made by a
  specified third party payor within such six year period.
    (b) Specified third-party payors which, in  the  course  of  an  audit
  pursuant to this section 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 such specified third-party payor 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
  specified third-party payors  in  accordance  with  this  section  shall
  include,  but  not be limited to, on a monthly basis, the source records
  generated  by  supporting  information  systems,  financial   accounting
  records, relevant correspondence and the addresses and dates of coverage
  for  all  individuals and family units, as defined by paragraphs (a) and
  (b) of subdivision one of this section, and such other records as may be
  required to prove compliance with, and to support reports  submitted  in
  accordance with, this section.
    (d)  If  a  specified  third-party  payor  fails  to  produce  data or
  documentation requested in furtherance of  an  audit  pursuant  to  this
  section for a month to which an assessment 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 enrollment exemptions permitted pursuant to this section
  cannot be determined from such available financial and statistical data,

  the estimated amount due may be calculated on  the  basis  of  aggregate
  data derived from such available 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  to  the  third party payor pursuant to this article. Interest and
  penalties shall be applied to such amounts due in  accordance  with  the
  provisions  of subdivision eight of section twenty-eight hundred seven-j
  of this article.
    (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  section
  twenty-eight  hundred  seven-j  of  this  article, 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  specified
  third-party payors in regard to which  audit  findings  have  been  made
  pursuant  to this section, 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
  interest and penalties, 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.
    * NB Expires December 31, 2011