§ 2807-C — General hospital inpatient reimbursement for annual rate periods beginning on or after January first, nineteen hundred eighty-eight

§ 2807-c. General hospital inpatient reimbursement for annual rate\nperiods beginning on or after January first, nineteen hundred\neighty-eight. 1. Payor payments. Payments to general hospitals for\ninpatient hospital services provided to persons who are not eligible for\npayments as beneficiaries of title XVIII of the federal social security\nact (medicare) shall be determined pursuant to this section. Payor\npayments shall be as follows unless an alternative reimbursement\nmethodology is authorized in accordance with paragraph (e), (f), (g),\n(h) or (i) of subdivision four of this section.\n * (a) Payments to general hospitals for reimbursement of inpatient\nhospital services provided to patients eligible for payments made by\nstate governmental agencies for patients discharged prior to January\nfirst, two thousand and on and after January first, two thousand; or for\npatients discharged prior to January first, nineteen hundred\nninety-seven provided in accordance with policies written by\ncorporations organized and operating in accordance with article\nforty-three of the insurance law, or payment by such a corporation on\nbehalf of subscribers of a foreign corporation as described in paragraph\n(d) of subdivision twelve of this section, which provide for\nreimbursement on an expense incurred basis; or for patients discharged\nprior to January first, nineteen hundred ninety-seven provided to\nsubscribers of organizations operating in accordance with the provisions\nof article forty-four of this chapter, shall be case based payments per\ndischarge, for each diagnosis-related group established in accordance\nwith paragraph (a) of subdivision three of this section, and shall\ninclude:\n (i) a reimbursable inpatient operating cost component determined in\naccordance with subdivision five of this section;\n (ii) capital related inpatient expenses determined in accordance with\nsubdivision eight of this section;\n (iii) for patients discharged prior to January first, nineteen hundred\nninety-seven (A) a bad debt and charity care allowance determined in\naccordance with subdivision fourteen of this section, (B) a general\nhealth care services allowance determined in accordance with subdivision\nfourteen-b of this section, and (C) a bad debt and charity care\nallowance for financially distressed hospitals determined in accordance\nwith subdivision fourteen-c of this section;\n (iv) a projection of reimbursable inpatient operating costs to the\nrate year by the trend factor determined in accordance with subdivision\nten of this section; and\n (v) adjustments for any modifications to the case payments determined\nin accordance with paragraph (a), (b), (c) or (d) of subdivision four of\nthis section.\n * NB Effective until December 31, 2026\n * (a) Payments to general hospitals for reimbursement of inpatient\nhospital services provided to patients eligible for payments made by\nstate governmental agencies; or provided in accordance with policies\nwritten by corporations organized and operating in accordance with\narticle forty-three of the insurance law, or payment by such a\ncorporation on behalf of subscribers of a foreign corporation as\ndescribed in paragraph (d) of subdivision twelve of this section, which\nprovide for reimbursement on an expense incurred basis; or provided to\nsubscribers of organizations operating in accordance with the provisions\nof article forty-four of this chapter, shall be case based payments per\ndischarge, for each diagnosis-related group established in accordance\nwith paragraph (a) of subdivision three of this section, and shall\ninclude:\n (i) a reimbursable inpatient operating cost component determined in\naccordance with subdivision five of this section;\n (ii) capital related inpatient expenses determined in accordance with\nsubdivision eight of this section;\n (iii) (A) a bad debt and charity care allowance determined in\naccordance with subdivision fourteen of this section, (B) a general\nhealth care services allowance determined in accordance with subdivision\nfourteen-b of this section, and (C) a bad debt and charity care\nallowance for financially distressed hospitals determined in accordance\nwith subdivision fourteen-c of this section;\n (iv) a projection of reimbursable inpatient operating costs to the\nrate year by the trend factor determined in accordance with subdivision\nten of this section; and\n (v) adjustments for any modifications to the case payments determined\nin accordance with paragraph (a), (b), (c) or (d) of subdivision four of\nthis section.\n * NB Effective December 31, 2026\n * (a-1) Payments made by local governmental agencies to general\nhospitals for reimbursement of inpatient hospital services provided to\nincarcerated individuals of local correctional facilities as defined in\nsubdivision sixteen of section two of the correction law shall be at the\nrates of payment determined pursuant to this section for state\ngovernmental agencies, excluding adjustments pursuant to subdivision\nfourteen-f of this section.\n * NB Effective until December 31, 2026\n * (a-1) Payments made by local governmental agencies to general\nhospitals for reimbursement of inpatient hospital services provided to\nincarcerated individuals of local correctional facilities as defined in\nsubdivision sixteen of section two of the correction law shall be at the\nrates of payment determined pursuant to this section for state\ngovernmental agencies.\n * NB Effective December 31, 2026\n * (a-2) (i) With the exception of those enrollees covered under a\npayment rate methodology agreement negotiated with a general hospital,\npayments for inpatient hospital services provided to patients eligible\nfor medical assistance pursuant to title eleven of article five of the\nsocial services law made by organizations operating in accordance with\nthe provisions of article forty-four of this chapter or by health\nmaintenance organizations organized and operating in accordance with\narticle forty-three of the insurance law shall be the rates of payment\nthat would be paid for such patients under the medical assistance\nprogram, (i) determined pursuant to this section, excluding adjustments\npursuant to subdivision fourteen-f of this section, and (ii) excluding\nmedical education costs that are reimbursed directly to the general\nhospital in accordance with paragraph (a-3) of this subdivision.\n (ii) Effective July first, two thousand seven, with the exception of\nthose enrollees covered under a payment rate methodology agreement\nnegotiated with a general hospital, payment for inpatient hospital\nservices provided to patients enrolled in the child health insurance\nprogram pursuant to title one-A of article twenty-five of this chapter\nmade by organizations operating in accordance with the provisions of\narticle forty-four of this chapter or by health maintenance\norganizations organized and operating in accordance with article\nforty-three of the insurance law shall be the rates of payment that\nwould be paid under the medical assistance program determined pursuant\nto this section, excluding adjustments pursuant to subdivision\nfourteen-f of this section.\n * NB Expires December 31, 2026\n * (a-3) Notwithstanding any inconsistent provision of law:\n (i) the commissioner shall establish, subject to the approval of the\ndirector of the budget, discrete rates of payment for general hospitals\nfor the period July first, nineteen hundred ninety-six through December\nthirty-first, nineteen hundred ninety-nine and periods on and after\nJanuary first, two thousand for payments under the medical assistance\nprogram pursuant to title eleven of article five of the social services\nlaw for persons eligible for medical assistance who are enrolled in\nhealth maintenance organizations and for payments under the family\nhealth plus program for persons enrolled in approved organizations\npursuant to title eleven-D of article five of the social services law\nbased on the components of rates of payment established pursuant to this\nsection for persons eligible for medical assistance who are not enrolled\nin health maintenance organizations for a general hospital for such rate\nperiod that reflect the estimated reimbursable costs of direct medical\neducation expenses and indirect medical education expenses in the\ndetermination of:\n (A) the hospital-specific average reimbursable inpatient operating\ncost per discharge pursuant to subdivision six of this section, and\n (B) group category average inpatient reimbursable operating cost per\ndischarge pursuant to subdivision seven of this section, and\n (C) the operating cost component of rates of payment pursuant to\nparagraphs (f) and (k) of subdivision four of this section, and\n (D) the operating cost component of rates of payment in accordance\nwith paragraphs (e), (g) and (i) of subdivision four of this section for\ngeneral hospitals or distinct units of general hospitals not reimbursed\non the basis of case based payments per discharge; and\n (E) notwithstanding clauses (A) through (D) of this subparagraph, for\nperiods on and after December first, two thousand nine, the operating\ncost component of rates of payment subject to subdivision thirty-five of\nthis section, and\n (F) notwithstanding clauses (A) through (D) of this subparagraph, for\nperiods on and after December first, two thousand nine, the operating\ncost component of rates of payment subject to paragraphs (e-1), (e-2)\nand (1) of subdivision four of this section for general hospitals or\ndistinct units of general hospitals not reimbursed on the basis of case\nbased payments per discharge; and\n (ii) such rates of payment may be established by the commissioner on\nany appropriate payment basis, including a case mix adjusted per\ndischarge basis.\n * NB Expires December 31, 2026\n * (b) For patients discharged prior to January first, nineteen hundred\nninety-seven, payments to general hospitals for reimbursement of\ninpatient hospital services provided to patients eligible for payments\npursuant to the comprehensive motor vehicle insurance reparations act;\nor enrolled in a self-insured fund which provides for reimbursement\ndirectly to general hospitals on an expense incurred basis, with the\nexception of those enrollees covered under a payment rate methodology\nagreement in accordance with the provisions of paragraph (a) of\nsubdivision two of this section; or insured under a commercial insurer\nlicensed to do business in this state and authorized to write accident\nand health insurance and whose policy provides inpatient hospital\ncoverage on an expense incurred basis; or receiving inpatient hospital\nservices pursuant to an out-of-plan benefits system authorized pursuant\nto section four thousand four hundred six of this chapter, except where\nsuch out-of-plan, inpatient hospital services are offered by an\norganization organized pursuant to the not-for-profit corporation law or\nwhich meets the qualifications of section 501(c) of the internal revenue\ncode, shall be case based payments per discharge, for each\ndiagnosis-related group established in accordance with paragraph (a) of\nsubdivision three of this section, and equal to the case payments to\ngeneral hospitals provided in accordance with paragraph (a) of this\nsubdivision for services provided to subscribers of corporations\norganized and operating in accordance with article forty-three of the\ninsurance law, adjusted for uncovered services, and increased by\nthirteen percent or, for payments pursuant to the workers' compensation\nlaw, the volunteer firefighters' benefit law and the volunteer ambulance\nworkers' benefit law, increased by five percent. Funds received by a\ngeneral hospital based on the payment differential applied pursuant to\nthis paragraph shall be hospital funds for patient care purposes.\nWithout due cause general hospitals shall not refuse to accept direct\npayments from a payor who would otherwise be eligible to reimburse\nhospitals for inpatient services on a case based payment per discharge\nin accordance with this subdivision.\n (b-1) (i) For patients discharged on and after January first, nineteen\nhundred ninety-seven and prior to January first, two thousand and on and\nafter January first, two thousand, payments to general hospitals for\nreimbursement of inpatient hospital services provided to patients\neligible for payments pursuant to the workers' compensation law, the\nvolunteer firefighters' benefit law, the volunteer ambulance workers'\nbenefit law, and the comprehensive motor vehicle insurance reparations\nact shall be at the rates of payment determined pursuant to this section\nfor state governmental agencies, excluding adjustments pursuant to\nsubdivision fourteen-f of this section and subdivision thirty-three of\nthis section, excluding such further reductions to such payments as are\nenacted as part of the state budget for the state fiscal year commencing\nApril first, two thousand ten and excluding such further reductions to\nsuch payments as are enacted as part of the state budget for state\nfiscal years commencing on and after April first, two thousand eleven.\n (ii) The provisions of paragraph (d) of subdivision eleven of this\nsection shall continue to apply to such payors for payments determined\npursuant to this paragraph.\n (b-2) A payor included in the payor categories specified in paragraph\n(a) or (b-1) of this subdivision shall not be provided the option of\npayment to a general hospital for inpatient services based on the lower\nof hospital charges or the case based payment per discharge determined\nin accordance with this section for a patient or apportioning the\nappropriate case based payment per discharge for a patient by excluding\npayment for a preexisting condition or acquired condition which has to\nbe treated along with the reason for the admission or, except as may\naffect qualification for payments in accordance with paragraph (b) or\n(d) of subdivision four of this section, for days within the inlier stay\ndetermined to be medically unnecessary.\n * NB Effective until December 31, 2026\n * (b) Payments to general hospitals for reimbursement of inpatient\nhospital services provided to patients eligible for payments pursuant to\nthe comprehensive motor vehicle insurance reparations act; or enrolled\nin a self-insured fund which provides for reimbursement directly to\ngeneral hospitals on an expense incurred basis, with the exception of\nthose enrollees covered under a payment rate methodology agreement in\naccordance with the provisions of paragraph (a) of subdivision two of\nthis section; or insured under a commercial insurer licensed to do\nbusiness in this state and authorized to write accident and health\ninsurance and whose policy provides inpatient hospital coverage on an\nexpense incurred basis; or receiving inpatient hospital services\npursuant to an out-of-plan benefits system authorized pursuant to\nsection four thousand four hundred six of this chapter, except where\nsuch out-of-plan, inpatient hospital services are offered by an\norganization organized pursuant to the not-for-profit corporation law or\nwhich meets the qualifications of section 501 (c) of the internal\nrevenue code, shall be case based payments per discharge, for each\ndiagnosis-related group established in accordance with paragraph (a) of\nsubdivision three of this section, and equal to the case payments to\ngeneral hospitals provided in accordance with paragraph (a) of this\nsubdivision for services provided to subscribers of corporations\norganized and operating in accordance with article forty-three of the\ninsurance law, adjusted for uncovered services, and increased by\nthirteen percent or, for payments pursuant to the workers' compensation\nlaw, the volunteer firefighters' benefit law and the volunteer ambulance\nworkers' benefit law, increased by five percent. Funds received by a\ngeneral hospital based on the payment differential applied pursuant to\nthis paragraph shall be hospital funds for patient care purposes.\nWithout due cause general hospitals shall not refuse to accept direct\npayments from a payor who would otherwise be eligible to reimburse\nhospitals for inpatient services on a case based payment per discharge\nin accordance with this subdivision. A payor included in the payor\ncategories specified in this paragraph or in paragraph (a) of this\nsubdivision shall not be provided the option of payment to a general\nhospital for inpatient services based on the lower of hospital charges\nor the case based payment per discharge determined in accordance with\nthis section for a patient or apportioning the appropriate case based\npayment per discharge for a patient by excluding payment for a\npreexisting condition or acquired condition which has to be treated\nalong with the reason for the admission or, except as may affect\nqualification for payments in accordance with paragraph (b) or (d) of\nsubdivision four of this section, for days within the inlier stay\ndetermined to be medically unnecessary.\n * NB Effective December 31, 2026\n * (c) Charge based payments. For patients discharged prior to January\nfirst, nineteen hundred ninety-seven, payments to general hospitals for\nreimbursement of inpatient hospital services provided to those for whom\na case based payment per discharge system is not authorized by paragraph\n(a) or (b) of this subdivision, or who are not covered under the\nprovisions of paragraph (a) of subdivision two of this section, shall be\non the basis of the hospital's charges; provided, however, for these\npatients the definition of a short stay patient pursuant to paragraph\n(d) of subdivision four of this section shall apply, and reimbursement\nto hospitals for such patients shall be at payments developed in\naccordance with paragraph (d) of subdivision four of this section,\nincreased by thirteen percent. The maximum amount to be charged to any\ncharge paying patient for a case shall be one hundred twenty percent of\nthe case based payment per discharge as determined under paragraph (b)\nof this subdivision for the diagnosis-related group with which the\npatient is identified. Each general hospital shall establish a charge\nschedule and inpatient charges from this schedule shall be applied\nuniformly for all inpatient charge based payments made in accordance\nwith this section.\n * NB Effective until December 31, 2026\n * (c) Charge based payments. Payments to general hospitals for\nreimbursement of inpatient hospital services provided to those for whom\na case based payment per discharge system is not authorized by paragraph\n(a) or (b) of this subdivision, or who are not covered under the\nprovisions of paragraph (a) of subdivision two of this section, shall be\non the basis of the hospital's charges; provided, however, for these\npatients the definition of a short stay patient pursuant to paragraph\n(d) of subdivision four of this section shall apply, and reimbursement\nto hospitals for such patients shall be at payments developed in\naccordance with paragraph (d) of subdivision four of this section,\nincreased by thirteen percent. The maximum amount to be charged to any\ncharge paying patient for a case shall be one hundred twenty percent of\nthe case based payment per discharge as determined under paragraph (b)\nof this subdivision for the diagnosis-related group with which the\npatient is identified. Each general hospital shall establish a charge\nschedule and inpatient charges from this schedule shall be applied\nuniformly for all inpatient charge based payments made in accordance\nwith this section.\n * NB Effective December 31, 2026\n (d) The components of rates of payment calculated in accordance with\nthis section related to inpatient operating costs shall be based on\ngeneral hospital reimbursable inpatient operating costs used in\ndetermining payments for services pursuant to section twenty-eight\nhundred seven-a of this article during the rate period January first,\nnineteen hundred eighty-seven through December thirty-first, nineteen\nhundred eighty-seven (or for a distinct unit of a general hospital\nexcluded from case based payments pursuant to paragraph (e) or (g) of\nsubdivision four of this section such distinct unit reimbursable\ninpatient operating costs), excluding inpatient operating costs related\nto services provided to beneficiaries of title XVIII of the federal\nsocial security act (medicare) in accordance with paragraph (g) of\nsubdivision eleven of this section and adjusted to reflect the\nannualized cost impact of rate revisions or adjustments, including the\nvolume adjustment and case mix adjustment for the nineteen hundred\neighty-seven rate period, made with respect to such services, which\nshall be defined as a general hospital's or distinct unit's reimbursable\ninpatient operating cost base; a projection to the nineteen hundred\neighty-eight rate period by the trend factor determined in accordance\nwith subdivision ten of this section; and an increase to reflect special\nadditional inpatient operating costs determined and allocated in\naccordance with paragraph (e) of this subdivision.\n (e) General hospital special additional inpatient operating costs\nshall be determined and allocated among general hospitals in accordance\nwith subparagraphs (i), (iii) and (iv) of this paragraph. For purposes\nof computing group category average inpatient reimbursable operating\ncosts in accordance with paragraph (a) of subdivision seven of this\nsection and an equivalent cost component for general hospitals that are\nexcluded from the case based payment per diagnosis-related group system\nin accordance with paragraph (e) or (g) of subdivision four of this\nsection special additional inpatient operating costs shall include an\nadditional increase determined and allocated among general hospitals in\naccordance with subparagraph (ii) of this paragraph.\n (i) The total cost increases pursuant to this subparagraph for all\ngeneral hospitals shall in the aggregate be one hundred thirty million\ndollars for the nineteen hundred eighty-eight rate period to reflect\nnineteen hundred eighty-five costs incurred in excess of the trend\nfactor between nineteen hundred eighty-one and nineteen hundred\neighty-five, such cost increases to be projected from nineteen hundred\neighty-eight to subsequent annual rate periods by the applicable trend\nfactor, and shall be allocated among general hospitals in accordance\nwith the following methodology:\n Five hundred dollars per bed shall be allocated to costs of each\ngeneral hospital based on the total number of inpatient beds for which\nthe hospital is certified pursuant to the operating certificate issued\nfor such general hospital in accordance with section twenty-eight\nhundred five of this article in effect on January first, nineteen\nhundred eighty-eight.\n A factor of one quarter of one percent of a general hospital's\nreimbursable inpatient operating cost base as defined in paragraph (d)\nof this subdivision, trended through nineteen hundred eighty-eight,\nshall be allocated to costs of general hospitals for technology advances\nand a further one quarter of one percent of such costs shall be\nallocated to costs of general hospitals for increased activities related\nto quality assurance and patient discharge planning.\n The balance of one hundred thirty million dollars after deducting the\ndollar value of the per bed cost enhancement and the dollar value of the\npercentage cost enhancements shall be allocated to costs of general\nhospitals based on the ratio of each general hospital's nineteen hundred\neighty-five cost incurred in excess of the trend factor between nineteen\nhundred eighty-one and nineteen hundred eighty-five in the following\ndiscrete areas, summed, to the total sum of such cost over trend of all\ngeneral hospitals applied to such balance: malpractice insurance costs,\ninfectious and other waste disposal costs, water charges, direct medical\neducation expenses, working capital interest costs of hospitals that\nqualified for distributions made in accordance with paragraph (b) of\nsubdivision sixteen of section twenty-eight hundred seven-a of this\narticle, costs of distinct psychiatric units excluded from case based\npayments per diagnosis-related group, and ambulance costs. For purposes\nof this subparagraph, nineteen hundred eighty-five cost incurred in\nexcess of the trend factor between nineteen hundred eighty-one and\nnineteen hundred eighty-five shall be calculated for each such discrete\narea based on a general hospital's inpatient operating costs for the\nfiscal year ending in nineteen hundred eighty-five, after excluding\ninpatient operating costs related to services provided to beneficiaries\nof title XVIII of the federal social security act (medicare), for such\ndiscrete area in excess of the hospital's comparable component of\nreimbursable inpatient operating costs for its fiscal year ending in\nnineteen hundred eighty-one, after excluding inpatient operating costs\nrelated to services provided to beneficiaries of title XVIII of the\nfederal social security act (medicare), trended through nineteen hundred\neighty-five by the appropriate component of the trend factors and\nadjusted to reflect approved decreases or increases in inpatient\noperating costs resulting from all rate adjustments.\n (ii) The total additional cost increases pursuant to this subparagraph\nfor all general hospitals shall in the aggregate be forty million\ndollars for the nineteen hundred eighty-eight rate period, such\nadditional cost increases to be projected from nineteen hundred\neighty-eight to the rate period by the applicable trend factor, to be\nallocated among general hospitals in accordance with the following\nmethodology:\n The additional increase of forty million dollars shall be allocated to\ncosts of general hospitals that are included in group categories\nestablished pursuant to paragraph (b) of subdivision seven of this\nsection based on the ratio of the nineteen hundred eighty-eight\nintermediate group operating costs of each such general hospital, and to\ncosts of general hospitals that are excluded from the case based payment\nper diagnosis-related group system in accordance with paragraph (e) or\n(g) of subdivision four of this section based on the ratio of the\nnineteen hundred eighty-eight intermediate operating costs of each such\ngeneral hospital, to the total sum of such intermediate group operating\ncosts and intermediate operating costs applied to the forty million\ndollars. For purposes of this subparagraph, intermediate group operating\ncosts of a general hospital shall be calculated in accordance with rules\nand regulations adopted by the council and approved by the commissioner\nbased on the reimbursable inpatient operating cost base determined in\naccordance with paragraph (d) of this subdivision of such general\nhospital; adjusted to exclude operating costs related to specialized\nhospital services for which an alternative reimbursement methodology is\nadopted pursuant to paragraph (e) or (g) or, if effective, (i) of\nsubdivision four of this section; and trended to the nineteen hundred\neighty-eight rate period by the trend factor determined in accordance\nwith subdivision ten of this section; and increased to reflect special\nadditional inpatient operating costs determined and allocated in\naccordance with subparagraph (i) of this paragraph; and adjusted to\nexclude a factor for operating costs of patients who required an\nalternate level of care in accordance with paragraph (h) of subdivision\nfour of this section; and adjusted to exclude the components of the\ntrended reimbursable inpatient operating cost base related to education,\nphysician, ambulance services and organ acquisition costs determined in\naccordance with subparagraphs (i), (iii) and (iv) of paragraph (c) of\nsubdivision seven of this section and malpractice insurance costs, and\nthe components of special additional inpatient operating costs\ndetermined and allocated in accordance with subparagraph (i) of this\nparagraph associated with cost increases in such costs. For purposes of\nthis subparagraph, intermediate operating costs of a general hospital\nexcluded from the case based payment per diagnosis-related group system\nshall be calculated in accordance with rules and regulations adopted by\nthe council and approved by the commissioner based on the reimbursable\ninpatient operating cost base determined in accordance with paragraph\n(d) of this subdivision of such general hospital; trended to the\nnineteen hundred eighty-eight rate period by the trend factor determined\nin accordance with subdivision ten of this section; and increased to\nreflect special additional inpatient operating costs determined and\nallocated in accordance with subparagraph (i) of this paragraph; and\nadjusted to exclude a factor for operating costs of patients who\nrequired an alternate level of care developed consistent with the\nprovisions of paragraph (h) of subdivision four of this section; and\nadjusted to exclude the components of the trended reimbursable inpatient\noperating cost base related to education, physician, ambulance services\nand organ acquisition costs determined consistent with the provisions of\nsubparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven\nof this section and malpractice insurance costs, and the components of\nspecial additional inpatient operating costs determined and allocated in\naccordance with subparagraph (i) of this paragraph associated with cost\nincreases in such costs.\n (iii) Cost increases pursuant to this subparagraph shall be made for\nthe nineteen hundred ninety-one rate period to reflect cost increases\nincurred in excess of the trend factor and not included in the costs\nused in determining payments in accordance with paragraph (d) of this\nsubdivision and subparagraphs (i) and (ii) of this paragraph. Such costs\nshall in the aggregate be three hundred twenty-nine million dollars\nexclusive of costs related to services provided to beneficiaries of\ntitle XVIII of the federal social security act (medicare). Such costs\nincreases shall be projected from nineteen hundred ninety-one to\nsubsequent annual rate periods by the applicable trend factor, and shall\nbe allocated among general hospitals, except those general hospitals\nwhose base year for determining payments for services in such facilities\nis nineteen hundred eighty-seven, in accordance with the following\nmethodology:\n (A) Up to two hundred twenty-two million dollars shall be allocated\nfor labor adjustments. If the total of the adjustments is less than two\nhundred twenty-two million dollars, then the adjustments shall be fully\nfunded. If the total of the adjustments is more than two hundred\ntwenty-two million dollars, then the adjustment specified in accordance\nwith item (II) of this clause shall be funded at the lower of twenty\npercent of the total amount allocated for labor adjustments or its\nproportional share of the labor adjustments unless the labor adjustment\nspecified in item (I) of this clause is less than eighty percent of the\ntotal amount allocated for labor adjustments in which case the\nadjustment specified in item (II) of this clause shall be equal to the\ndifference between two hundred twenty-two million dollars and the total\namount of the adjustment specified in item (I) of this clause.\n (I) A portion of the amount allocated for labor adjustments shall be\nfor labor cost increases related to registered nurses' salaries and\nfringes (twenty percent of salaries) and an add-on for the ripple effect\non other health care professionals of at least thirty-five percent. Such\nadjustment shall cover both inpatient and outpatient cost incurred,\nbased on costs reported in a survey conducted by the department for the\nperiod January first, nineteen hundred ninety through June thirtieth,\nnineteen hundred ninety on forms specified by the commissioner and\nreceived by the department no later than November first, nineteen\nhundred ninety, annualized, in excess of nineteen hundred eighty-five\nlabor costs related to registered nurses' salaries and fringes trended\nto nineteen hundred ninety and the nineteen hundred eighty-eight\nstatewide nurse salary adjustment trended to nineteen hundred ninety by\nthe appropriate components of the trend factors adjusted to reflect the\neffect of the annualization of nineteen hundred ninety data and the\nresult trended to nineteen hundred ninety-one and shall be based\nexclusively on regional experience. Such regional adjustment shall not\nbe less than zero. Each individual hospital within a region shall\nreceive a portion of the regional adjustment equal to its share of the\ntotal inpatient and outpatient reimbursable operating costs for the\nregion excluding costs related to services provided to beneficiaries of\ntitle XVIII of the federal social security act (medicare) and excluding\ndirect medical education costs.\n (II) A portion of the amount allocated for labor adjustments shall be\nfor personnel costs other than those related to registered nurses'\nsalaries and fringes and the ripple effect on other health care\nprofessionals. Such adjustment shall cover both inpatient and outpatient\ncosts incurred, based on costs reported in a survey conducted by the\ndepartment for the period January first, nineteen hundred ninety through\nJune thirtieth, nineteen hundred ninety on forms specified by the\ncommissioner and received by the department no later than November\nfirst, nineteen hundred ninety, annualized, in excess of nineteen\nhundred eighty-five personnel costs covered by this adjustment trended\nto nineteen hundred ninety and the annualized rate adjustments approved\nin nineteen hundred eighty-nine for personnel costs covered by this\nadjustment for increased hospital costs to meet additional state\nrequirements that became effective July first, nineteen hundred\neighty-nine trended to nineteen hundred ninety by the appropriate\ncomponents of the trend factors adjusted to reflect the effect of the\nannualization of nineteen hundred ninety data and the result trended to\nnineteen hundred ninety-one and shall be based exclusively on regional\ndata.\n (III) In the event that federal financial participation in payments\nmade for beneficiaries eligible for medical assistance under title XIX\nof the federal social security act based upon the allocation and\nadjustment specified in items (I) and (II) of this clause related to\noutpatient costs as a component of such payments is not approved by the\nfederal government then such outpatient costs shall not be considered in\ncalculating such adjustment.\n (C) Thirty-three million dollars shall be allocated for technology\nadvances and changes in medical practice. A fixed amount per bed shall\nbe allocated to the costs of each general hospital based on the total\nnumber of inpatient beds for which the general hospital is certified\npursuant to the operating certificate issued for such general hospital\nin accordance with section twenty-eight hundred five of this article in\neffect on June thirtieth, nineteen hundred ninety.\n (D) Thirty-four million dollars shall be allocated to those general\nhospitals providing comprehensive health care to the communities they\nserve as determined by the commissioner pursuant to regulations approved\nby the council. Comprehensive health care includes providing and/or\naccommodating patients' health care needs at the appropriate levels and\nsettings of care, and reaches outside of traditional inpatient services\nto outpatient and other services. Factors to be considered in deciding\nwhich general hospitals are providing comprehensive health care and the\nsize of the adjustment shall include but not be limited to: clinic and\nemergency room volume compared to inpatient volume (measured using total\nvolume and/or volume related to medicaid and medically indigent\npatients); number and type of clinic services offered; availability of\nservices; whether the general hospital is an AIDS designated center,\nprenatal care assistance program provider, home health care provider,\ntrauma center, burn center; whether the general hospital offers neonatal\nintensive care services, dialysis services, birthing center backup\nagreements, AIDS outpatient programs, specific mental health, drug and\nalcohol programs including outpatient and emergency services and those\ndesignated pursuant to section 9.39 of the mental hygiene law; and\nwhether the general hospital's emergency room is designated as a 911\nreceiving hospital. In the event that federal financial participation in\npayments made for beneficiaries eligible for medical assistance under\ntitle XIX of the federal social security act based upon the adjustment\nspecified in this clause as a component of such payments is not approved\nby the federal government because of the inclusion of outpatient\nservices then such outpatient services shall not be considered in\ncalculating such adjustment. If such exclusion results in the allocation\nfor this adjustment not being spent, then any unspent portion shall be\nreallocated to further fund the adjustments specified in clauses (D) and\n(E) of this subparagraph in the same proportion as their original\nfunding.\n (E)(I) Twenty-six million dollars shall be allocated to the costs of\ngeneral hospitals based on the ratio of each general hospital's nineteen\nhundred eighty-nine cost incurred in excess of the trend factor between\nnineteen hundred eighty-five and nineteen hundred eighty-nine in the\ncertain discrete areas, summed, to the total sum of such cost over trend\nof all general hospitals applied to the total funds under this\nallocation. Such discrete cost areas shall include but not be limited\nto: infectious and other waste disposal costs, universal precautions,\nworking capital interest costs, costs for asbestos removal, costs of low\nosmolality contrast media, malpractice costs, water and sewer charges,\nambulance costs and costs related to designation as a trauma center. For\npurposes of this clause, nineteen hundred eighty-nine cost incurred in\nexcess of the trend factor between nineteen hundred eighty-five and\nnineteen hundred eighty-nine shall be calculated for each such discrete\narea based on a general hospital's inpatient operating costs for the\nfiscal year ending in nineteen hundred eighty-nine, after excluding\ninpatient operating costs related to services provided to beneficiaries\nof title XVIII of the federal social security act (medicare), for such\ndiscrete area in excess of the hospital's comparable component of\nreimbursable inpatient operating costs for its fiscal year ending in\nnineteen hundred eighty-five, after excluding inpatient operating costs\nrelated to services provided to beneficiaries of title XVIII of the\nfederal social security act (medicare), trended through nineteen hundred\neighty-nine by the appropriate component of the trend factors and\nadjusted to reflect approved decreases or increases in inpatient\noperating costs resulting from all rate adjustments.\n (II) Any funds allocated under this clause and not distributed\npursuant to item (I) of this clause shall be allocated for the\nfollowing: to reimburse for a portion of the cost increases incurred\nabove the trend factor between nineteen hundred eighty-one and nineteen\nhundred eighty-five for those discrete cost areas specified in the last\nparagraph of subparagraph (i) of paragraph (e) of this subdivision as\nadded by chapter two of the laws of nineteen hundred eighty-eight and\nnot reimbursed in accordance with such paragraph. Such funds shall be\nallocated to general hospitals in the same manner as specified in such\nparagraph.\n (F) Seven million two hundred thousand dollars shall be allocated to\naccount for the increase in the number of patients admitted through the\nemergency room and the high costs of treating such patients which has\nresulted in an increase in severity within diagnosis related groups.\nSuch funds shall be allocated to general hospitals based on the nineteen\nhundred eighty-nine hospital-specific data on increased admissions\nthrough the emergency room since nineteen hundred eighty-one, excluding\nthose admissions related to providing services to beneficiaries of title\nXVIII of the federal social security act (medicare).\n (G) Two hundred fifty dollars per bed shall be allocated to the costs\nof each general hospital having two hundred or less certified acute care\nbeds and classified as a rural hospital for purposes of determining\npayment for inpatient acute care services provided to beneficiaries of\ntitle XVIII of the federal social security act (medicare) or under state\nregulations, for recruiting and retaining health care personnel, based\non the total number of inpatient acute care beds for which such general\nhospital is certified pursuant to the operating certificate issued for\nsuch general hospital in accordance with section twenty-eight hundred\nfive of this article in effect on June thirtieth, nineteen hundred\nninety.\n (H) One million dollars shall be allocated to assist general hospitals\ninvolved in a merger, acquisition, or consolidation in meeting the costs\nassociated with such merger, acquisition, or consolidation on or after\nJanuary first, nineteen hundred ninety-one. The commissioner shall make\nrate adjustments for such allocations.\n (I) Five hundred thousand dollars shall be allocated for a\npractitioner placement program to assist general hospitals in the\nplacement of physicians and other health care practitioners to practice\nprimary health care and/or dentistry in underserved areas, to serve the\nmedically needy, and including services with affiliated community based\nproviders. The commissioner shall make rate adjustments for such\nallocations. Notwithstanding any inconsistent provision of this\nsubdivision, this clause shall not apply in rate periods commencing on\nor after January first, nineteen hundred ninety-four.\n (iv) Cost increases pursuant to this subparagraph shall be made for\nthe nineteen hundred ninety-four rate period to reflect cost increases\nincurred in excess of the trend factor and not included in the costs\nused in determining payments in accordance with paragraph (d) of this\nsubdivision and subparagraphs (i), (ii) and (iii) of this paragraph.\nSuch costs shall in the aggregate be one hundred seventy-three million\ndollars exclusive of costs related to services provided to beneficiaries\nof title XVIII of the federal social security act (medicare). Such cost\nincreases shall be projected from nineteen hundred ninety-four to\nsubsequent annual rate periods by the applicable trend factor, and shall\nbe allocated among general hospitals in accordance with the following\nmethodology:\n (A) Forty-six million dollars shall be allocated to the costs of\ngeneral hospitals for treating tuberculosis patients. Each general\nhospital shall receive a portion of this total equal to its share of the\nstatewide total of inpatient tuberculosis discharges based on the most\nrecent twelve month period for which data is available.\n (B) Sixty-three million dollars shall be allocated for labor\nadjustments in accordance with the following methodology:\n (I) Fifty-five million dollars shall be for labor cost increases\nincurred prior to June thirtieth, nineteen hundred ninety-three. Each\ngeneral hospital shall receive a portion of this total equal to its\nshare of the statewide total of inpatient and outpatient reimbursable\noperating costs based on nineteen hundred ninety data excluding costs\nrelated to services provided to beneficiaries of title XVIII of the\nfederal social security act (medicare) and excluding direct medical\neducation costs.\n (II) Eight million dollars of the amount to be allocated for labor\nadjustments pursuant to this clause shall be distributed to general\nhospitals located in the counties of Ulster, Sullivan, Orange, Dutchess,\nPutnam, Rockland, Columbia, Delaware and Westchester, to account for\nprior disproportionate increases in unreimbursed labor costs. Each\nindividual hospital shall receive a portion of the eight million dollars\nequal to its share of the total inpatient and outpatient reimbursable\noperating costs based on nineteen hundred ninety data for all hospitals\nlocated in the above-referenced counties excluding costs related to\nservices provided to beneficiaries of title XVIII of the federal social\nsecurity act (medicare) and excluding direct medical education costs.\n (C) Fifty-five million dollars shall be allocated to the costs of\nincreased activities related to regulatory compliance, universal\nprecautions and infection control related to AIDS, tuberculosis, and\nother infectious diseases, including the training of employees with\nregard to infection control, and for infectious and other waste disposal\ncosts. A fixed amount per bed shall be allocated to the costs of each\ngeneral hospital based on the total number of inpatient beds for which\nthe general hospital is certified pursuant to the operating certificate\nissued for each general hospital in accordance with section twenty-eight\nhundred five of this article in effect on August twenty-fourth, nineteen\nhundred ninety-three.\n (D) Three million dollars shall be allocated as follows:\n (I) Two hundred fifty dollars per bed shall be allocated to the costs\nof each general hospital having two hundred or less certified acute care\nbeds and classified as a rural hospital for purposes of determining\npayment for inpatient services provided to beneficiaries of title XVIII\nof the federal social security act (medicare) or under state\nregulations, in recognition of the unique costs incurred by these\nfacilities in complying with state regulations, based on the total\nnumber of inpatient acute care beds for which such general hospital is\ncertified pursuant to the operating certificate issued for such general\nhospital in accordance with section twenty-eight hundred five of this\narticle in effect on August twenty-fourth, nineteen hundred\nninety-three.\n (II) The remainder shall be allocated on a proportional basis to the\ncosts of each general hospital classified as a rural hospital for\npurposes of determining payment for inpatient services provided to\nbeneficiaries of title XVIII of the federal social security act\n(medicare) or under state regulations, in recognition of the unique\ncosts incurred by these facilities to provide hospital services in\nremote or sparsely populated areas, according to the following\nmethodology:\n (1) the net income, or the net loss expressed as a negative, as a\nproportion of the net patient revenue, of each such hospital, based on\noperating results for the nineteen hundred ninety and nineteen hundred\nninety-one rate years, shall be computed and averaged, and expressed as\na percentage;\n (2) each such resulting percentage average shall be multiplied by each\nsuch hospital's number of inpatient beds for which such hospital is\ncertified pursuant to the operating certificate issued for such hospital\nin accordance with section two thousand eight hundred five of this\narticle in effect on June thirtieth, nineteen hundred ninety, and such\nresulting products for all such hospitals shall be summed, and such sum\nshall be divided by the total of all such beds for all such hospitals,\nand the resulting quotient shall be the weighted average rural operating\nmargin expressed as a percentage; and\n (3) one percentage point shall be subtracted from each such hospital's\naverage net operating margin, and the resulting difference shall be\ndivided by the weighted average rural operating margin; and\n (4) (a) if the quotient resulting from the computation in subitem\nthree above is less than zero, then the absolute value of such quotient\nshall be multiplied by each such hospital's number of inpatient beds for\nwhich such hospital is certified pursuant to the operating certificate\nissued for such hospital in accordance with section two thousand eight\nhundred five of this chapter in effect on June thirtieth, nineteen\nhundred ninety, such product shall be multiplied by one hundred fifty\ndollars, and such resulting amount shall be such hospital's adjustment\npursuant to this clause;\n (b) if the quotient resulting from the computation in subitem three\nabove is zero or greater, such hospital's adjustment pursuant to this\nclause shall be zero; and\n (c) provided, however, that if the total of all such adjustments so\ncomputed exceeds the amount to be allocated in accordance with this\nitem, each such hospital's adjustment shall be proportionately reduced.\n (E) Three million dollars shall be allocated to assist general\nhospitals involved in a merger, acquisition, or consolidation in meeting\nthe costs associated with such merger, acquisition, or consolidation on\nor after January first, nineteen hundred ninety-four. The commissioner\nshall make rate adjustments for such allocations.\n (F) (I) One million five hundred thousand dollars shall be allocated\nfor enhanced rates for general hospitals participating within a rural\nhealth network as defined in subdivision two of section twenty-nine\nhundred fifty-one of this chapter. Such rate enhancements shall be\nestablished only for inpatient services provided by such hospitals\nthrough the written rural health network agreement, where such services\nhave been approved for enhanced rates by the commissioner.\nNotwithstanding any inconsistent provision of law, such enhanced rates\nshall be subject to the availability of federal financial participation\npursuant to title XIX of the federal social security act in expenditures\nmade for eligible patients, including pooling arrangements and volume\nadjustments, provided, however that such enhanced rates shall not affect\nthe calculation for any other general hospital of the group price\ncomponent calculated pursuant to subparagraph (i) of paragraph (a) of\nsubdivision seven of this section.\n (II) One million five hundred thousand dollars shall be allocated for\nenhanced rates for general hospitals participating within a central\nservices facility rural health network as defined in subdivision three\nof section twenty-nine hundred fifty-one of this chapter. Such rate\nenhancements shall be established only for inpatient services provided\nby such hospitals through the network operational plan, where such\nservices have been approved for enhanced rates by the commissioner.\nNotwithstanding any inconsistent provision of law, such enhanced rates\nshall be subject to the availability of federal financial participation\npursuant to title XIX of the federal social security act in expenditures\nmade for eligible patients, including pooling arrangements and volume\nadjustments, provided, however that such enhanced rates shall not affect\nthe calculation for any other general hospital of the group price\ncomponent calculated pursuant to subparagraph (i) of paragraph (a) of\nsubdivision seven of this section.\n (f) The commissioner and the state director of the budget shall\nconsider providing a supplementary increase to general hospital\nreimbursable inpatient operating costs for purposes of computing rates\nof payment for annual rate periods beginning on or after January first,\nnineteen hundred eighty-nine in accordance with this section for\nreasonable and necessary supplementary cost increases in general\nhospital operating costs for such rate period or periods based on\nincreased minimum standards and procedures relating to general hospital\noperating certificates adopted by the council and approved by the\ncommissioner or state initiatives related to recruitment or maintenance\nof an appropriate level of personnel providing professional services to\npatients. Any such supplementary increase shall be allocated to costs of\ngeneral hospitals in accordance with rules and regulations adopted by\nthe council and approved by the commissioner.\n (g) Hospital discharges for purposes of computing case based payments\nper discharge pursuant to this section shall be based on the number of\npatient discharges during the rate period from January first, nineteen\nhundred eighty-seven through December thirty-first, nineteen hundred\neighty-seven excluding discharges of beneficiaries of title XVIII of the\nfederal social security act (medicare) and adjusted as provided in\nspecific provisions of this section, or the number of such patient\ndischarges during a recent twelve month period prior thereto established\nby regulation for which data are available subsequently reconciled by an\nadjustment to reflect nineteen hundred eighty-seven discharge data.\n * (h) Notwithstanding any inconsistent provision of this section,\ncommencing April first, nineteen hundred ninety-five:\n (i) rates of payment for patients eligible for payments made by state\ngovernmental agencies shall be reduced by the commissioner to reflect an\nexclusion from reimbursable inpatient operating costs commencing April\nfirst, nineteen hundred ninety-five of the special additional inpatient\noperating costs determined and allocated among general hospitals in\naccordance with clause (C) of subparagraph (iii) and clause (C) of\nsubparagraph (iv) of paragraph (e) of this subdivision and the factor of\none quarter of one percent of general hospitals' reimbursable inpatient\noperating cost base allocated to costs of general hospitals for\ntechnology advances in accordance with subparagraph (i) of paragraph (e)\nof this subdivision; and\n (ii) general hospitals may not request and the commissioner shall not\nconsider any pending or further appeals for an adjustment to rates of\npayment based on costs associated with technology advances and changes\nin medical practice and such adjustments to reimbursable inpatient\noperating costs pursuant to clause (C) of subparagraph (iv) of paragraph\n(e) of this subdivision.\n (iii) Notwithstanding the foregoing, or any other provision of this\nsection, the commissioner may establish pass through payments, or other\nappropriate methodologies, for the period ending December thirty-first,\ntwo thousand three for innovative medical device advances for which the\nfederal centers for medicare and medicaid services adopts new codes to\nthe hospital inpatient prospective payment system prior to the federal\nfood and drug administration's approval of such medical device.\n * NB Expired March 31, 2011\n (i) For the rate period July first, two thousand seven through March\nthirty-first, two thousand eight and for rates applicable to the state\nfiscal year commencing April first, two thousand eight, and each state\nfiscal year thereafter through March thirty-first, two thousand nine,\nand for the period April first, two thousand nine through November\nthirtieth, two thousand nine, provided, however, that for the period\nApril first, two thousand nine through November thirtieth, two thousand\nnine the aggregate rate adjustments calculated pursuant to subparagraph\n(ii) of this paragraph shall not exceed four million dollars, and\ncontingent upon the availability of federal financial participation:\n (i) The commissioner shall adjust inpatient medical assistance rates\nof payment calculated pursuant to this section for public hospitals\nother than non-state public hospitals located in a city with a\npopulation of more than one million persons, that meet the targeted\nmedicaid discharge percentage in accordance with the methodology set\nforth in subparagraph (ii) of this paragraph. For purposes of this\nparagraph, "targeted medicaid discharge percentage" shall mean that at\nleast seventeen and one-half percent of a public hospital's total\ndischarges were patients eligible for payments under the medical\nassistance program pursuant to title eleven of article five of the\nsocial services law, including those enrolled in health maintenance\norganizations, and patients eligible for payments under the family\nhealth plus program pursuant to title eleven-D of article five of the\nsocial services law, based on data reported in such hospital's\ninstitutional cost report submitted for the two thousand four period and\nfiled with the department by November first, two thousand six. Any\nhospital that meets the filing deadline shall have until June first, two\nthousand seven to submit revised and corrected data schedules in such\ninstitutional cost report which established eligibility for such\nadjusted rate.\n (ii) The aggregate amount of rate adjustments calculated pursuant to\nthis paragraph shall not exceed six million dollars for each rate\nperiod. Such amount shall be allocated proportionally based on the\nrelative numbers of medicaid discharges among those public hospitals\neligible for rate adjustments in accordance with subparagraph (i) of\nthis paragraph based on each such hospital's reported medical assistance\ndata specified in subparagraph (i) of this paragraph. Such amounts shall\nbe included as an add-on to medical assistance inpatient rates of\npayment, excluding exempt unit rates, and shall not be reconciled to\nreflect changes in medical assistance utilization between two thousand\nfour and the current rate year.\n (j) For the rate period July first, two thousand seven through March\nthirty-first, two thousand eight and for rates applicable to the state\nfiscal year commencing April first, two thousand eight, and each state\nfiscal year thereafter through March thirty-first, two thousand nine and\nfor the period April first, two thousand nine through November\nthirtieth, two thousand nine, provided, however, that for the period\nApril first, two thousand nine through November thirtieth, two thousand\nnine the aggregate rate adjustments calculated pursuant to subparagraph\n(ii) of this paragraph shall not exceed twenty-eight million dollars,\nand contingent upon the availability of federal financial participation:\n (i) The commissioner shall adjust inpatient medical assistance rates\nof payment calculated pursuant to this section for voluntary hospitals\nother than voluntary hospitals located in a city with a population of\nmore than one million persons that meet the targeted medicaid discharge\npercentage in accordance with the methodology set forth in subparagraph\n(ii) of this paragraph. For purposes of this paragraph, "targeted\nMedicaid discharge percentage" shall mean between seventeen and one-half\npercent and thirty-five percent of a voluntary hospital's total\ndischarges were patients eligible for payments under the medical\nassistance program pursuant to title eleven of article five of the\nsocial services law, including those enrolled in health maintenance\norganizations, and patients eligible for payments under the family\nhealth plus program pursuant to title eleven-D of article five of the\nsocial services law, based on data reported in such hospital's\ninstitutional cost report submitted for the two thousand four period and\nfiled with the department by November first, two thousand six. Any\nhospital that meets the filing deadline shall have until June first, two\nthousand seven to submit revised and corrected data schedules in such\ninstitutional cost report which established eligibility for such\nadjusted rate.\n (ii) The aggregate amount of rate adjustments calculated pursuant to\nthis paragraph shall not exceed forty-two million dollars for each rate\nperiod. Such amount shall be allocated proportionally based on relative\nnumbers of medicaid discharges among those voluntary hospitals eligible\nfor rate adjustments in accordance with subparagraph (i) of this\nparagraph based on each such hospital's reported medical assistance data\nspecified in subparagraph (i) of this paragraph. Such amounts shall be\nincluded as an add-on to medical assistance inpatient rates of payment,\nexcluding exempt unit rates, and shall not be reconciled to reflect\nchanges in medical assistance utilization between two thousand four and\nthe rate year.\n (k) Subject to the availability of federal financial participation,\nthe commissioner shall adjust inpatient rates of payment for non-public\ngeneral hospitals located in a city with a population of more than one\nmillion persons for the following periods and in the following amounts\nin order to ensure meaningful access to the hospital's services and\nreasonable accommodation for all medicaid patients who require language\nassistance:\n (i) for the period July first, two thousand seven through December\nthirty-first, two thousand seven, thirty-eight million dollars shall be\nallocated proportionally to such hospitals based on fifty percent of\neach such hospital's reported general clinic medicaid visits and fifty\npercent on each such hospital's reported medicaid inpatient discharges,\nas reported in each hospital's two thousand four institutional cost\nreport, as submitted to the department prior to November first, two\nthousand six, to the total of all such general clinic visits reported by\nall such hospitals.\n (ii) for the period April first, two thousand eight through March\nthirty-first, two thousand nine, and each state fiscal year thereafter\nthrough November thirtieth, two thousand nine, thirty-eight million\ndollars shall be allocated on an annualized basis for such purpose to\nsuch hospitals in accordance with the methodology set forth in\nsubparagraph (i) of this paragraph, provided, however, that thirty\npercent of such funds shall be allocated proportionally, based on the\nnumber of foreign languages utilized by one or more percent of the\nresidents in each hospital total service area population, provided,\nhowever, that for the period April first, two thousand nine through\nNovember thirtieth, two thousand nine, such allocation shall be reduced\nto twenty-five million three hundred thirty-three thousand dollars.\n (l) Effective for periods on and after July first, two thousand seven\nthrough November thirtieth, two thousand nine:\n (i) Subject to the availability of federal financial participation,\nthe commissioner shall adjust inpatient medical assistance rates of\npayment calculated pursuant to this section for general hospitals\nlocated in the counties of Nassau and Suffolk in accordance with the\nmethodology set forth in subparagraph (ii) of this paragraph. For\npurposes of this paragraph, "medicaid inpatient discharges" shall mean\nthe total number of such general hospital's discharges where the\npatients were eligible for payments under the medical assistance program\npursuant to title eleven of article five of the social services law,\nincluding those enrolled in health maintenance organizations, and\npatients eligible for payments under the family health plus program\npursuant to title eleven-D of article five of the social services law,\nbased on data reported in such hospital's institutional cost report\nsubmitted for the two thousand four period and filed with the department\nby November first, two thousand six.\n (ii) The amount of rate adjustments calculated pursuant to this\nparagraph shall not exceed five million dollars in the aggregate\nannually. Such amount shall be allocated proportionally based on the\nrelative numbers of medicaid discharges among those general hospitals\neligible for rate adjustments in accordance with subparagraph (i) of\nthis paragraph based on each such hospital's reported medical assistance\ndata specified in subparagraph (i) of this paragraph. Such amounts shall\nbe included as an add-on to medical assistance inpatient rates of\npayment, excluding exempt unit rates, and shall not be reconciled to\nreflect changes in medical assistance utilization between two thousand\nfour and the current rate year.\n 2. Special payment rate methodology agreements, negotiated rates. (a)\nAny payment rate methodology agreement negotiated between a self-insured\nand self-administered fund and a specific general hospital or its\nsuccessor which was in effect on May first, nineteen hundred eighty-five\nshall be permitted to continue with such fund, or a self-insured and\nself-administered fund related in interest to such fund through merger,\nconsolidation or corporate reorganization subsequent to May first,\nnineteen hundred eighty-five, as long as any revision to such\nmethodology does not provide more of an economic advantage to the fund\nthan the previous agreement. A general hospital which has any such\nagreement shall file with the commissioner information regarding each\nsuch agreement, as may be required by regulations adopted by the council\nand approved by the commissioner.\n (b)(i) Nothing in this section shall prohibit the establishment of\nspecial payment rate methodologies in arrangements between general\nhospitals and health maintenance organizations operating in accordance\nwith the provisions of article forty-three of the insurance law or\narticle forty-four of this chapter, provided the commissioner has been\nnotified of the proposed arrangement, has reviewed such proposed\narrangement and has issued his written approval of the arrangement. The\ncommissioner shall not approve such an arrangement if it would result in\npayments to a general hospital for inpatient services provided to\nsubscribers of health maintenance organizations which in the aggregate\nare less than what otherwise would have been paid under the provisions\nof this section, unless the health maintenance organization demonstrates\nthat such lower payments are justified because the arrangement will\nresult in lower costs to the general hospital, and the payments\napproximate costs. Such arrangements may be approved by the commissioner\nto: integrate the medical delivery functions of the health maintenance\norganization with the medical delivery functions of the hospital,\nincluding but not limited to joint staffing arrangements or\npre-admission testing arrangements; or integrate the method of payment\nand financial incentives to the hospital with the method of payment and\nfinancial incentives to physicians or other providers in the health\nmaintenance organization; or integrate the method of payment and\nfinancial incentives to the hospital with the health maintenance\norganization, including, but not limited to, bed leasing or capitation\npayments. Notwithstanding any inconsistent provision of this section,\nfor periods beginning on or after January first, nineteen hundred\nninety-four, negotiated agreements between health maintenance\norganizations and general hospitals which were approved by the\ncommissioner and which were in effect on December thirty-first, nineteen\nhundred ninety-three, may continue.\n (ii) Notwithstanding any inconsistent provisions of this section,\nhealth maintenance organizations operating in accordance with the\nprovisions of article forty-three of the insurance law or article\nforty-four of this chapter, having enrollees eligible for inpatient\ngeneral hospital payments as beneficiaries of title XVIII of the federal\nsocial security act (medicare) shall reimburse general hospitals for\ninpatient services for these enrollees in accordance with the provisions\ncontained in title XVIII of the federal social security act (medicare).\n (c) Special payment rate methodology agreements other than those\npermitted in accordance with the provisions of paragraphs (a) and (b) of\nthis subdivision shall not be authorized, and no other arrangements with\na general hospital for inpatient rates of payment other than those\nestablished in accordance with this section shall be negotiated.\n * (d) Notwithstanding any inconsistent provision of law, the\nprovisions of paragraphs (a), (b) and (c) of this subdivision shall not\napply to payments for patients discharged on or after January first,\nnineteen hundred ninety-seven.\n * NB Expires December 31, 2026\n 3. Diagnosis-related groups and weights. (a) The commissioner shall\nestablish as a basis for case classification for case based rates of\npayment the same system of diagnosis-related groups for classification\nof hospital discharges as established for purposes of reimbursement of\ninpatient hospital service pursuant to title XVIII of the federal social\nsecurity act (medicare) in effect on the first day of July in the year\npreceding the rate period. However, the council may adopt rules and\nregulations, subject to the approval of the commissioner, to adjust such\ndiagnosis-related groups or establish additional diagnosis-related\ngroups to reflect subsequent revisions applicable to reimbursement for\ndischarges of beneficiaries of title XVIII of the federal social\nsecurity act (medicare) effective subsequent to the first day of July in\nthe year preceding the rate period, or to identify medically appropriate\npatterns of health resource use efficiently and economically provided.\nNo such regulations, however, except those to reflect subsequent\nrevisions applicable to reimbursement for discharges of beneficiaries of\ntitle XVIII of the federal social security act (medicare) or for changes\nmade to diagnosis-related groups for neonatal services and services to\nacquired immune deficiency syndrome (AIDS) patients shall apply to the\nrate period beginning January first, nineteen hundred eighty-eight. For\nsubsequent rate periods regulations other than those to reflect\nsubsequent revisions applicable to reimbursement for discharges of\nbeneficiaries of title XVIII of the federal social security act\n(medicare) may in addition apply to changes to the diagnosis-related\ngroups for other services, including but not limited to, pediatric\nservices; provided, however, that psychiatric and rehabilitation\nservices shall not be included.\n Notwithstanding section one hundred twelve or one hundred seventy-four\nof the state finance law or any other law, rule or regulation to the\ncontrary, the commissioner may contract with a vendor for nominal\nconsideration to develop the specifications for the adjusted or\nadditional diagnosis-related groups if the commissioner certifies to the\ncomptroller that such contract is in the best interest of the health of\nthe people of the state. Notwithstanding that such specifications shall\nbe available pursuant to article six of the public officers law, such\ncontract may provide that the specifications for such adjusted or\nadditional diagnosis-related groups provided by the vendor shall be\nsubject to copyright protection pursuant to federal copyright law.\n (b) The methodology for assignment of patient discharges within\ndiagnosis-related groups applicable for purposes of determining payments\nfor discharges of beneficiaries of title XVIII of the federal social\nsecurity act (medicare) in effect on the first day of July in the year\npreceding the rate period, revised to reflect such adjustments as may be\nmade to the diagnosis-related group classification system pursuant to\nparagraph (a) of this subdivision, shall be applied to assign specific\npatient discharges within the diagnosis-related groups established\npursuant to paragraph (a) of this subdivision. The council may adopt\nrules and regulations, subject to the approval of the commissioner, to\nrevise the methodology for the assignment of specific patient discharges\nwithin the diagnosis-related groups to reflect revisions to the\nmethodology applicable for purposes of determining payments for\ndischarges of beneficiaries of title XVIII of the federal social\nsecurity act (medicare) effective subsequent to the first day of July in\nthe year preceding the rate period.\n * (c) (i) The commissioner shall determine an appropriate weighting\nfactor for each diagnosis-related group which reflects the relative\ngeneral hospital resources used by all patients, other than\nbeneficiaries of title XVIII of the federal social security act\n(medicare), with respect to discharges classified within that\ndiagnosis-related group compared to discharges classified within other\ndiagnosis-related groups. For rate periods during the period January\nfirst, nineteen hundred eighty-eight through December thirty-first,\nnineteen hundred ninety, the appropriate weighting factor for each\ndiagnosis-related group shall be determined using nineteen hundred\neighty-five costs and statistics for a representative sample of general\nhospitals. For rate periods during the period January first, nineteen\nhundred ninety-one through December thirty-first, nineteen hundred\nninety-three, the appropriate weighting factor for each\ndiagnosis-related group shall be determined using nineteen hundred\neighty-nine costs and statistics for a representative sample of general\nhospitals. For rate periods during the period January first, nineteen\nhundred ninety-four through December thirty-first, nineteen hundred\nninety-nine and on and after January first, two thousand through\nDecember thirty-first, two thousand seven, the appropriate weighting\nfactor for each diagnosis-related group shall be determined using\nnineteen hundred ninety-two costs and statistics for a representative\nsample of general hospitals. For rate periods on and after January\nfirst, two thousand eight, the appropriate weighting factor for each\ndiagnosis-related group shall be determined using two thousand four\ncosts and statistics for a representative sample of general hospitals,\nand, further, the computation of the group average arithmetic inlier\nlength-of-stays for each diagnostic related group, as otherwise\ndetermined in accordance with applicable regulations, shall utilize two\nthousand four data as reported to the department, and, be based on a\nrepresentative sample of general hospitals, and further, the short-stay\nand long-stay length-of-stay trimpoints, as otherwise determined in\naccordance with applicable regulations, shall be computed utilizing two\nthousand four data as reported to the department and based on a\nrepresentative sample of general hospitals. Provided however, that if\nthe department does not release updated data and documentation described\nin subparagraph (iii) of this paragraph, the effective rate period shall\nbe April 1, 2008. Discharges and costs related to the exceptions to case\npayment provided in accordance with paragraphs (e), (g) and (i) of\nsubdivision four of this section shall be eliminated from the costs and\nstatistics used in determining the appropriate weighting factors, while\nthe cost factor related to the exception provided in paragraph (h) of\nsubdivision four of this section shall be eliminated. The costs and\nstatistics for the case payment modifications calculated pursuant to\nparagraphs (a), (b), (c) and (d) of subdivision four of this section\nshall be eliminated in accordance with paragraph (c) of subdivision six\nof this section. Costs related to education, physician, ambulance\nservices and organ acquisition identified consistent with the provisions\nof paragraph (c) of subdivision seven of this section and costs related\nto malpractice insurance shall also be eliminated. The council may adopt\nrules and regulations, subject to the approval of the commissioner, to\nprospectively adjust weighting factors determined in accordance with\nthis paragraph to reflect changes in medical technology. After the\ncommissioner issues rate certifications pursuant to subdivision four of\nsection twenty-eight hundred seven of this article the commissioner\nshall expeditiously make available for inspection by general hospitals\nand payors the data, consistent with appropriate department procedures\nfor the release and protection of confidential data, and the methodology\nutilized to determine the appropriate weighting factors.\n (ii) Notwithstanding any contrary provision of law, the case mix\nadjustment to the operating component of per diem rates of payment paid\nto general hospitals or units of general hospitals that are exempt from\ncase based payments, as determined in accordance with subdivision four\nof this section and as otherwise computed in accordance with applicable\nregulations, shall, for periods on and after January first, two thousand\neight, be computed utilizing the diagnosis-related group classification\nsystem in effect for the rate year for inpatient case based medicaid\nrates of payment and the related per day cost weights calculated using\ntwo thousand four data as reported to the department and based on a\nrepresentative sample of general hospitals. For rate periods on and\nafter the two thousand eleven rate period, such case mix adjustment\nshall utilize the same base period data as determined in accordance with\nparagraph (e) of this subdivision.\n (iii) The department shall, by no later than June first, two thousand\nseven, make available to hospital industry representatives relevant\nupdated data and documentation that the department will utilize, in\naccordance with this paragraph, in developing appropriate service\nintensity weights for each diagnosis-related group for the two thousand\neight rate period. The department will thereafter consult with hospital\nindustry representatives in developing regulations to implement the\nutilization of such updated service intensity weight data applicable to\nrate periods on and after two thousand eight. If it is deemed\nappropriate by the commissioner, in consultation with hospital industry\nrepresentatives, such regulations may provide for the phase-in over a\nperiod of time of the application of such updated data in determining\nMedicaid rates on and after two thousand eight, provided, however, that\nthe application of such updated data shall be fully reflected in such\nrates by no later than January first, two thousand ten.\n (iv) By no later than December first, two thousand seven, the\ncommissioner shall issue a report to the governor and the legislature\ndescribing the updated data utilization applicable, in accordance with\nthe provisions of this paragraph, to periods on and after two thousand\neight and setting forth the factors considered in developing it.\n * NB Effective until December 31, 2026\n * (c) The commissioner shall determine an appropriate weighting factor\nfor each diagnosis-related group which reflects the relative general\nhospital resources used by all patients, other than beneficiaries of\ntitle XVIII of the federal social security act (medicare), with respect\nto discharges classified within that diagnosis-related group compared to\ndischarges classified within other diagnosis-related groups. For rate\nperiods during the period January first, nineteen hundred eighty-eight\nthrough December thirty-first, nineteen hundred ninety, the appropriate\nweighting factor for each diagnosis-related group shall be determined\nusing nineteen hundred eighty-five costs and statistics for a\nrepresentative sample of general hospitals. For rate periods during the\nperiod January first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three, the appropriate weighting\nfactor for each diagnosis-related group shall be determined using\nnineteen hundred eighty-nine costs and statistics for a representative\nsample of general hospitals. For rate periods during the period January\nfirst, nineteen hundred ninety-four through June thirtieth, nineteen\nhundred ninety-six, the appropriate weighting factor for each\ndiagnosis-related group shall be determined using nineteen hundred\nninety-two costs and statistics for a representative sample of general\nhospitals. Discharges and costs related to the exceptions to case\npayment provided in accordance with paragraphs (e), (g) and (i) of\nsubdivision four of this section shall be eliminated from the costs and\nstatistics used in determining the appropriate weighting factors, while\nthe cost factor related to the exception provided in paragraph (h) of\nsubdivision four of this section shall be eliminated. The costs and\nstatistics for the case payment modifications calculated pursuant to\nparagraphs (a), (b), (c) and (d) of subdivision four of this section\nshall be eliminated in accordance with paragraph (c) of subdivision six\nof this section. Costs related to education, physician, ambulance\nservices and organ acquisition identified consistent with the provisions\nof paragraph (c) of subdivision seven of this section and costs related\nto malpractice insurance shall also be eliminated. The council may adopt\nrules and regulations, subject to the approval of the commissioner, to\nprospectively adjust weighting factors determined in accordance with\nthis paragraph to reflect changes in medical technology. After the\ncommissioner issues rate certifications pursuant to subdivision four of\nsection twenty-eight hundred seven of this chapter the commissioner\nshall expeditiously make available for inspection by general hospitals\nand payors the data, consistent with appropriate department procedures\nfor the release and protection of confidential data, and the methodology\nutilized to determine the appropriate weighting factors.\n * NB Effective December 31, 2026\n (d) The commissioner shall consult with technical advisory groups as\nnecessary in establishing diagnosis-related groups and weights in\naccordance with paragraphs (a), (b) and (c) of this subdivision and in\nmaking adjustments in accordance with paragraphs (b) and (c) of\nsubdivision six of this section.\n (e) The appropriate weighting factor for each diagnosis-related group,\nthe group average arithmetic inlier length-of-stays for each\ndiagnosis-related group, and the short-stay and long-stay length-of-stay\ntrimpoints shall, by no later than the two thousand eleven rate period,\nbe based on reported costs and statistics from a representative sample\nof general hospitals from a base period no earlier than two thousand\nseven. Thereafter, the base period reported costs and statistics\nutilized for such purposes shall be updated no less frequently than\nevery four years and the new base periods utilized shall be no more than\nfour years prior to the applicable rate period.\n 3-a. Dispute resolution system. (a) * The commissioner shall\nestablish, in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner, a payment dispute resolution\nsystem to resolve disputes between payors of inpatient hospital services\nand general hospitals for patients discharged on or after January first,\nnineteen hundred ninety-one and prior to January first, nineteen hundred\nninety-seven. The commissioner shall designate the use of a uniform set\nof guidelines for determining the application of particular\ndiagnosis-related group categories to particular patients which may\ninclude guidelines published by associations, universities or other\norganizations. The dispute resolution process shall apply to all payors\nof hospital services described in paragraphs (a), (b) and (c) of\nsubdivision one of this section, including patients or payors which pay\nhospitals' charges or coinsurance, provided, however, such process shall\nnot include payments made for persons eligible for payments as\nbeneficiaries of title XVIII of the federal social security act\n(medicare) as a patients' primary payor or payments made pursuant to\ntitle eleven of article five of the social services law, provided that\nthis exception shall not include payments for medical assistance\nparticipants in health maintenance organizations or prepaid health\nservices plans. A payor of hospital services included in paragraph (a)\nof subdivision one of this section may serve as, or designate, the\nreview agent for their subscribers, beneficiaries or enrolled members\nfor an initial review and a reconsideration review but the final step in\nsuch dispute resolution process shall be an independent party unrelated\nto the payor which party shall be approved by the commissioner pursuant\nto this section.\n * NB Effective until December 31, 2026\n * The commissioner shall establish, in accordance with rules and\nregulations adopted by the council and approved by the commissioner, a\npayment dispute resolution system to resolve disputes between payors of\ninpatient hospital services and general hospitals for patients\ndischarged on or after January first, nineteen hundred ninety-one. The\ncommissioner shall designate the use of a uniform set of guidelines for\ndetermining the application of particular diagnosis-related group\ncategories to particular patients which may include guidelines published\nby associations, universities or other organizations. The dispute\nresolution process shall apply to all payors of hospital services\ndescribed in paragraphs (a), (b) and (c) of subdivision one of this\nsection, including patients or payors which pay hospitals' charges or\ncoinsurance, provided, however, such process shall not include payments\nmade for persons eligible for payments as beneficiaries of title XVIII\nof the federal social security act (medicare) as a patients' primary\npayor or payments made pursuant to title eleven of article five of the\nsocial services law, provided that this exception shall not include\npayments for medical assistance participants in health maintenance\norganizations or prepaid health services plans. A payor of hospital\nservices included in paragraph (a) of subdivision one of this section\nmay serve as, or designate, the review agent for their subscribers,\nbeneficiaries or enrolled members for an initial review and a\nreconsideration review but the final step in such dispute resolution\nprocess shall be an independent party unrelated to the payor which party\nshall be approved by the commissioner pursuant to this section.\n * NB Effective December 31, 2026\n In the event a third party payor or patient desires to challenge the\nappropriateness of a bill for hospital services rendered by a general\nhospital for a particular patient, or in the event a general hospital\ndesires to challenge the appropriateness of a payment by a third party\npayor on behalf of a particular patient, then either the hospital or the\npayor may submit the question to the dispute resolution process\nestablished pursuant to this subdivision. The disputes submitted for\nresolution may include the appropriateness of the application of a\nparticular diagnosis-related group category, as described in subdivision\nthree of this section, to a particular patient; the appropriate\nclassification and payment of an inpatient stay as a modification of a\ncase payment pursuant to paragraph (a), (b), (c), or (d) of subdivision\nfour of this section, including whether payment for services should be,\nbased on medical necessity or other reasons, made as a case payment or\npayment as a modification of a case payment; whether payment should\nappropriately be made pursuant to an alternative reimbursement\nmethodology authorized in accordance with paragraph (e) or (h) of\nsubdivision four of this section and the payment for such services;\nwhether payment for services rendered by a general hospital should be\nappropriately, based on medical necessity or other reasons, made as\npayment for inpatient care or payment for outpatient care and the\npayment for such services; or whether the hospital stay should be\nclassified as a readmission as defined in accordance with regulations\nadopted pursuant to paragraph (l) of subdivision eleven of this section\nand the payment for such stay.\n The dispute resolution system established shall provide for an initial\nreview and a reconsideration review. The council shall adopt necessary\nrules and regulations, subject to the approval of the commissioner,\nincluding but not limited to those for determining the parties to a\ndispute resolution review and any reconsideration review; the procedures\nand time limits to initiate a dispute resolution review or any\nreconsideration review; the procedures for notification of all parties\ninvolved in the dispute upon initiation of a dispute resolution review\nor any reconsideration review; time limits for resolving disputes; the\nestablishment of dispute resolution and reconsideration fees; and\nrequired documents to be submitted including the hospital bill in\ndispute, a copy of the patient medical record, or so much thereof as may\nbe required, and a statement of issues including the basis for the\ndispute. During a dispute resolution review or any reconsideration\nreview, a party may present documentation or evidence in support of its\nposition regarding the appropriate diagnosis-related group to which the\npatient discharge should be assigned or the proper payment for the case.\nThe commissioner shall approve a statewide utilization review\norganization or regional utilization review organization to conduct and\ndetermine such dispute resolution reviews including any reconsideration\nreviews in accordance with paragraph (b) of this subdivision. Every\ngeneral hospital bill issued for a patient discharged on or after\nJanuary first, nineteen hundred ninety-one other than for discharges of\npatients eligible for medical assistance pursuant to title eleven of\narticle five of the social services law subject to case based payments\ndetermined pursuant to this section based on diagnosis-related group\nassigned or maximum hospital charges for a case determined pursuant to\nthis section based on diagnosis-related group assigned shall include or\nbe accompanied by a notice of the payment dispute resolution system;\nprovided, however, that a general hospital issuing bills to a payor for\ntwenty-five or more patients per year may send such notice to such payor\non an annual basis. The form and content of such notice shall be\ndetermined in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner.\n (b) The commissioner shall approve a statewide utilization review\norganization or regional utilization review organizations to conduct and\ndetermine dispute resolution reviews, including reconsideration reviews,\npursuant to this subdivision. To be approved as a utilization review\norganization in accordance with this subdivision such organization must\nmeet the following criteria: the organization shall employ or otherwise\nsecure the services of adequate personnel, including medical personnel,\nqualified to review such disputes, the organization shall demonstrate\nthe ability to render decisions in a timely manner, the organization\nshall agree to provide ready access by the commissioner to all data,\nrecords and information it collects and maintains concerning its review\nactivities under this subdivision, the organization shall agree to\nprovide to the commissioner such data, information and reports as the\ncommissioner determines necessary to evaluate the review process\nprovided pursuant to this subdivision, the organization shall provide\nassurances that review personnel shall not have a conflict of interest\nin conducting a review based on payor, hospital or professional\naffiliation, and the organization meets such other performance and\nefficiency criteria regarding the conduct of reviews pursuant to this\nsubdivision established by the commissioner. The commissioner may\nwithdraw approval of a utilization review organization where such\norganization fails to continue to meet approval criteria established\npursuant to this paragraph. A utilization review organization approved\npursuant to this paragraph shall be authorized to receive and review\npatient medical records and shall develop and implement appropriate\nprocedures to maintain confidentiality of such patient medical records.\n (c) Upon resolution of a payment dispute in accordance with this\nparagraph, the parties involved in the dispute shall be notified of the\nreason for the decision and the hospital bill in dispute shall be\nadjusted to reflect such resolution.\n (d) The party initiating a payment dispute resolution review or any\nreconsideration review must submit to the utilization review\norganization a dispute resolution fee established to recover the costs\nrelated to the conduct of the initial dispute resolution reviews or a\nreconsideration review fee established to recover the costs related to\nthe conduct of such reconsideration reviews, except that for payors in\nparagraph (a) of subdivision one of this section which serve as or\ndesignate the review agent for their subscribers, beneficiaries, or\nenrolled members a fee shall be charged only for the final step in the\ndispute resolution process. Upon resolution of a payment dispute in\naccordance with this subdivision in favor of the payor, the amount due\nto the hospital by a payor based upon the hospital bill shall be reduced\nby the amount of any fee paid pursuant to this paragraph by such payor.\nUpon resolution of a payment dispute in accordance with this subdivision\nin favor of the general hospital, the amount due to the hospital based\nupon the hospital bill shall be increased by the amount of any fee paid\npursuant to this paragraph by such general hospital.\n (e) Nothing herein shall relieve the responsibilities of the payors as\nset forth in paragraphs (a), (b) and (c) of subdivision one of this\nsection.\n (f)(i) Whenever the amount of payment made by a payor to a general\nhospital is less than the amount of payment due determined by a\nutilization review organization in accordance with this subdivision,\ngeneral hospitals in accordance with paragraph (d) of subdivision eleven\nof this section may include financing or working capital charges on such\nbalance owed to the general hospital by a payor.\n (ii) Whenever the amount of payment made by a payor to a general\nhospital is in excess of the amount of payment due determined by a\nutilization review organization in accordance with this subdivision,\ninterest shall be due on such excess owed by the general hospital to a\npayor of two percent for the first thirty days and one percent per month\nthereafter from the date of payment of such excess amount. Interest\nshall not be applied to excess amounts owed to third party payors\nparticipating in an advance payment system.\n (g) For payment amounts eligible for payment dispute resolution\npursuant to this subdivision, a general hospital shall not bill a\npatient or pursue collection efforts against a patient for the\ndifference between a hospital bill and the payment made on such bill by\na payor within the payor categories specified in paragraph (a), (b) or\n(c) of subdivision one of this section, except for uncovered services by\na payor, deductibles and coinsurance based on maximum hospital charges\ncalculated based on the undisputed amount of the hospital bill, until\nfinal decision of the utilization review organization. Nothing in this\nsubdivision shall be construed to prohibit a general hospital from\nissuing an informational bill to a patient regarding such difference\nbetween the hospital bill and the payment made on such bill to advise\nthe patient of the amount in dispute.\n (h) The formal written decision of a utilization review organization\napproved by the commissioner to conduct and determine dispute resolution\nreviews in accordance with paragraph (b) of this subdivision upon a\nreconsideration review, or if there is no reconsideration review upon an\ninitial review, or for a payor of hospital services included in\nparagraph (a) of subdivision one of this section which serves as or\ndesignates the review agent for their subscribers, beneficiaries or\nenrolled members upon the final step in the dispute resolution process\nas to the questions of the appropriateness of a bill for hospital\nservices or the calculation of the proper payment for such hospital\nservices shall be admissible in evidence at any subsequent trial upon\nthe request of any party to the action. The decision shall not be\nbinding upon the jury or, in a case tried without a jury, upon the trial\ncourt, but shall be considered prima facie evidence to establish the\nfacts resolved by the utilization review organization.\n 4. Modifications and exceptions to case payment rates. Case based\nrates of payment shall be modified and per diem or other unit of service\npayments shall be provided, or exceptions shall be made to case\npayments, in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner, in the following\ncircumstances:\n (a) where a case that is eligible for payment under the case based\npayment system is transferred between general hospitals, the receiving\nhospital shall be reimbursed its total case payment amount for the\ndiagnosis-related group (including any payments made in accordance with\nthis subdivision), and the transferring hospital shall receive\nreimbursement on a basis consistent with the methodology developed for\nthe elimination of transfer patient costs in accordance with\nsubparagraph (i) of paragraph (c) of subdivision six of this section\nplus additions contained in subparagraph (ii) of paragraph (a) of\nsubdivision one of this section on a per diem basis. The payment to a\ntransferring general hospital shall not exceed the case payment amount\nfor the diagnosis-related group computed in accordance with this\nsection;\n (b) where the cost per case for a patient that does not qualify for\npayment pursuant to paragraph (a) or (d) of this subdivision is in\nexcess of the basic case payment rate for the diagnosis-related group\nmultiplied by two and the overall hospital-specific average cost per\ncase multiplied by six, the payment to the general hospital in addition\nto the basic case payment rate will be one hundred percent, or such\npercentage as computed in accordance with subparagraph (ii) of paragraph\n(c) of subdivision six of this section, multiplied by the difference\nbetween the general hospital's cost for the case and the greater of the\nbasic case payment rate for the diagnosis-related group multiplied by\ntwo or the overall hospital-specific cost per case multiplied by six. In\ndetermining whether a case qualifies for payment under this paragraph,\nprospective rate adjustments made in accordance with paragraph (c) of\nsubdivision eleven of this section to reflect the retroactive impact of\nan adjustment on prior rates, shall be excluded. Where a case qualifies\nfor payment pursuant to both this paragraph and paragraph (c) of this\nsubdivision then payment shall be made in accordance with this paragraph\nif such payment exceeds that which would be made in accordance with\nparagraph (c) of this subdivision. The general hospital's costs per case\nshall be computed by adjusting the general hospital's actual charges for\nthe case by the general hospital's inpatient cost to charge ratio;\n (c) where a patient is identified as a long stay patient, payment to\nthe general hospital in addition to the basic case payment rate shall be\non a basis consistent with the methodology developed for the elimination\nof long stay patient costs in accordance with subparagraph (iii) of\nparagraph (c) of subdivision six of this section. Where a case qualifies\nfor payment pursuant to both this paragraph and paragraph (b) of this\nsubdivision then payment shall be made in accordance with paragraph (b)\nof this subdivision if such payment exceeds that which would be made in\naccordance with this paragraph. A long stay patient is defined as an\ninpatient whose hospital stay exceeds the long stay outlier threshold\nfor the diagnosis-related group;\n (d) where a patient is identified as a short stay patient, payment to\nthe general hospital shall be on a basis consistent with the methodology\ndeveloped for the elimination of short stay patient costs in accordance\nwith subparagraph (iv) of paragraph (c) of subdivision six of this\nsection plus additions contained in subparagraph (ii) of paragraph (a)\nof subdivision one of this section on a per diem basis. A short stay\npatient is defined as an inpatient discharged from the hospital on the\nsame day of admission, or the day after admission except for those stays\nwhere the statewide mean length of stay for the diagnosis-related group\nis less than three days, or whose hospital stay is not greater than\ntwenty percent of the statewide mean length of stay for the\ndiagnosis-related group with which the patient is identified, excluding\nnormal newborn cases and normal deliveries;\n (e) in cases where a general hospital or distinct unit of a general\nhospital is not or would not have been reimbursed on a case based\npayment per diagnosis-related group for inpatient services provided on\nor before December thirty-first, two thousand one, to beneficiaries of\ntitle XVIII of the federal social security act (medicare), reimbursement\nshall be on a per diem basis computed for excluded general hospitals\nbased on the hospital's reimbursable inpatient operating cost base, or\nfor excluded distinct units of general hospitals based on the distinct\nunit's reimbursable inpatient operating cost base, determined in\naccordance with paragraph (d) of subdivision one of this section,\nprojected to the applicable rate period by the trend factor determined\nin accordance with subdivision ten of this section, and increased in\naccordance with subparagraphs (i), (iii) and (iv) of paragraph (e) of\nsubdivision one of this section to reflect special additional inpatient\noperating costs, and adjusted to exclude a factor for operating costs of\npatients who required an alternate level of care developed consistent\nwith the provisions of paragraph (h) of this subdivision, and increased\nfor excluded general hospitals to reflect the product of the group\ncategory percentage amount applicable for purposes of determining group\ncategory average inpatient reimbursable operating cost per discharge\n(price) in the rate period pursuant to paragraph (b) of subdivision five\nof this section for general hospitals reimbursed on a case based payment\nper diagnosis-related group applied to such excluded general hospital's\nadditional cost increases determined in accordance with subparagraph\n(ii) of paragraph (e) of subdivision one of this section, and adjusted\non a payor category basis to reflect allocation of malpractice insurance\ncosts in accordance with the methodology developed pursuant to\nsubparagraph (ii) of paragraph (h) of subdivision eleven of this\nsection, for those patients included in the payor categories pursuant to\nthe provisions of paragraph (a) or (b) of subdivision one of this\nsection; provided, however, for those patients included in the payor\ncategories pursuant to the provisions of paragraph (b) of subdivision\none of this section payment shall be at the per diem payment to the\nhospital or distinct unit of the hospital for services provided to\nsubscribers of corporations organized and operating in accordance with\narticle forty-three of the insurance law, adjusted for uncovered\nservices, and increased by thirteen percent or by five percent, as the\ncase may be; provided further, however, for those general hospitals that\nare not reimbursed on a case-based payment per diagnosis-related group\nfor inpatient services provided to beneficiaries of title XVIII of the\nfederal social security act (medicare) as a result of their designation\nby the secretary of health and human services as a comprehensive cancer\nhospital or as a result of their status as an acute care exempt\nchildren's hospital, the base year for determining payments for services\nin such facilities shall be nineteen hundred eighty-seven, provided,\nhowever, such hospitals shall be allowed adjustments in rates of payment\nto reflect costs incurred subsequent to nineteen hundred eighty-seven\nbut not reflected in such base. Funds received by a general hospital\nbased on the payment differential in accordance with paragraph (b) of\nsubdivision one of this section applied pursuant to this paragraph shall\nbe hospital funds for patient care purposes. For those patients not\ncovered under the provisions of paragraph (a) or (b) of subdivision one\nof this section, or who are not covered under the provisions of\nparagraph (a) of subdivision two of this section, payment shall be on\nthe basis of the hospital's charge schedule, limited to one hundred\ntwenty percent of the total per diem payment that would have been made\nif the patient were included in the payor categories pursuant to the\nprovisions of paragraph (b) of subdivision one of this section. Rates of\npayment for excluded general hospitals and excluded distinct units of\ngeneral hospitals for a rate period shall be increased on a per diem\nbasis by additions and allowances specified in subparagraphs (ii) and\n(iii) of paragraph (a) of subdivision one of this section. In adopting\nregulations for purposes of determining rates of payment for psychiatric\nservices pursuant to this paragraph, the council and the commissioner\nshall consider the advice of the commissioner of mental health and may\ninclude case mix and other adjustments for such rates of payment. The\ncommissioner of mental health shall study and report on alternative\nprocedures for the development of rates of payment for inpatient\npsychiatric care. Such report shall be submitted to the governor, the\nlegislature and the commissioner of health by January first, nineteen\nhundred ninety-three. Recommendations for alternative financing shall\ntake into consideration methods to improve access to inpatient care for\nseriously mentally ill persons.\n (e-1) Notwithstanding any inconsistent provision of paragraph (e) of\nthis subdivision or any other contrary provision of law and subject to\nthe availability of federal financial participation, per diem rates of\npayment by governmental agencies for a general hospital or a distinct\nunit of a general hospital for inpatient psychiatric services that would\notherwise be subject to the provisions of paragraph (e) of this\nsubdivision shall, with regard to days of service associated with\nadmissions occurring on and after April first, two thousand ten, be in\naccordance with the following:\n (i) For rate periods on or after April first, two thousand ten, the\ncommissioner, in consultation with the commissioner of the office of\nmental health, shall promulgate regulations, and may promulgate\nemergency regulations, establishing methodologies for determining the\noperating cost components of rates of payments for services described in\nthis paragraph. The commissioner may make such adjustments to the\nmethodology for computing such rates as is necessary to achieve no\naggregate, net growth in overall Medicaid expenditures related to such\nrates, as compared to such aggregate expenditures from the prior year.\nIn determining the updated base year to be utilized pursuant to this\nsubparagraph, the commissioner shall take into account the base year\ndetermined in accordance with paragraph (c) of subdivision thirty-five\nof this section.\n Furthermore, the commissioner shall establish such rates in\nconsultation with industry representatives to achieve an appropriate\nbase year update to the operating cost components of rates of payment\nfor services described in this paragraph and that takes into account\nfacility cost, mix of services, and patient specific conditions.\n (ii) Rates of payment established pursuant to subparagraph (i) of this\nparagraph shall reflect an aggregate net statewide increase in\nreimbursement for such services of up to twenty-five million dollars on\nan annual basis.\n (iii) Capital cost reimbursement for general hospitals otherwise\nsubject to the provisions of this paragraph shall remain subject to the\nprovisions of subdivision eight of this section.\n (e-2) Notwithstanding any inconsistent provision of paragraph (e) of\nthis subdivision or any other contrary provision of law and subject to\nthe availability of federal financial participation, per diem rates of\npayment by governmental agencies for inpatient services provided by a\ngeneral hospital or a distinct unit of a general hospital for services,\nas described below, that would otherwise be subject to the provisions of\nparagraph (e) of this subdivision, shall, with regard to days of service\noccurring on and after December first, two thousand nine, be in accord\nwith the following:\n (i) For physical medical rehabilitation services and for chemical\ndependency rehabilitation services, the operating cost component of such\nrates shall reflect the use of two thousand five operating costs for\neach respective category of services as reported by each facility to the\ndepartment prior to July first, two thousand nine and as adjusted for\ninflation pursuant to paragraph (c) of subdivision ten of this section,\nas otherwise modified by any applicable statute, provided, however, that\nsuch two thousand five reported operating costs, but not including\nreported direct medical education cost, shall, for rate-setting\npurposes, be held to a ceiling of one hundred ten percent of the average\nof such reported costs in the region in which the facility is located,\nas determined pursuant to clause (E) of subparagraph (iv) of paragraph\n(1) of this subdivision; and provided, further, that for physical\nmedical rehabilitation services, the commissioner is authorized to make\nadjustments to such rates for the purposes of reimbursing pediatric\nventilator services.\n (ii) For services provided by rural hospitals designated as critical\naccess hospitals in accordance with title XVIII of the federal social\nsecurity act, the operating cost component of such rates shall reflect\nthe use of two thousand five operating costs as reported by each\nfacility to the department prior to July first, two thousand nine and as\nadjusted for inflation pursuant to paragraph (c) of subdivision ten of\nthis section, as otherwise modified by any applicable statutes,\nprovided, however, that such two thousand five reported operating costs\nshall, for rate-setting purposes, be held to a ceiling of one hundred\nten percent of the average of such reported costs for all such\ndesignated hospitals statewide.\n (iii) For inpatient services provided by specialty long term acute\ncare hospitals and for inpatient services provided by cancer hospitals\nas so designated as of December thirty-first, two thousand eight, the\noperating cost component of such rates shall reflect the use of two\nthousand five operating costs for each respective category of facility\nas reported by each facility to the department prior to July first, two\nthousand nine and as adjusted for inflation pursuant to paragraph (c) of\nsubdivision ten of this section, as otherwise modified by any applicable\nstatutes.\n (iv) For facilities designated by the federal department of health and\nhuman services as exempt acute care children's hospitals as of December\nthirty-first, two thousand eight, for which a discrete institutional\ncost report was filed for the two thousand seven calendar year, and\nwhich has reported Medicaid discharges greater than fifty percent of\ntotal discharges in such cost report, shall be determined in accordance\nwith the following:\n (A) The operating cost component of such rates shall reflect the use\nof two thousand seven operating costs as reported by each facility to\nthe department prior to July first, two thousand nine and as adjusted\nfor the inflation pursuant to paragraph (c) of subdivision ten of this\nsection, as otherwise modified by any applicable statutes, and as\nfurther adjusted as the commissioner deems appropriate, including\ntransition adjustments. Such rates shall be determined on a per case\nbasis or per diem basis, as set forth in regulations promulgated by the\ncommissioner.\n (B) The operating component of outpatient specialty rates of hospitals\nsubject to this subparagraph shall reflect the use of two thousand seven\noperating costs as reported to the department prior to December first,\ntwo thousand eight, and shall include such adjustments as the\ncommissioner deems appropriate.\n (C) The base period reported operating costs used to establish\ninpatient and outpatient rates determined pursuant to this subparagraph\nshall be updated no less frequently than every two years and each such\nhospital shall submit such additional data as the commissioner may\nrequire to assist in the development of ambulatory patient groups (APGs)\nrates for such hospitals' outpatient specialty services.\n (D) Notwithstanding any other provisions of law to the contrary and\nsubject to the availability of federal financial participation, for all\nrate periods on and after April first, two thousand fourteen, the\noperating component of outpatient specialty rates of hospitals subject\nto this subparagraph shall be determined by the commissioner pursuant to\nregulations, including emergency regulations, and in consultation with\nsuch specialty outpatient facilities, provided however, that for the\nperiod beginning October first, two thousand thirteen through September\nthirtieth, two thousand fourteen, services provided to patients enrolled\nin medicaid managed care shall be paid by the medicaid managed care\nplans at no less than the otherwise applicable medicaid fee-for-service\nrates, as computed in accordance with clause (B) of this subparagraph\nfor the period beginning October first, two thousand thirteen through\nMarch thirty-first, two thousand fourteen and as computed in accordance\nwith this clause for the period beginning April first, two thousand\nfourteen through September thirtieth, two thousand fourteen.\n (E) For facilities subject to the provisions of this subparagraph, the\ndepartment shall examine the feasibility of reimbursing such facilities\nfor services provided to children eligible for medical assistance on a\nnon-fee-for-service basis. For purposes of this clause,\n"non-fee-for-service" shall be defined as an alternative payment method\nto bundle certain services rendered by such facility, including\ninpatient, outpatient, specialty outpatient and physician services, in\namounts determined by the commissioner. The department shall examine:\n (a) what services could be provided pursuant to the\nnon-fee-for-service basis;\n (b) how to ensure, for children enrolled in Medicaid managed care,\nthat their health plans can continue to assist in the coordination of\ntheir care, particularly upon discharge from inpatient, outpatient or\nspecialty outpatient services; and\n (c) whether incentives should be incorporated for meeting quality\nbenchmarks or achieving efficiencies in the delivery and coordination of\ncare or whether other means should be considered to achieve these\nobjectives.\n The department shall provide a report of its findings and\nrecommendations to the governor and legislature no later than March\nfirst, two thousand fifteen.\n (v) Rates established pursuant to this paragraph shall be deemed as\nexcluding reimbursement for physician services for inpatient services\nand claims for Medicaid fee payments for such physician services for\nsuch inpatient care may be submitted separately from the rate in\naccordance with otherwise applicable law.\n (vi) Capital cost reimbursement for general hospitals otherwise\nsubject to the provisions of this paragraph shall remain subject to the\nprovisions of subdivision eight of this section.\n (vii) The commissioner may promulgate regulations, including emergency\nregulations, implementing the provisions of this paragraph, and,\nfurther, such regulations may provide for an update of the base year\ncosts and statistics used to compute such rates, provided, however, that\nsuch base year update shall take effect no earlier than April first, two\nthousand fifteen, and provided further, however, that the commissioner\nmay make such adjustments to such utilization and to the methodology for\ncomputing such rates as is necessary to achieve no aggregate, net growth\nin overall Medicaid expenditures related to such rates, as compared to\nsuch aggregate expenditures from the prior year. In determining the\nupdated base year to be utilized pursuant to this subparagraph, the\ncommissioner shall take into account the base year determined in\naccordance with paragraph (c) of subdivision thirty-five of this\nsection.\n (viii) The operating cost component of rates of payment pursuant to\nthis paragraph for a general hospital or distinct unit of a general\nhospital without adequate cost experience shall be based on the lower of\nthe facility's or unit's inpatient budgeted operating costs per day,\nadjusted to actual, or the applicable regional ceiling, if any.\n (ix) The operating cost component of inpatient medicaid rates subject\nto subparagraphs (i), (ii) and (iii) of this paragraph shall, with\nregard to alternative level of care (ALC) days of care be subject to\ncomputation pursuant to paragraph (h) of this subdivision.\n * (f) where a general hospital having two hundred or less certified\nacute care beds, based on the total number of inpatient acute care beds\nfor which such general hospital is certified pursuant to the operating\ncertificate issued for such general hospital in accordance with section\ntwenty-eight hundred five of this article in effect on June thirtieth,\nnineteen hundred ninety, is classified as a rural hospital for purposes\nof determining payment for inpatient services provided to beneficiaries\nof title XVIII of the federal social security act (medicare) or under\nstate regulations, such general hospital may at its option have its\nreimbursable inpatient operating cost component of case based rates of\npayment per diagnosis-related group based one hundred percent on the\ngeneral hospital's hospital-specific average reimbursable inpatient\noperating cost per discharge determined in accordance with subdivision\nsix of this section; provided however, commencing April first, nineteen\nhundred ninety-six the reimbursable inpatient operating cost component\nof case based rates of payment per diagnosis-related group for patients\neligible for payments made by state governmental agencies shall be\nreduced by five percent to encourage improved productivity and\nefficiency. Such election shall not alter the calculation of the group\nprice component calculated pursuant to subparagraph (i) of paragraph (a)\nof subdivision seven of this section;\n * NB There are 2 par. (f)'s\n * (f) where a general hospital having two hundred or less certified\nacute care beds, based on the total number of inpatient acute care beds\nfor which such general hospital is certified pursuant to the operating\ncertificate issued for such general hospital in accordance with section\ntwenty-eight hundred five of this article in effect on June thirtieth,\nnineteen hundred ninety, is classified as a rural hospital for purposes\nof determining payment for inpatient services provided to beneficiaries\nof title XVIII of the federal social security act (medicare) or under\nstate regulations, such general hospital may at its option have its\nreimbursable inpatient operating cost component of case based rates of\npayment per diagnosis-related group based one hundred percent on the\ngeneral hospital's hospital-specific average reimbursable inpatient\noperating cost per discharge determined in accordance with subdivision\nsix of this section; provided however,\n (i) commencing April first, nineteen hundred ninety-six through July\nthirty-first, nineteen hundred ninety-six, the reimbursable inpatient\noperating cost component of case based rates of payment per\ndiagnosis-related group, excluding any operating cost components related\nto direct and indirect expenses of graduate medical education, for\npatients eligible for payments made by state governmental agencies shall\nbe reduced by five percent; and\n (ii) commencing August first, nineteen hundred ninety-six through\nMarch thirty-first, nineteen hundred ninety-seven, the reimbursable\ninpatient operating cost component of case based rates of payment per\ndiagnosis-related group, excluding any operating cost components related\nto direct and indirect expenses of graduate medical education, for\npatients eligible for payments made by state governmental agencies shall\nbe reduced by two and five-tenths percent; and\n (iii) commencing April first, nineteen hundred ninety-seven through\nMarch thirty-first, nineteen hundred ninety-nine and commencing July\nfirst, nineteen hundred ninety-nine through March thirty-first, two\nthousand and April first, two thousand through March thirty-first, two\nthousand five and for periods commencing April first, two thousand five\nthrough March thirty-first, two thousand six and for periods commencing\non and after April first, two thousand six through March thirty-first,\ntwo thousand seven, and for periods commencing on and after April first,\ntwo thousand seven through March thirty-first, two thousand nine, and\nfor periods commencing on and after April first, two thousand nine\nthrough March thirty-first, two thousand eleven, the reimbursable\ninpatient operating cost component of case based rates of payment per\ndiagnosis-related group, excluding any operating cost components related\nto direct and indirect expenses of graduate medical education, for\npatients eligible for payments made by state governmental agencies shall\nbe reduced by three and thirty-three hundredths percent to encourage\nimproved productivity and efficiency. Such election shall not alter the\ncalculation of the group price component calculated pursuant to\nsubparagraph (i) of paragraph (a) of subdivision seven of this section;\n * NB Effective until December 31, 2026\n * (f) where a general hospital having two hundred or less certified\nacute care beds, based on the total number of inpatient acute care beds\nfor which such general hospital is certified pursuant to the operating\ncertificate issued for such general hospital in accordance with section\ntwenty-eight hundred five of this article in effect on June thirtieth,\nnineteen hundred ninety, is classified as a rural hospital for purposes\nof determining payment for inpatient services provided to beneficiaries\nof title XVIII of the federal social security act (medicare) or under\nstate regulations, such general hospital may at its option have its\nreimbursable inpatient operating cost component of case based rates of\npayment per diagnosis-related group based one hundred percent on the\ngeneral hospital's hospital-specific average reimbursable inpatient\noperating cost per discharge determined in accordance with subdivision\nsix of this section; provided however,\n (i) commencing April first, nineteen hundred ninety-six through July\nthirty-first, nineteen hundred ninety-six, the reimbursable inpatient\noperating cost component of case based rates of payment per\ndiagnosis-related group, excluding any operating cost components related\nto direct and indirect expenses of graduate medical education, for\npatients eligible for payments made by state governmental agencies shall\nbe reduced by five percent; and\n (ii) commencing August first, nineteen hundred ninety-six through\nMarch thirty-first, nineteen hundred ninety-seven, the reimbursable\ninpatient operating cost component of case based rates of payment per\ndiagnosis-related group, excluding any operating cost components related\nto direct and indirect expenses of graduate medical education, for\npatients eligible for payments made by state governmental agencies shall\nbe reduced by two and five-tenths percent; and\n (iii) commencing April first, nineteen hundred ninety-seven through\nMarch thirty-first, nineteen hundred ninety-nine and commencing July\nfirst, nineteen hundred ninety-nine through March thirty-first, two\nthousand, the reimbursable inpatient operating cost component of case\nbased rates of payment per diagnosis-related group, excluding any\noperating cost components related to direct and indirect expenses of\ngraduate medical education, for patients eligible for payments made by\nstate governmental agencies shall be reduced by three and thirty-three\nhundredths percent to encourage improved productivity and efficiency.\nSuch election shall not alter the calculation of the group price\ncomponent calculated pursuant to subparagraph (i) of paragraph (a) of\nsubdivision seven of this section;\n * NB Effective and expires December 31, 2026\n * (f) where a general hospital having two hundred or less certified\nacute care beds, based on the total number of inpatient acute care beds\nfor which such general hospital is certified pursuant to the operating\ncertificate issued for such general hospital in accordance with section\ntwenty-eight hundred five of this article in effect on June thirtieth,\nnineteen hundred ninety, is classified as a rural hospital for purposes\nof determining payment for inpatient services provided to beneficiaries\nof title XVIII of the federal social security act (medicare) or under\nstate regulations, such general hospital may at its option have its\nreimbursable inpatient operating cost component of case based rates of\npayment per diagnosis-related group based one hundred percent on the\ngeneral hospital's hospital-specific average reimbursable inpatient\noperating cost per discharge determined in accordance with subdivision\nsix of this section. Such election shall not alter the calculation of\nthe group price component calculated pursuant to subparagraph (i) of\nparagraph (a) of subdivision seven of this section;\n * NB Effective December 31, 2026\n * NB There are 2 par (f)'s\n (g) in cases where general hospitals or distinct units of general\nhospitals, other than those specified in paragraphs (e) and (f) of this\nsubdivision, may be excluded from case based payments or receive an\nadjustment to case based payment rates. An exclusion or adjustment shall\nbe provided only where the council, subject to the approval of the\ncommissioner, determines that the case based rates of payment determined\nin accordance with this section would not reflect medically appropriate\npatterns of health resource use for such general hospital services\nefficiently and economically provided. If an exclusion is provided, then\nthe reimbursement provisions contained in paragraph (e) of this\nsubdivision shall apply. The commissioner shall provide to the council\nan analysis of the effect of case based payments on rural general\nhospitals and the council, subject to the above criteria and the\napproval of the commissioner, may exclude for any of the annual rate\nperiods beginning on or after January first, nineteen hundred\neighty-eight any of these general hospitals from case based payments or\nprovide an adjustment to the case based payments in addition to that\nauthorized in accordance with paragraph (f) of this subdivision;\n (h) where alternate level of care (ALC) days are provided, a factor as\ndetermined in subparagraph (i) of this paragraph for the costs of these\npatients in a general hospital shall not be included in computations\nrelating to the determination of general hospital case based rates of\npayment pursuant to this section. Alternate level of care days shall be\ndays of care provided by a general hospital to a patient for whom it has\nbeen determined that inpatient hospital services are not medically\nnecessary, but that post-hospital extended care services are medically\nnecessary and are being provided by the general hospital. Separate rates\nof payment shall be established for such patients based on the level of\ncare required and shall reflect: (i) operating costs based on the\nnineteen hundred eighty-seven regional average operating cost component\nof rates of payment for hospital based residential health care\nfacilities determined in accordance with section twenty-eight hundred\neight of this article and trended to the rate period, and (ii) additions\ncontained in subparagraph (iii) of paragraph (a) of subdivision one of\nthis section. In the event that federal financial participation in\npayments made for beneficiaries eligible for medical assistance under\ntitle XIX of the federal social security act based upon the rates\ncalculated in accordance with this paragraph is not approved by the\nfederal government, the council subject to the approval of the\ncommissioner shall adopt regulations for such payments;\n (i) if diagnosis-related groups are not adjusted or established in\naccordance with paragraph (a) of subdivision three of this section for\nservices to acquired immune deficiency syndrome (AIDS) patients, then\ngeneral hospitals shall receive separate payments for these patients\nbased on regulations adopted by the council and approved by the\ncommissioner;\n (j) where general hospitals or distinct units of general hospitals are\nexcluded from or receive an adjustment to case based payments per\ndiagnosis-related group in accordance with paragraph (e), (f) or (g) of\nthis subdivision, reimbursement shall continue to be calculated in\naccordance with such paragraph until the beginning of the rate period\nimmediately following the date when the general hospital or the distinct\nunit of the general hospital is no longer excluded from or no longer\nreceives an adjustment to case based payments per diagnosis-related\ngroup for inpatient services provided to beneficiaries of title XVIII of\nthe federal social security act (medicare), or until appropriate\ndiagnosis-related groups have been developed for the specialized service\nprovided by the general hospital or distinct unit of the general\nhospital, pursuant to paragraph (a) of subdivision three of this\nsection; and\n * (k) for facilities designated by the federal department of health\nand human services as an exempt acute care children's hospital, payment\neffective January first, nineteen hundred ninety-four will be based upon\na hospital specific case payment amount inclusive of high cost and high\nlength of stay outlier costs. The nineteen hundred eighty-seven base\nyear cost, trended, volume adjusted and case mix adjusted where\napplicable to nineteen hundred ninety-two, trended will be utilized to\ndetermine the rate of payment effective January first, nineteen hundred\nninety-four. Commencing April first, nineteen hundred ninety-six, the\noperating cost component of rates of payment for patients eligible for\npayments made by a state governmental agency shall be reduced by five\npercent to encourage improved productivity and efficiency. The facility\nwill be eligible to receive the financial incentives for the physician\nspecialty weighting incentive towards primary care pursuant to\nsubparagraph (ii) of paragraph (a) of subdivision twenty-five of this\nsection.\n * NB There are 2 par (k)'s\n * (k) for facilities designated by the federal department of health\nand human services as an exempt acute care children's hospital, payment\neffective January first, nineteen hundred ninety-four will be based upon\na hospital specific case payment amount inclusive of high cost and high\nlength of stay outlier costs. The nineteen hundred eighty-seven base\nyear cost, trended, volume adjusted and case mix adjusted where\napplicable to nineteen hundred ninety-two, trended will be utilized to\ndetermine the rate of payment effective January first, nineteen hundred\nninety-four.\n (i) Commencing April first, nineteen hundred ninety-six through July\nthirty-first, nineteen hundred ninety-six, the operating cost component\nof rates of payment, excluding any operating cost components related to\ndirect and indirect expenses of graduate medical education, for patients\neligible for payments made by a state governmental agency shall be\nreduced by five percent; and\n (ii) commencing August first, nineteen hundred ninety-six through\nMarch thirty-first, nineteen hundred ninety-seven the operating cost\ncomponent of rates of payment, excluding any operating cost components\nrelated to direct and indirect expenses of graduate medical education,\nfor patients eligible for payments made by a state governmental agency\nshall be reduced by two and five-tenths percent; and\n (iii) commencing April first, nineteen hundred ninety-seven through\nMarch thirty-first, nineteen hundred ninety-nine and commencing July\nfirst, nineteen hundred ninety-nine through March thirty-first, two\nthousand and April first, two thousand through March thirty-first, two\nthousand five and commencing April first, two thousand five through\nMarch thirty-first, two thousand six, and for periods commencing on and\nafter April first, two thousand six through March thirty-first, two\nthousand seven, and for periods commencing on and after April first, two\nthousand seven through March thirty-first, two thousand nine, and for\nperiods commencing on and after April first, two thousand nine through\nMarch thirty-first, two thousand eleven, the operating cost component of\nrates of payment, excluding any operating cost components related to\ndirect and indirect expenses of graduate medical education, for patients\neligible for payments made by a state governmental agency shall be\nreduced by three and thirty-three hundredths percent to encourage\nimproved productivity and efficiency. The facility will be eligible to\nreceive the financial incentives for the physician specialty weighting\nincentive towards primary care pursuant to subparagraph (ii) of\nparagraph (a) of subdivision twenty-five of this section.\n * NB Effective until December 31, 2026\n * (k) for facilities designated by the federal department of health\nand human services as an exempt acute care children's hospital, payment\neffective January first, nineteen hundred ninety-four will be based upon\na hospital specific case payment amount inclusive of high cost and high\nlength of stay outlier costs. The nineteen hundred eighty-seven base\nyear cost, trended, volume adjusted and case mix adjusted where\napplicable to nineteen hundred ninety-two, trended will be utilized to\ndetermine the rate of payment effective January first, nineteen hundred\nninety-four.\n (i) Commencing April first, nineteen hundred ninety-six through July\nthirty-first, nineteen hundred ninety-six, the operating cost component\nof rates of payment, excluding any operating cost components related to\ndirect and indirect expenses of graduate medical education for patients\neligible for payments made by a state governmental agency shall be\nreduced by five percent; and\n (ii) commencing August first, nineteen hundred ninety-six through\nMarch thirty-first, nineteen hundred ninety-seven the operating cost\ncomponent of rates of payment, excluding any operating cost components\nrelated to direct and indirect expenses of graduate medical education,\nfor patients eligible for payments made by a state governmental agency\nshall be reduced by two and five-tenths percent; and\n (iii) commencing April first, nineteen hundred ninety-seven through\nMarch thirty-first, nineteen hundred ninety-nine and commencing July\nfirst, nineteen hundred ninety-nine through March thirty-first, two\nthousand, the operating cost component of rates of payment, excluding\nany operating cost components related to direct and indirect expenses of\ngraduate medical education, for patients eligible for payments made by a\nstate governmental agency shall be reduced by three and thirty-three\nhundredths percent to encourage improved productivity and efficiency.\nThe facility will be eligible to receive the financial incentives for\nthe physician specialty weighting incentive towards primary care\npursuant to subparagraph (ii) of paragraph (a) of subdivision\ntwenty-five of this section.\n * NB Effective and expires December 31, 2026\n * (k) for facilities designated by the federal department of health\nand human services as an exempt acute care children's hospital, payment\neffective January first, nineteen hundred ninety-four will be based upon\na hospital specific case payment amount inclusive of high cost and high\nlength of stay outlier costs. The nineteen hundred eighty-seven base\nyear cost, trended, volume adjusted and case mix adjusted where\napplicable to nineteen hundred ninety-two, trended will be utilized to\ndetermine the rate of payment effective January first, nineteen hundred\nninety-four. The facility will be eligible to receive the financial\nincentives for the physician specialty weighting incentive towards\nprimary care pursuant to subparagraph (ii) of paragraph (a) of\nsubdivision twenty-five of this section.\n * NB Effective December 31, 2026\n * NB There are 2 par (k)'s\n (l) Notwithstanding any inconsistent provision of this section and\nsubject to the availability of federal financial participation, rates of\npayment by governmental agencies for general hospitals which are\ncertified by the office of alcoholism and substance abuse services to\nprovide inpatient detoxification and withdrawal services and, with\nregard to inpatient services provided to patients discharged on and\nafter December first, two thousand eight and who are determined to be in\ndiagnosis-related groups as defined by the commissioner and published on\nthe New York state department of health website, shall be made on a per\ndiem basis in accordance with the following:\n (i) for the period December first, two thousand eight through March\nthirty-first, two thousand nine, seventy-five percent of the operating\ncost component of such rates of payments shall reflect the operating\ncost component of rates of payment effective for December thirty-first,\ntwo thousand seven, as adjusted for inflation pursuant to paragraph (c)\nof subdivision ten of this section, as otherwise modified by any\napplicable statutes, and twenty-five percent of such rates shall reflect\nthe use of two thousand six operating costs as reported by each facility\nto the department prior to two thousand eight and as computed in\naccordance with the provisions of subparagraph (iv) of this paragraph;\n (ii) for the period April first, two thousand nine through March\nthirty-first, two thousand ten, thirty-seven and five tenths percent of\nthe operating cost component of such rates of payment shall reflect the\noperating cost component of rates of payment effective December\nthirty-first, two thousand seven, as adjusted for inflation pursuant to\nparagraph (c) of subdivision ten of this section, as otherwise modified\nby any applicable statutes, and sixty-two and five tenths percent of\nsuch rates of payment shall reflect the use of two thousand six\noperating costs as reported by each facility to the department prior to\ntwo thousand eight and as computed in accordance with the provisions of\nsubparagraph (iv) of this paragraph;\n (iii) for periods on and after April first, two thousand ten, one\nhundred percent of the operating cost component of such rates of payment\nshall reflect the use of two thousand six operating costs as reported to\nthe department prior to two thousand eight and as computed in accordance\nwith the provisions of subparagraph (iv) of this paragraph.\n (iv) rates of payment computed in accordance with this paragraph and\nreflecting the use of two thousand six base year operating costs shall\nbe in accord with the following, provided, however that the commissioner\nmay establish criteria under which reimbursement may be provided at\nhigher percentages and for longer periods.\n (A) For each of the regions within the state as described in clause\n(E) of this subparagraph the commissioner shall determine the average\nper diem cost incurred by general hospitals in that region subject to\nthe provisions of this paragraph with regard to inpatients requiring\nmedically managed detoxification services, as defined by applicable\nregulations promulgated by the office of alcoholism and substance abuse\nservices. In determining such costs the commissioner shall utilize two\nthousand six costs and statistics as reported by such hospitals to the\ndepartment prior to two thousand eight.\n (B) Per diem payments for inpatients requiring medically managed\ninpatient detoxification services shall reflect one hundred percent of\nthe per diem amounts computed pursuant to clause (A) of this\nsubparagraph for the applicable region in which the facility is located\nand as trended forward to adjust for inflation, provided however, that\nsuch payments shall be reduced by fifty percent for any such services\nprovided on or after the sixth day of services through the tenth day of\nservices, and further provided that no payments shall be made for any\nservices provided on or after the eleventh day.\n (C) Per diem payments for inpatients requiring medically supervised\nwithdrawal services, as defined by applicable regulations promulgated by\nthe office of alcoholism and substance abuse services, shall reflect one\nhundred percent of the per diem amounts computed pursuant to clause (A)\nof this subparagraph for the applicable region in which the facility is\nlocated for the period January first, two thousand nine through December\nthirty-first, two thousand nine, and as trended forward to adjust for\ninflation, and shall reflect seventy-five percent of such per diem\namounts for periods on and after January first, two thousand ten, as\ntrended forward to adjust for inflation, provided, however, that such\npayments shall be reduced by fifty percent for any services provided on\nor after the sixth day of services through the tenth day of services,\nand further provided that no payments shall be made for any services\nprovided on and after the eleventh day.\n (D) Per diem payments for inpatients placed in observation beds, as\ndefined by applicable regulations promulgated by the office of\nalcoholism and substance abuse services, shall be at the same level as\nwould be paid pursuant to clause (A) of this paragraph, provided,\nhowever, that such payments shall not apply for more than two days of\ncare, after which payments for such inpatients shall reflect their\ndesignation as requiring either medically managed detoxification\nservices or medically supervised withdrawal services, and further\nprovided that days of care provided in such observation beds shall, for\nreimbursement purposes, be fully reflected in the computation of the\ninitial five days of care as set forth in clauses (A) and (B) of this\nsubparagraph.\n (E) For the purposes of this paragraph, the regions of the state shall\nbe as follows:\n (I) New York city, consisting of the counties of Bronx, New York,\nKings, Queens and Richmond;\n (II) Long Island, consisting of the counties of Nassau and Suffolk;\n (III) Northern metropolitan, consisting of the counties of Columbia,\nDelaware, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and\nWestchester;\n (IV) Northeast, consisting of the counties of Albany, Clinton, Essex,\nFulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady,\nSchoharie, Warren and Washington;\n (V) Utica/Watertown, consisting of the counties of Franklin, Herkimer,\nLewis, Oswego, Otsego, St. Lawrence, Jefferson, Chenango, Madison and\nOneida;\n (VI) Central, consisting of the counties of Broome, Cayuga, Chemung,\nCortland, Onondaga, Schuyler, Seneca, Steuben, Tioga and Tompkins;\n (VII) Rochester, consisting of Monroe, Ontario, Livingston, Wayne and\nYates;\n (VIII) Western, consisting of the counties of Allegany, Cattaraugus,\nChautauqua, Erie, Genesee, Niagara, Orleans and Wyoming.\n (F) Capital cost reimbursement for general hospitals otherwise subject\nto the provisions of this paragraph shall remain subject to the\nprovisions of subdivision eight of this section.\n (v) the commissioner may promulgate regulations, including emergency\nregulations, providing for an update of the base year costs and\nstatistics used to compute rates of payment pursuant to this paragraph,\nprovided, however, that such base year update shall take effect no\nearlier than April first, two thousand fifteen, and provided further,\nhowever, that the commissioner may make such adjustments to such\nutilization and to the methodology for computing such rates as is\nnecessary to achieve no aggregate, net growth in overall Medicaid\nexpenditures related to such rates, as compared to such aggregate\nexpenditures from the prior year. In determining the updated base year\nto be utilized pursuant to this subparagraph, the commissioner shall\ntake into account the base year determined in accordance with paragraph\n(c) of subdivision thirty-five of this section.\n 5. Reimbursable inpatient operating cost component. (a) The\nreimbursable inpatient operating cost component of case based rates of\npayment per diagnosis-related group for general hospital inpatient\nhospital services shall be the product of the average reimbursable\ninpatient operating cost per discharge determined in accordance with\nparagraph (b) of this subdivision, adjusted by a third-party payor of\nhospital services for uncovered services by such payor, and the\nweighting factors determined in accordance with paragraph (c) of\nsubdivision three of this section.\n (b) (i) For the rate year January first, nineteen hundred eighty-eight\nthrough December thirty-first, nineteen hundred eighty-eight, average\nreimbursable inpatient operating cost per discharge shall be a composite\nsum of no less than ninety percent of the general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge determined in accordance with paragraph (a) of subdivision six\nof this section and a percentage amount not to exceed ten percent of the\ngeneral hospital's group category average inpatient reimbursable\noperating cost per discharge (price) determined in accordance with\nparagraph (a) of subdivision seven of this section such that the\ncomposite sum equals one hundred percent.\n (ii) For the rate year commencing January first, nineteen hundred\neighty-nine, average reimbursable inpatient operating cost per discharge\nshall be a composite sum of no less than seventy-five percent of the\ngeneral hospital's hospital-specific average reimbursable inpatient\noperating cost per discharge determined in accordance with paragraph (a)\nof subdivision six of this section and a percentage amount not to exceed\ntwenty-five percent of the general hospital's group category average\ninpatient reimbursable operating cost per discharge (price) determined\nin accordance with paragraph (a) of subdivision seven of this section,\nsuch that the composite sum equals one hundred percent.\n (iii) Except as provided in clause (C) of this subparagraph, for\nannual rate years commencing on or after January first, nineteen hundred\nninety, average reimbursable inpatient operating cost per discharge\nshall be a composite sum of no less than forty-five percent of the\ngeneral hospital's hospital-specific average reimbursable inpatient\noperating cost per discharge determined in accordance with paragraph (a)\nof subdivision six of this section and a percentage amount not to exceed\nfifty-five percent of the general hospital's group category average\ninpatient reimbursable operating cost per discharge (price) determined\nin accordance with paragraph (a) of subdivision seven of this section,\nsuch that the composite sum equals one hundred percent.\n ** (A) Except as provided in clause (B) of this subparagraph and\nsubparagraph (iv) of this paragraph, for annual rate years commencing on\nor after January first, nineteen hundred ninety, average reimbursable\ninpatient operating cost per discharge shall be a composite sum of no\nless than forty-five percent of the general hospital's hospital-specific\naverage reimbursable inpatient operating cost per discharge determined\nin accordance with paragraph (a) of subdivision six of this section and\na percentage amount not to exceed fifty-five percent of the general\nhospital's group category average inpatient reimbursable operating cost\nper discharge (price) determined in accordance with paragraph (a) of\nsubdivision seven of this section, such that the composite sum equals\none hundred percent.\n ** NB There are 2 clause (A)'s\n ** (A) Except as provided in clauses (B) and (C) of this subparagraph\nand subparagraphs (iv), (v) and (vi) of this paragraph, for annual rate\nyears commencing on or after January first, nineteen hundred ninety,\naverage reimbursable inpatient operating cost per discharge shall be a\ncomposite sum of no less than forty-five percent of the general\nhospital's hospital-specific average reimbursable inpatient operating\ncost per discharge determined in accordance with paragraph (a) of\nsubdivision six of this section and a percentage amount not to exceed\nfifty-five percent of the general hospital's group category average\ninpatient reimbursable operating cost per discharge (price) determined\nin accordance with paragraph (a) of subdivision seven of this section,\nsuch that the composite sum equals one hundred percent.\n ** NB Effective until December 31, 2026\n ** (A) Except as provided in clause (B) of this subparagraph, for\nannual rate years commencing on or after January first, nineteen hundred\nninety, average reimbursable inpatient operating cost per discharge\nshall be a composite sum of no less than forty-five percent of the\ngeneral hospital's hospital-specific average reimbursable inpatient\noperating cost per discharge determined in accordance with paragraph (a)\nof subdivision six of this section and a percentage amount not to exceed\nfifty-five percent of the general hospital's group category average\ninpatient reimbursable operating cost per discharge (price) determined\nin accordance with paragraph (a) of subdivision seven of this section,\nsuch that the composite sum equals one hundred percent.\n ** NB Effective December 31, 2026\n ** NB There are 2 clause (A)'s\n * (B) For discharges on or after April first, nineteen hundred\nninety-five for purposes of reimbursement of inpatient hospital services\nfor patients eligible for payments made by state governmental agencies\nassigned to one of the twenty most common diagnosis-related groups for\nall general hospitals, the average reimbursable inpatient operating cost\nper discharge of a general hospital shall be the lower of (I) the amount\ndetermined in accordance with clause (A) of this subparagraph or (II)\nthe average amount determined in accordance with clause (A) of this\nsubparagraph for all general hospitals in the group category to which\nthe hospital is assigned. The twenty most common diagnosis-related\ngroups shall be determined using discharge data for the year two years\nprior to the rate year for all general hospitals, excluding\nbeneficiaries of title XVIII of the federal social security act\n(medicare) and patients assigned to diagnosis related groups for human\nimmunodeficiency virus (HIV) infection, acquired immune deficiency\nsyndrome, alcohol/drug use or alcohol/drug induced organic mental\ndisorders, and exempt unit or exempt hospital patients.\n * NB Expired March 31, 2011\n * (C) (I) For discharges on or after July first, two thousand six\nthrough December thirty-first, two thousand six, and subject to the\navailability of federal financial participation, rates of payment by\nstate governmental agencies to Westchester medical center shall be\nincreased by an aggregate amount of twenty-five million dollars to\nassist the medical center to maintain critically needed health care\nservices.\n (II) For discharges on or after January first, two thousand seven\nthrough December thirty-first, two thousand seven, and subject to the\navailability of federal financial participation, rates of payment by\nstate governmental agencies to Westchester medical center shall be\nincreased by an aggregate amount of twenty-five million dollars to\nassist the medical center to maintain critically needed health care\nservices.\n (III) For discharges on or after January first, two thousand eight\nthrough December thirty-first, two thousand eight, and subject to the\navailability of federal financial participation, rates of payment by\nstate governmental agencies to Westchester medical center shall be\nincreased by an aggregate amount of twenty-five million dollars to\nassist the medical center to maintain critically needed health care\nservices.\n * NB Expired March 31, 2011\n * (iv) for discharges on or after April first, nineteen hundred\nninety-six for purposes of reimbursement of inpatient hospital services\nfor patients eligible for payments made by state governmental agencies,\nthe average reimbursable inpatient operating cost per discharge of a\ngeneral hospital shall be the sum of:\n (A) the amount determined in accordance with clause (B) of\nsubparagraph (iii) of this paragraph, excluding the value of direct\nmedical education expenses, as defined in subparagraph (i) of paragraph\n(c) of subdivision seven of this section, reflected in the general\nhospital's hospital-specific average reimbursable inpatient operating\ncost per discharge and group category average inpatient reimbursable\noperating cost per discharge, and excluding the value of forty-five\npercent of the indirect medical education expenses, as defined in\nsubparagraph (ii) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital specific average\nreimbursable inpatient operating cost per discharge, and excluding the\nvalue of fifty-five percent of the indirect medical education expenses\nreflected in a general hospital's group category average inpatient\nreimbursable operating cost per discharge in accordance with subdivision\ntwenty-five of this section as amended;\n (B) minus five percent of the amount determined in accordance with\nclause (A) of this subparagraph;\n (C) plus the value of direct medical education expenses, as defined in\nsubparagraph (i) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge and group category\naverage inpatient reimbursable operating cost per discharge;\n (D) minus five percent of the costs of hospital based physicians\nreflected in the direct medical education amount determined in\naccordance with clause (C) of this subparagraph;\n (E) plus the value of forty-five percent of the indirect medical\neducation expenses, as defined in subparagraph (ii) of paragraph (c) of\nsubdivision seven of this section, reflected in the general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge; and\n (F) plus the value of fifty-five percent of the indirect medical\neducation expenses reflected in the general hospital's group category\naverage inpatient operating cost per discharge in accordance with\nsubdivision twenty-five of this section as amended.\n * NB There are 3 subpar (iv)'s\n * (iv) for discharges on or after April first, nineteen hundred\nninety-six for purposes of reimbursement of inpatient hospital services\nfor patients eligible for payments made by state governmental agencies,\nthe average reimbursable inpatient operating cost per discharge of a\ngeneral hospital shall to encourage improved productivity and efficiency\nbe the sum of:\n (A) the amount determined in accordance with clause (B) of\nsubparagraph (iii) of this paragraph, excluding the value of direct\nmedical education expenses, as defined in subparagraph (i) of paragraph\n(c) of subdivision seven of this section, reflected in the general\nhospital's hospital-specific average reimbursable inpatient operating\ncost per discharge and group category average inpatient reimbursable\noperating cost per discharge, and excluding the value of forty-five\npercent of the indirect medical education expenses, as defined in\nsubparagraph (ii) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital specific average\nreimbursable inpatient operating cost per discharge, and excluding the\nvalue of fifty-five percent of the indirect medical education expenses\nreflected in a general hospital's group category average inpatient\nreimbursable operating cost per discharge in accordance with subdivision\ntwenty-five of this section as amended;\n (B) minus five percent of the amount determined in accordance with\nclause (A) of this subparagraph;\n (C) plus the value of direct medical education expenses, as defined in\nsubparagraph (i) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge and group category\naverage inpatient reimbursable operating cost per discharge;\n (D) minus five percent of the costs of hospital based physicians\nreflected in the direct medical education amount determined in\naccordance with clause (C) of this subparagraph;\n (E) plus the value of forty-five percent of the indirect medical\neducation expenses, as defined in subparagraph (ii) of paragraph (c) of\nsubdivision seven of this section, reflected in the general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge; and\n (F) plus the value of fifty-five percent of the indirect medical\neducation expenses reflected in the general hospital's group category\naverage inpatient operating cost per discharge in accordance with\nsubdivision twenty-five of this section as amended.\n * NB There are 3 subpar (iv)'s\n * (iv) for discharges on or after April first, nineteen hundred\nninety-six through July thirty-first, nineteen hundred ninety-six for\npurposes of reimbursement of inpatient hospital services for patients\neligible for payments made by state governmental agencies, the average\nreimbursable inpatient operating cost per discharge of a general\nhospital shall, to encourage improved productivity and efficiency, be\nthe sum of:\n (A) the amount determined in accordance with clause (B) of\nsubparagraph (iii) of this paragraph, excluding the value of direct\nmedical education expenses, as defined in subparagraph (i) of paragraph\n(c) of subdivision seven of this section, reflected in the general\nhospital's hospital-specific average reimbursable inpatient operating\ncost per discharge and group category average inpatient reimbursable\noperating cost per discharge, and excluding the value of forty-five\npercent of the indirect medical education expenses, as defined in\nsubparagraph (ii) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital specific average\nreimbursable inpatient operating cost per discharge, and excluding the\nvalue of fifty-five percent of the indirect medical education expenses\nreflected in a general hospital's group category average inpatient\nreimbursable operating cost per discharge in accordance with subdivision\ntwenty-five of this section as amended;\n (B) minus five percent of the amount determined in accordance with\nclause (A) of this subparagraph;\n (C) plus the value of direct medical education expenses, as defined in\nsubparagraph (i) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge and group category\naverage inpatient reimbursable operating cost per discharge;\n (D) minus five percent of the costs of hospital based physicians\nreflected in the direct medical education amount determined in\naccordance with clause (C) of this subparagraph;\n (E) plus the value of forty-five percent of the indirect medical\neducation expenses, as defined in subparagraph (ii) of paragraph (c) of\nsubdivision seven of this section, reflected in the general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge; and\n (F) plus the value of fifty-five percent of the indirect medical\neducation expenses reflected in the general hospital's group category\naverage inpatient operating cost per discharge in accordance with\nsubdivision twenty-five of this section as amended.\n * NB Expires December 31, 2026\n * NB There are 3 subpar (iv)'s\n * (v) for discharges on or after August first, nineteen hundred\nninety-six through March thirty-first, nineteen hundred ninety-seven for\npurposes of reimbursement of inpatient hospital services for patients\neligible for payments made by state governmental agencies, the average\nreimbursable inpatient operating cost per discharge of a general\nhospital shall, to encourage improved productivity and efficiency, be\nthe sum of:\n (A) the amount determined in accordance with clause (B) of\nsubparagraph (iii) of this paragraph, excluding the value of direct\nmedical education expenses, as defined in subparagraph (i) of paragraph\n(c) of subdivision seven of this section, reflected in the general\nhospital's hospital-specific average reimbursable inpatient operating\ncost per discharge and group category average inpatient reimbursable\noperating cost per discharge, and excluding the value of forty-five\npercent of the indirect medical education expenses, as defined in\nsubparagraph (ii) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital specific average\nreimbursable inpatient operating cost per discharge, and excluding the\nvalue of fifty-five percent of the indirect medical education expenses\nreflected in a general hospital's group category average inpatient\nreimbursable operating cost per discharge in accordance with subdivision\ntwenty-five of this section as amended;\n (B) minus two and five-tenths percent of the amount determined in\naccordance with clause (A) of this subparagraph;\n (C) plus the value of direct medical education expenses, as defined in\nsubparagraph (i) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge and group category\naverage inpatient reimbursable operating cost per discharge;\n (D) minus two and five-tenths percent of the costs of hospital based\nphysicians reflected in the direct medical education amount determined\nin accordance with clause (C) of this subparagraph;\n (E) plus the value of forty-five percent of the indirect medical\neducation expenses, as defined in subparagraph (ii) of paragraph (c) of\nsubdivision seven of this section, reflected in the general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge; and\n (F) plus the value of fifty-five percent of the indirect medical\neducation expenses reflected in the general hospital's group category\naverage inpatient operating cost per discharge in accordance with\nsubdivision twenty-five of this section as amended.\n * NB Expires December 31, 2026\n * (vi) for discharges on or after April first, nineteen hundred\nninety-seven through March thirty-first, nineteen hundred ninety-nine\nand for discharges on or after July first, nineteen hundred ninety-nine\nthrough March thirty-first, two thousand and for discharges on or after\nApril first, two thousand through March thirty-first, two thousand five\nand for discharges on or after April first, two thousand five through\nMarch thirty-first, two thousand six, and for discharges on or after\nApril first, two thousand six through March thirty-first, two thousand\nseven, and for discharges on or after April first, two thousand seven\nthrough March thirty-first, two thousand nine, and for discharges on or\nafter April first, two thousand nine through March thirty-first, two\nthousand eleven, for purposes of reimbursement of inpatient hospital\nservices for patients eligible for payments made by state governmental\nagencies, the average reimbursable inpatient operating cost per\ndischarge of a general hospital shall, to encourage improved\nproductivity and efficiency, be the sum of:\n (A) the amount determined in accordance with clause (B) of\nsubparagraph (iii) of this paragraph, excluding the value of direct\nmedical education expenses, as defined in subparagraph (i) of paragraph\n(c) of subdivision seven of this section, reflected in the general\nhospital's hospital-specific average reimbursable inpatient operating\ncost per discharge and group category average inpatient reimbursable\noperating cost per discharge, and excluding the value of forty-five\npercent of the indirect medical education expenses, as defined in\nsubparagraph (ii) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge, and excluding the\nvalue of fifty-five percent of the indirect medical education expenses\nreflected in a general hospital's group category average inpatient\nreimbursable operating cost per discharge in accordance with subdivision\ntwenty-five of this section as amended;\n (B) minus three and thirty-three hundredths percent of the amount\ndetermined in accordance with clause (A) of this subparagraph;\n (C) plus the value of direct medical education expenses, as defined in\nsubparagraph (i) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge and group category\naverage inpatient reimbursable operating cost per discharge;\n (D) minus three and thirty-three hundredths percent of the costs of\nhospital based physicians reflected in the direct medical education\namount determined in accordance with clause (C) of this subparagraph;\n (E) plus the value of forty-five percent of the indirect medical\neducation expenses, as defined in subparagraph (ii) of paragraph (c) of\nsubdivision seven of this section, reflected in the general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge; and\n (F) plus the value of fifty-five percent of the indirect medical\neducation expenses reflected in the general hospital's group category\naverage inpatient operating cost per discharge in accordance with\nsubdivision twenty-five of this section as amended.\n * NB Effective until December 31, 2026\n * (vi) for discharges on or after April first, nineteen hundred\nninety-seven through March thirty-first, nineteen hundred ninety-nine\nand for discharges on or after July first, nineteen hundred ninety-nine\nthrough March thirty-first, two thousand for purposes of reimbursement\nof inpatient hospital services for patients eligible for payments made\nby state governmental agencies, the average reimbursable inpatient\noperating cost per discharge of a general hospital shall, to encourage\nimproved productivity and efficiency, be the sum of:\n (A) the amount determined in accordance with clause (B) of\nsubparagraph (iii) of this paragraph, excluding the value of direct\nmedical education expenses, as defined in subparagraph (i) of paragraph\n(c) of subdivision seven of this section, reflected in the general\nhospital's hospital-specific average reimbursable inpatient operating\ncost per discharge and group category average inpatient reimbursable\noperating cost per discharge, and excluding the value of forty-five\npercent of the indirect medical education expenses, as defined in\nsubparagraph (ii) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge, and excluding the\nvalue of fifty-five percent of the indirect medical education expenses\nreflected in a general hospital's group category average inpatient\nreimbursable operating cost per discharge in accordance with subdivision\ntwenty-five of this section as amended;\n (B) minus three and thirty-three hundredths percent of the amount\ndetermined in accordance with clause (A) of this subparagraph;\n (C) plus the value of direct medical education expenses, as defined in\nsubparagraph (i) of paragraph (c) of subdivision seven of this section,\nreflected in the general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge and group category\naverage inpatient reimbursable operating cost per discharge;\n (D) minus three and thirty-three hundredths percent of the costs of\nhospital based physicians reflected in the direct medical education\namount determined in accordance with clause (C) of this subparagraph;\n (E) plus the value of forty-five percent of the indirect medical\neducation expenses, as defined in subparagraph (ii) of paragraph (c) of\nsubdivision seven of this section, reflected in the general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge; and\n (F) plus the value of fifty-five percent of the indirect medical\neducation expenses reflected in the general hospital's group category\naverage inpatient operating cost per discharge in accordance with\nsubdivision twenty-five of this section as amended.\n * NB Effective and expires December 31, 2026\n * (c) Notwithstanding any inconsistent provision of this section,\ncommencing July first, nineteen hundred ninety-six through March\nthirty-first, nineteen hundred ninety-nine and July first, nineteen\nhundred ninety-nine through March thirty-first, two thousand and April\nfirst, two thousand through March thirty-first, two thousand five and\nfor periods on and after April first, two thousand five through March\nthirty-first, two thousand six, and for periods on and after April\nfirst, two thousand six through March thirty-first, two thousand seven,\nand for periods on and after April first, two thousand seven through\nMarch thirty-first, two thousand nine, and for periods on and after\nApril first, two thousand nine through March thirty-first, two thousand\neleven, rates of payment for a general hospital for patients eligible\nfor payments made by state governmental agencies shall be further\nreduced by the commissioner to encourage improved productivity and\nefficiency by providers by a factor determined as follows:\n (i) an aggregate reduction shall be calculated for each general\nhospital commencing July first, nineteen hundred ninety-six through\nMarch thirty-first, nineteen hundred ninety-nine and July first,\nnineteen hundred ninety-nine through March thirty-first, two thousand\nand April first, two thousand through March thirty-first, two thousand\nfive and for periods on and after April first, two thousand five through\nMarch thirty-first, two thousand six, and for periods on and after April\nfirst, two thousand six through March thirty-first, two thousand seven,\nand for periods on and after April first, two thousand seven through\nMarch thirty-first, two thousand nine, and for periods on and after\nApril first, two thousand nine through March thirty-first, two thousand\neleven, as the result of (A) eighty-nine million dollars on an\nannualized basis for each year, multiplied by (B) the ratio of patient\ndays for patients eligible for payments made by state governmental\nagencies provided in a base year two years prior to the rate year by a\ngeneral hospital, divided by the total of such patient days summed for\nall general hospitals; and\n (ii) (A) the result for each general hospital shall be allocated to\nunits within such hospital exempt from case based rates of payment based\non the ratio of such patient days provided in the exempt unit to the\ntotal of such patient days provided by the general hospital, and (B) the\nresult divided by such patient days provided in the exempt unit, for a\nper diem unit of service reduction in rates of payment for such exempt\nunit for patients eligible for payments made by state governmental\nagencies for such general hospital; and\n (iii) any amount not allocated to exempt units shall be divided by\ncase based discharges (or for exempt hospitals by patient days) in the\nbase year two years prior to the rate year for patients eligible for\npayments made by state governmental agencies, for a per case (or for\nexempt hospitals a per diem) unit of service reduction in rates of\npayment for patients eligible for payments made by state governmental\nagencies for such general hospital.\n * NB Effective until December 31, 2026\n * (c) Notwithstanding any inconsistent provision of this section,\ncommencing July first, nineteen hundred ninety-six through March\nthirty-first, nineteen hundred ninety-nine and July first, nineteen\nhundred ninety-nine through March thirty-first, two thousand rates of\npayment for a general hospital for patients eligible for payments made\nby state governmental agencies shall be further reduced by the\ncommissioner to encourage improved productivity and efficiency by\nproviders by a factor determined as follows:\n (i) an aggregate reduction shall be calculated for each general\nhospital commencing July first, nineteen hundred ninety-six through\nMarch thirty-first, nineteen hundred ninety-nine and July first,\nnineteen hundred ninety-nine through March thirty-first, two thousand as\nthe result of (A) eighty-nine million dollars on an annualized basis for\neach year, multiplied by (B) the ratio of patient days for patients\neligible for payments made by state governmental agencies provided in a\nbase year two years prior to the rate year by a general hospital,\ndivided by the total of such patient days summed for all general\nhospitals; and\n (ii) (A) the result for each general hospital shall be allocated to\nunits within such hospital exempt from case based rates of payment based\non the ratio of such patient days provided in the exempt unit to the\ntotal of such patient days provided by the general hospital, and (B) the\nresult divided by such patient days provided in the exempt unit, for a\nper diem unit of service reduction in rates of payment for such exempt\nunit for patients eligible for payments made by state governmental\nagencies for such general hospital; and\n (iii) any amount not allocated to exempt units shall be divided by\ncase based discharges (or for exempt hospitals by patient days) in the\nbase year two years prior to the rate year for patients eligible for\npayments made by state governmental agencies, for a per case (or for\nexempt hospitals a per diem) unit of service reduction in rates of\npayment for patients eligible for payments made by state governmental\nagencies for such general hospital.\n * NB Effective and expires December 31, 2026\n 6. Operating costs. (a) A general hospital's hospital-specific average\nreimbursable inpatient operating cost per discharge shall be determined\nin accordance with rules and regulations adopted by the council and\napproved by the commissioner based on the hospital's reimbursable\ninpatient operating cost base determined in accordance with paragraph\n(d) of subdivision one of this section; adjusted in accordance with\nparagraph (b) of this subdivision to reflect exceptions to case\npayments; and projected to the applicable rate period by a trend factor\ndetermined in accordance with subdivision ten of this section; and\nincreased in accordance with subparagraphs (i), (iii) and (iv) of\nparagraph (e) of subdivision one of this section to reflect special\nadditional inpatient operating costs; and adjusted in accordance with\nsubparagraphs (i), (ii) and (iv) of paragraph (c) of this subdivision to\nreflect modifications to case payments; and standardized to reflect\nnineteen hundred eighty-seven hospital case mix. A general hospital's\nhospital-specific average reimbursable inpatient operating cost per\ndischarge shall be adjusted on a payor category basis to reflect\nallocation of malpractice insurance costs in accordance with the\nmethodology developed pursuant to subparagraph (ii) of paragraph (h) of\nsubdivision eleven of this section.\n (b) In accordance with rules and regulations adopted by the council\nand approved by the commissioner, the commissioner shall adjust\nreimbursable inpatient operating costs and discharges to exclude\noperating costs and statistics related to specialized hospital services\nfor which an alternative reimbursement methodology is adopted pursuant\nto paragraph (e) or (g) of subdivision four of this section, a factor\nfor operating costs of patients who required an alternate level of care\nin accordance with paragraph (h) of subdivision four of this section and\nthe operating costs and statistics of AIDS patients pursuant to\nparagraph (i) of subdivision four of this section if effective.\n (c) In accordance with rules and regulations adopted by the council\nand approved by the commissioner, the commissioner shall adjust\nweighting factors developed pursuant to paragraph (c) of subdivision\nthree of this section and reimbursable inpatient operating costs and\nstatistics on which case payment rates are based to take into account\nthe provisions for additional payments in accordance with paragraph (a),\n(b), (c) or (d) of subdivision four of this section. The rules and\nregulations are to be designed to identify an estimate of costs and\nstatistics as if the payment methodology effective for the applicable\nrate period including payment based on the higher of high-cost outliers\nor long-stay outliers was in effect during the period used to establish\nsuch costs and statistics to accomplish the following:\n (i) an estimate of costs for inpatient services to patients\ntransferred to another general hospital receiving case payment rates\npursuant to paragraph (a) of subdivision four of this section shall be\neliminated from reimbursable inpatient operating costs considering a\ntransfer patient cost conversion factor determined based on nineteen\nhundred eighty-five data from a representative sample of general\nhospitals; a case mix neutral acute care cost component of a general\nhospital's reimbursable inpatient operating cost base per day after\napplication of the trend factor and the addition of special additional\ninpatient operating costs; transfer patient days incurred by such\ngeneral hospital in nineteen hundred eighty-seven or the number of such\ntransfer patient days during a recent twelve month period prior thereto\nestablished by regulation for which data are available subsequently\nreconciled by an adjustment to reflect nineteen hundred eighty-seven\ndata; and the specific diagnosis-related groups with which the transfer\npatients are identified. Such costs shall be eliminated in accordance\nwith rules and regulations adopted by the council and approved by the\ncommissioner which shall contain the specific methodology to adequately\nidentify the costs related to transfer cases. Transfer cases shall be\neliminated in computing discharges of the transferring hospital. The\ncosts and discharges for transfer cases for each general hospital\nparticipating in the determination of the weighting factors shall be\nremoved before calculating the weighting factors;\n (ii) an estimate of costs for the outlier portion of inpatient\nservices which would qualify for additional payments as cost outliers in\naccordance with paragraph (b) of subdivision four of this section shall\nbe eliminated from reimbursable inpatient operating costs based on a\ngeneral hospital's high cost percentage outlier factor, applied to an\nacute care cost component of such general hospital's reimbursable\ninpatient operating cost base after application of the trend factor and\nthe addition of special additional inpatient operating costs. The high\ncost percentage outlier factor shall be calculated based on a\ndetermination of the percentage of nineteen hundred eighty-seven\ndischarges of patients other than beneficiaries of title XVIII of the\nfederal social security act (medicare) for which the commissioner has\ncomplete hospital bill submissions or such discharges during a recent\ntwelve month period prior thereto established by regulation for which\nhospital bills are available, as follows, (a) for general hospitals that\nhave complete hospital bill submissions for at least ninety percent of\ntheir discharges, a high cost percentage outlier factor based on such\ndata, and (b) for general hospitals that have complete hospital bill\nsubmissions for at least eighty percent but less than ninety percent of\ntheir discharges, a high cost percentage outlier factor based on such\ndata plus an additional one-quarter of one percent, and (c) for general\nhospitals that have complete bill submissions for less than eighty\npercent of their discharges, a high cost percentage outlier factor\ndetermined based on nineteen hundred eighty-five data from a\nrepresentative sample of general hospitals plus an additional\none-quarter of one percent. The calculation of the high cost percentage\noutlier factor shall be subsequently reconciled by an adjustment to\nreflect the percentage of such complete hospital bill submissions for\nsuch nineteen hundred eighty-seven discharges as submitted to the\ncommissioner prior to August first, nineteen hundred eighty-eight.\n The minimum percentage threshold applicable pursuant to clause (a) of\nthe first paragraph of this subparagraph may be increased to "at least\nninety-five percent" and the percentage ceiling applicable pursuant to\nclause (b) of the first paragraph of this subparagraph increased to\n"less than ninety-five percent" pursuant to rules and regulations\nadopted by the council and approved by the commissioner based upon a\nstudy and a report by the commissioner of a sample of incomplete\ndischarge records which showed that there was a significant difference\nin the value of high cost outlier cases potentially reflected in\nincomplete records from the value of high cost outlier cases reflected\nin records for which the commissioner has complete hospital bill\nsubmissions.\n The maximum amount to be eliminated on a statewide basis shall be\nthree percent of the total of nineteen hundred eighty-eight acute care\ncost components of general hospital reimbursable inpatient operating\ncosts reimbursed on the case payment system. In the event that the total\namount as calculated exceeds three percent, the calculated amount will\nbe reduced to three percent by the application of a percentage computed\nby dividing expected outlier costs based on the three percent by actual\noutlier costs, which shall also be the percentage of outlier costs to be\nreimbursed in the payment year. The costs for the outlier portion of\ncost outliers for general hospitals participating in the determination\nof the weighting factors shall be removed from each diagnosis-related\ngroup before determining the weighting factors;\n * (iii) an estimate of inpatient costs which are related to a hospital\nstay in excess of the long stay threshold for long stay patients as\ndefined in paragraph (c) of subdivision four of this section shall be\neliminated from reimbursable inpatient operating costs in determining\ngroup category average inpatient reimbursable operating costs\nconsidering a long stay patient cost conversion factor, which shall be\nestablished at sixty percent provided, however, such long stay patient\ncost conversion factor may be revised for an annual rate period or\nperiods beginning on or after January first, nineteen hundred\neighty-nine in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner; a case mix neutral acute care\ncost component of a general hospital's reimbursable inpatient operating\ncost base per day after application of the trend factor and the addition\nof special additional inpatient operating costs; long stay patient days\nincurred by such general hospital in nineteen hundred eighty-seven or\nthe number of such long stay patient days during a recent twelve month\nperiod prior thereto established by regulation for which data are\navailable subsequently reconciled by an adjustment to reflect nineteen\nhundred eighty-seven data; and the specific diagnosis-related groups\nwith which the long stay patients are identified. The long stay outlier\nthresholds shall be determined by adding a sufficient number of standard\ndeviations to the mean length of stay for each diagnosis-related group\nsuch that it is estimated for rates of payment during the period January\nfirst, nineteen hundred eighty-eight through December thirty-first,\nnineteen hundred ninety based upon nineteen hundred eighty-five data\nfrom a representative sample of general hospitals and for rates of\npayment during the period January first, nineteen hundred ninety-one\nthrough December thirty-first, nineteen hundred ninety-three based upon\nnineteen hundred eighty-nine data from a representative sample of\ngeneral hospitals and for rates of payment during the period January\nfirst, nineteen hundred ninety-four through December thirty-first,\nnineteen hundred ninety-nine and periods on and after January first, two\nthousand based upon nineteen hundred ninety-two data from a\nrepresentative sample of general hospitals that the costs associated\nwith the portion of hospital stays in excess of the long stay outlier\nthresholds do not exceed three percent of the total of the acute care\ncost components of reimbursable inpatient operating costs related to the\ndetermination of case based rates of payment. The costs associated with\nthe outlier portion of long stay outliers for each general hospital\nparticipating in the determination of the weighting factors shall be\nremoved from each diagnosis-related group before calculating the\nweighting factors;\n * NB Effective until December 31, 2026\n * (iii) an estimate of inpatient costs which are related to a hospital\nstay in excess of the long stay threshold for long stay patients as\ndefined in paragraph (c) of subdivision four of this section shall be\neliminated from reimbursable inpatient operating costs in determining\ngroup category average inpatient reimbursable operating costs\nconsidering a long stay patient cost conversion factor, which shall be\nestablished at sixty percent provided, however, such long stay patient\ncost conversion factor may be revised for an annual rate period or\nperiods beginning on or after January first, nineteen hundred\neighty-nine in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner; a case mix neutral acute care\ncost component of a general hospital's reimbursable inpatient operating\ncost base per day after application of the trend factor and the addition\nof special additional inpatient operating costs; long stay patient days\nincurred by such general hospital in nineteen hundred eighty-seven or\nthe number of such long stay patient days during a recent twelve month\nperiod prior thereto established by regulation for which data are\navailable subsequently reconciled by an adjustment to reflect nineteen\nhundred eighty-seven data; and the specific diagnosis-related groups\nwith which the long stay patients are identified. The long stay outlier\nthresholds shall be determined by adding a sufficient number of standard\ndeviations to the mean length of stay for each diagnosis-related group\nsuch that it is estimated for rates of payment during the period January\nfirst, nineteen hundred eighty-eight through December thirty-first,\nnineteen hundred ninety based upon nineteen hundred eighty-five data\nfrom a representative sample of general hospitals and for rates of\npayment during the period January first, nineteen hundred ninety-one\nthrough December thirty-first, nineteen hundred ninety-three based upon\nnineteen hundred eighty-nine data from a representative sample of\ngeneral hospitals and for rates of payment during the period January\nfirst, nineteen hundred ninety-four through December thirty-first,\nnineteen hundred ninety-nine based upon nineteen hundred ninety-two data\nfrom a representative sample of general hospitals that the costs\nassociated with the portion of hospital stays in excess of the long stay\noutlier thresholds do not exceed three percent of the total of the acute\ncare cost components of reimbursable inpatient operating costs related\nto the determination of case based rates of payment. The costs\nassociated with the outlier portion of long stay outliers for each\ngeneral hospital participating in the determination of the weighting\nfactors shall be removed from each diagnosis-related group before\ncalculating the weighting factors;\n * NB Effective and expires December 31, 2026\n * (iii) an estimate of inpatient costs which are related to a hospital\nstay in excess of the long stay threshold for long stay patients as\ndefined in paragraph (c) of subdivision four of this section shall be\neliminated from reimbursable inpatient operating costs in determining\ngroup category average inpatient reimbursable operating costs\nconsidering a long stay patient cost conversion factor, which shall be\nestablished at sixty percent provided, however, such long stay patient\ncost conversion factor may be revised for an annual rate period or\nperiods beginning on or after January first, nineteen hundred\neighty-nine in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner; a case mix neutral acute care\ncost component of a general hospital's reimbursable inpatient operating\ncost base per day after application of the trend factor and the addition\nof special additional inpatient operating costs; long stay patient days\nincurred by such general hospital in nineteen hundred eighty-seven or\nthe number of such long stay patient days during a recent twelve month\nperiod prior thereto established by regulation for which data are\navailable subsequently reconciled by an adjustment to reflect nineteen\nhundred eighty-seven data; and the specific diagnosis-related groups\nwith which the long stay patients are identified. The long stay outlier\nthresholds shall be determined by adding a sufficient number of standard\ndeviations to the mean length of stay for each diagnosis-related group\nsuch that it is estimated for rates of payment during the period January\nfirst, nineteen hundred eighty-eight through December thirty-first,\nnineteen hundred ninety based upon nineteen hundred eighty-five data\nfrom a representative sample of general hospitals and for rates of\npayment during the period January first, nineteen hundred ninety-one\nthrough December thirty-first, nineteen hundred ninety-three based upon\nnineteen hundred eighty-nine data from a representative sample of\ngeneral hospitals and for rates of payment during the period January\nfirst, nineteen hundred ninety-four through June thirtieth, nineteen\nhundred ninety-six based upon nineteen hundred ninety-two data from a\nrepresentative sample of general hospitals that the costs associated\nwith the portion of hospital stays in excess of the long stay outlier\nthresholds do not exceed three percent of the total of the acute care\ncost components of reimbursable inpatient operating costs related to the\ndetermination of case based rates of payment. The costs associated with\nthe outlier portion of long stay outliers for each general hospital\nparticipating in the determination of the weighting factors shall be\nremoved from each diagnosis-related group before calculating the\nweighting factors;\n * NB Effective December 31, 2026\n (iv) an estimate of inpatient costs which are related to short stay\npatients as defined in paragraph (d) of subdivision four of this section\nshall be eliminated from reimbursable inpatient operating costs\nconsidering a short stay patient cost conversion factor determined based\non nineteen hundred eighty-five data from a representative sample of\ngeneral hospitals; a case mix neutral acute care cost component of a\ngeneral hospital's reimbursable inpatient operating cost base per day\nafter application of the trend factor and the addition of special\nadditional inpatient operating costs; short stay patient days incurred\nby such general hospital in nineteen hundred eighty-seven or the number\nof such short stay patient days during a recent twelve month period\nprior thereto established by regulation for which data are available\nsubsequently reconciled by an adjustment to reflect nineteen hundred\neighty-seven data; and the specific diagnosis-related groups with which\nthe short stay patients are identified. Such costs shall be eliminated\nin accordance with rules and regulations adopted by the council and\napproved by the commissioner which shall contain the specific\nmethodology to adequately identify the costs related to short stay\npatients. Short stay cases shall be eliminated in computing discharges\nof a general hospital. The costs and discharges for short stay cases for\neach general hospital participating in the determination of the\nweighting factors shall be removed before calculating the weighting\nfactors.\n 7. Operating cost group component. (a) A general hospital's group\ncategory average inpatient reimbursable operating cost per discharge\n(price) shall be a composite factor determined in accordance with rules\nand regulations adopted by the council and approved by the commissioner\nbased on a group price component determined in accordance with\nsubparagraph (i) of this paragraph, a hospital-specific price component\ndetermined in accordance with subparagraph (ii) of this paragraph, and\nan adjustment in accordance with subparagraph (iii) of this paragraph.\n (i) The group price component shall be based on the costs and\nstatistics of general hospitals in the group category established\npursuant to paragraph (b) of this subdivision to which the hospital is\nassigned by the commissioner to compute a group based average inpatient\nreimbursable operating cost per discharge for the group category.\nGeneral hospital costs and statistics shall be determined consistent\nwith the methodology to determine hospital-specific average reimbursable\ninpatient operating cost per discharge pursuant to subdivision six of\nthis section; adjusted to reflect additional cost increases in\naccordance with subparagraph (ii) of paragraph (e) of subdivision one of\nthis section; and adjusted to exclude the components of\nhospital-specific inpatient reimbursable operating costs related to\neducation, physician, ambulance services and organ acquisition costs\ndetermined in accordance with paragraph (c) of this subdivision and\nmalpractice insurance costs, and the components of special additional\ninpatient operating costs determined and allocated in accordance with\nsubparagraphs (i), (iii) and (iv) of paragraph (e) of subdivision one of\nthis section associated with cost increases in such costs; and adjusted\nto exclude the components of special additional inpatient operating\ncosts determined and allocated in accordance with clauses (B), (D), (H),\nand (I) of subparagraph (iii) and clauses (A), (E) and (F) of\nsubparagraph (iv) of paragraph (e) of subdivision one of this section;\nand adjusted to reflect additional modifications to case payments in\naccordance with subparagraph (iii) of paragraph (c) of subdivision six\nof this section. The group based average inpatient reimbursable\noperating costs computed for a general hospital shall be adjusted to\nreflect the hospital-specific indirect medical education costs\npercentage of such hospital determined in accordance with subparagraph\n(ii) of paragraph (c) of this subdivision.\n Hospital costs shall be standardized for comparison purposes\nconsidering differences in wage and wage-related costs levels and such\nother economic factors, such as a power equalization factor, as may be\ndetermined in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner.\n (ii) A hospital-specific price component shall be determined for each\ngeneral hospital based on such hospital's hospital-specific education,\nphysician, ambulance services and organ acquisition costs determined in\naccordance with subparagraphs (i), (iii) and (iv) of paragraph (c) of\nthis subdivision and malpractice insurance costs, and the components of\nspecial additional inpatient operating costs determined and allocated in\naccordance with subparagraphs (i), (iii) and (iv) of paragraph (e) of\nsubdivision one of this section associated with cost increases in such\ncosts, and special additional inpatient operating costs determined and\nallocated in accordance with clauses (B), (D), (H) and (I) of\nsubparagraph (iii) and clauses (A), (E) and (F) of subparagraph (iv) of\nparagraph (e) of subdivision one of this section, as excluded pursuant\nto subparagraph (i) of this paragraph, per discharge, standardized to\nreflect nineteen hundred eighty-seven hospital case mix.\n (iii) A general hospital's group category average inpatient\nreimbursable operating cost per discharge shall be adjusted on a payor\ncategory basis to reflect allocation of malpractice insurance costs in\naccordance with the methodology developed pursuant to subparagraph (ii)\nof paragraph (h) of subdivision eleven of this section.\n (b) General hospital group categories shall be established in\naccordance with rules and regulations adopted by the council and\napproved by the commissioner for purposes of computing group category\naverage inpatient reimbursable operating cost per discharge considering,\nbut not limited to, factors such as hospital size, hospital medical\neducation activity, teaching status and geographic divisions of the\nstate.\n (c) Education, physician, ambulance services and organ acquisition\ncosts shall include:\n (i) direct medical education expenses, defined as the reimbursable\ncosts of residents, fellows, and supervising physicians, combined with\nthe costs of hospital based physicians;\n (ii) indirect medical education expenses, defined as an estimate of\nthe costs, other than direct costs, of educational activities in\nteaching hospitals attributable to factors including but not limited to\nincreased overhead, more severely ill patients and the tendency of\nresidents to provide more tests than experienced licensed physicians.\nFor the rate period beginning January first, nineteen hundred\neighty-eight and ending December thirty-first, nineteen hundred\neighty-eight, an estimate of indirect medical education costs shall be\ndetermined in accordance with the methodology applicable for purposes of\ndetermining an estimate of indirect medical education costs for\nreimbursement for inpatient hospital service pursuant to title XVIII of\nthe federal social security act (medicare) in effect on the first day of\nJuly in the year preceding the rate period. The council may adopt rules\nand regulations, subject to the approval of the commissioner, to revise\nthe methodology for the determination of an estimate of indirect medical\neducation costs to reflect revisions to the methodology applicable for\npurposes of determining reimbursement for inpatient hospital service\npursuant to title XVIII of the federal social security act (medicare)\neffective subsequent to the first day of July in the year preceding the\nrate period. For annual rate periods beginning on or after January\nfirst, nineteen hundred eighty-nine an estimate of indirect medical\neducation costs shall be determined in accordance with rules and\nregulations adopted by the council and approved by the commissioner;\n (iii) the reimbursable costs of schools of nursing, allied\nprofessional programs and ambulance services; and\n (iv) the reimbursable costs of organ acquisition services not\nreimbursed pursuant to the methodology applicable for purposes of\nreimbursement pursuant to title XVIII of the federal social security act\n(medicare).\n (d) The commissioner shall establish, in accordance with rules and\nregulations adopted by the council and approved by the commissioner, the\nmethodology to determine the hospital's group category average inpatient\nreimbursable operating cost per discharge (price) and the percentage\namounts, pursuant to subparagraphs (i), (ii) and (iii) of paragraph (b)\nof subdivision five of this section, of the group category average\ninpatient reimbursable operating cost per discharge to be used to\ndetermine the inpatient reimbursable operating cost component of case\nbased rates for annual rate periods beginning on or after January first,\nnineteen hundred eighty-eight.\n 8. Capital related inpatient expenses. (a) Capital related inpatient\nexpenses including but not limited to straight line depreciation on\nbuildings and non-movable equipment, accelerated depreciation on major\nmovable equipment if requested by the hospital, rentals and interest on\ncapital debt (or for hospitals financed pursuant to article\ntwenty-eight-B of this chapter, such expenses, including amortization in\nlieu of depreciation, as determined pursuant to the reimbursement\nregulations promulgated pursuant to such article and article\ntwenty-eight of this chapter), shall be included in rates of payment\ndetermined pursuant to this section based on a budget for capital\nrelated inpatient expenses and subsequently reconciled to actual\nexpenses and statistics through appropriate audit procedures. General\nhospitals shall submit to the commissioner, at least one hundred twenty\ndays prior to the commencement of each year, a schedule of capital\nrelated inpatient expenses for the forthcoming year. Any capital\nexpenditure which requires or required approval pursuant to this article\nmust have received such approval for any capital related expense\ngenerated by such capital expenditure to be included in rates of\npayment. The basis for determining capital related inpatient expenses\nshall be the lesser of actual cost or the final amount specifically\napproved for the construction of the capital asset. The submitted budget\nmay include the capital related inpatient expenses for all existing\ncapital assets as well as estimates of capital related inpatient\nexpenses for capital assets to be acquired or placed in use prior to the\ncommencement of the rate year or during the rate year provided all\nrequired approvals have been obtained.\n The council shall adopt, with the approval of the commissioner,\nregulations to:\n (i) identify by type the eligible capital related inpatient expenses;\n (ii) safeguard the future financial viability of voluntary, non-profit\ngeneral hospitals by requiring funding of inpatient depreciation on\nbuilding and fixed and movable equipment;\n (iii) provide authorization to adjust inpatient rates by advancing\npayment of depreciation as needed, in instances of capital debt related\nfinancial distress of voluntary, non-profit general hospitals; and\n (iv) provide a methodology for the reimbursement treatment of sales.\n (b) Capital related inpatient expenses shall be included in case based\npayments based on the hospital's average capital related inpatient\nexpenses per discharge. Adjustments shall be made to capital related\ncosts and statistics to reflect capital related inpatient expenses\nreimbursed on a per diem basis in accordance with paragraphs (a), (d),\n(e), (g) and (i) of subdivision four of this section.\n (c) In order to reconcile capital related inpatient expenses included\nin rates of payment based on a budget to actual expenses and statistics\nfor the rate period for a general hospital, rates of payment for a\ngeneral hospital shall be adjusted to reflect the dollar value of the\ndifference between capital related inpatient expenses included in the\ncomputation of rates of payment for a prior rate period based on a\nbudget and actual capital related inpatient expenses for such prior rate\nperiod, each as determined in accordance with paragraph (a) of this\nsubdivision, adjusted to reflect increases or decreases in volume of\nservice in such prior rate period compared to statistics applied in\ndetermining the capital related inpatient expenses component of rates of\npayment based on a budget for such prior rate period.\n For rates effective April first, two thousand twenty through March\nthirty-first, two thousand twenty-one, the budgeted capital-related\nexpenses add-on as described in paragraph (a) of this subdivision, based\non a budget submitted in accordance to paragraph (a) of this\nsubdivision, shall be reduced by five percent relative to the rate in\neffect on such date; and the actual capital expenses add-on as described\nin paragraph (a) of this subdivision, based on actual expenses and\nstatistics through appropriate audit procedures in accordance with\nparagraph (a) of this subdivision shall be reduced by five percent\nrelative to the rate in effect on such date.\n For rates effective April first, two thousand twenty-one through\nSeptember thirtieth, two thousand twenty-four, the budgeted\ncapital-related expenses add-on as described in paragraph (a) of this\nsubdivision, based on a budget submitted in accordance to paragraph (a)\nof this subdivision, shall be reduced by ten percent relative to the\nrate in effect on such date; and the actual capital expenses add-on as\ndescribed in paragraph (a) of this subdivision, based on actual expenses\nand statistics through appropriate audit procedures in accordance with\nparagraph (a) of this subdivision shall be reduced by ten percent\nrelative to the rate in effect on such date.\n For rates effective on and after October first, two thousand\ntwenty-four, the budgeted capital-related expenses add-on as described\nin paragraph (a) of this subdivision, based on a budget submitted in\naccordance with paragraph (a) of this subdivision, shall be reduced by\ntwenty percent relative to the rate in effect on such date; and the\nactual capital expenses add-on as described in paragraph (a) of this\nsubdivision shall be reduced by twenty percent relative to the rate in\neffect on such date.\n For any rate year, all reconciliation add-on amounts calculated for\nthe period of April first, two thousand twenty through September\nthirtieth, two thousand twenty-four shall be reduced by ten percent, and\nall reconciliation recoupment amounts calculated for the period of April\nfirst, two thousand twenty through September thirtieth, two thousand\ntwenty-four shall increase by ten percent.\n For any rate year, all reconciliation add-on amounts calculated on and\nafter October first, two thousand twenty-four shall be reduced by twenty\npercent, and all reconciliation recoupment amounts calculated on or\nafter October first, two thousand twenty-four shall increase by twenty\npercent.\n Notwithstanding any inconsistent provision of subparagraph (i) of\nparagraph (e) of subdivision nine of this section, capital related\ninpatient expenses of a general hospital included in the computation of\nrates of payment based on a budget shall not be included in the\ncomputation of a volume adjustment made in accordance with such\nsubparagraph. Adjustments to rates of payment for a general hospital\nmade pursuant to this paragraph shall be made in accordance with\nparagraph (c) of subdivision eleven of this section. Such adjustments\nshall not be carried forward except for such volume adjustment as may be\nauthorized in accordance with subparagraph (i) of paragraph (e) of\nsubdivision nine of this section for such general hospital.\n * (e) Notwithstanding any inconsistent provision of this subdivision,\ncommencing April first, nineteen hundred ninety-five, when a factor for\nreconciliation of budgeted capital related inpatient expenses to actual\ncapital related inpatient expenses for a prior year is included in the\ncapital related inpatient expenses component of rates of payment, such\ncapital related inpatient expenses component of rates of payment shall\nbe reduced by the commissioner by the difference between the reconciled\ncapital related inpatient expenses included in rates of payment\ndetermined in accordance with paragraphs (a), (b) and (c) of this\nsubdivision for such prior year and capital related inpatient expenses\nfor such prior year calculated based on the hospital's average capital\nrelated inpatient expenses computed on a per diem basis.\n * NB Effective through March 31, 2029\n * (f) Notwithstanding any inconsistent provision of this section,\ncommencing April first, nineteen hundred ninety-five for purposes of\ndetermining the capital related inpatient expenses component of rates of\npayment for patients eligible for payments made by state governmental\nagencies for a rate year, the submitted budget for capital related\ninpatient expenses of a general hospital applicable to the rate year\nshall be decreased by the commissioner to reflect the percentage amount\nby which the budget for the base year two years prior to the rate year\nfor capital related inpatient expenses of the hospital exceeded actual\nexpenses.\n * NB Effective through March 31, 2029\n * (g) Notwithstanding any inconsistent provision of this article,\ncommencing April first, nineteen hundred ninety-five for rates of\npayment for patients eligible for payments made by state governmental\nagencies, the capital related inpatient expenses component determined in\naccordance with paragraph (a) of this subdivision and the capital cost\nper visit components determined in accordance with subparagraphs (i) and\n(ii) of paragraph (g) of subdivision two of section twenty-eight hundred\nseven of this article shall be adjusted by the commissioner to exclude\nsuch expenses related to:\n (i) forty-four percent of the costs of major movable equipment; and\n (ii) staff housing.\n * NB Effective through March 31, 2029\n 9. Adjustments. For annual rate periods beginning on or after January\nfirst, nineteen hundred eighty-eight:\n (a) The commissioner shall on his own initiative, or on the basis of a\nrequest from a general hospital, adjust an established rate to reflect:\n (i) the reduction of costs related to the elimination of a general\nhospital inpatient service in instances where the costs of such service\nwere included in the rate established; and\n (ii) the correction of errors or omissions of data or in computation.\n (b) General hospitals may request and the commissioner shall consider\nan adjustment to an established rate to reflect increased expenses in\nexcess of costs reported by the general hospital in the nineteen hundred\neighty-five cost report, after application of the trend factor, or\nreconsideration of disallowed expenses based on:\n (i) justification of all or a portion of expenses not included in the\nrate resulting from the cost analysis process contained in subparagraph\n(i) of paragraph (a) of this subdivision;\n (ii) additional operational expenses related to approved construction\nor service changes;\n (iii) the addition of costs related to a state requirement for\nadditional services to be provided or additional costs to be incurred in\nmeeting state and federal requirements;\n (iv) additional operational expenses to permit a more efficient and\neconomical method of delivering a service;\n (v) increased costs determined to be needed to recruit or maintain an\nappropriate level of personnel providing professional services to\npatients; and\n (vi) increased costs for compensation of employees.\n (c) In determining the reasonableness or justification of an\nadjustment to an established rate related to subparagraph (vi) of\nparagraph (b) of this subdivision, the commissioner shall consider:\n (i) the fiscal capability of the general hospital to finance such\nincreases from its own resources;\n (ii) the past history of the general hospital with respect to\ncompensation increases and allowed compensation trend factors; and\n (iii) the economy in the area in which the general hospital is\nlocated.\n (d) General hospitals may request and the commissioner shall consider\na change in assignment among the group categories established pursuant\nto paragraph (b) of subdivision seven of this section to which the\nhospital is assigned for purposes of computing group category average\nreimbursable inpatient operating cost per discharge.\n (e) (i) Volume adjustments which would result in revisions in case\npayment rates shall not be made to reflect increases or decreases in\ndischarges for other than beneficiaries of title XVIII of the federal\nsocial security act (medicare) in rate years beginning on or after\nJanuary first, nineteen hundred eighty-eight, except in those specific\ninstances where a decrease in volume as measured by discharges,\nincluding discharges of patients for whom reimbursement is provided on a\nper diem basis in accordance with paragraph (a) of subdivision eleven of\nthis section, is equal to or greater than one percent of discharges in\nnineteen hundred eighty-seven for those general hospitals having two\nhundred or less certified acute care beds and classified as a rural\nhospital for purposes of determining payment for inpatient services\nprovided to beneficiaries of title XVIII of the federal social security\nact (medicare) or under state regulations, based on the total number of\ninpatient acute care beds for which such general hospital is certified\npursuant to the operating certificate issued for such general hospital\nin accordance with section twenty-eight hundred five of this article in\neffect on June thirtieth, nineteen hundred ninety, or equal to or\ngreater than ten percent of discharges in nineteen hundred eighty-seven\nfor all other general hospitals, and the failure to make such adjustment\nseriously impacts on the financial stability of a needed hospital, and\nexcept in those specific instances where an increase in volume as\nmeasured by discharges is equal to or greater than ten percent of\ndischarges in nineteen hundred eighty-seven. Provided, however, that an\nadjustment for volume increases shall not apply to those general\nhospitals having two hundred or less certified acute care beds and\nclassified as a rural hospital for purposes of determining payment for\ninpatient services provided to beneficiaries of title XVIII of the\nfederal social security act (medicare) or under state regulations, based\non the total number of inpatient acute care beds for which such general\nhospital is certified pursuant to the operating certificate issued for\nsuch general hospital in accordance with section twenty-eight hundred\nfive of this article in effect on June thirtieth, nineteen hundred\nninety. For general hospitals and distinct units of general hospitals\nnot reimbursed on a case based payment per discharge basis, volume\nadjustments may be made during the above indicated rate years in\naccordance with regulations adopted by the council and approved by the\ncommissioner.\n (ii) The commissioner shall adjust the rates for those general\nhospitals and units of general hospitals excluded from case payment in\naccordance with paragraph (e) or (g) of subdivision four of this section\nfor case mix changes for other than beneficiaries of title XVIII of the\nfederal social security act (medicare).\n (f) General hospitals that did not qualify for a volume adjustment for\nthe nineteen hundred eighty-six and nineteen hundred eighty-seven rate\nperiods for rates of payment determined in accordance with section\ntwenty-eight hundred seven-a of this article may request and the\ncommissioner shall consider an adjustment to an established case based\nrate of payment for nineteen hundred eighty-eight based on increases in\nvolume as measured by discharges, based on a comparison between nineteen\nhundred eighty-five and nineteen hundred eighty-seven discharges,\nexcluding in such comparison discharges of patients who are\nbeneficiaries of title XVIII of the federal social security act\n(medicare) and discharges related to transfer cases (transferring\nhospital) and short stay cases as defined in this section, provided such\ngeneral hospital meets performance criteria established in accordance\nwith rules and regulations adopted by the council and approved by the\ncommissioner. Such criteria shall include but need not be limited to:\nmaintenance of like patient occupancy rates for the rate periods\nnineteen hundred eighty-five, nineteen hundred eighty-six and nineteen\nhundred eighty-seven; a reduction in patient length of stay for other\nthan beneficiaries of title XVIII of the federal social security act\n(medicare) based on a comparison with nineteen hundred eighty-five data;\nand an expanded use of ambulatory surgery by the general hospital based\non a comparison with nineteen hundred eighty-five data. Such adjustment\nshall consider, but need not be limited to, the variable costs related\nto volume changes in accordance with rules and regulations adopted by\nthe council and approved by the commissioner.\n (g) All appeals shall be submitted to the commissioner, who may submit\na copy of the appeal to interested parties for the purpose of providing\nan opportunity for comment within a specified time period.\n (h) The commissioner shall act upon all properly documented appeals\nfor adjustments concerning base year costs by November first of the\ncalendar year for which the rate is effective provided that all\ninformation necessary to determine whether an adjustment is justified is\nsubmitted by the facility prior to May first of such year. In the event\nsuch an appeal is filed by May first, but information necessary to\ndetermine whether an adjustment is justified is submitted after such\ndate, the commissioner shall act on the appeal within six months after\nreceiving the necessary information.\n * 10. Trend factors. (a) The commissioner, in accordance with the\nmethodology developed for rate periods through March thirty-first, two\nthousand, for rates of payment for state governmental agencies and\nthrough December thirty-first, nineteen hundred ninety-six for rates of\npayment for all other payors pursuant to paragraph (b) of this\nsubdivision, shall establish trend factors to project for the effects of\ninflation. The factors shall be applied to the appropriate portion of\nreimbursable costs. The methodology for developing the trend factor\nshall include the appropriate external price indicators and shall also\ninclude the data from major collective bargaining agreements as reported\nquarterly by the federal department of labor, bureau of labor\nstatistics, for non-supervisory employees.\n (b) The methodology shall be developed for rate periods through March\nthirty-first, two thousand, for rates of payment for state governmental\nagencies and through December thirty-first, nineteen hundred ninety-six\nfor rates of payment for all other payors by four independent\nconsultants with expertise in health economics or reimbursement\nmethodologies for health-related services appointed by the\ncommissioner. For nineteen hundred ninety-six, through March\nthirty-first, two thousand, the commissioner shall apply the nineteen\nhundred ninety-five trend factor methodology. The commissioner shall\nmonitor the actual price movements of the external price indicators\nused in the methodology for one interim adjustment to the trend factors\nto reflect such price movements and one final adjustment to the trend\nfactors to reflect such price movements. At the same time adjustments\nare made to the trend factors in accordance with this paragraph,\nadjustments shall be made to all inpatient rates of payment affected by\nthe adjusted trend factors.\n (c) (1) For rate periods on and after April first, two thousand, the\ncommissioner shall establish trend factors for rates of payment for\nstate governmental agencies to project for the effects of inflation\nexcept that such trend factors shall not be applied to services for\nwhich rates of payment are established by the commissioners of the\ndepartment of mental hygiene. The factors shall be applied to the\nappropriate portion of reimbursable costs.\n (2) In developing trend factors for such rates of payment, the\ncommissioner shall use the most recent Congressional Budget Office\nestimate of the rate year's U.S. Consumer Price Index for all urban\nconsumers published in the Congressional Budget Office Economic and\nBudget Outlook after June first of the rate year prior to the year for\nwhich rates are being developed.\n (3) After the final U.S. Consumer Price Index (CPI) for all urban\nconsumers is published by the United States Department of Labor, Bureau\nof Labor Statistics, for a particular rate year, the commissioner shall\nreconcile such final CPI to the projection used in subparagraph two of\nthis paragraph and any difference will be included in the prospective\ntrend factor for the current year.\n (4) At the time adjustments are made to the trend factors in\naccordance with this paragraph, adjustments shall be made to all\ninpatient rates of payment affected by the trend factor adjustment.\n * NB Effective until December 31, 2026\n * 10. Trend factors. (a) The commissioner, in accordance with the\nmethodology developed pursuant to paragraph (b) of this subdivision,\nshall establish trend factors to project for the effects of inflation.\nThe factors shall be applied to the appropriate portion of reimbursable\ncosts. The methodology for developing the trend factor shall include the\nappropriate external price indicators and shall also include the data\nfrom major collective bargaining agreements as reported quarterly by the\nfederal department of labor, bureau of labor statistics, for\nnon-supervisory employees.\n (b) The methodology shall be developed by four independent consultants\nwith expertise in health economics or reimbursement methodologies for\nhealth-related services appointed by the commissioner. On or about\nSeptember first of each year, the consultants shall provide to the\ncommissioner and the council a report in writing detailing the\nmethodology to be used to determine the trend factors for the subsequent\ntwelve month period commencing January first. The commissioner shall\nmonitor the actual price movements during this twelve month period of\nthe external price indicators used in the methodology, shall report the\nresults of the monitoring to the consultants and shall implement the\nrecommendations of the consultants for one prospective interim annual\nadjustment to the trend factors to reflect such price movements and to\nbe effective on January first, one year after the initial trend factor\nwas established and one prospective final annual adjustment to the trend\nfactors to reflect such price movements and to be effective on January\nfirst, two years after the initial trend factor was established. At the\nsame time adjustments are made to the trend factors in accordance with\nthis paragraph, adjustments shall be made to all inpatient rates of\npayment affected by the adjusted trend factors.\n * NB Effective December 31, 2026\n 11. Special provisions. (a) Notwithstanding any inconsistent provision\nof this chapter or any other law to the contrary, payment for inpatient\nhospital services provided on or after January first, nineteen hundred\neighty-eight to a patient admitted to a general hospital prior to\nJanuary first, nineteen hundred eighty-eight otherwise eligible for\npayment on a case based payment per discharge basis for a\ndiagnosis-related group shall be at the rate of payment for such general\nhospital for such patient in effect for December thirty-first, nineteen\nhundred eighty-seven provided, however, that the operating cost\ncomponents of such rates of payment for inpatient hospital services\nprovided on or after January first, nineteen hundred eighty-eight shall\nbe projected to the rate period by the trend factor determined in\naccordance with subdivision ten of this section and reconciled on a\ncumulative basis on or about March thirty-first, nineteen hundred\neighty-eight and December thirty-first, nineteen hundred eighty-eight\nfor payment of adjusted rates of payment based on such trend factor\nadjustment. The component of such rates of payment based on the\nallowances provided in accordance with paragraphs (e) and (f) of\nsubdivision eight of section twenty-eight hundred seven-a of this\narticle shall be returned to the applicable regional pool created in\naccordance with subdivision fifteen of such section and distributed in\naccordance with subdivision sixteen of such section based on needs for\nthe financing of losses resulting from bad debts and the costs of\ncharity care as determined for purposes of nineteen hundred eighty-seven\ndistributions.\n (b) The council shall adopt rules and regulations subject to the\napproval of the commissioner regarding payor payment responsibilities\nwhen a patient has coverage with more than one payor for general\nhospital inpatient services and during a hospital stay exhausts benefits\navailable from the primary payor, or receives services not reimbursed by\nthe primary payor, so that the hospital shall be reimbursed by a\nsecondary payor for services not reimbursed by the primary payor that\nare included as a benefit of the secondary payor. A primary payor for\npurposes of this paragraph shall include benefits available pursuant to\ntitle XVIII of the federal social security act (medicare).\n * (c)(i) Adjustments to rates made pursuant to this section for rate\nperiods commencing on or after January first, nineteen hundred\nninety-seven may be made prospectively or retrospectively on the next\nfollowing January or July unless otherwise specifically authorized.\n (ii) The commissioner may further adjust rates retrospectively for\npayments by state governmental agencies upon a finding that the failure\nto do so seriously impacts on a general hospital's financial stability.\n (iii) Regardless of whether rates are adjusted prospectively or\nretrospectively the authorized dollar value of the adjustment shall be\nthe same, calculated by including the retroactive impact of such\nadjustment if such adjustment is made prospectively. A prospective\nadjustment to reflect the retroactive impact of an adjustment shall be\nincluded in the determination of rates of payment for a prospective rate\nperiod based on the methodology applied in accordance with this section\nfor calculation of rates of payment for such prospective rate period.\nThe allowance reflected in payments to a general hospital or a pool\nrelated to a prospective adjustment which reflects the retroactive\nimpact of an adjustment shall be computed based on the allowance\npercentage in effect during the prospective period such adjustment is in\neffect. No recalculation of the basis for distribution of funds from bad\ndebt and charity care regional pools determined in accordance with\nsubdivision seventeen of this section shall be made for a prospective\nadjustment which reflects the retroactive impact of an adjustment.\n * NB Effective until December 31, 2026\n * (c)(i) Adjustments to rates made pursuant to this section shall be\nmade prospectively on the next following January or July unless\notherwise specifically authorized provided, however, that adjustments to\nrates of payment to reflect nineteen hundred eighty-seven data and\nstatistics may be made retrospectively and such retrospective\nadjustments shall, to the extent practicable, be cumulated for one\ncomprehensive adjustment.\n (ii) The commissioner may further adjust rates retrospectively upon a\nfinding that the failure to do so seriously impacts on a general\nhospital's financial stability.\n (iii) Regardless of whether rates are adjusted prospectively or\nretrospectively the authorized dollar value of the adjustment shall be\nthe same, calculated by including the retroactive impact of such\nadjustment if such adjustment is made prospectively. A prospective\nadjustment to reflect the retroactive impact of an adjustment shall be\nincluded in the determination of rates of payment for a prospective rate\nperiod based on the methodology applied in accordance with this section\nfor calculation of rates of payment for such prospective rate period,\nprovided, however, that no recalculation of bad debt and charity care\nallowance percentages determined in accordance with subdivision fourteen\nof this section shall be made for a prospective adjustment which\nreflects the retroactive impact of an adjustment. The bad debt and\ncharity care allowance of a general hospital related to a prospective\nadjustment which reflects the retroactive impact of an adjustment shall\nbe computed based on the bad debt and charity care allowance percentage\nof such hospital in effect during the prospective period such adjustment\nis in effect. No recalculation of the basis for distribution of funds\nfrom bad debt and charity care regional pools determined in accordance\nwith subdivision seventeen of this section shall be made for a\nprospective adjustment which reflects the retroactive impact of an\nadjustment.\n * NB Effective December 31, 2026\n (d) Working capital. General hospitals may include as a financing or\nworking capital charge an addition of two percent of any valid claim not\npaid within thirty days of submission or determination of payor\nliability, whichever is later, and one percent per month thereafter.\nFinancing or working capital charges shall not be applied to hospital\nbillings to third party payors participating in an advance payment\nsystem. Any payor not participating in an advance payment system or\noffering admission billing shall allow interim billing for a patient\nwhose stay exceeds thirty days.\n (e) (i) Except for payments made pursuant to the workers' compensation\nlaw, the volunteer firefighters' benefit law, or the volunteer ambulance\nworkers' benefit law, a two percent discount from general hospital\npayments shall be available to all payors whose payments are calculated\nin accordance with paragraphs (b) and (c) of subdivision one of this\nsection making payment in full to a general hospital for covered\nhospital services within ten calendar days of receipt from the hospital\nby the appropriate payor of a bill for such services.\n (ii) A three percentage point reduction in the differential of five\npercent for general hospital payments shall be available to all payors\nwhose payments are calculated in accordance with paragraph (b) of\nsubdivision one or paragraph (e) of subdivision four of this section\nwhich are making payments pursuant to the workers' compensation law, the\nvolunteer firefighters' benefit law, or the volunteer ambulance workers'\nbenefit law when such payments are made in full to a general hospital\nfor covered hospital services within ninety calendar days of receipt\nfrom the hospital by the appropriate payor of a bill for such services,\nand an additional two percentage point reduction shall be available for\nsuch payors if such payment is made within forty-five calendar days of\nreceipt of such a bill.\n (f) (i) * In order to allow for real increases in general hospital\ncase mix while limiting the effect of potential case mix changes that\nare the result of changes in coding practices rather than real changes\nin case mix, the commissioner shall annually for rate periods through\nDecember thirty-first, nineteen hundred ninety-six, in accordance with\nrules and regulations adopted by the council and approved by the\ncommissioner, adjust individual general hospitals' case payment rates\ndetermined in accordance with paragraphs (a) and (b) of subdivision one\nof this section to account for increases in the statewide average case\nmix, based on increases in statewide average assignment to\ndiagnosis-related groups for all patients other than beneficiaries of\ntitle XVIII of the federal social security act (medicare), that exceed\nthe allowable statewide increase determined in accordance with this\nsubparagraph. The commissioner further shall adjust individual general\nhospitals' case payment rates determined in accordance with this section\nfor state governmental agencies for the periods January first, nineteen\nhundred ninety-seven through March thirty-first, two thousand and on and\nafter April first, two thousand, in accordance with clause (G) of this\nsubparagraph and to account for increases in statewide average case mix,\nbased on increases in statewide average assignment to diagnosis-related\ngroups based on data only for patients that are eligible for medical\nassistance pursuant to title eleven of article five of the social\nservices law, including such patients enrolled in health maintenance\norganizations, that exceed the allowable statewide increase determined\nin accordance with clause (B-1) of this subparagraph.\n * NB Effective until December 31, 2026\n * In order to allow for real increases in general hospital case mix\nwhile limiting the effect of potential case mix changes that are the\nresult of changes in coding practices rather than real changes in case\nmix, the commissioner shall annually for rate periods through December\nthirty-first, nineteen hundred ninety-six, in accordance with rules and\nregulations adopted by the council and approved by the commissioner,\nadjust individual general hospitals' case payment rates determined in\naccordance with paragraphs (a) and (b) of subdivision one of this\nsection to account for increases in the statewide average case mix,\nbased on increases in statewide average assignment to diagnosis-related\ngroups for all patients other than beneficiaries of title XVIII of the\nfederal social security act (medicare), that exceed the allowable\nstatewide increase determined in accordance with this subparagraph. The\ncommissioner further shall adjust individual general hospitals' case\npayment rates determined in accordance with this section for state\ngovernmental agencies for the periods January first, nineteen hundred\nninety-seven through March thirty-first, two thousand in accordance with\nclause (G) of this subparagraph and to account for increases in\nstatewide average case mix, based on increases in statewide average\nassignment to diagnosis-related groups based on data only for patients\nthat are eligible for medical assistance pursuant to title eleven of\narticle five of the social services law, including such patients\nenrolled in health maintenance organizations, that exceed the allowable\nstatewide increase determined in accordance with clause (B-1) of this\nsubparagraph.\n * NB Effective and expires December 31, 2026\n * In order to allow for real increases in general hospital case mix\nwhile limiting the effect of potential case mix changes that are the\nresult of changes in coding practices rather than real changes in case\nmix, the commissioner shall annually, in accordance with rules and\nregulations adopted by the council and approved by the commissioner,\nadjust individual general hospitals' case payment rates determined in\naccordance with paragraphs (a) and (b) of subdivision one of this\nsection to account for increases in the statewide average case mix,\nbased on increases in statewide average assignment to diagnosis-related\ngroups for all patients other than beneficiaries of title XVIII of the\nfederal social security act (medicare), that exceed the allowable\nstatewide increase determined in accordance with this subparagraph.\n * NB Effective December 31, 2026\n (A) The increase in the statewide average case mix in a rate year\nduring the period January first, nineteen hundred eighty-eight through\nDecember thirty-first, nineteen hundred ninety-three from the nineteen\nhundred eighty-seven statewide average case mix shall not exceed two\npercent in nineteen hundred eighty-eight compared to nineteen hundred\neighty-seven, three percent in nineteen hundred eighty-nine compared to\nnineteen hundred eighty-seven, four percent in nineteen hundred ninety\ncompared to nineteen hundred eighty-seven, five percent in nineteen\nhundred ninety-one compared to nineteen hundred eighty-seven, and,\nnotwithstanding any inconsistent rule or regulation, for rates of\npayment for state governmental agencies six percent in nineteen hundred\nninety-two compared to nineteen hundred eighty-seven and seven percent\nin nineteen hundred ninety-three compared to nineteen hundred\neighty-seven, and for rates of payment for payors other than state\ngovernmental agencies six and seven-tenths percent in nineteen hundred\nninety-two compared to nineteen hundred eighty-seven and seven percent\nin nineteen hundred ninety-three compared to nineteen hundred\neighty-seven.\n * (B) The increase in the statewide average case mix in a rate year\nduring the period January first, nineteen hundred ninety-four through\nDecember thirty-first, nineteen hundred ninety-six from the nineteen\nhundred ninety-two statewide average case mix, plus adjustments, shall\nnot exceed: for rates of payment for state governmental agencies two\npercent in the period January first, nineteen hundred ninety-four\nthrough June thirtieth, nineteen hundred ninety-four, and,\nnotwithstanding any inconsistent rule or regulation, six and two-tenths\npercent in the period July first, nineteen hundred ninety-four through\nDecember thirty-first, nineteen hundred ninety-four, three percent in\nthe period January first, nineteen hundred ninety-five through March\nthirty-first, nineteen hundred ninety-five, two percent in the period\nApril first, nineteen hundred ninety-five through December thirty-first,\nnineteen hundred ninety-five, and three percent in the period January\nfirst, nineteen hundred ninety-six through December thirty-first,\nnineteen hundred ninety-six; and for rates of payment for payors other\nthan state governmental agencies two percent in nineteen hundred\nninety-four, three percent in nineteen hundred ninety-five, and four\npercent in the period January first, nineteen hundred ninety-six through\nDecember thirty-first, nineteen hundred ninety-six. Adjustments to the\nnineteen hundred ninety-two statewide average case mix shall mean an\nadjustment for any increase in nineteen hundred ninety-two statewide\naverage case mix compared to nineteen hundred eighty-seven statewide\naverage case mix in excess of six percent of nineteen hundred\neighty-seven statewide average case mix and a further adjustment to\nreflect that measurement of case mix increase from the nineteen hundred\nninety-two statewide average case mix rather than the nineteen hundred\neighty-seven statewide average case mix reflects the increase in\nstatewide average case mix from nineteen hundred eighty-seven to\nnineteen hundred ninety-two in order to maintain the effective maximum\nrate of allowable statewide average case mix increases at a percentage\nper year of the nineteen hundred eighty-seven statewide average case\nmix. Nineteen hundred ninety-two case mix shall be determined based on\nnineteen hundred ninety-two data received by the department by April\nthirtieth, nineteen hundred ninety-three.\n * NB Effective until December 31, 2026\n * (B) The increase in the statewide average case mix in a rate year\nduring the period January first, nineteen hundred ninety-four through\nJune thirtieth, nineteen hundred ninety-six from the nineteen hundred\nninety-two statewide average case mix, plus adjustments, shall not\nexceed: for rates of payment for state governmental agencies two percent\nin the period January first, nineteen hundred ninety-four through June\nthirtieth, nineteen hundred ninety-four, and, notwithstanding any\ninconsistent rule or regulation, six and two-tenths percent in the\nperiod July first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-four, three percent in the period\nJanuary first, nineteen hundred ninety-five through March thirty-first,\nnineteen hundred ninety-five, and two percent in the period April first,\nnineteen hundred ninety-five through December thirty-first, nineteen\nhundred ninety-five, and three percent in the period January first,\nnineteen hundred ninety-six through June thirtieth, nineteen hundred\nninety-six; and for rates of payment for payors other than state\ngovernmental agencies two percent in nineteen hundred ninety-four, three\npercent in nineteen hundred ninety-five, and four percent in the period\nJanuary first, nineteen hundred ninety-six through June thirtieth,\nnineteen hundred ninety-six. Adjustments to the nineteen hundred\nninety-two statewide average case mix shall mean an adjustment for any\nincrease in nineteen hundred ninety-two statewide average case mix\ncompared to nineteen hundred eighty-seven statewide average case mix in\nexcess of six percent of nineteen hundred eighty-seven statewide average\ncase mix and a further adjustment to reflect that measurement of case\nmix increase from the nineteen hundred ninety-two statewide average case\nmix rather than the nineteen hundred eighty-seven statewide average case\nmix reflects the increase in statewide average case mix from nineteen\nhundred eighty-seven to nineteen hundred ninety-two in order to maintain\nthe effective maximum rate of allowable statewide average case mix\nincreases at a percentage per year of the nineteen hundred eighty-seven\nstatewide average case mix. Nineteen hundred ninety-two case mix shall\nbe determined based on nineteen hundred ninety-two data received by the\ndepartment by April thirtieth, nineteen hundred ninety-three.\n * NB Effective December 31, 2026\n (B-1) The increase in the statewide average case mix in the periods\nJanuary first, nineteen hundred ninety-seven through March thirty-first,\ntwo thousand and on and after April first, two thousand through March\nthirty-first, two thousand six and on and after April first, two\nthousand six through March thirty-first, two thousand seven, and on and\nafter April first, two thousand seven through March thirty-first, two\nthousand nine, and on and after April first, two thousand nine through\nMarch thirty-first, two thousand eleven, from the statewide average case\nmix for the period January first, nineteen hundred ninety-six through\nDecember thirty-first, nineteen hundred ninety-six shall not exceed one\npercent for nineteen hundred ninety-seven, two percent for nineteen\nhundred ninety-eight, three percent for the period January first,\nnineteen hundred ninety-nine through September thirtieth, nineteen\nhundred ninety-nine, four percent for the period October first, nineteen\nhundred ninety-nine through December thirty-first, nineteen hundred\nninety-nine, and four percent for two thousand plus an additional one\npercent per year thereafter, based on comparison of data only for\npatients that are eligible for medical assistance pursuant to title\neleven of article five of the social services law, including such\npatients enrolled in health maintenance organizations.\n (C) Rate year case mix shall be determined based on rate year data\nreceived by the department by April thirtieth next following the end of\nthe rate year. Case mix may be determined based on general hospital data\nreceived or amended after such due dates provided, however, that a\ngeneral hospital that does not submit the appropriate data in a timely\nmanner shall be subject to the provisions of section twelve-d of this\nchapter.\n * (D) If in any rate period on an annualized basis the cumulative case\nmix increase exceeds the allowable statewide increase, rates of payment\nto general hospitals shall be adjusted in accordance with rules and\nregulations adopted by the council and approved by the commissioner\nwhich shall contain the specific methodology to allocate the reduction\namong general hospitals, in order to reduce the effect of the statewide\nincrease on rates of payment to reflect the allowable increase.\nNotwithstanding any inconsistent provision of this paragraph, rate\nadjustments for purposes of this paragraph shall be made on a six month\nrate period basis for the period July first, nineteen hundred\nninety-four through December thirty-first, nineteen hundred ninety-four.\nThe retroactive impact of adjustments to rates of payment for payors\nother than state governmental agencies based on the amendments to this\nparagraph effective July first, nineteen hundred ninety-four shall be\nreflected in a prospective adjustment to rates of payment for such\npayors for the period July first, nineteen hundred ninety-four through\nDecember thirty-first, nineteen hundred ninety-four.\n * NB Effective until December 31, 2026\n * (D) If in any rate year the cumulative case mix increase exceeds the\nallowable statewide increase, rates of payment to general hospitals\nshall be adjusted in accordance with rules and regulations adopted by\nthe council and approved by the commissioner which shall contain the\nspecific methodology to allocate the reduction among general hospitals,\nin order to reduce the effect of the statewide increase on rates of\npayment to reflect the allowable increase. Notwithstanding any\ninconsistent provision of this paragraph, rate adjustments for purposes\nof this paragraph shall be made on a six month rate period basis for the\nperiod July first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-four. The retroactive impact of\nadjustments to rates of payment for payors other than state governmental\nagencies based on the amendments to this paragraph effective July first,\nnineteen hundred ninety-four shall be reflected in a prospective\nadjustment to rates of payment for such payors for the period July\nfirst, nineteen hundred ninety-four through December thirty-first,\nnineteen hundred ninety-four.\n * NB Effective December 31, 2026\n (E) Such methodology shall take into account past trends of individual\ngeneral hospitals' case mix changes, and, within the aggregate allowable\nstatewide increase in case mix, permit general hospitals to appeal to\nthe commissioner their proposed allocation of a reduction in rates of\npayment related to increases in statewide average case mix based on such\nfactors as changes in hospital service delivery and referral patterns.\n (F) Case mix changes due to acquired immune deficiency syndrome,\ntuberculosis, epidemics or other catastrophes resulting in extraordinary\nhospital utilization shall not be subject to this limitation.\n * (G) Adjustments determined in accordance with clause (B) of this\nsubparagraph for the period January first, nineteen hundred ninety-six\nthrough December thirty-first, nineteen hundred ninety-six on a final\nbasis, and in accordance with subparagraph (ii) of this paragraph on an\ninterim basis, shall be applied to rates of payment for state\ngovernmental agencies during the period January first, nineteen hundred\nninety-seven through March thirty-first, two thousand and periods on and\nafter April first, two thousand.\n * NB Expires December 31, 2026\n * (G) Adjustments determined in accordance with clause (B) of this\nsubparagraph for the period January first, nineteen hundred ninety-six\nthrough December thirty-first, nineteen hundred ninety-six on a final\nbasis, and in accordance with subparagraph (ii) of this paragraph on an\ninterim basis, shall be applied to rates of payment for state\ngovernmental agencies during the period January first, nineteen hundred\nninety-seven through March thirty-first, two thousand.\n * NB Effective and repealed December 31, 2026\n * (ii) (A) The commissioner shall, in accordance with rules and\nregulations adopted by the council and approved by the commissioner, for\npurposes of payments on an interim basis periodically compute an\nadjustment to individual general hospitals' case payment rates for prior\nperiods for the payor categories specified in paragraphs (a) and (b) of\nsubdivision one of this section to account for increases in the\nstatewide average case mix, based on increases in statewide average\nassignment to diagnosis-related groups for all patients other than\nbeneficiaries of title XVIII of the federal social security act\n(medicare), that exceed the allowable statewide increase. The increase\nin the statewide average case mix in a rate year during the period\nJanuary first, nineteen hundred eighty-eight through December\nthirty-first, nineteen hundred ninety-three from the nineteen hundred\neighty-seven statewide average case mix and in a rate year during the\nperiod January first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-six from the adjusted nineteen\nhundred ninety-two statewide average case mix shall not exceed the\nallowable statewide increase as determined in accordance with\nsubparagraph (i) of this paragraph. Adjustments may be made on a\nquarterly basis consistent with this annual limitation. If in any\nquarter of the rate year the cumulative case mix increase for the rate\nyear exceeds the allowable statewide increase, payment rates to general\nhospitals shall be adjusted in accordance with rules and regulations\nadopted by the council and approved by the commissioner which shall\ncontain the specific methodology to allocate the reduction among general\nhospitals provided, however, that any funds to be recovered from\nhospitals based on such adjustments for prior periods shall be recovered\nby prospective adjustment of rates of payment in accordance with\nparagraph (c) of this subdivision, in order to reduce the effect of the\nstatewide increase on rates of payment to reflect the allowable\nincrease, taking into consideration the effect of any adjustment\napplicable in the rate period made in accordance with subparagraph (iii)\nof this paragraph. Case mix changes due to acquired immune deficiency\nsyndrome, tuberculosis, epidemics or other catastrophes resulting in\nextraordinary hospital utilization shall not be subject to this\nlimitation, pursuant to rules and regulations adopted by the council and\napproved by the commissioner.\n (B) The commissioner further shall for purposes of payments on an\ninterim basis periodically compute an adjustment to individual general\nhospitals' case payment rates for prior periods for payments made by\nstate governmental agencies to account for increases in the statewide\naverage case mix, based on increases in statewide average assignment to\ndiagnosis-related groups for patients that are eligible for medical\nassistance pursuant to title eleven of article five of the social\nservices law eligible for payments made by state governmental agencies\nor by health maintenance organizations, that exceed the allowable\nstatewide increase as determined in accordance with clause (B-1) of\nsubparagraph (i) of this paragraph.\n * NB Effective until December 31, 2026\n * (ii) The commissioner shall, in accordance with rules and\nregulations adopted by the council and approved by the commissioner, for\npurposes of payments on an interim basis periodically compute an\nadjustment to individual general hospitals' case payment rates for prior\nperiods for the payor categories specified in paragraphs (a) and (b) of\nsubdivision one of this section to account for increases in the\nstatewide average case mix, based on increases in statewide average\nassignment to diagnosis-related groups for all patients other than\nbeneficiaries of title XVIII of the federal social security act\n(medicare), that exceed the allowable statewide increase. The increase\nin the statewide average case mix in a rate year during the period\nJanuary first, nineteen hundred eighty-eight through December\nthirty-first, nineteen hundred ninety-three from the nineteen hundred\neighty-seven statewide average case mix and in a rate year during the\nperiod January first, nineteen hundred ninety-four through June\nthirtieth, nineteen hundred ninety-six from the adjusted nineteen\nhundred ninety-two statewide average case mix shall not exceed the\nallowable statewide increase as determined in accordance with\nsubparagraph (i) of this paragraph. Adjustments may be made on a\nquarterly basis consistent with this annual limitation. If in any\nquarter of the rate year the cumulative case mix increase for the rate\nyear exceeds the allowable statewide increase, payment rates to general\nhospitals shall be adjusted in accordance with rules and regulations\nadopted by the council and approved by the commissioner which shall\ncontain the specific methodology to allocate the reduction among general\nhospitals provided, however, that any funds to be recovered from\nhospitals based on such adjustments for prior periods shall be recovered\nby prospective adjustment of rates of payment in accordance with\nparagraph (c) of this subdivision, in order to reduce the effect of the\nstatewide increase on rates of payment to reflect the allowable\nincrease, taking into consideration the effect of any adjustment\napplicable in the rate period made in accordance with subparagraph (iii)\nof this paragraph. Case mix changes due to acquired immune deficiency\nsyndrome, tuberculosis, epidemics or other catastrophes resulting in\nextraordinary hospital utilization shall not be subject to this\nlimitation, pursuant to rules and regulations adopted by the council and\napproved by the commissioner.\n * NB Effective December 31, 2026\n (iii) The commissioner shall, in accordance with rules and regulations\nadopted by the council and approved by the commissioner, periodically\nprospectively adjust for purposes of payments on an interim basis\nindividual general hospitals' case payment rates for the payor\ncategories specified in paragraphs (a) and (b) of subdivision one of\nthis section to account for increases in statewide average assignment to\ndiagnosis-related groups which exceed the allowable statewide increase\nas determined in accordance with subparagraph (ii) of this paragraph.\n (iv) Rates of payment of a general hospital shall be adjusted in\naccordance with paragraph (c) of this subdivision to reflect the\ndifference between an individual general hospital's case payment rates\nadjusted in accordance with subparagraph (i) of this paragraph for a\nrate period and such rates determined in accordance with paragraphs (a)\nand (b) of subdivision one of this section, taking into consideration\nany adjustment to case payment rates applicable for such rate period\nmade in accordance with subparagraphs (ii) and (iii) and for the periods\nbeginning on or after July first, nineteen hundred ninety, subparagraph\n(v) of this paragraph.\n (v) Notwithstanding any inconsistent provision of law, for the periods\nbeginning on or after July first, nineteen hundred ninety and subsequent\nannual rate periods beginning January first the commissioner shall\nreduce, in accordance with the methodology adopted for purposes of\nadjustments pursuant to subparagraph (ii) of this paragraph, for\npurposes of payments on an interim basis individual general hospitals'\ncase payment rates applicable to state governmental agencies for a\nprospective period to reflect an estimate of the cumulative increase in\nstatewide average assignment to diagnosis-related groups for prior\nperiods including prior quarters of the rate period which exceeds the\nallowable statewide increase specified in subparagraph (i) of this\nparagraph for the prospective period. Such adjustment if effected for\nless than an annual prospective rate period shall reflect an annualized\nadjustment.\n (vi) Notwithstanding any inconsistent provision of law, adjustments to\nrates of payment pursuant to this paragraph based on nineteen hundred\nninety-three data that reflects an increase in statewide average case\nmix compared to nineteen hundred eighty-seven that exceeds the increase\nbased on nineteen hundred ninety-two data in statewide average case mix\ncompared to nineteen hundred eighty-seven shall not be implemented until\nApril first, nineteen hundred ninety-five and shall be made\nprospectively for rates of payment issued effective April first,\nnineteen hundred ninety-five including the impact of such adjustment for\nthe period January first, nineteen hundred ninety-five through March\nthirtieth, nineteen hundred ninety-five.\n (g) Notwithstanding any other provisions of this section, all costs\nand statistics that are related to inpatient services provided to\nbeneficiaries of title XVIII of the federal social security act\n(medicare) shall not be included in the establishment of any payment\nrates computed in accordance with the provisions of this section.\n (i) Unless provided otherwise in specific provisions included in this\nsection, the exclusion of costs which are related to routine inpatient\nservices provided to beneficiaries of title XVIII of the federal social\nsecurity act (medicare) and covered by title XVIII of the federal social\nsecurity act (medicare) shall be based on the nineteen hundred\neighty-five inpatient days actually paid on behalf of beneficiaries of\ntitle XVIII of the federal social security act (medicare) plus any days\nfor such beneficiaries not paid on the basis of a decision by a review\nagent that the days were unnecessary. Ancillary costs related to\ninpatient services provided to beneficiaries of title XVIII of the\nfederal social security act (medicare) and covered by title XVIII of the\nfederal social security act (medicare) shall be excluded on the basis of\nthe nineteen hundred eighty-five cost center ratio of hospital ancillary\ninpatient service charges related to such beneficiaries to total\nhospital cost center inpatient ancillary services charges applied to\ncost center costs. Inpatient malpractice insurance costs which are\nattributable to title XVIII of the federal social security act\n(medicare) shall be excluded based on the methodology employed by title\nXVIII of the federal social security act (medicare) to identify such\ncosts.\n (ii) Costs and statistics related to inpatient services provided to\nbeneficiaries of title XVIII of the federal social security act\n(medicare) and covered by a secondary payor shall be excluded in\naccordance with rules and regulations adopted by the council and\napproved by the commissioner in the determination of case payment rates\ncomputed in accordance with the provisions of this section.\n (h)(i) Any malpractice insurance costs which are the result of general\nhospitals having to purchase or provide excess malpractice insurance\ncoverage for physicians in accordance with section nineteen of chapter\ntwo hundred ninety-four of the laws of nineteen hundred eighty-five or\nsection eighteen of chapter two hundred sixty-six of the laws of\nnineteen hundred eighty-six as amended shall not be included in\ncalculating malpractice insurance costs for purposes of paragraph (e) of\nsubdivision one of this section.\n (ii) The component of general hospital reimbursable inpatient\noperating costs based on the general hospital's inpatient malpractice\ninsurance costs plus the component of special additional inpatient\noperating costs determined in accordance with subparagraphs (i) and\n(iii) of paragraph (e) of subdivision one of this section specifically\nrelated to inpatient malpractice insurance costs used to determine\npayment rates for annual rate periods beginning on or after January\nfirst, nineteen hundred eighty-eight shall be allocated among the payors\nin accordance with regulations adopted by the council and approved by\nthe commissioner.\n (i) For patients discharged during the period April first, nineteen\nhundred ninety-two through March thirty-first, nineteen hundred\nninety-three insured under a commercial insurer licensed to do business\nin this state and authorized to write accident and health insurance and\nwhose policy provides inpatient hospital coverage on an expense incurred\nbasis, the payment rate shall be increased in addition to the payment\nrate conversion factor of thirteen percent by a supplementary payment\nrate conversion factor of eleven percent for a total conversion factor\nof twenty-four percent. This paragraph shall not apply to payments\npursuant to the workers' compensation law, the volunteer firefighters'\nbenefit law, the volunteer ambulance workers' benefit law, the\ncomprehensive motor vehicle insurance reparations act, the terms of any\npersonal injury liability insurance policy, marine and inland marine\ninsurance policy or marine protections and indemnity insurance policy.\n (j) No operating cost ceilings or disallowances other than those\napplicable for purposes of the determination of a general hospital's\nreimbursable inpatient operating cost base in accordance with paragraph\n(d) of subdivision one of this section shall be applied to general\nhospitals, except for any cost ceilings or disallowances applied for\npurposes of subdivision twenty-four of this section and cost\ndisallowances for general hospitals with rates based on budgeted costs.\n (k) Notwithstanding any inconsistent provision of this section, case\nbased rates of payment per discharge may, in accordance with rules and\nregulations adopted by the council and approved by the commissioner,\nreflect incorporation of severity of illness considerations in the\nmethodology to determine such rates of payment.\n (l) Notwithstanding any inconsistent provision of this section,\nnothing in this section shall preclude a modification to case based\nrates of payment per discharge in accordance with rules and regulations\nadopted by the council and approved by the commissioner to reflect\nreadmission of an individual or unnecessary multiple admissions of an\nindividual to a general hospital or general hospitals.\n (m) Notwithstanding any inconsistent provision of this section, a\ngeneral hospital that exceeded maximum charge limitations as determined\nby the commissioner in the rate periods nineteen hundred eighty-four\nthrough nineteen hundred eighty-seven may be authorized in accordance\nwith rules and regulations adopted by the council and approved by the\ncommissioner to reduce payments determined pursuant to this section in\norder to effect a reduction equivalent to such amount by which such\ngeneral hospital exceeded maximum charge limitations.\n (n) (i) For a patient discharged from a general hospital on or after\nAugust first, nineteen hundred eighty-eight and covered by a payor\nincluded in the payor categories specified in paragraph (a) or (b) of\nsubdivision one of this section that provides for a percentage\ncoinsurance responsibility by or on behalf of such patient for covered\nhospital services: (A) the dollar value of such percentage coinsurance\nresponsibility by or on behalf of such patient shall be determined by\nmultiplying such coinsurance percentage by the hospital's charges for\nsuch patient, determined in accordance with paragraph (c) of subdivision\none of this section or paragraph (e) of subdivision four of this section\nfor a general hospital or distinct unit of a general hospital not\nreimbursed on case based payments, for the services covered by the\npayor, considering any applicable deductibles, and (B) the payment due\nto a general hospital for reimbursement of inpatient hospital services\nby such payor shall be determined by multiplying the payment rate\ndetermined in accordance with this section for such patient for covered\nhospital services by the coinsurance percentage for which such payor is\nresponsible, considering any applicable deductibles.\n (ii) A patient covered by a payor included in the payor categories\nspecified in paragraph (a) or (b) of subdivision one of this section\nshall be deemed liable for the payment rate for inpatient hospital\nservices for such patient for covered services determined in accordance\nwith this section based on the rate of payment for such payor, provided,\nhowever, that for a patient discharged from a general hospital on or\nafter August first, nineteen hundred eighty-eight a percentage\ncoinsurance responsibility by or on behalf of such patient shall be\ndeemed satisfied by payment of the dollar value of such percentage\ncoinsurance responsibility determined in accordance with clause (A) of\nsubparagraph (i) of this paragraph.\n (o) No general hospital shall refuse to provide hospital services to a\nperson presented or proposed to be presented for admission to such\ngeneral hospital by a representative of a correctional facility or a\nlocal correctional facility as defined respectively in subdivisions\nfour, fifteen and sixteen of section two of the correction law based\nsolely on the grounds such person is an incarcerated individual of such\ncorrectional facility or local correctional facility. No general\nhospital may demand or request any charge for hospital services provided\nto such person in addition to the charges or rates authorized in\naccordance with this article, except for charges for identifiable\nadditional hospital costs associated with or reasonable additional\ncharges associated with security arrangements for such person.\n (p)(i) Notwithstanding any inconsistent provision of law, a general\nhospital that provides an inpatient component of hospice care for\npersons eligible for payments to a hospice by a government agency made\nin accordance with subdivisions two and three of section four thousand\ntwelve of this chapter shall be reimbursed for such inpatient services\nby or on behalf of the hospice at a rate of payment no greater than the\napplicable rate of payment determined in accordance with subdivisions\ntwo and three of section four thousand twelve of this chapter for such\nhospice and no general hospital may charge for such inpatient services\nrendered an amount in excess of such applicable rate of payment.\n (ii) Notwithstanding any inconsistent provision of law, a general\nhospital that provides in accordance with contractual arrangements\nbetween a hospice and such general hospital an inpatient component of\nhospice care for persons who are not eligible for payments to the\nhospice by a government agency made in accordance with subdivisions two\nand three of section four thousand twelve of this chapter or as\nbeneficiaries of title XVIII of the federal social security act\n(medicare) shall be reimbursed for such inpatient services by or on\nbehalf of the hospice in accordance with such contractual arrangements.\n (q) A third-party payor specified in paragraph (a), (b) or (c) of\nsubdivision one of this section, with the exception of governmental\nagencies, shall provide the general hospital with a remittance advice at\nthe time payment or adjustment to such payment is made. Such remittance\nadvice shall include the patient's name, date of service, admission or\nfinancial control number if available and diagnosis-related group\nclassification number if applicable and if different than that billed by\nthe hospital. Such remittance advice shall also include (i) the amount\nor percentage payable under the policy or certificate after deductibles,\nco-payments and any other reduction of the amount billed including\ndeductions for prompt payment; and (ii) a specific explanation of any\ndenial, reduction, or other reason including any other third-party payor\ncoverage, for not providing full reimbursement of the amount claimed.\n * (r) Notwithstanding any inconsistent provision of this section, for\npurposes of establishing rates of payment by state governmental agencies\nfor general hospital inpatient services provided for discharges on or\nafter April first, nineteen hundred ninety-five, the reimbursable base\nyear inpatient administrative and general costs of a general hospital,\nwhich shall include but not be limited to reported administrative and\ngeneral, data processing, non-patient telephone, purchasing, admitting,\nand credit and collection costs, excluding a provider reimbursed on an\ninitial budget basis, shall not exceed the statewide average of total\nreimbursable base year inpatient administrative and general costs. For\nthe purposes of this paragraph, reimbursable base year administrative\nand general costs shall mean those base year administrative and general\ncosts remaining after application of all other efficiency standards,\nincluding, but not limited to, peer group cost ceilings or guidelines.\nThe limitation on reimbursement for provider administrative and general\nexpenses provided by this paragraph shall be expressed as a percentage\nreduction of the operating cost component of the rate promulgated by the\ncommissioner for each general hospital.\n * NB Expired March 31, 2011\n * (s) Notwithstanding any inconsistent provisions of this section, for\nthe period July first, nineteen hundred ninety-six through March\nthirty-first, nineteen hundred ninety-seven, the commissioner shall\nincrease rates of payment for patients eligible for payments made by\nstate governmental agencies by an amount not to exceed forty-five\nmillion dollars in the aggregate to be allocated among those voluntary\nnon-profit and private proprietary general hospitals which qualified for\nrate adjustments pursuant to this paragraph as in effect for the period\nJuly first, nineteen hundred ninety-five through June thirtieth,\nnineteen hundred ninety-six proportionally based on each such general\nhospital's proportional share of the total funds allocated pursuant to\nthis paragraph as in effect for the period of July first, nineteen\nhundred ninety-five through June thirtieth, nineteen hundred ninety-six.\n * NB Expires December 31, 2026\n (s-1) To the extent funds are available pursuant to the provisions of\nparagraph (s-2) of this subdivision and otherwise notwithstanding any\ninconsistent provision of law to the contrary, for the rate periods\nSeptember first, nineteen hundred ninety-seven through March\nthirty-first, nineteen hundred ninety-eight, and April first, nineteen\nhundred ninety-eight through March thirty-first, nineteen hundred\nninety-nine, the commissioner shall increase rates of payment for\npatients eligible for payments made by state governmental agencies by an\namount not to exceed forty-eight million dollars in the aggregate for\neach such rate period, allocated among those voluntary non-profit and\nprivate proprietary general hospitals which qualified for rate\nadjustments pursuant to paragraph (s) of this subdivision as in effect\nfor the period July first, nineteen hundred ninety-five through June\nthirtieth, nineteen hundred ninety-six proportionally based on each such\ngeneral hospital's proportional share of total funds allocated pursuant\nto paragraph (s) of this subdivision as in effect for the period of July\nfirst, nineteen hundred ninety-five through June thirtieth, nineteen\nhundred ninety-six. The rate adjustments calculated in accordance with\nthis paragraph shall be subject to retrospective reconciliation to\nensure that each hospital receives in the aggregate its proportionate\nshare of the full allocation, to the extent allowable under federal law,\nprovided however that the department shall not be required to reconcile\npayments made pursuant to paragraph (s) of this subdivision applicable\nto periods prior to September first, nineteen hundred ninety-seven.\n (s-2) (i) Notwithstanding any inconsistent provision of law to the\ncontrary, the following funds heretofore or hereinafter accumulated\nshall be transferred by the commissioner and credited to the credit of\nthe state general fund medical assistance local assistance account in an\naggregate amount equal to the non-federal share of the costs of the rate\nadjustments authorized pursuant to paragraph (s-1) of this subdivision:\n (A) from pool reserves from statewide and regional pools established\npursuant to sections twenty-eight hundred seven-a, twenty-eight hundred\nseven-c, and twenty-eight hundred eight-c of this article;\n (B) from unobligated monies available pursuant to paragraph (b) of\nsubdivision nineteen of section twenty-eight hundred seven-c of this\narticle;\n (C) from interest income derived from pools established pursuant to\nsections twenty-eight hundred seven-k, twenty-eight hundred seven-l and\ntwenty-eight hundred seven-s of this article.\n (ii) To the extent that funds available pursuant to the provisions of\nsubparagraph (i) of this paragraph are insufficient to meet the\nnon-federal share of the costs of the rate adjustments authorized\npursuant to paragraph (s-1) of this subdivision, the following funds\nhereto or hereinafter accumulated may be transferred by the commissioner\nto the state general fund medical assistance local assistance account\nfor the purposes set forth in subparagraph (i) of this paragraph:\n (A) from unobligated monies available pursuant to paragraphs (g) and\n(j) of subdivision 1 of section twenty-eight hundred seven-l of this\narticle;\n (B) from unobligated monies available pursuant to clause (D) of\nsubparagraph (ii) of paragraph (b) of subdivision one of section\ntwenty-eight hundred seven-l of this article.\n (iii) Notwithstanding any inconsistent provision of law to the\ncontrary, the commissioner shall transfer up to an additional two\nmillion dollars from the funding sources identified in subparagraph (i)\nof this paragraph to the state general fund. To the extent monies\navailable from the funding sources identified in subparagraph (i) of\nthis paragraph total less than two million dollars, the commissioner\nshall transfer monies from funding sources identified in subparagraph\n(ii) of this paragraph to the state general fund so that the total\namount transferred pursuant to this provision equals two million\ndollars.\n (s-3) To the extent funds are available pursuant to the provisions of\nparagraph (s-4) of this subdivision and otherwise notwithstanding any\ninconsistent provision of law to the contrary, for the rate period July\nfirst, nineteen hundred ninety-nine through March thirty-first, two\nthousand, the commissioner shall increase rates of payment for patients\neligible for payments made by state governmental agencies by an amount\nnot to exceed thirty-six million dollars in the aggregate. Such amount\nshall be allocated among those voluntary non-profit and private\nproprietary general hospitals which continue to provide inpatient\nservices as of July first, nineteen hundred ninety-nine under a previous\nor new name and which qualified for rate adjustments pursuant to\nparagraph (s) of this subdivision as in effect for the period July\nfirst, nineteen hundred ninety-five through June thirtieth, nineteen\nhundred ninety-six proportionally based on each such general hospital's\nproportional share of total funds allocated pursuant to paragraph (s) of\nthis subdivision as in effect for the period of July first, nineteen\nhundred ninety-five through June thirtieth, nineteen hundred ninety-six,\nprovided however, that amounts allocable to previously but no longer\nqualified hospitals shall be proportionally reallocated to the remaining\nqualified hospitals. The rate adjustments calculated in accordance with\nthis paragraph shall be subject to retrospective reconciliation to\nensure that each hospital receives in the aggregate its proportionate\nshare of the full allocation, to the extent allowable under federal law,\nprovided however that the department shall not be required to reconcile\npayments made pursuant to paragraph (s) of this subdivision applicable\nto periods prior to September first, nineteen hundred ninety-seven.\n (s-4) Notwithstanding any inconsistent provision of law to the\ncontrary, funds available pursuant to section 32-c of part F of the\nchapter of the laws of nineteen hundred ninety-nine which adds this\nparagraph shall be transferred by the commissioner and credited to the\ncredit of the state general fund medical assistance local assistance\naccount in an aggregate amount equal to the non-federal share of the\ncosts of the rate adjustments authorized pursuant to paragraph (s-3) of\nthis subdivision.\n * (s-5) To the extent funds are available pursuant to paragraph (s) of\nsubdivision one of section twenty-eight hundred seven-v of this article\nand otherwise notwithstanding any inconsistent provision of law, for\nrate periods April first, two thousand through March thirty-first, two\nthousand three, the commissioner shall increase rates of payment for\npatients eligible for payments made by state governmental agencies by an\namount not to exceed forty-eight million dollars annually in the\naggregate. Such amount shall be allocated among those voluntary\nnon-profit and private proprietary general hospitals which continue to\nprovide inpatient services as of July first, nineteen hundred\nninety-nine under a previous or new name and which qualified for rate\nadjustments pursuant to paragraph (s) of this subdivision as in effect\nfor the period July first, nineteen hundred ninety-five through June\nthirtieth, nineteen hundred ninety-six proportionally based on each such\ngeneral hospital's proportional share of total funds allocated pursuant\nto paragraph (s) of this subdivision as in effect for the period of July\nfirst, nineteen hundred ninety-five through June thirtieth, nineteen\nhundred ninety-six, provided however, that amounts allocable to\npreviously but no longer qualified hospitals shall be proportionally\nreallocated to the remaining qualified hospitals. The rate adjustments\ncalculated in accordance with this paragraph shall be subject to\nretrospective reconciliation to ensure that each hospital receives in\nthe aggregate its proportionate share of the full allocation, to the\nextent allowable under federal law, provided however that the department\nshall not be required to reconcile payments made pursuant to paragraph\n(s) of this subdivision applicable to periods prior to September first,\nnineteen hundred ninety-seven.\n * NB Expires December 31, 2026\n (s-6) To the extent funds are available otherwise notwithstanding any\ninconsistent provision of law to the contrary, for rate periods April\nfirst, two thousand three through March thirty-first, two thousand five,\nthe commissioner shall increase rates of payment for patients eligible\nfor payments made by state governmental agencies by an amount not to\nexceed forty-eight million dollars annually in the aggregate. Such\namount shall be allocated among those voluntary non-profit and private\nproprietary general hospitals which continue to provide inpatient\nservices as of July first, nineteen hundred ninety-nine under a previous\nor new name and which qualified for rate adjustments pursuant to\nparagraph (s) of this subdivision as in effect for the period July\nfirst, nineteen hundred ninety-five through June thirtieth, nineteen\nhundred ninety-six proportionally based on each such general hospital's\nproportional share of total funds allocated pursuant to paragraph (s) of\nthis subdivision as in effect for the period of July first, nineteen\nhundred ninety-five through June thirtieth, nineteen hundred ninety-six,\nprovided however, that amounts allocable to previously but no longer\nqualified hospitals shall be proportionally reallocated to the remaining\nqualified hospitals. The rate adjustments calculated in accordance with\nthis paragraph shall be subject to retrospective reconciliation to\nensure that each hospital receives in the aggregate its proportionate\nshare of the full allocation, to the extent allowable under federal law,\nprovided however that the department shall not be required to reconcile\npayments made pursuant to paragraph (s) of this subdivision applicable\nto periods prior to September first, nineteen hundred ninety-seven.\nThese payments may be added to rates of payment or made as aggregate\npayments to eligible hospitals.\n (s-7) To the extent funds are available otherwise notwithstanding any\ninconsistent provision of law to the contrary, for rate periods April\nfirst, two thousand five through March thirty-first, two thousand seven,\nthe commissioner shall increase rates of payment for patients eligible\nfor payments made by state governmental agencies by an amount not to\nexceed forty-eight million dollars annually in the aggregate. Such\namount shall be allocated among those voluntary non-profit and private\nproprietary general hospitals which continue to provide inpatient\nservices as of April first, two thousand five under a previous or new\nname and which qualified for rate adjustments pursuant to paragraph (s)\nof this subdivision as in effect for the period July first, nineteen\nhundred ninety-five through June thirtieth, nineteen hundred ninety-six\nproportionally based on each such general hospital's proportional share\nof total funds allocated pursuant to paragraph (s) of this subdivision\nas in effect for the period of July first, nineteen hundred ninety-five\nthrough June thirtieth, nineteen hundred ninety-six, provided however,\nthat amounts allocable to previously but no longer qualified hospitals\nshall be proportionally reallocated to the remaining qualified\nhospitals. The rate adjustments calculated in accordance with this\nparagraph shall be subject to retrospective reconciliation to ensure\nthat each hospital receives in the aggregate its proportionate share of\nthe full allocation, to the extent allowable under federal law, provided\nhowever that the department shall not be required to reconcile payments\nmade pursuant to paragraph (s) of this subdivision applicable to periods\nprior to September first, nineteen hundred ninety-seven.\n (s-8) To the extent funds are available and otherwise notwithstanding\nany inconsistent provision of law to the contrary, for rate periods on\nand after April first, two thousand seven through November thirtieth,\ntwo thousand nine, the commissioner shall increase rates of payment for\npatients eligible for payments made by state governmental agencies by an\namount not to exceed sixty million dollars annually in the aggregate.\nSuch amount shall be allocated among those voluntary non-profit general\nhospitals which continue to provide inpatient services as of April\nfirst, two thousand seven through March thirty-first, two thousand eight\nand which have medicaid inpatient discharges percentages equal to or\ngreater than thirty-five percent. This percentage shall be computed\nbased upon data reported to the department in each hospital's two\nthousand four institutional cost report, as submitted to the department\non or before January first, two thousand seven. The rate adjustments\ncalculated in accordance with this paragraph shall be allocated\nproportionally based on each eligible hospital's total reported medicaid\ninpatient discharges in two thousand four, to the total reported\nmedicaid inpatient discharges for all such eligible hospitals in two\nthousand four, provided, however, that such rate adjustments shall be\nsubject to reconciliation to ensure that each hospital receives in the\naggregate its proportionate share of the full allocation to the extent\nallowable under federal law. Such payments may be added to rates of\npayment or made as aggregate payments to eligible hospitals, provided,\nhowever, that subject to the availability of federal financial\nparticipation and solely for the period April first, two thousand seven\nthrough March thirty-first, two thousand eight, six million dollars in\nthe aggregate of this sixty million dollars shall be allocated to\nvoluntary non-profit hospitals which continue to provide inpatient\nservices as of April first, two thousand seven through March\nthirty-first, two thousand eight and which have Medicaid inpatient\ndischarge percentages of less than thirty-five percent and which had\npreviously qualified for distributions pursuant to paragraph (s-7) of\nthis subdivision. The rate adjustment calculated in accordance with this\nparagraph shall be allocated proportionally based on the amount of money\nthe hospital had received in two thousand six.\n 12. Provisions for article forty-three insurance law corporations and\narticle forty-four of this chapter organizations. Except as provided in\nparagraphs (a) and (b) of this subdivision, general hospital charges for\ninpatient and outpatient services to subscribers or beneficiaries of\ncontracts entered into pursuant to the provisions of article forty-three\nof the insurance law or to members of a comprehensive health services\nplan operating pursuant to the provisions of article forty-four of this\nchapter for patient services rendered shall not exceed the rates of\npayment approved by the commissioner for payments by such article\nforty-three insurance law corporations or article forty-four\norganizations. No general hospital may demand or request any charge for\nsuch covered services in addition to the charges or rates authorized by\nthis article.\n (a) Any general hospital which terminated its contract with an article\nnine-c insurance law corporation or a comprehensive health services plan\nafter October first, nineteen hundred seventy-six and prior to May\nfirst, nineteen hundred seventy-eight, may not charge subscribers or\nbeneficiaries of contracts entered into pursuant to the provisions of\narticle forty-three of the insurance law, or members of a comprehensive\nhealth services plan operating pursuant to the provisions of article\nforty-four of this chapter, amounts in excess of the payments\nestablished by such hospital for patient services in accordance with the\nprovisions of paragraph (c) of subdivision one of this section, or in\nthe event the article forty-three insurance law corporation or\ncomprehensive health services plan operating pursuant to the provisions\nof article forty-four of this chapter provides for reimbursement on an\nexpense incurred basis and makes payment directly to such hospital for\npatient services for its subscribers or beneficiaries, such article\nforty-three insurance law corporation or comprehensive health services\nplan shall be an additional category of payor of inpatient hospital\nservices whose rates of payment are determined in accordance with\nparagraph (b) of subdivision one of this section based on an imputed\nrate of payment determined in accordance with paragraph (a) of\nsubdivision one of this section for an article forty-three insurance law\ncorporation, adjusted for uncovered services, and increased by thirteen\npercent.\n (b) Any general hospital which had notified in writing an article\nnine-c corporation or a comprehensive health services plan prior to June\nfirst, nineteen hundred seventy-eight of its intention to terminate its\ncontract with such corporation or plan in accordance with the terms of\nsuch contract, except a general hospital subject to the provisions of\nparagraph (a) of this subdivision may not charge a subscriber or\nbeneficiary of a contract entered into pursuant to the provisions of\narticle forty-three of the insurance law, or a member of a comprehensive\nhealth services plan operating pursuant to the provisions of article\nforty-four of this chapter, after the effective date of termination of\nsuch contract, amounts in excess of the payments established by such\nhospital for patient services in accordance with the provisions of\nparagraph (c) of subdivision one of this section, or in the event the\narticle forty-three insurance law corporation or comprehensive health\nservices plan operating pursuant to the provisions of article forty-four\nof this chapter provides for reimbursement on an expense incurred basis\nand makes payment directly to such hospital for patient services for its\nsubscribers or beneficiaries, such article forty-three insurance law\ncorporation or comprehensive health services plan shall be an additional\ncategory of payor of inpatient hospital services whose rates of payment\nare determined in accordance with paragraph (b) of subdivision one of\nthis section based on an imputed rate of payment determined in\naccordance with paragraph (a) of subdivision one of this section for an\narticle forty-three insurance law corporation, adjusted for uncovered\nservices, and increased by thirteen percent.\n (c) No general hospital shall refuse to provide patient services to\nsuch subscribers or beneficiaries solely on the grounds of such\nsubscription or membership.\n (d) The provisions of this subdivision shall also apply to payments to\ngeneral hospitals by a corporation organized and operating in accordance\nwith article forty-three of the insurance law for inpatient and\noutpatient services on behalf of subscribers of a foreign corporation\nwhich performs similar functions in another state or which belongs to a\nnational association comprised of similar corporations to which the\narticle forty-three corporation also belongs; provided, however, the\nforeign corporation or the laws of the state in which the foreign\ncorporation is organized extends to article forty-three corporations\norganized and operating in this state a reciprocal right to have the\nforeign corporation make payments to hospitals in that other state on\nbehalf of subscribers of the article forty-three corporations at the\nsame rate of payment as that foreign corporation pays for its own\nsubscribers.\n * (e) The provisions of this subdivision shall not apply to patients\ndischarged on or after January first, nineteen hundred ninety-seven.\n * NB Expires December 31, 2026\n 13. Restitution authorization. In enforcing the provisions of\nsubdivisions one and twelve of this section, the commissioner may, in\naddition to the penalties and injunctions set forth in section twelve of\nthis chapter, order that any general hospital provide restitution for\nany overpayments made by any party. Any hospital may request a formal\nhearing pursuant to the provisions of section twelve-a of this chapter\nin the event the hospital objects to any order of the commissioner\nhereunder. The commissioner may direct that such a hearing be held\nwithout any request by a hospital.\n 14. Bad debt and charity care allowance. * (a) With the exception of\nrates of payment for services provided to beneficiaries of title XVIII\nof the federal social security act (medicare), all rates and general\nhospital charges, including rates of payment for state governmental\nagencies provided all federal approvals necessary by federal law and\nregulation for federal financial participation in payments made for\nbeneficiaries eligible for medical assistance under title XIX of the\nfederal social security act based upon the allowance provided herein as\na component of such payments are granted, established for rate periods\ncommencing on or after January first, nineteen hundred eighty-eight and\nprior to January first, nineteen hundred ninety-seven in accordance with\nthis section shall include the allowance specified in paragraph (c) of\nthis subdivision. The allowance shall be computed on the basis of the\noperating and capital related components of such rates after trending of\nthe operating portion. For the purposes of this subdivision and\nsubdivision seventeen of this section, major public general hospitals\nare defined as all state operated general hospitals, all general\nhospitals operated by the New York city health and hospitals corporation\nas established by chapter one thousand sixteen of the laws of nineteen\nhundred sixty-nine as amended and all other public general hospitals\nhaving annual inpatient operating costs in excess of twenty-five million\ndollars.\n * NB Effective until December 31, 2026\n * (a) With the exception of rates of payment for services provided to\nbeneficiaries of title XVIII of the federal social security act\n(medicare), all rates and general hospital charges, including rates of\npayment for state governmental agencies provided all federal approvals\nnecessary by federal law and regulation for federal financial\nparticipation in payments made for beneficiaries eligible for medical\nassistance under title XIX of the federal social security act based upon\nthe allowance provided herein as a component of such payments are\ngranted, established for rate periods commencing on or after January\nfirst, nineteen hundred eighty-eight in accordance with this section\nshall include the allowance specified in paragraph (c) of this\nsubdivision. The allowance shall be computed on the basis of the\noperating and capital related components of such rates after trending of\nthe operating portion. For the purposes of this subdivision and\nsubdivision seventeen of this section, major public general hospitals\nare defined as all state operated general hospitals, all general\nhospitals operated by the New York city health and hospitals corporation\nas established by chapter one thousand sixteen of the laws of nineteen\nhundred sixty-nine as amended and all other public general hospitals\nhaving annual inpatient operating costs in excess of twenty-five million\ndollars.\n * NB Effective December 31, 2026\n (b) The allowance shall be a percentage to reflect the needs for the\nfinancing of losses resulting from bad debts and the costs of charity\ncare of general hospitals within article forty-three insurance law\nregions, or such other regions as adopted pursuant to subdivision\nsixteen of this section, and within a statewide determination of\nfinancial resources to be committed for this purpose.\n Need shall be defined as inpatient losses from bad debts reduced to\ncost and the inpatient costs of charity care increased by any deficit of\nsuch hospital from providing ambulatory services, excluding any portion\nof such deficit resulting from governmental payments below average visit\ncosts, and revenues and expenses related to the provision of referred\nambulatory services. Funds received by major public general hospitals\npursuant to article forty-one of the mental hygiene law shall be\nconsidered to have been provided for inpatient hospital deficits only.\nThe council shall adopt rules and regulations, subject to the approval\nof the commissioner, to establish uniform reporting and accounting\nprinciples designed to enable hospitals to fairly and accurately\ndetermine and report losses from bad debts and the costs of charity\ncare.\n (c) The regional amounts to be included in rates approved for the rate\nyear commencing January first, nineteen hundred eighty-eight shall be\nequal to the sum of the following two components divided by the total\nreimbursable inpatient costs for the general hospitals located in the\nregion, excluding inpatient costs related to beneficiaries of title\nXVIII of the federal social security act (medicare), and after\napplication of the trend factor. The first component shall be the result\nof the ratio between the total nominal payment amount in dollars as\ndetermined in subparagraph (i) of this paragraph that would be allocated\nto voluntary non-profit, private proprietary and public general\nhospitals other than major public general hospitals in the region based\non a targeted need formula applied in accordance with subparagraphs (i)\nand (ii) of this paragraph and the statewide sum of such nominal payment\namounts to voluntary non-profit, private proprietary and public general\nhospitals other than major public general hospitals applied to the total\nstatewide resources committed for this purpose to regional pools in the\nrate year, excluding the total statewide amount allocated in the rate\nyear for this purpose to major public general hospitals in accordance\nwith subparagraph (iii) of this paragraph. The second component shall be\nthe dollar amount allocated to major public general hospitals in the\nregion in accordance with subparagraph (iii) of this paragraph. The\nregional amount to be included in the rates approved for the rate years\ncommencing on or after January first, nineteen hundred eighty-nine shall\nbe computed in the same manner except that the base year for the\ntargeted need as specified in subparagraph (i) of this paragraph shall\nbe the calendar year which is two years prior to the rate year. For each\nannual rate period commencing on or after January first, nineteen\nhundred eighty-eight, the statewide amount to be available in regional\npools for this purpose shall equal five and forty-eight hundredths\npercent of the total hospital reimbursable inpatient costs, excluding\ninpatient costs related to services provided to beneficiaries of title\nXVIII of the federal social security act (medicare), computed without\nconsideration of inpatient uncollectible amounts, and after application\nof the trend factor.\n (i) Targeted need shall be defined as the relationship of need to net\npatient service revenue expressed as a percentage. Net patient service\nrevenue shall be defined as net patient revenue attributable to\ninpatient and outpatient services excluding referred ambulatory\nservices. For the rate year beginning January first, nineteen hundred\neighty-eight and ending December thirty-first, nineteen hundred\neighty-eight the scale specified in subparagraph (ii) of this paragraph\nshall be utilized to calculate individual hospital's nominal payment\namounts on the basis of the percentage relationship between their\nnineteen hundred eighty-six need and nineteen hundred eighty-six net\npatient service revenues. The nominal payment amount shall be defined as\nthe sum of the dollars attributable to the application of an\nincrementally increasing proportion of reimbursement for percentage\nincreases in targeted need according to the scale specified in\nsubparagraph (ii) of this paragraph. The sum of the nominal payment\namounts for all hospitals in a region shall be the region's total\nnominal payment amount.\n (ii) The scale utilized for development of each hospital's nominal\npayment amount shall be as follows:\n Percentage of Reimbursement\n Attributable to that Portion\n Targeted Need Percentage of Targeted Need\n 0 -1% 35%\n 1+ -2% 50%\n 2+ -3% 65%\n 3+ -4% 85%\n 4+ -5% 90%\n 5%+ 95%\n (iii) The dollar amount allocated to major public general hospitals in\na region in the rate years nineteen hundred eighty-eight, nineteen\nhundred eighty-nine and in that portion of the nineteen hundred ninety\nrate year beginning on January first and ending on June thirtieth shall\nbe one hundred two percent and in that portion of the nineteen hundred\nninety rate year beginning on July first and ending on December\nthirty-first, and in subsequent rate years shall be one hundred ten\npercent of the result of the application of the ratio of the major\npublic general hospitals' inpatient reimbursable costs within the region\nto total statewide general hospital inpatient reimbursable costs, as\ncomputed on the basis of nineteen hundred eighty-five financial and\nstatistical reports and excluding costs related to services to\nbeneficiaries of title XVIII of the federal social security act\n(medicare), to the statewide resources committed for this purpose to\nregional pools, computed without consideration of inpatient\nuncollectible amounts.\n (iv) Notwithstanding any inconsistent provision of this section,\ncommencing April first, nineteen hundred ninety-five the allowance\npursuant to this subdivision shall be a uniform regional allowance\npercentage of five and forty-eight hundredths percent for all regions.\n (d) In the event the regional percentage bad debt and charity care\nallowances for general hospitals for a rate period commencing on or\nafter January first, nineteen hundred ninety-four determined in\naccordance with paragraph (c) of this subdivision to be submitted to bad\ndebt and charity care regional pools established pursuant to subdivision\nsixteen of this section and deposited in accordance with subdivision\nseventeen of this section do not qualify for waiver pursuant to federal\nlaw and regulation related to such regional allowance variations, in\norder for such allowances to be qualified as a broad-based health care\nrelated tax for purposes of the revenues received by the state from such\nallowances not reducing the amount expended by the state as medical\nassistance for purposes of federal financial participation, but the\nregional percentage allowances for the nineteen hundred ninety-three\nrate year do so qualify, then the regional percentage allowances for the\nregions for the nineteen hundred ninety-three rate year determined in\naccordance with paragraph (c) of this subdivision shall be further\ncontinued for such period for such regions.\n 14-a. Supplementary bad debt and charity care adjustment. (a)\nNotwithstanding any inconsistent provision of this section, rates of\npayment for inpatient hospital services for persons eligible for\npayments made by state governmental agencies for the period April first,\nnineteen hundred eighty-nine to December thirty-first, nineteen hundred\neighty-nine and for each annual period commencing January first during\nthe period January first, nineteen hundred ninety to December\nthirty-first, nineteen hundred ninety-three applicable to patients\neligible for federal financial participation under title XIX of the\nfederal social security act in medical assistance provided pursuant to\ntitle eleven of article five of the social services law determined in\naccordance with this section for a major public general hospital, as\ndefined in paragraph (a) of subdivision fourteen of this section, shall\ninclude a supplementary bad debt and charity care adjustment determined\nin accordance with paragraph (b) of this subdivision provided the state\ngovernmental agency or the county government in which such general\nhospital is located, or the city of New York for a general hospital\noperated by the New York city health and hospitals corporation, files in\nsuch time and manner as may be specified by the commissioner an election\nfor such adjustment for such hospital for each period provided that such\nelection is subject to the approval of the state director of the budget\nand provided all federal approvals necessary by federal law and\nregulation for federal financial participation in payments made for\nbeneficiaries eligible for medical assistance under title XIX of the\nfederal social security act based upon the adjustment provided herein as\na component of such payments are granted.\n (b)(i) A supplementary bad debt and charity care adjustment for the\nperiod April first, nineteen hundred eighty-nine to December\nthirty-first, nineteen hundred eighty-nine and for each annual period\ncommencing January first during the period January first, nineteen\nhundred ninety to December thirty-first, nineteen hundred ninety-three\nfor an eligible major public general hospital shall be determined for\neach period in accordance with rules and regulations adopted by the\ncouncil and approved by the commissioner based upon the amount\ncalculated by subtracting the amount projected to be distributed to such\nmajor public general hospital pursuant to paragraph (a) of subdivision\nseventeen of this section for such period from an amount calculated as\nthe product of the projected bad debt and charity care nominal payment\namount coverage ratio for such period for voluntary non-profit, private\nproprietary and public general hospitals other than major public general\nhospitals multiplied by the base year bad debt and charity care imputed\nnominal payment amount for such major public general hospital determined\nin accordance with the methodology provided in paragraph (c) of\nsubdivision fourteen of this section for calculation of a nominal\npayment amount for voluntary non-profit, private proprietary and public\ngeneral hospitals other than major public general hospitals. The\ncoverage ratio shall be computed as the ratio between the sum of the\ndollar value of the amount committed to the regional pools in accordance\nwith paragraph (c) of subdivision fourteen of this section and paragraph\n(a) of subdivision nineteen of this section for the rate period that\nwould be allocated to voluntary non-profit, private proprietary and\npublic general hospitals other than major public general hospitals in\naccordance with paragraph (b) of subdivision seventeen of this section\nand the base year nominal payment amount for such hospitals.\n (ii) A supplementary bad debt and charity care adjustment provided in\naccordance with subparagraph (i) of this paragraph shall be adjusted to\nreflect actual distributions pursuant to paragraph (a) and (b) of\nsubdivision seventeen of this section.\n * (c) Notwithstanding any inconsistent provision of this subdivision,\na supplementary bad debt and charity care adjustment shall be determined\nand provided for each of the nineteen hundred ninety-four, nineteen\nhundred ninety-five and nineteen hundred ninety-six rate periods,\nprovided that the election pursuant to paragraph (a) of this subdivision\nis continued for such period, for a major public general hospital equal\nto the higher of such adjustment for the nineteen hundred ninety-one\nrate period or for the nineteen hundred ninety-three rate period. The\nadjustment may be made to rates of payment or as aggregate payments to\nan eligible hospital.\n * NB Effective until December 31, 2026\n * (c) Notwithstanding any inconsistent provision of this subdivision,\na supplementary bad debt and charity care adjustment shall be determined\nand provided for each of the nineteen hundred ninety-four, nineteen\nhundred ninety-five and for the period January first, nineteen hundred\nninety-six through June thirtieth, nineteen hundred ninety-six rate\nperiods, provided that the election pursuant to paragraph (a) of this\nsubdivision is continued for such period, for a major public general\nhospital equal to the higher of such adjustment for the nineteen hundred\nninety-one rate period or for the nineteen hundred ninety-three rate\nperiod. The adjustment may be made to rates of payment or as aggregate\npayments to an eligible hospital.\n * NB Effective December 31, 2026\n * (d) Notwithstanding any inconsistent provision of law, the\nprovisions of paragraphs (a), (b) and (c) of this subdivision shall not\napply to payments for patients discharged on or after January first,\nnineteen hundred ninety-seven.\n * NB Expires December 31, 2026\n 14-b. General health care services allowance. (a) With the exception\nof rates of payment for services provided to beneficiaries of title\nXVIII of the federal social security act (medicare), all rates and\ngeneral hospital charges established for rate periods commencing on or\nafter January first, nineteen hundred ninety-one in accordance with this\nsection shall include a percentage allowance of the general hospital's\nreimbursable inpatient costs, excluding inpatient costs related to\nservices provided to beneficiaries of title XVIII of the federal social\nsecurity act (medicare), computed without consideration of inpatient\nuncollectible amounts, and after application of the trend factor, as\nfollows:\n (i) for the nineteen hundred ninety-one, nineteen hundred ninety-two\nand nineteen hundred ninety-three rate periods, an allowance of\ntwenty-three hundredths of one percent;\n (ii) for the nineteen hundred ninety-four rate period, an allowance of\nsix hundred fourteen thousandths of one percent;\n (iii) for the January first, nineteen hundred ninety-five through June\nthirtieth, nineteen hundred ninety-five rate period, an allowance of six\nhundred thirty-seven thousandths of one percent;\n (iv) for the July first, nineteen hundred ninety-five through December\nthirty-first, nineteen hundred ninety-five rate period, an allowance of\none and forty-two hundredths percent; and\n * (v) for the January first, nineteen hundred ninety-six through\nDecember thirty-first, nineteen hundred ninety-six rate period, an\nallowance of one and nine hundredths percent.\n * NB Effective until December 31, 2026\n * (v) for the January first, nineteen hundred ninety-six through June\nthirtieth, nineteen hundred ninety-six rate period, an allowance of one\nand nine hundredths percent.\n * NB Effective December 31, 2026\n (b) For rate periods beginning on or after January first, nineteen\nhundred ninety-one but prior to January first, nineteen hundred\nninety-four, funds will be accumulated and made available in regional\npools created by the commissioner for regional distributions in\naccordance with section twenty-eight hundred seven-bb of this chapter\nthrough the submission by or on behalf of general hospitals of the\nallowance included in rates and charges in accordance with paragraph (a)\nof this subdivision. Such regions shall be those established pursuant to\nparagraph (b) of subdivision sixteen of this section. The regional pools\nmay be administered in accordance with the provisions of paragraph (c)\nof subdivision sixteen of this section applicable to bad debt and\ncharity care regional pools. Payments by or on behalf of general\nhospitals to regional pools shall be due and arrearages shall be treated\nin accordance with the provisions of subdivision twenty of this section\napplicable to bad debt and charity care regional pools.\n (c) If on September thirtieth, nineteen hundred ninety-four, any funds\naccumulated over the period January first, nineteen hundred ninety-one\nthrough December thirty-first, nineteen hundred ninety-three are unused\nor uncommitted for the allocations provided for in this subdivision,\nsuch unused or uncommitted funds shall be reallocated for use in\naccordance with the provisions of subdivision seventeen of this section.\n (d) For the rate periods commencing on or after January first,\nnineteen hundred ninety-four, funds will be accumulated in a statewide\npool created by the commissioner through the submission by or on behalf\nof general hospitals of the allowance included in rates and charges in\naccordance with paragraph (a) of this subdivision, for distributions in\naccordance with subdivision nineteen-a of this section.\n (e) The commissioner is authorized to contract with a pool\nadministrator designated in accordance with paragraph (c) of subdivision\nsixteen of this section or, if not available, such other administrators\nas the commissioner shall designate, to receive funds for the pools\ncreated pursuant to this subdivision and to distribute funds in\naccordance with this subdivision and subdivision nineteen-a of this\nsection. If a pool administrator is designated, the commissioner shall\nconduct or cause to be conducted an annual audit of the receipt and\ndistribution of pool funds. The reasonable costs and expenses of a pool\nadministrator as approved by the commissioner, not to exceed for\npersonnel services on an annual basis two hundred thousand dollars,\nshall be paid from the pooled funds.\n (f) (i) Payments to the pools by or on behalf of general hospitals of\nfunds due based on the allowances provided in accordance with this\nsubdivision shall be due in accordance with the provisions of\nsubdivision twenty of this section in the same manner as applicable to\nbad debt and charity care regional pools. Arrearages in payments due may\nbe collected and interest and penalties due shall be determined and may\nbe collected by the commissioner in accordance with the provisions of\nsubdivision twenty of this section in the same manner as applicable to\nbad debt and charity care regional pools.\n (ii) Notwithstanding any inconsistent provision of this section, as\nshall be necessary to obtain federal financial participation in medical\nassistance expenditures in accordance with title XIX of the federal\nsocial security act, the allowances included in rates of payment\npursuant to this subdivision on behalf of patients eligible for medical\nassistance pursuant to title eleven of article five of the social\nservices law shall be withheld from medical assistance payments to\ngeneral hospitals and paid to pools on behalf of the general hospitals\nwhere a general hospital elects such withholding in such time and manner\nas specified by the commissioner, and in the event a general hospital\ndoes not elect such withholding, payments by such general hospital to a\npool based on an allowance received for medical assistance patients\nshall be due within five days of receipt of such funds. Funds withheld\nby a payor and paid to a pool on behalf of a general hospital shall be\nconsidered received by such general hospital and paid to the pool by\nsuch general hospital for all purposes.\n (g) The allowances provided pursuant to paragraph (a) of this\nsubdivision shall be effective and implemented for purposes of\ndetermining rates of payment for state governmental agencies contingent\non receipt of all federal approvals necessary by federal law or\nregulations for federal financial participation in payments made for\nbeneficiaries eligible for medical assistance under title XIX of the\nfederal social security act based upon such allowances as a component of\nsuch payments. If such federal approvals are not granted for such\nallowances or components thereof, rates of payment for state\ngovernmental agencies shall be determined in accordance with the\nprovisions of this section without consideration of such allowances or\nsuch components plus an adjustment not subject to federal financial\nparticipation equal to one-half of the difference between such rates of\npayment determined without consideration of such allowances or\ncomponents and a rate of payment determined based on such allowances or\ncomponents. The pools established pursuant to this subdivision shall\nrefund to the state governmental agency from pool reserves, current\nfunds or future receipts any overpayment received based on a retroactive\nreduction pursuant to this paragraph in the allowances.\n (h) The allowances provided pursuant to paragraph (a) of this\nsubdivision or components thereof shall be of no force and effect and\nshall be deemed to have been null and void as of January first, nineteen\nhundred ninety-four in the event the secretary of the department of\nhealth and human services determines that such allowances or such\ncomponents thereof are an impermissible health care related tax for\npurposes of the federal medicaid voluntary contribution and\nprovider-specific tax amendments of nineteen hundred ninety-one for\npurposes of such funds reducing the amount deemed expended by the state\nas medical assistance for purposes of federal financial participation.\n 14-c. Bad debt and charity care allowance for financially distressed\nhospitals. * (a) With the exception of rates of payment for services\nprovided to beneficiaries of title XVIII of the federal social security\nact (medicare), all rates and general hospital charges established for\nrate periods commencing on or after January first, nineteen hundred\nninety-one but prior to January first, nineteen hundred ninety-four in\naccordance with this section shall include an allowance of two hundred\nthirty-five thousandths of one percent; and for the rate periods during\nthe period January first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-six an allowance of three hundred\ntwenty-five thousandths of one percent of the general hospital's\nreimbursable inpatient costs, excluding inpatient costs related to\nservices provided to beneficiaries of title XVIII of the federal social\nsecurity act (medicare), computed without consideration of inpatient\nuncollectible amounts, and after application of the trend factor.\n * NB Effective until December 31, 2026\n * (a) With the exception of rates of payment for services provided to\nbeneficiaries of title XVIII of the federal social security act\n(medicare), all rates and general hospital charges established for rate\nperiods commencing on or after January first, nineteen hundred\nninety-one but prior to January first, nineteen hundred ninety-four in\naccordance with this section shall include an allowance of two hundred\nthirty-five thousandths of one percent; and for the rate periods during\nthe period January first, nineteen hundred ninety-four through June\nthirtieth, nineteen hundred ninety-six an allowance of three hundred\ntwenty-five thousandths of one percent of the general hospital's\nreimbursable inpatient costs, excluding inpatient costs related to\nservices provided to beneficiaries of title XVIII of the federal social\nsecurity act (medicare), computed without consideration of inpatient\nuncollectible amounts, and after application of the trend factor.\n * NB Effective December 31, 2026\n (b) A statewide pool shall be created through the submissions by or on\nbehalf of general hospitals of the allowance included in rates and\ncharges in accordance with paragraph (a) of this subdivision. Funds\naccumulated in the statewide pool, including income from invested funds,\nshall be deposited by the commissioner and credited to a special\nrevenue-other fund to be established by the comptroller. To the extent\nof funds appropriated therefor, funds shall be made available for\ndistributions by or on behalf of the state, as payments under the state\nmedical assistance program provided pursuant to title eleven of article\nfive of the social services law, from the statewide pool in the same\nmanner as distributions made in accordance with paragraph (c) of\nsubdivision nineteen of this section. The statewide pools may be\nadministered in accordance with the provisions of paragraph (c) of\nsubdivision sixteen of this section applicable to bad debt and charity\ncare regional pools. Payments by or on behalf of general hospitals to\nstatewide pools shall be due and arrearages, interest and penalties\nshall be treated in accordance with the provisions of subdivision twenty\nof this section applicable to bad debt and charity care regional pools.\n (c) Notwithstanding any inconsistent provision of law, the\ncommissioner may allocate and distribute funds accumulated in the\nstatewide pool created pursuant to this subdivision and funds\naccumulated in the statewide pool created by the assessments authorized\nin accordance with subdivision eighteen of this section and available\nfor distribution in accordance with paragraphs (c) and (d) of\nsubdivision nineteen of this section for contracts for independent\nmanagement audits of financially distressed hospitals, provided,\nhowever, that the total amount for audits pursuant to this paragraph\nshall not exceed two million five hundred thousand dollars over the\nperiod January first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-five. Copies of management audit\nreports of financially distressed hospitals shall be provided by the\ncommissioner to the chairs of the senate and assembly health committees.\n 14-d. Supplementary low income patient adjustment. * (a)\nNotwithstanding any inconsistent provision of this section, payment for\ninpatient hospital services for persons eligible for payments made by\nstate governmental agencies for rate periods during the period January\nfirst, nineteen hundred ninety-one through December thirty-first,\nnineteen hundred ninety-six applicable to patients eligible for federal\nfinancial participation under title XIX of the federal social security\nact in medical assistance provided pursuant to title eleven of article\nfive of the social services law determined in accordance with this\nsection shall include for eligible general hospitals a supplementary low\nincome patient adjustment determined in accordance with paragraph (b) of\nthis subdivision, provided all federal approvals necessary by federal\nlaw and regulation for federal financial participation in payments made\nfor beneficiaries eligible for medical assistance under title XIX of the\nfederal social security act based upon the adjustment provided herein as\na component of such payments are granted. The adjustment may be made to\nrates of payment or as aggregate payments to an eligible hospital.\n * NB Effective until December 31, 2026\n * (a) Notwithstanding any inconsistent provision of this section,\npayment for inpatient hospital services for persons eligible for\npayments made by state governmental agencies for rate periods during the\nperiod January first, nineteen hundred ninety-one through June\nthirtieth, nineteen hundred ninety-six applicable to patients eligible\nfor federal financial participation under title XIX of the federal\nsocial security act in medical assistance provided pursuant to title\neleven of article five of the social services law determined in\naccordance with this section shall include for eligible general\nhospitals a supplementary low income patient adjustment determined in\naccordance with paragraph (b) of this subdivision, provided all federal\napprovals necessary by federal law and regulation for federal financial\nparticipation in payments made for beneficiaries eligible for medical\nassistance under title XIX of the federal social security act based upon\nthe adjustment provided herein as a component of such payments are\ngranted. The adjustment may be made to rates of payment or as aggregate\npayments to an eligible hospital.\n * NB Effective December 31, 2026\n * (b) A supplementary low income patient adjustment for the period\nJanuary first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three shall be determined, subject\nto the provisions of subparagraph (iv) of this paragraph, and for the\nperiod January first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-six shall be determined for each\neligible hospital according to the scale specified in subparagraph (iii)\nof this paragraph based upon the amount calculated by multiplying the\napplicable supplemental percentage coverage of need amount for the\nhospital by the hospital's need as defined in paragraph (b) of\nsubdivision fourteen of this section; provided, however, that for the\nperiod January first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-six if the sum of the adjustments\npursuant to clause (C) of subparagraph (iii) of this paragraph would\nexceed thirty-six million dollars for a rate year on an annualized basis\nthe supplemental percentage coverage of need scale pursuant to clause\n(C) of subparagraph (iii) of this paragraph shall be reduced on a pro\nrata basis so that the sum of such adjustments provided for the rate\nyear on an annualized basis shall not exceed thirty-six million dollars.\n (i) The low income patient percentage of a general hospital shall be\ndefined as the ratio of the sum of inpatient discharges of patients\neligible for medical assistance pursuant to title eleven of article five\nof the social services law plus inpatient discharges of self-pay\npatients plus inpatient discharges of charity care patients divided by\ntotal inpatient discharges expressed as a percentage. For the period\nJanuary first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three, the percentages shall be\ncalculated based on base year nineteen hundred eighty-nine, received by\nthe department no later than November first, nineteen hundred ninety,\ndata from the statewide planning and research cooperative system\nconsistent with data submitted in accordance with section twenty-eight\nhundred five-a of this article. For the period January first, nineteen\nhundred ninety-four through December thirty-first, nineteen hundred\nninety-six, the percentages shall be calculated based on base year\nnineteen hundred ninety-one, received by the department no later than\nNovember first, nineteen hundred ninety-three, data from the statewide\nplanning and research cooperative system consistent with data submitted\nin accordance with section twenty-eight hundred five-a of this article.\nIn order to be eligible for an adjustment pursuant to this subdivision,\na hospital must maintain its collection efforts to obtain payment in\nfull from self-pay patients.\n (ii) For the period January first, nineteen hundred ninety-one through\nDecember thirty-first, nineteen hundred ninety-three, hospital need\nshall be calculated based on base year nineteen hundred eighty-nine\ndata. For the period January first, nineteen hundred ninety-four through\nDecember thirty-first, nineteen hundred ninety-six, hospital need shall\nbe calculated based on base year nineteen hundred ninety-one data.\n (iii)(A) The scale utilized for development of a hospital's\nsupplementary low income patient adjustment shall be as follows for the\nperiod January first, nineteen hundred ninety-one through June\nthirtieth, nineteen hundred ninety-one:\n Low Income Supplemental Percentage\n Patient Percentage Coverage of Need\n 50+ 55% 5%\n 55+ 60% 10%\n 60+ 65% 15%\n 65+ 70% 22.5%\n 70+ 75% 30%\n 75+ 80% 37.5%\n 80+ 45%\n (B) The scale utilized for development of a hospital's supplementary\nlow income adjustment shall be as follows for the period July first,\nnineteen hundred ninety-one for a public general hospital through\nDecember thirty-first, nineteen hundred ninety-six and for a voluntary\nnon-profit or a private proprietary general hospital through September\nthirtieth, nineteen hundred ninety-two:\n Low Income Supplemental Percentage\n Patient Percentage Coverage of Need\n 35+ 55% 20%\n 55+ 60% 25%\n 60+ 65% 30%\n 65+ 70% 37.5%\n 70+ 45%\n (C) The scale utilized for development of a voluntary non-profit or\nprivate proprietary general hospital's supplementary low income patient\nadjustment shall be as follows for the period October first, nineteen\nhundred ninety-two through March thirty-first, nineteen hundred\nninety-three and for the period January first, nineteen hundred\nninety-four through December thirty-first, nineteen hundred ninety-six:\n Low Income Supplemental Percentage\n Patient Percentage Coverage of Need\n 35+ 50% 10%\n 50+ 55% 20%\n 55+ 60% 25%\n 60+ 65% 30%\n 65+ 70% 37.5%\n 70+ 45%\n (D) The scale utilized for development of a voluntary non-profit or\nprivate proprietary general hospital's supplementary low income patient\nadjustment for the period May fifteenth, nineteen hundred ninety-three\nthrough December thirty-first, nineteen hundred ninety-three shall be at\none hundred twenty percent of the supplemental percentage coverage of\nneed scale specified in clause (C) of this subparagraph.\n (iv) A supplementary low income patient adjustment determined\naccording to the scale specified in subparagraph (iii) of this paragraph\nshall be limited for rate periods during the period January first,\nnineteen hundred ninety-one through December thirty-first, nineteen\nhundred ninety-three such that the amount of such adjustment for an\neligible hospital, plus the amount committed to the regional pools in\naccordance with paragraph (c) of subdivision fourteen of this section\nand paragraph (a) of subdivision nineteen of this section for the rate\nperiod that would be allocated to such hospital, plus, if applicable,\nany distribution for the rate period pursuant to paragraph (d) of\nsubdivision nineteen of this section for such hospital, and plus for a\nmajor public general hospital the amount of any supplementary bad debt\nand charity care adjustment provided pursuant to subdivision fourteen-a\nof this section for the rate period shall not exceed ninety percent of\nneed.\n (v) The provisions of this subdivision shall not apply to a general\nhospital eligible for distributions made pursuant to paragraph (c) of\nsubdivision nineteen of this section.\n * NB Effective until December 31, 2026\n * (b) A supplementary low income patient adjustment for the period\nJanuary first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three shall be determined, subject\nto the provisions of subparagraph (iv) of this paragraph, and for the\nperiod January first, nineteen hundred ninety-four through June\nthirtieth, nineteen hundred ninety-six shall be determined for each\neligible hospital according to the scale specified in subparagraph (iii)\nof this paragraph based upon the amount calculated by multiplying the\napplicable supplemental percentage coverage of need amount for the\nhospital by the hospital's need as defined in paragraph (b) of\nsubdivision fourteen of this section; provided, however, that for the\nperiod January first, nineteen hundred ninety-four through June\nthirtieth, nineteen hundred ninety-six if the sum of the adjustments\npursuant to clause (C) of subparagraph (iii) of this paragraph would\nexceed thirty-six million dollars for a rate year on an annualized basis\nthe supplemental percentage coverage of need scale pursuant to clause\n(C) of subparagraph (iii) of this paragraph shall be reduced on a pro\nrate basis so that the sum of such adjustments provided for the rate\nyear on an annualized basis shall not exceed thirty-six million dollars.\n (i) The low income patient percentage of a general hospital shall be\ndefined as the ratio of the sum of inpatient discharges of patients\neligible for medical assistance pursuant to title eleven of article five\nof the social services law plus inpatient discharges of self-pay\npatients plus inpatient discharges of charity care patients divided by\ntotal inpatient discharges expressed as a percentage. For the period\nJanuary first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three, the percentages shall be\ncalculated based on base year nineteen hundred eighty-nine, received by\nthe department no later than November first, nineteen hundred ninety,\ndata from the statewide planning and research cooperative system\nconsistent with data submitted in accordance with section twenty-eight\nhundred five-a of this article. For the period January first, nineteen\nhundred ninety-four through June thirtieth, nineteen hundred ninety-six,\nthe percentages shall be calculated based on base year nineteen hundred\nninety-one, received by the department no later than November first,\nnineteen hundred ninety-three, data from the statewide planning and\nresearch cooperative system consistent with data submitted in accordance\nwith section twenty-eight hundred five-a of this article. In order to be\neligible for an adjustment pursuant to this subdivision, a hospital must\nmaintain its collection efforts to obtain payment in full from self-pay\npatients.\n (ii) For the period January first, nineteen hundred ninety-one through\nDecember thirty-first, nineteen hundred ninety-three, hospital need\nshall be calculated based on base year nineteen hundred eighty-nine\ndata. For the period January first, nineteen hundred ninety-four through\nJune thirtieth, nineteen hundred ninety-six, hospital need shall be\ncalculated based on base year nineteen hundred ninety-one data.\n (iii)(A) The scale utilized for development of a hospital's\nsupplementary low income patient adjustment shall be as follows for the\nperiod January first, nineteen hundred ninety-one through June\nthirtieth, nineteen hundred ninety-one:\n Low Income Supplemental Percentage\n Patient Percentage Coverage of Need\n 50+ 55% 5%\n 55+ 60% 10%\n 60+ 65% 15%\n 65+ 70% 22.5%\n 70+ 75% 30%\n 75+ 80% 37.5%\n 80+ 45%\n (B) The scale utilized for development of a hospital's supplementary\nlow income adjustment shall be as follows for the period July first,\nnineteen hundred ninety-one for a public general hospital through June\nthirtieth, nineteen hundred ninety-six and for a voluntary non-profit or\na private proprietary general hospital through September thirtieth,\nnineteen hundred ninety-two:\n Low Income Supplemental Percentage\n Patient Percentage Coverage of Need\n 35+ 55% 20%\n 55+ 60% 25%\n 60+ 65% 30%\n 65+ 70% 37.5%\n 70+ 45%\n (C) The scale utilized for development of a voluntary non-profit or\nprivate proprietary general hospital's supplementary low income patient\nadjustment shall be as follows for the period October first, nineteen\nhundred ninety-two through March thirty-first, nineteen hundred\nninety-three and for the period January first, nineteen hundred\nninety-four through June thirtieth, nineteen hundred ninety-six:\n Low Income Supplemental Percentage\n Patient Percentage Coverage of Need\n 35+ 50% 10%\n 50+ 55% 20%\n 55+ 60% 25%\n 60+ 65% 30%\n 65+ 70% 37.5%\n 70+ 45%\n (D) The scale utilized for development of a voluntary non-profit or\nprivate proprietary general hospital's supplementary low income patient\nadjustment for the period May fifteenth, nineteen hundred ninety-three\nthrough December thirty-first, nineteen hundred ninety-three shall be at\none hundred twenty percent of the supplemental percentage coverage of\nneed scale specified in clause (C) of this subparagraph.\n (iv) A supplementary low income patient adjustment determined\naccording to the scale specified in subparagraph (iii) of this paragraph\nshall be limited for rate periods during the period January first,\nnineteen hundred ninety-one through December thirty-first, nineteen\nhundred ninety-three such that the amount of such adjustment for an\neligible hospital, plus the amount committed to the regional pools in\naccordance with paragraph (c) of subdivision fourteen of this section\nand paragraph (a) of subdivision nineteen of this section for the rate\nperiod that would be allocated to such hospital, plus, if applicable,\nany distribution for the rate period pursuant to paragraph (d) of\nsubdivision nineteen of this section for such hospital, and plus for a\nmajor public general hospital the amount of any supplementary bad debt\nand charity care adjustment provided pursuant to subdivision fourteen-a\nof this section for the rate period shall not exceed ninety percent of\nneed.\n (v) The provisions of this subdivision shall not apply to a general\nhospital eligible for distributions made pursuant to paragraph (c) of\nsubdivision nineteen of this section.\n * NB Effective December 31, 2026\n (c) A supplementary low income patient adjustment provided in\naccordance with this subdivision for rate periods during the period\nJanuary first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three shall be adjusted to reflect\nactual distributions pursuant to paragraphs (a) and (b) of subdivision\nseventeen of this section and paragraph (d) of subdivision nineteen of\nthis section and adjustments provided pursuant to subdivision fourteen-a\nof this section.\n (d) Notwithstanding any inconsistent provision of law, a voluntary\nnon-profit or proprietary general hospital where the low income patient\npercentage, as determined in accordance with provisions of this\nsubdivision, is between thirty-five and sixty-five percent shall be\ncharged an assessment which for the period July first, nineteen hundred\nninety-one through December thirty-first, nineteen hundred ninety-one\nshall equal five percent of the general hospital's bad debt and charity\ncare need as determined in accordance with paragraph (b) of subdivision\nfourteen of this section and for the period January first, nineteen\nhundred ninety-two through September thirtieth, nineteen hundred\nninety-two shall equal seven and one-half percent of the general\nhospital's bad debt and charity care need as determined in accordance\nwith paragraph (b) of subdivision fourteen of this section. Such\nassessment shall be paid to the commissioner or his designee prior to\nOctober first, nineteen hundred ninety-two in accordance with a schedule\nestablished by the commissioner. The assessments may be administered in\naccordance with the provisions of paragraph (c) of subdivision sixteen\nof this section applicable to bad debt and charity care regional pools.\nPayments of the assessments shall be due and arrearages shall be treated\nin accordance with the provisions of subdivision twenty of this section\napplicable to bad debt and charity care regional pools. Funds\naccumulated shall be deposited by the commissioner and credited to the\ndepartment of social services medical assistance program general fund -\nlocal assistance account appropriation.\n * (e) Notwithstanding any inconsistent provision of law, the\nprovisions of paragraphs (a) and (b) of this subdivision shall not apply\nto payments for patients discharged on or after January first, nineteen\nhundred ninety-seven.\n * NB Expires December 31, 2026\n * 14-f. Public general hospital indigent care adjustment.\nNotwithstanding any inconsistent provision of this section and subject\nto the availability of federal financial participation, payment for\ninpatient hospital services for persons eligible for payments made by\nstate governmental agencies for the period January first, nineteen\nhundred ninety-seven through December thirty-first, nineteen hundred\nninety-nine and periods on and after January first, two thousand\napplicable to patients eligible for federal financial participation\nunder title XIX of the federal social security act in medical assistance\nprovided pursuant to title eleven of article five of the social services\nlaw determined in accordance with this section shall include for\neligible public general hospitals a public general hospital indigent\ncare adjustment equal to the aggregate amount of the adjustments\nprovided for such public general hospital for the period January first,\nnineteen hundred ninety-six through December thirty-first, nineteen\nhundred ninety-six pursuant to subdivisions fourteen-a and fourteen-d of\nthis section on an annualized basis, provided, however, that for periods\non and after January first, two thousand thirteen an annual amount of\nfour hundred twelve million dollars shall be allocated to eligible major\npublic hospitals based on each hospital's proportionate share of\nmedicaid and uninsured losses to total medicaid and uninsured losses for\nall eligible major public hospitals, net of any disproportionate share\nhospital payments received pursuant to sections twenty-eight hundred\nseven-k and twenty-eight hundred seven-w of this article. The adjustment\nmay be made to rates of payment or as aggregate payments to an eligible\nhospital.\n * NB Effective until December 31, 2026\n * 14-f. Public general hospital indigent care adjustment.\nNotwithstanding any inconsistent provision of this section, payment for\ninpatient hospital services for persons eligible for payments made by\nstate governmental agencies for the period January first, nineteen\nhundred ninety-seven through December thirty-first, nineteen hundred\nninety-nine applicable to patients eligible for federal financial\nparticipation under title XIX of the federal social security act in\nmedical assistance provided pursuant to title eleven of article five of\nthe social services law determined in accordance with this section shall\ninclude for eligible public general hospitals a public general hospital\nindigent care adjustment equal to the aggregate amount of the\nadjustments provided for such public general hospital for the period\nJanuary first, nineteen hundred ninety-six through December\nthirty-first, nineteen hundred ninety-six pursuant to subdivisions\nfourteen-a and fourteen-d of this section on an annualized basis,\nprovided all federal approvals necessary by federal law and regulation\nfor federal financial participation in payments made for beneficiaries\neligible for medical assistance under title XIX of the federal social\nsecurity act based upon the adjustment provided herein as a component of\nsuch payments are granted. The adjustment may be made to rates of\npayment or as aggregate payments to an eligible hospital.\n * NB Effective and repealed December 31, 2026\n 15. Special provisions for payments by governmental agencies. In the\nevent that federal financial participation in payments made for\nbeneficiaries eligible for medical assistance under title XIX of the\nfederal social security act based upon the allowance specified in\nparagraph (c) of subdivision fourteen of this section as a component of\nsuch payments is not approved by the federal government, rates of\npayment by governmental agencies for the operating cost component of\ngeneral hospital inpatient services shall be increased for each hospital\nby the same percentage allowance as each hospital's federal fiscal year\nnineteen hundred eighty-seven disproportionate share payment adjustment\nfactor for revenues received from services provided to beneficiaries of\ntitle XVIII of the federal social security act (medicare) as determined\nin accordance with the provisions of section eighteen hundred\neighty-six-d of title XVIII of the federal social security act\n(medicare). Increased amounts received by general hospitals in\naccordance with the provision of this subdivision shall be offset\nagainst distributions to such hospitals that were made or would be made\npursuant to the provisions contained in subdivisions seventeen and\nnineteen of this section. In the event that distributions had been made\nto such hospitals pursuant to such subdivisions, the hospital shall, on\na proportional basis, return to the pool from which the distributions\nwere made an amount equal to the increased amounts received under this\nsubdivision to the extent that such increased amounts do not exceed\ndistributions made. Funds in the statewide pool created in accordance\nwith subdivision sixteen of this section, which would have been\ndistributed in accordance with paragraph (c) of subdivision nineteen of\nthis section if the provisions of this subdivision were not in effect,\nless any amounts not distributed as the result of the offset provisions\nof this subdivision shall be distributed to regional pools to the extent\nthat such funds are available and necessary to maintain regional pool\ndistributions, with consideration of the offset provisions in this\nsubdivision, at the levels that would be available pursuant to the\nprovisions of subdivision fourteen of this section if the provisions of\nthis subdivision did not apply.\n 16. Bad debt and charity care regional pools and bad debt and charity\ncare and capital statewide pool, general. (a) Funds will be made\navailable in bad debt and charity care regional pools created by the\ncommissioner for distributions in accordance with subdivision seventeen\nof this section through the submissions by or on behalf of general\nhospitals of the allowance included in rates and charges in accordance\nwith paragraph (c) of subdivision fourteen of this section and through\nthe transfer of funds available from the bad debt and charity care and\ncapital statewide pool in accordance with paragraph (a) of subdivision\nnineteen of this section. Funds will be made available for distributions\nin accordance with subdivision nineteen of this section from a bad debt\nand charity care and capital statewide pool created by the commissioner\nthrough the submissions by general hospitals of the amount of the\nassessments authorized in accordance with subdivision eighteen of this\nsection.\n (b) The regions are established as the article forty-three insurance\nplan regions, with the exception that the southern sixteen counties\nshall be divided into three regions for the purposes of subdivisions\nfourteen and seventeen of this section with separate regions consisting\nof Richmond, Manhattan, Bronx, Queens and Kings counties; Nassau and\nSuffolk counties; and Delaware, Columbia, Ulster, Sullivan, Orange,\nDutchess, Putnam, Rockland and Westchester counties. Such regions shall\nbe the same regions established and in effect January first, nineteen\nhundred eighty-five. The council with the approval of the commissioner\nmay combine regions, with the exception of the above specified regions\nfor the southern sixteen counties, upon application of the article\nforty-three insurance law plans involved and a demonstration that\nsignificant inequities would not occur.\n (c) For periods prior to January first, two thousand five, the\ncommissioner and the commissioner of social services are authorized to\ncontract with the article forty-three insurance law plans, or if not\navailable such other administrators as the commissioner and the\ncommissioner of social services shall designate, to receive funds for\nthe bad debt and charity care regional pools and/or the bad debt and\ncharity care and capital statewide pool and distribute funds from such\npools. In the event contracts with the article forty-three insurance law\nplans or other commissioners' designees are effectuated, the\ncommissioner and the commissioner of social services shall jointly\nconduct or cause to be conducted annual audits of the receipt and\ndistribution of the pooled funds. The reasonable costs and expenses of a\npool administrator as approved by the commissioner and the commissioner\nof social services, not to exceed for personnel services on an annual\nbasis four hundred thousand dollars for all pools, shall be paid from\nthe pooled funds. Such pool administrator or pool administrators shall\nbe acting on behalf of the state medical assistance program provided\npursuant to title eleven of article five of the social services law in\nthe distribution to hospitals pursuant to subdivisions fourteen-c,\nseventeen and paragraphs (c) and (d) of subdivision nineteen of this\nsection of pooled funds.\n (d) In order for a general hospital to participate in the distribution\nof funds from the pools, the general hospital must implement collection\npolicies and procedures approved by the commissioner.\n (e) In order for a general hospital to be eligible for distribution of\nfunds from the pools, such general hospital if it provides obstetrical\ncare and services must agree to participate in a program approved by the\ndepartment for the provision of prenatal care to persons eligible for\nmedical assistance or medically indigent persons if requested by such a\nprogram. Nothing stated herein shall require a hospital to grant\nadmitting privileges to a physician solely because such person is part\nof an approved program. The participation of hospitals in an approved\nprogram shall include, but not be limited to:\n (i) arrangements with designated prenatal care providers for\nprebooking pregnant women for approximate delivery time, and provision\nof staff and facilities for the delivery and necessary postpartum care\nfor women and infants involved in such programs;\n (ii) a system for medical record transfer from a prenatal care\nprovider to hospital staff participating in delivery and for the\ntransfer of information regarding hospital delivery and care back to the\nprenatal care provider for postpartum follow-up; and\n (iii) an agreement with designated prenatal care providers to accept\nthe care of high risk patients on a referral basis and/or to provide\nspecial tests and procedures which are not ordinarily available to\nprenatal care clinics if such hospital is capable of caring for high\nrisk patients and/or providing special tests and procedures.\n (f) The council may adopt regulations subject to the approval of the\ncommissioner to allow advanced distributions from these pools to a\ngeneral hospital qualifying for distributions in accordance with\nparagraph (c) of subdivision nineteen of this section, based on a\ndemonstration by the hospital that there is an inability to finance\ncurrent obligations and obtain needed working capital.\n * (g) Notwithstanding any inconsistent provision of law to the\ncontrary, from interest heretofore earned or hereinafter earned on funds\nin bad debt and charity care regional pools and the bad debt and charity\ncare and capital statewide pool established pursuant to this section,\nsuch amounts as shall be necessary, within amounts appropriated, shall\nbe reallocated to, and the state comptroller is hereby authorized and\ndirected to receive for deposit to, the credit of the department of\nhealth's special revenue fund - other, hospital based grants program\naccount, for purposes of services and expenses related to general\nhospital based grant programs for the period April first, nineteen\nhundred ninety-four through June thirtieth, nineteen hundred ninety-six\nand for the period July first, nineteen hundred ninety-six through March\nthirty-first, nineteen hundred ninety-seven.\n * NB Effective until December 31, 2026\n * (g) Notwithstanding any inconsistent provision of law to the\ncontrary, from interest heretofore earned or hereinafter earned on funds\nin bad debt and charity care regional pools and the bad debt and charity\ncare and capital statewide pool established pursuant to this section,\nsuch amounts as shall be necessary, within amounts appropriated, shall\nbe reallocated to, and the state comptroller is hereby authorized and\ndirected to receive for deposit to, the credit of the department of\nhealth's special revenue fund - other, hospital based grants program\naccount, for purposes of services and expenses related to general\nhospital based grant programs for the period April first, nineteen\nhundred ninety-four through June thirtieth, nineteen hundred ninety-six.\n * NB Effective December 31, 2026\n 16-a. Pool administration, general. (a) If a general hospital fails to\ntimely file a report with the department of funds due to a regional pool\nor a statewide pool established pursuant to this section, the\ncommissioner may estimate the amount due from such hospital based on\navailable financial and statistical data and may collect in accordance\nwith subdivision twenty of this section any amount due based on such\nestimate as a deficiency in payments to such regional pool or statewide\npool with interest and penalties. The commissioner shall provide a\ngeneral hospital with notice of any estimate of the amount due pursuant\nto this paragraph at least three days prior to collection of a\ndeficiency by the commissioner. Such notice shall contain the financial\nbasis for the commissioner's estimate.\n * (b) Notwithstanding any inconsistent provision of section one\nhundred twelve or one hundred seventy-four of the state finance law or\nany other law, at the discretion of the commissioner and the\ncommissioner of social services without a competitive bid or request for\nproposal process, regional pool and statewide pool administration\ncontracts in effect for rate year nineteen hundred ninety-three may be\nextended for administration of regional pools and statewide pools\nestablished for rate years nineteen hundred ninety-four and nineteen\nhundred ninety-five and nineteen hundred ninety-six to provide an\nuninterrupted continuation of services and may be amended as may be\nnecessary.\n * NB Effective until December 31, 2026\n * (b) Notwithstanding any inconsistent provision of section one\nhundred twelve or one hundred seventy-four of the state finance law or\nany other law, at the discretion of the commissioner and the\ncommissioner of social services without a competitive bid or request for\nproposal process, regional pool and statewide pool administration\ncontracts in effect for rate year nineteen hundred ninety-three may be\nextended for administration of regional pools and statewide pools\nestablished for rate years nineteen hundred ninety-four and nineteen\nhundred ninety-five and for the rate period January first, nineteen\nhundred ninety six through June thirtieth, nineteen hundred ninety-six\nto provide an uninterrupted continuation of services and may be amended\nas may be necessary.\n * NB Effective December 31, 2026\n 17. Bad debt and charity care regional pool distributions. Funds\naccumulated in bad debt and charity care regional pools, including\nincome from invested funds, from the allowance specified in paragraph\n(c) of subdivision fourteen of this section and funds accumulated in bad\ndebt and charity care regional pools, including income from invested\nfunds, from the transfer of funds available from the bad debt and\ncharity care and capital statewide pool in accordance with paragraph (a)\nof subdivision nineteen of this section shall be deposited by the\ncommissioner and credited to a special revenue-other fund to be\nestablished by the comptroller. To the extent of funds appropriated\ntherefor, funds shall be made available for distribution by or on behalf\nof the state, as payments under the state medical assistance program\nprovided pursuant to title eleven of article five of the social services\nlaw, from bad debt and charity care regional pools in accordance with\nthe following methodology and sequence:\n (a) For the nineteen hundred eighty-eight, nineteen hundred\neighty-nine and for that portion of the nineteen hundred ninety rate\nyear beginning on January first and ending on June thirtieth, each\neligible major public general hospital shall receive a portion of its\nbad debt and charity care need equal to one hundred two percent of the\nresult of the application of its percentage of statewide inpatient\nreimbursable costs excluding costs related to services provided to\nbeneficiaries of title XVIII of the federal social security act\n(medicare), developed on the basis of nineteen hundred eighty-five\nfinancial and statistical reports, to the total of all regional pools.\nFor that portion of the nineteen hundred ninety rate year beginning on\nJuly first and ending on December thirty-first and in the annual rate\nyears beginning on or after January first, nineteen hundred ninety-one,\neach eligible major public general hospital shall receive a portion of\nits bad debt and charity care need equal to one hundred ten percent of\nthe result of the application of its percentage of statewide inpatient\nreimbursable costs excluding costs related to services provided to\nbeneficiaries of title XVIII of the federal social security act\n(medicare), developed on the basis of nineteen hundred eighty-five\nfinancial and statistical reports, to the total of all regional pools.\n (b) (i) Funds remaining in the regional pools after distribution in\naccordance with paragraph (a) of this subdivision shall be distributed\nto voluntary non-profit, private proprietary and public general\nhospitals, other than major public general hospitals, on the basis of\neach hospital's targeted need share. For the rate year beginning January\nfirst, nineteen hundred eighty-eight, an individual hospital's targeted\nneed share shall be defined as the relationship between each hospital's\nnineteen hundred eighty-six nominal payment amount as defined in\nsubparagraph (i) of paragraph (c) of subdivision fourteen of this\nsection to the nineteen hundred eighty-six nominal payment amounts for\nall hospitals in the region other than major public general hospitals.\nFor annual rate years beginning on or after January first, nineteen\nhundred eighty-nine, the base need shall be the calendar year which is\ntwo years prior to the rate year. The amount of funds to be distributed\nin accordance with this paragraph and paragraph (a) of this subdivision\nshall be limited to the amount of funds accumulated in the pools.\n (ii) Notwithstanding any inconsistent provision of this section,\ncommencing April first, nineteen hundred ninety-five funds remaining in\nthe regional pools after distribution in accordance with paragraph (a)\nof this subdivision shall be aggregated on a statewide basis and treated\nas a common pool for statewide distributions and distributed to\nvoluntary non-profit, private proprietary and public general hospitals,\nother than major public general hospitals, on the basis of each\nhospital's targeted need share defined as the relationship between each\nhospital's base year nominal payment amount as defined in subparagraph\n(i) of paragraph (c) of subdivision fourteen of this section to the base\nyear nominal payment amounts for all hospitals statewide other than\nmajor public general hospitals.\n (d) The department may provide for interim payments to general\nhospitals of funds available for distribution from regional pools\npursuant to this subdivision, subject to reasonable retainage for\nadjustments, subsequently reconciled to amounts due determined in\naccordance with this subdivision.\n (e) Notwithstanding any inconsistent provision of this section, in the\nevent funds available pursuant to paragraph (b-1) of subdivision\nnineteen of this section for programs to provide health care coverage\nfor uninsured or underinsured children are inadequate to provide\ncoverage to all eligible children for whom application for coverage is\nmade in a rate period, such additional amounts not to exceed twenty-five\nmillion dollars for nineteen hundred ninety-four as shall be necessary\nto provide such coverage shall be reserved by the commissioner from the\namount to be available in bad debt and charity care regional pools for\nsuch rate period for additional distributions to such programs. Ten\nmillion dollars of the amount reserved for nineteen hundred ninety-four\nshall not result in a decrease to disproportionate share payments to\nhospitals.\n 18. Bad debt and charity care and capital statewide pool funding.\n* The commissioner shall create a bad debt and charity care and capital\nstatewide pool which shall be funded by a transfer of funds, which is\nhereby authorized, for the period January first, nineteen hundred\nninety-five through December thirty-first, nineteen hundred ninety-five,\nthe period January first, nineteen hundred ninety-six through June\nthirtieth, nineteen hundred ninety-six and the period July first,\nnineteen hundred ninety-six through December thirty-first, nineteen\nhundred ninety-six equal to seven million five hundred thousand dollars\nfor the nineteen hundred ninety-five period, three million seven hundred\nfifty thousand dollars for the January first, nineteen hundred\nninety-six through June thirtieth, nineteen hundred ninety-six period\nand three million seven hundred fifty thousand dollars for the July\nfirst, nineteen hundred ninety-six through December thirty-first,\nnineteen hundred ninety-six period to be submitted to a statewide pool,\nas designated by the commissioner, from the medical malpractice\ninsurance association pursuant to section five thousand five hundred\nsixteen-c of the insurance law and through an assessment which shall be\ncharged to general hospitals. In the event that the transfers of funds\nauthorized by section five thousand five hundred sixteen-c of the\ninsurance law do not occur by January first, nineteen hundred\nninety-five, January first, nineteen hundred ninety-six and August\nfirst, nineteen hundred ninety-six respectively, the commissioner for\neach period for which such transfer from the medical malpractice\ninsurance association has not occurred shall transfer seven million five\nhundred thousand dollars for the nineteen hundred ninety-five period,\nthree million seven hundred fifty thousand dollars for the January\nfirst, nineteen hundred ninety-six through June thirtieth, nineteen\nhundred ninety-six period and three million seven hundred fifty thousand\ndollars for the July first, nineteen hundred ninety-six through December\nthirty-first, nineteen hundred ninety-six period from regional or\nstatewide pool reserves for pools established pursuant to this section\nand section twenty-eight hundred eight-c or twenty-eight hundred seven-a\nof this article to the bad debt and charity care and capitol statewide\npool established pursuant to this subdivision. Such assessment shall be\nsubmitted to a statewide pool as designated by the commissioner and\ndistributed on a monthly basis in accordance with subdivision twenty of\nthis section. The assessment shall be:\n * NB Effective until December 31, 2026\n * The commissioner shall create a bad debt and charity care and\ncapital statewide pool which shall be funded by a transfer of funds,\nwhich is hereby authorized, for the period January first, nineteen\nhundred ninety-five through December thirty-first, nineteen hundred\nninety-five and the period January first, nineteen hundred ninety-six\nthrough June thirtieth, nineteen hundred ninety-six equal to seven\nmillion five hundred thousand dollars for the nineteen hundred\nninety-five period and three million seven hundred fifty thousand\ndollars for the January first, nineteen hundred ninety-six through June\nthirtieth, nineteen hundred ninety-six period to be submitted to a\nstatewide pool, as designated by the commissioner, from the medical\nmalpractice insurance association pursuant to section five thousand five\nhundred sixteen-c of the insurance law and through an assessment which\nshall be charged to general hospitals. In the event that the transfers\nof funds authorized by section five thousand five hundred sixteen-c of\nthe insurance law do not occur by January first, nineteen hundred\nninety-five and January first nineteen hundred ninety-six respectively,\nthe commissioner for each period for which such transfer from the\nmedical malpractice insurance association has not occurred shall\ntransfer seven million five hundred thousand dollars for the nineteen\nhundred ninety-five period and three million seven hundred fifty\nthousand dollars for the January first, nineteen hundred ninety-six\nthrough June thirtieth, nineteen hundred ninety-six period from regional\nor statewide pool reserves for pools established pursuant to this\nsection and section twenty-eight hundred eight-c or twenty-eight hundred\nseven-a of this article to the bad debt and charity care and capital\nstatewide pool established pursuant to this subdivision. Such assessment\nshall be submitted to a statewide pool as designated by the commissioner\nand distributed on a monthly basis in accordance with subdivision twenty\nof this section. The assessment shall be:\n * NB Effective December 31, 2026\n * (a) one and seventy-five thousandths percent of each general\nhospital's gross revenue received for inpatient hospital services\nprovided during the period January first, nineteen hundred eighty-eight\nthrough December thirty-first, nineteen hundred eighty-eight; one and\nfive hundredths percent of each general hospital's gross revenue\nreceived for inpatient hospital services provided during the period\nJanuary first, nineteen hundred eighty-nine through December\nthirty-first, nineteen hundred eighty-nine; and one percent of each\ngeneral hospital's gross revenue received for inpatient hospital\nservices provided during annual periods beginning on or after January\nfirst, nineteen hundred ninety through December thirty-first, nineteen\nhundred ninety-nine and on or after January first, two thousand,\n * NB Effective until December 31, 2026\n * (a) one and seventy-five thousandths percent of each general\nhospital's gross revenue received for inpatient hospital services\nprovided during the period January first, nineteen hundred eighty-eight\nthrough December thirty-first, nineteen hundred eighty-eight; one and\nfive hundredths percent of each general hospital's gross revenue\nreceived for inpatient hospital services provided during the period\nJanuary first, nineteen hundred eighty-nine through December\nthirty-first, nineteen hundred eighty-nine; and one percent of each\ngeneral hospital's gross revenue received for inpatient hospital\nservices provided during annual periods beginning on or after January\nfirst, nineteen hundred ninety through December thirty-first, nineteen\nhundred ninety-nine,\n * NB Effective and expires December 31, 2026\n * (a) one and seventy-five thousandths percent of each general\nhospital's gross revenue received for inpatient hospital services\nprovided during the period January first, nineteen hundred eighty-eight\nthrough December thirty-first, nineteen hundred eighty-eight; one and\nfive hundredths percent of each general hospital's gross revenue\nreceived for inpatient hospital services provided during the period\nJanuary first, nineteen hundred eighty-nine through December\nthirty-first, nineteen hundred eighty-nine; and one percent of each\ngeneral hospital's gross revenue received for inpatient hospital\nservices provided during annual rate periods beginning on or after\nJanuary first, nineteen hundred ninety,\n * NB Effective December 31, 2026\n * (b) provided, however, subject to the provisions of paragraph (e) of\nthis subdivision there shall be no assessment against those voluntary\nnon-profit and private proprietary general hospitals which qualify for\ndistributions made in accordance with paragraph (c) of subdivision\nnineteen of this section, or for the annual assessment period January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-seven which qualified for distributions made in\naccordance with paragraph (c) of subdivision nineteen of this section as\nof December thirty-first, nineteen hundred ninety-five, and\n * NB Effective until December 31, 2026\n * (b) provided, however, subject to the provisions of paragraph (e) of\nthis subdivision there shall be no assessment against those voluntary\nnon-profit and private proprietary general hospitals which qualify for\ndistributions made in accordance with paragraph (c) of subdivision\nnineteen of this section, and\n * NB Effective December 31, 2026\n * (c) provided further, however, subject to the provisions of\nparagraph (e) of this subdivision the assessment against those voluntary\nnon-profit and private proprietary general hospitals which qualified for\ndistributions made in accordance with paragraph (c) of subdivision\nnineteen of this section as of December thirty-first, nineteen hundred\nninety-five shall for the annual assessment period January first,\nnineteen hundred ninety-eight through December thirty-first, nineteen\nhundred ninety-eight be abated in the amount of three-quarters of one\npercent of gross revenue received and for the annual assessment period\nJanuary first, nineteen hundred ninety-nine through December\nthirty-first, nineteen hundred ninety-nine be abated in the amount of\none-quarter of one percent of gross revenue received.\n * NB Effective until December 31, 2026\n * (c) provided further, however, subject to the provisions of\nparagraph (e) of this subdivision the assessment against those voluntary\nnon-profit and private proprietary general hospitals which qualified for\ndistributions made in accordance with paragraph (b) of subdivision\nsixteen of section twenty-eight hundred seven-a of this article during\nthe nineteen hundred eighty-seven rate period or qualified for\ndistributions made in accordance with paragraph (c) of subdivision\nnineteen of this section during a rate period or rate periods but which\ndo not continue to qualify for distributions made in accordance with\nparagraph (c) of subdivision nineteen of this section during a rate\nperiod or rate periods shall for the initial rate period in which such\ngeneral hospital does not continue to qualify for distributions made in\naccordance with paragraph (c) of subdivision nineteen of this section be\nabated in the amount of two-thirds of one percent of gross revenue\nreceived and for the next succeeding annual rate period be abated in the\namount of one-third of one percent of gross revenue received.\n * NB Effective December 31, 2026\n * (d) Gross revenue received shall mean all moneys received for or on\naccount of inpatient hospital service, provided, however, that subject\nto the provisions of paragraph (e) of this subdivision gross revenue\nreceived shall not include distributions from bad debt and charity care\nregional pools, health care services pools, bad debt and charity care\nfor financially distressed hospitals statewide pools and bad debt and\ncharity care and capital statewide pools created in accordance with this\nsection or distributions from funds allocated in accordance with section\ntwenty-eight hundred seven-l, twenty-eight hundred seven-k, twenty-eight\nhundred seven-v or twenty-eight hundred seven-w of this article and\nshall not include the components of rates of payment or charges related\nto the allowances provided in accordance with subdivisions fourteen,\nfourteen-b and fourteen-c of this section, the adjustment provided in\naccordance with subdivision fourteen-a of this section, the adjustment\nprovided in accordance with subdivision fourteen-d of this section, the\nadjustment for health maintenance organization reimbursement rates\nprovided in accordance with former subdivision two-a of this section,\npayments made pursuant to paragraph (i) of subdivision thirty-five of\nthis section or, if effective, the adjustment provided in accordance\nwith subdivision fifteen of this section, the adjustment provided in\naccordance with section eighteen of chapter two hundred sixty-six of the\nlaws of nineteen hundred eighty-six as amended, revenue received from\nphysician practice or faculty practice plan discrete billings for\nprivate practicing physician services, revenue from affiliation\nagreements or contracts with public hospitals for the delivery of health\ncare services at such public hospitals, revenue received as\ndisproportionate share hospital payments in accordance with title\nnineteen of the federal social security act, or revenue from government\ndeficit financing, provided, however, that funds received as medical\nassistance payments which include state share amounts authorized\npursuant to section twenty-eight hundred seven-v of this article that\nare not disproportionate share hospital payments shall be included\nwithin the meaning of gross revenue for purposes of this subdivision.\n * NB Effective until December 31, 2026\n * (d) Gross revenue received shall mean all moneys received for or on\naccount of inpatient hospital service, provided, however, that subject\nto the provisions of paragraph (e) of this subdivision gross revenue\nreceived shall not include distributions from bad debt and charity care\nregional pools, health care services pools, bad debt and charity care\nfor financially distressed hospitals statewide pools and bad debt and\ncharity care and capital statewide pools created in accordance with this\nsection and shall not include the components of rates of payment or\ncharges related to the allowances provided in accordance with\nsubdivisions fourteen, fourteen-b and fourteen-c of this section, the\nadjustment provided in accordance with subdivision fourteen-a of this\nsection, the adjustment provided in accordance with subdivision\nfourteen-d of this section, the adjustment for health maintenance\norganization reimbursement rates provided in accordance with subdivision\ntwo-a of this section, or, if effective, the adjustment provided in\naccordance with subdivision fifteen of this section or the adjustment\nprovided in accordance with section eighteen of chapter two hundred\nsixty-six of the laws of nineteen hundred eighty-six as amended.\n * NB Effective December 31, 2026\n (e) Each exclusion of hospitals or sources of gross revenue received\nfrom the assessments effective on or after October first, nineteen\nhundred ninety-two established pursuant to this subdivision shall be\ncontingent upon either: (i) qualification of the assessments for waiver\npursuant to federal law and regulation; or, (ii) consistent with federal\nlaw and regulation, not requiring a waiver by the secretary of the\ndepartment of health and human services related to such exclusion; in\norder for the assessments under this section to be qualified as a\nbroad-based health care related tax for purposes of the revenues\nreceived by the state pursuant to the assessments not reducing the\namount expended by the state as medical assistance for purposes of\nfederal financial participation. The commissioner shall collect the\nassessments relying on such exclusions, pending any contrary action by\nthe secretary of the department of health and human services. In the\nevent the secretary of the department of health and human services\ndetermines that the assessments do not so qualify based on any such\nexclusion, then the exclusion shall be deemed to have been null and void\nas of October first, nineteen hundred ninety-two and the commissioner\nshall collect any retroactive amount due as a result, without interest\nor penalty provided the hospital pays the retroactive amount due within\nninety days of notice from the commissioner to the hospital that the\nexclusion is null and void. Interest and penalties shall be measured\nfrom the due date of ninety days following notice from the commissioner\nto the hospital.\n (f) Payments of assessments and allowances required to be submitted by\ngeneral hospitals pursuant to this subdivision and subdivisions fourteen\nand fourteen-b of this section and paragraph (a) of subdivision two of\nsection twenty-eight hundred seven-d of this article shall be subject to\naudit by the commissioner for a period of six years following the close\nof the calendar year in which such payments are due, after which such\npayments shall be deemed final and not subject to further adjustment or\nreconciliation, including through offset adjustments or reconciliations\nmade by general hospitals with regard to subsequent payments, provided,\nhowever, that nothing herein shall be construed as precluding the\ncommissioner from pursuing collection of any such assessments and\nallowances which are identified as delinquent within such six year\nperiod, or which are identified as delinquent as a result of an audit\ncommenced within such six year audit period, or from conducting an audit\nof any adjustment or reconciliation made by a general hospital within\nsuch six year period, or from conducting an audit of payments made prior\nto such six year period which are found to be commingled with payments\nwhich are otherwise subject to timely audit pursuant to this section.\nGeneral hospitals which, in the course of such an audit, fail to produce\ndata or documentation requested in furtherance of such an audit, within\nthirty days of such request may be assessed a civil penalty of up to ten\nthousand dollars for each such failure, provided, however, that such\ncivil penalty shall not be imposed if the hospital demonstrates good\ncause for such failure. The imposition of such civil penalties shall be\nsubject to the provisions of section twelve-a of this chapter.\n (g) If a general hospital fails to produce data or documentation\nrequested in furtherance of an audit for a month to which an assessment\napplies, the commissioner may estimate, based on available financial and\nstatistical data as determined by the commissioner, the amount due for\nsuch month. If the impact of exemptions permitted pursuant to paragraph\n(d) of this subdivision cannot be determined from such available\nfinancial and statistical data the estimated amount due may be\ncalculated on the basis of the general hospital's aggregate gross\ninpatient revenue amount, as determined from such available financial\nand statistical data for the year subject to audit. Estimated amounts\ndue pursuant to this paragraph shall be paid by a general hospital\nwithin sixty days or within such other time period as agreed to by the\ncommissioner and the facility. Thereafter the commissioner shall take\nall necessary steps to collect amounts owed pursuant to this paragraph,\nincluding by offsetting, or by directing the state comptroller to\noffset, such amounts due from any other payments made by state\ngovernmental agencies to the general hospital pursuant to this article.\nInterest and penalties shall be applied to such amounts due in\naccordance with the provisions of paragraph (c) of subdivision twenty of\nthis section.\n (h) The commissioner shall take all necessary steps to collect\ndelinquent amounts owed pursuant to this subdivision, including by\nrecoupment or offsetting, or by directing the state comptroller to\noffset, such amounts due from any other payments made by state\ngovernmental agencies to the general hospital pursuant to this article.\nInterest and penalties shall be applied to such amounts due in\naccordance with the provisions of paragraph (c) of subdivision twenty of\nthis section. Delinquent amounts which have been referred for recoupment\nor offset pursuant to this paragraph, or which have been referred to the\noffice of the attorney general for collection, shall be deemed final and\nnot subject to further revision or reconciliation by the commissioner\nbased on any additional reports or other information submitted by the\nhospital, provided, however, that such delinquencies shall not be\nreferred for such recoupment or for such collection based on estimated\namounts unless the hospital has received written notification of such\ndelinquencies and has been given no less than thirty days in which to\nsubmit delinquent reports.\n (i) The commissioner may enter into agreements with general hospitals\nsubject to this subdivision, in regard to which audit findings or prior\nsettlements have been made pursuant to this subdivision, extending and\napplying such audit findings or prior settlements or a portion thereof,\nin settlement and satisfaction of potential audit liabilities for\nsubsequent un-audited periods. The commissioner may reduce or waive\npayment of interest and penalties otherwise applicable to such\nsubsequent un-audited periods when such amounts due as a result of such\nagreement, other than reduced or waived penalties and interest, are paid\nin full to the commissioner or the commissioner's designee within sixty\ndays of execution of such agreement by all parties to the agreement. Any\npayments made pursuant to agreements entered into in accordance with\nthis paragraph shall be deemed to be in full satisfaction of any\nliability arising under this subdivision, as referenced in such\nagreements and for the time periods covered by such agreements,\nprovided, however, that the commissioner may audit future retroactive\nadjustments to payments made for such periods based on reports filed by\nhospitals subsequent to such agreements.\n 19. Bad debt and charity care and capital statewide pool distribution.\n* Funds accumulated in the statewide pool created by the assessment\nauthorized in accordance with subdivision eighteen of this section for\nperiods through December thirty-first, nineteen hundred ninety-six,\nincluding income from invested funds, shall be distributed or retained\nin accordance with the following sequence:\n * NB Effective until December 31, 2026\n * Funds accumulated in the statewide pool created by the assessment\nauthorized in accordance with subdivision eighteen of this section,\nincluding income from invested funds, shall be distributed or retained\nin accordance with the following sequence:\n * NB Effective December 31, 2026\n (a) Funds shall be distributed by the commissioner to bad debt and\ncharity care regional pools established pursuant to subdivision sixteen\nof this section to provide additional funds for distribution from such\nbad debt and charity care regional pools in accordance with subdivision\nseventeen of this section equal to the amount computed as the difference\nbetween the amount that would be available in such regional pools based\non a statewide determination of financial resources to be committed to\nregional pools in each year in accordance with paragraph (c) of\nsubdivision fourteen of this section based upon a percentage factor\nequal to five and ninety-three hundredths percent and the amount to be\navailable in such regional pools based on a statewide determination of\nfinancial resources to be committed to regional pools in each year in\naccordance with paragraph (c) of subdivision fourteen of this section\nbased upon a percentage factor equal to five and forty-eight hundredths\npercent.\n * (b) An amount not to exceed seventeen million dollars on an\nannualized basis from the assessment through December thirty-first,\nnineteen hundred ninety-six may annually be placed in a statewide\naccount in accordance with rules and regulations adopted by the council\nand approved by the commissioner for the purpose of securing financing\nof capital improvement projects for general hospitals qualifying for\ndistributions made in accordance with paragraph (c) of this subdivision.\nAny reserved funds available on September first, nineteen hundred\nninety-seven and not obligated, in accordance with section twelve of\nchapter nine hundred thirty-four of the laws of nineteen hundred\neighty-five as amended, for the purpose of securing financing of capital\nimprovement projects for general hospitals and any reserved funds that\nthereafter become available may be transferred by the commissioner, in\nconsultation with the director of the budget and the dormitory\nauthority, to the health facility restructuring pool established\npursuant to section twenty-eight hundred fifteen of this article or to\nthe general hospital indigent care pool established pursuant to section\ntwenty-eight hundred seven-k of this article.\n * NB Effective until December 31, 2026\n * (b) An amount not to exceed seventeen million dollars may annually\nbe placed in a statewide account in accordance with rules and\nregulations adopted by the council and approved by the commissioner for\nthe purpose of securing financing of capital improvement projects for\ngeneral hospitals qualifying for distributions made in accordance with\nparagraph (c) of this subdivision.\n * NB Effective December 31, 2026\n * (b-1) An amount equal to: twenty million dollars annually for the\nperiod January first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three; thirty million dollars for\nthe period January first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-four; thirty-seven million five\nhundred thousand dollars for the period January first, nineteen hundred\nninety-five through December thirty-first, nineteen hundred ninety-five;\neighteen million seven hundred fifty thousand dollars for the period\nJanuary first, nineteen hundred ninety-six through June thirtieth,\nnineteen hundred ninety-six; and eighteen million seven hundred fifty\nthousand dollars for the period July first, nineteen hundred ninety-six\nthrough December thirty-first, nineteen hundred ninety-six shall\nannually be reserved and accumulated from year to year by the\ncommissioner for distributions to programs to provide health care\ncoverage for uninsured or underinsured children. Such accumulated funds\nshall not be used for any other purpose other than those authorized in\nsection twenty-five hundred ten and twenty-five hundred eleven of this\nchapter. If on March thirty-first, nineteen hundred ninety-eight, any\nfunds accumulated during the period January first, nineteen hundred\nninety-one through December thirty-first, nineteen hundred ninety-seven\nare unused or uncommitted for such distributions, such unused or\nuncommitted funds shall be immediately transferred by the commissioner\nto the health care initiatives pool established by the commissioner to\nprovide additional funds for distribution to programs to provide health\ncare coverage for uninsured or underinsured children pursuant to\nsections twenty-five hundred ten and twenty-five hundred eleven of this\nchapter. For cash flow purposes, the commissioner may borrow from\nregional or statewide pool reserves for pools established pursuant to\nthis section such funds as shall be necessary not to exceed the amount\nauthorized to be reserved annually to meet premium requirements pursuant\nto sections twenty-five hundred ten and twenty-five hundred eleven of\nthis chapter for a rate year and shall refund such moneys when pool\nfunds become available pursuant to this paragraph for such rate year.\n * NB Effective until December 31, 2026\n * (b-1) An amount equal to: twenty million dollars annually for the\nperiod January first, nineteen hundred ninety-one through December\nthirty-first, nineteen hundred ninety-three; thirty million dollars for\nthe period January first, nineteen hundred ninety-four through December\nthirty-first, nineteen hundred ninety-four; thirty-seven million five\nhundred thousand dollars for the period January first, nineteen hundred\nninety-five through December thirty-first, nineteen hundred ninety-five;\nand eighteen million seven hundred fifty thousand dollars for the period\nJanuary first, nineteen hundred ninety-six through June thirtieth,\nnineteen hundred ninety-six shall annually be reserved and accumulated\nfrom year to year by the commissioner for distributions to programs to\nprovide health care coverage for uninsured or underinsured children.\nSuch accumulated funds shall not be used for any other purpose other\nthan those authorized in section twenty-five hundred ten and twenty-five\nhundred eleven of this chapter. If on September thirtieth, nineteen\nhundred ninety-seven, any funds accumulated during the period January\nfirst, nineteen hundred ninety-one through June thirtieth, nineteen\nhundred ninety-six are unused or uncommitted for such distributions,\nsuch unused or uncommitted funds shall be immediately transferred by the\ncommissioner to bad debt and charity care regional pools established\npursuant to subdivision sixteen of this section to provide additional\nfunds for distribution from such bad debt and charity care regional\npools in accordance with subdivision seventeen of this section. For cash\nflow purposes, the commissioner may borrow from regional or statewide\npool reserves for pools established pursuant to this section such funds\nas shall be necessary not to exceed the amount authorized to be reserved\nannually to meet premium requirements pursuant to sections twenty-five\nhundred ten and twenty-five hundred eleven of this chapter for a rate\nyear and shall refund such moneys when pool funds become available\npursuant to this paragraph for such rate year.\n * NB Effective December 31, 2026\n (b-2) Funds available for distribution in accordance with paragraphs\n(c) and (d) of this subdivision shall be deposited by the commissioner\nand credited to a special revenue-other fund to be established by the\ncomptroller. To the extent of funds appropriated therefor, funds shall\nbe made available for distributions by or on behalf of the state, as\npayments under the state medical assistance program provided pursuant to\ntitle eleven of article five of the social services law from the bad\ndebt and charity care and capital statewide pool pursuant to paragraphs\n(c) and (d) of this subdivision.\n (c) Funds shall be made available on a statewide basis for\ndistribution by the commissioner in accordance with rules and\nregulations adopted by the council and approved by the commissioner to\nassist voluntary non-profit and private proprietary general hospitals\nexperiencing severe fiscal hardship because of insufficient resources to\nfinance losses resulting from bad debts and the costs of charity care.\nAmounts to be distributed for bad debt and charity care purposes shall\nbe determined after consideration of amounts to be distributed from\nregional pools in accordance with subdivision seventeen of this section\nand shall result in up to one hundred percent as defined in paragraph\n(b) of subdivision fourteen of this section being financed for these\ngeneral hospitals.\n (d) Funds shall be made available on a statewide basis for\ndistribution by the commissioner in accordance with rules and\nregulations adopted by the council and approved by the commissioner to\nassist voluntary non-profit and private proprietary general hospitals\nwhich qualified for distributions made in accordance with paragraph (b)\nof subdivision sixteen of section twenty-eight hundred seven-a of this\narticle during the nineteen hundred eighty-seven rate period or\nqualified for distributions made in accordance with paragraph (c) of\nthis subdivision during a rate period or rate periods but which do not\ncontinue to qualify for distributions made in accordance with paragraph\n(c) of this subdivision during a rate period or rate periods. Amounts to\nbe distributed to a general hospital pursuant to this paragraph for the\ninitial rate period in which such general hospital does not continue to\nqualify for distributions made in accordance with paragraph (c) of this\nsubdivision shall be two-thirds of the amount such general hospital\nwould have received in accordance with paragraph (c) of this subdivision\nfor such initial rate period if the hospital had continued to be\neligible for such distribution and for the next succeeding annual rate\nperiod one-third of the amount such general hospital would have received\nin accordance with paragraph (c) of this subdivision for such succeeding\nrate period.\n (e) There shall be set aside within a transition account in the\nstatewide pool, from accumulated funds, from the total allocation to the\nbad debt and charity care and capital statewide pool of the assessment\nof one and seventy-five thousandths percent of gross revenue received in\naccordance with paragraph (a) of subdivision eighteen of this section\nfor the rate period commencing January first, nineteen hundred\neighty-eight and the assessment of one and five hundredths percent of\ngross revenue received in accordance with paragraph (a) of subdivision\neighteen of this section for the rate period commencing January first,\nnineteen hundred eighty-nine an amount equal to seventy-five thousandths\nof one percent of gross revenue received and five hundredths of one\npercent of gross revenue received respectively to be distributed to\nvoluntary non-profit, private proprietary and public general hospitals\nreceiving less bad debt and charity care funds under the provisions of\nthis section than if the provisions of section twenty-eight hundred\nseven-a of this article had applied using the same base year need as\ncalculated in accordance with subdivision fourteen of this section.\nRules for such distribution shall be those adopted by the council and\napproved by the commissioner.\n (f) Any balance in the statewide pool shall be distributed in\naccordance with the following:\n (i) Fifty percent of the balance shall be reserved and accumulated\nfrom year to year by the commissioner for distributions to regional\npilot projects to provide health care coverage under insurance or\nequivalent mechanisms for uninsured or underinsured individuals and\nfamilies and to provide health care coverage for catastrophic expenses\nprovided legislation is enacted before July fifteenth, nineteen hundred\neighty-eight authorizing such regional pilot projects and including an\nauthorization for such regional pilot projects, notwithstanding any\ninconsistent provision of law, to negotiate special payment rate\nmethodologies with general hospitals for inpatient hospital services.\n (ii) * The remaining balance shall be reserved and accumulated from\nyear to year by the commissioner for priority distributions in\naccordance with rules and regulations adopted by the council and\napproved by the commissioner: (A) to assist general hospitals in\noffsetting losses from bad debt and the costs of charity care in\nproviding existing or expanded priority health services to the medically\nindigent or medically underserved in urban and rural areas including,\nbut not limited to, services for pregnant women, services for children\nunder the age of six, and services related to acquired immune deficiency\nsyndrome; (B) for quality assurance demonstration projects; (C) for\nseverity of illness measurement demonstration projects; (D) for cost\nanalyses and evaluations of health care provider services; (E) for\nquality improvement program grants and contracts pursuant to subdivision\nfifteen of section two hundred six of this chapter and department of\nhealth administrative costs related thereto; and (F) for initiatives to\nimprove public health and to expand the availability of health care\nservices.\n * NB Effective until December 31, 2026\n * The remaining balance shall be reserved and accumulated from year to\nyear by the commissioner for priority distributions in accordance with\nrules and regulations adopted by the council and approved by the\ncommissioner: (A) to assist general hospitals in offsetting losses from\nbad debt and the costs of charity care in providing existing or expanded\npriority health services to the medically indigent or medically\nunderserved in urban and rural areas including, but not limited to,\nservices for pregnant women, services for children under the age of six,\nand services related to acquired immune deficiency syndrome; (B) for\nquality assurance demonstration projects; (C) for severity of illness\nmeasurement demonstration projects; (D) for cost analyses and\nevaluations of health care provider services; and (E) for quality\nimprovement program grants and contracts pursuant to subdivision fifteen\nof section two hundred six of this chapter and department of health\nadministrative costs related thereto.\n * NB Effective December 31, 2026\n Notwithstanding any provision of law to the contrary, a sum not to\nexceed three million five hundred thousand dollars from funds available\nfor distribution pursuant to this subparagraph may be allocated and\ndistributed to regional pilot projects to provide health care coverage\nunder insurance or equivalent mechanisms for uninsured or underinsured\nindividuals and families pursuant to chapter seven hundred three of the\nlaws of nineteen hundred eighty-eight.\n Notwithstanding any inconsistent provision of section one hundred\ntwelve or one hundred seventy-four of the state finance law or any other\nlaw, funds available for distribution pursuant to this subparagraph may\nbe allocated and distributed without a competitive bid or request for\nproposal process.\n (iii) Any unused funds from the allocations provided for in paragraph\n(b) and paragraph (e) of this subdivision and subparagraph (i) of this\nparagraph and any funds contingently allocated to regional pilot\nprojects pursuant to subparagraph (i) of this paragraph if authorizing\nlegislation is not enacted as required by such subparagraph shall be\nreallocated for use in accordance with the provisions of subparagraph\n(ii) of this paragraph.\n (iv) Notwithstanding any inconsistent provision of this section, the\ncommissioner shall enter into agreements with one or more persons,\nnot-for-profit corporations, or other organizations, other than a state\nemployee, official or agency, for the purposes of an independent\nevaluation of the implementation and effectiveness of primary care\ninitiatives, including preferred primary care provider designations,\napplicable to general hospitals, diagnostic and treatment centers and\nparticipating practitioners and may allocate and distribute funds\notherwise available for distribution in accordance with subparagraph\n(ii) of this paragraph for the costs of such evaluation. The evaluation\nshall assess factors including but not limited to:\n (A) the overall effect of such primary care initiatives on access to\nand utilization of health care services;\n (B) the extent to which such initiatives have fostered cooperative\nworking relationships between various providers of health care services;\n (C) the impact of such initiatives on the cost of health care\nservices.\n An initial evaluation pursuant to this subparagraph shall be submitted\nto the governor and the legislature on or before April first, nineteen\nhundred ninety-two and a further evaluation shall be submitted by April\nfirst, nineteen hundred ninety-three.\n * 19-a. Health care services allowance statewide pool distribution.\nFunds accumulated in the statewide pool created by the allowance\nauthorized in accordance with subparagraphs (ii) and (iii) of paragraph\n(a) of subdivision fourteen-b of this section, including income from\ninvested funds, shall be distributed or retained in accordance with the\nfollowing:\n (a) Funds shall be transferred to primary health care services\nregional pools created by the commissioner, and shall be available,\nincluding income from invested funds, for distributions in accordance\nwith section twenty-eight hundred seven-bb of this article. Such funds\nshall be transferred to each regional pool so that the regional pool\nreceives, for the rate periods January first, nineteen hundred\nninety-four through December thirty-first, nineteen hundred ninety-four\nfifty-one and five-tenths percent, January first, nineteen hundred\nninety-five through December thirty-first, nineteen hundred ninety-five\nforty-nine and six-tenths percent, and January first, nineteen hundred\nninety-six through December thirty-first, nineteen hundred ninety-six\nforty-nine and six-tenths percent of the total funds to be accumulated\nin the statewide pool from the allowance submitted by or on behalf of\nhospitals in that region. Such regions shall be those established for\npurposes of section two thousand nine hundred four-b of this chapter.\n (b) A fixed percentage of the total funds accumulated in the statewide\npool, including income from invested funds, shall be available for\nprimary care education and training. For the rate periods January first,\nnineteen hundred ninety-four through December thirty-first, nineteen\nhundred ninety-four, such percentage shall be twenty-two and one-tenth\npercent, and January first, nineteen hundred ninety-five through\nDecember thirty-first, nineteen hundred ninety-five, such percentage\nshall be twenty and four-tenths percent, and January first, nineteen\nhundred ninety-six through December thirty-first, nineteen hundred\nninety-six such percentage shall be twenty and four-tenths percent.\nFunds shall be available for distributions as follows:\n (i) up to four million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for primary care undergraduate medical education in\naccordance with section nine hundred two of this chapter;\n (ii) up to four million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for the primary care physician loan repayment program in\naccordance with section nine hundred three of this chapter;\n (iii) up to two million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for the primary care practitioner scholarship program in\naccordance with section nine hundred four of this chapter;\n (iv) up to two million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for the primary care practitioner education program in\naccordance with section nine hundred five of this chapter;\n (v) the balance remaining annually plus income thereon from invested\nfunds shall be set aside and reserved from accumulated funds and may be\naccumulated from year to year for distributions by the commissioner for\nhealth care development in accordance with section nine hundred six of\nthis chapter; and\n (vi) provided, however, that the commissioner in the absence of\nqualified recipients within a category may reallocate any funds\nremaining or unallocated within such a category for distribution by the\ncommissioner for the primary care practitioner scholarship program in\naccordance with section nine hundred four of this chapter and the\nprimary care practitioner education program in accordance with section\nnine hundred five of this chapter.\n (c) A fixed percentage of the total funds accumulated in the statewide\npool, including income from invested funds, shall be deposited by the\ncommissioner into the miscellaneous special revenue fund - 339, health\ncare planning account, which is established for services and expenses\nfor health planning, for purposes of: (i) per capita support of health\nsystems agencies, provided no health systems agency shall receive less\nthan two hundred fifty thousand dollars annually from the per capita\nallocation, and provided further that a health systems agency receiving\nthe minimum level of funding provided pursuant to a per capita formula\nshall also be entitled to receive matching support; (ii) matching\nsupport for other contributions received by health systems agencies from\nqualified sources as determined by the commissioner; (iii) five hundred\nthousand dollars for global budgeting demonstrations grants authorized\npursuant to section twenty-eight hundred fourteen of this article; and\n(iv) five hundred thousand dollars for health networks grants authorized\npursuant to section twenty-eight hundred fourteen of this article. For\nthe rate period January first, nineteen hundred ninety-four through\nDecember thirty-first, nineteen hundred ninety-four such percentage\nshall be eight and eight-tenths percent, and for the rate period January\nfirst, nineteen hundred ninety-five through December thirty-first,\nnineteen hundred ninety-six such percentage shall be eight and\ntwo-tenths percent.\n (c-1) Notwithstanding any other provision of law to the contrary, any\nunspent funds available for programs and services pursuant to\nsubparagraphs (iii) and (iv) of paragraph (c) of this subdivision as of\nApril first, nineteen hundred ninety-five and any additional funds\navailable for programs and services pursuant to subparagraphs (iii) and\n(iv) of paragraph (c) of this subdivision for the period April first,\nnineteen hundred ninety-five through December thirty-first, nineteen\nhundred ninety-five shall be transferred by the commissioner and\ndeposited and credited to the medical assistance program general fund -\nlocal assistance account.\n (c-2) Notwithstanding any other provision of law to the contrary,\nfunds accumulated for programs and services pursuant to subparagraphs\n(i) and (ii) of paragraph (c) of this subdivision for nineteen hundred\nninety-five shall be transferred by the commissioner and deposited and\ncredited to the general fund - local assistance account.\n (d) A fixed percentage of the total funds accumulated in the statewide\npool, including income from invested funds, shall be deposited by the\ncommissioner and credited to the emergency medical services training\naccount established for purposes of section ninety-seven-q of the state\nfinance law for services and expenses related to emergency medical\nservices training and administration. For the rate period January first,\nnineteen hundred ninety-four through December thirty-first, nineteen\nhundred ninety-four, such percentage shall be seventeen and six-tenths\npercent, for the rate period January first, nineteen hundred ninety-five\nthrough December thirty-first, nineteen hundred ninety-five, such\npercentage shall be twenty-one and eight-tenths percent, and for the\nrate period January first, nineteen hundred ninety-six through December\nthirty-first, nineteen hundred ninety-six, such percentage shall be\ntwenty-one and eight-tenths percent.\n (f) Distributions from the pools created in accordance with this\nsubdivision and subdivision fourteen-b of this section, and the\ncomponents of rates of payment or charges related to the allowances\nprovided in accordance with subdivision fourteen-b of this section shall\nnot be included in gross revenue received for purposes of the\nassessments pursuant to subdivision eighteen of this section, subject to\nthe provisions of paragraph (e) of subdivision eighteen of this section,\nand shall not be included in gross receipts received for purposes of the\nassessments pursuant to section twenty-eight hundred seven-d of this\narticle, subject to the provisions of subdivision twelve of section\ntwenty-eight hundred seven-d of this article.\n (g) Notwithstanding any inconsistent provisions of law, the\ncommissioner may borrow from regional or statewide pool reserves for\npools established pursuant to sections twenty-eight hundred eight-c,\ntwenty-eight hundred seven-a or this section of this article such funds\nas shall be necessary, not to exceed the amounts projected to be\navailable pursuant to paragraph (d) of subdivision fourteen-b of this\nsection, annually for distributions in accordance with paragraphs (a),\n(b), (c), (d) and (h) of this subdivision for a rate year and shall\nrefund such moneys when pool funds become available pursuant to\nparagraphs (a), (b), (c), (d) and (h) of this subdivision for such rate\nyear.\n (h) Notwithstanding any inconsistent provision of this subdivision,\nprior to allocation of funds in accordance with paragraphs (a), (b), (c)\nand (d) of this subdivision from the allowance for the period July\nfirst, nineteen hundred ninety-five through December thirty-first,\nnineteen hundred ninety-five and from the allowance for the period\nJanuary first, nineteen hundred ninety-six through June thirtieth,\nnineteen hundred ninety-six, thirty-nine million five hundred thousand\ndollars from the nineteen hundred ninety-five pool and forty-four\nmillion five hundred thousand dollars from the nineteen hundred\nninety-six pool respectively shall be reserved by the commissioner from\nthe amount accumulated in the statewide pool, proportionally based on\nthe total amount of funds projected to be accumulated in the pool for\nthe year, for additional distributions in accordance with paragraph\n(b-1) of subdivision nineteen of this section to programs to provide\nhealth care coverage for uninsured or underinsured children, and the\nbalance of funds accumulated in the statewide pool shall be\nproportionally allocated in accordance with paragraphs (a), (b), (c) and\n(d) of this subdivision.\n * NB Effective until December 31, 2026\n * 19-a. Health care services allowance statewide pool distribution.\nFunds accumulated in the statewide pool created by the allowance\nauthorized in accordance with subparagraphs (ii) and (iii) of paragraph\n(a) of subdivision fourteen-b of this section, including income from\ninvested funds, shall be distributed or retained in accordance with the\nfollowing:\n (a) Funds shall be transferred to primary health care services\nregional pools created by the commissioner, and shall be available,\nincluding income from invested funds, for distributions in accordance\nwith section twenty-eight hundred seven-bb of this article. Such funds\nshall be transferred to each regional pool so that the regional pool\nreceives, for the rate periods January first, nineteen hundred\nninety-four through December thirty-first, nineteen hundred ninety-four\nfifty-one and five-tenths percent, January first, nineteen hundred\nninety-five through December thirty-first, nineteen hundred ninety-five\nforty-nine and six-tenths percent, and January first, nineteen hundred\nninety-six through June thirtieth, nineteen hundred ninety-six\nforty-nine and six tenths percent of the total funds to be accumulated\nin the statewide pool from the allowance submitted by or on behalf of\nhospitals in that region. Such regions shall be those established for\npurposes of section two thousand nine hundred four-b of this chapter.\n (b) A fixed percentage of the total funds accumulated in the statewide\npool, including income from invested funds, shall be available for\nprimary care education and training. For the rate periods January first,\nnineteen hundred ninety-four through December thirty-first, nineteen\nhundred ninety-four, such percentage shall be twenty-two and one-tenth\npercent, January first, nineteen hundred ninety-five through December\nthirty-first, nineteen hundred ninety-five, such percentage shall be\ntwenty and four-tenths percent, and January first, nineteen hundred\nninety-six through June thirtieth, nineteen hundred ninety-six, such\npercentage shall be twenty and four-tenths percent. Funds shall be\navailable for distributions as follows:\n (i) up to four million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for primary care undergraduate medical education in\naccordance with section nine hundred two of this chapter;\n (ii) up to four million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for the primary care physician loan repayment program in\naccordance with section nine hundred three of this chapter;\n (iii) up to two million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for the primary care practitioner scholarship program in\naccordance with section nine hundred four of this chapter;\n (iv) up to two million dollars annually plus income thereon from\ninvested funds shall be set aside and reserved from accumulated funds\nand may be accumulated for the following year for distribution by the\ncommissioner for the primary care practitioner education program in\naccordance with section nine hundred five of this chapter;\n (v) the balance remaining annually plus income thereon from invested\nfunds shall be set aside and reserved from accumulated funds and may be\naccumulated from year to year for distributions by the commissioner for\nhealth care development in accordance with section nine hundred six of\nthis chapter; and\n (vi) provided, however, that the commissioner in the absence of\nqualified recipients within a category may reallocate any funds\nremaining or unallocated within such a category for distribution by the\ncommissioner for the primary care practitioner scholarship program in\naccordance with section nine hundred four of this chapter and the\nprimary care practitioner education program in accordance with section\nnine hundred five of this chapter.\n (c) A fixed percentage of the total funds accumulated in the statewide\npool including income from invested funds, shall be deposited by the\ncommissioner into the miscellaneous special revenue fund - 339, health\ncare planning account, which is established for services and expenses\nfor health planning, for purposes of: (i) per capita support of health\nsystems agencies, provided no health systems agency shall receive less\nthan two hundred fifty thousand dollars annually from the per capita\nallocation, and provided further that a health systems agency receiving\nthe minimum level of funding provided pursuant to a per capita formula\nshall also be entitled to receive matching support; (ii) matching\nsupport for other contributions received by health systems agencies from\nqualified sources as determined by the commissioner; (iii) five hundred\nthousand dollars for global budgeting demonstrations grants authorized\npursuant to section twenty-eight hundred fourteen of this article; and\n(iv) five hundred thousand dollars for health networks grants authorized\npursuant to section twenty-eight hundred fourteen of this article. For\nthe rate period January first, nineteen hundred ninety-four through\nDecember thirty-first, nineteen hundred ninety-four such percentage\nshall be eight and eight-tenths percent, and for the rate period January\nfirst, nineteen hundred ninety-five through June thirtieth, nineteen\nhundred ninety-six such percentage shall be eight and two-tenths\npercent.\n (c-1) Notwithstanding any other provision of law to the contrary, any\nunspent funds available for programs and services pursuant to\nsubparagraphs (iii) and (iv) of paragraph (c) of this subdivision as of\nApril first, nineteen hundred ninety-five and any additional funds\navailable for programs and services pursuant to subparagraphs (iii) and\n(iv) of paragraph (c) of this subdivision for the period April first,\nnineteen hundred ninety-five through December thirty-first, nineteen\nhundred ninety-five shall be transferred by the commissioner and\ndeposited and credited to the medical assistance program general fund\nlocal assistance account.\n (c-2) Notwithstanding any other provision of law to the contrary,\nfunds accumulated for programs and services pursuant to subparagraphs\n(i) and (ii) of paragraph (c) of this subdivision for nineteen hundred\nninety-five shall be transferred by the commissioner and deposited and\ncredited to the general fund - local assistance account.\n (d) A fixed percentage of the total funds accumulated in the statewide\npool, including income from invested funds, shall be deposited by the\ncommissioner and credited to the emergency medical services training\naccount established for purposes of section ninety-seven-q of the state\nfinance law for services and expenses related to emergency medical\nservices training and administration. For the rate period January first,\nnineteen hundred ninety-four through December thirty-first, nineteen\nhundred ninety-four, such percentage shall be seventeen and six-tenths\npercent, for the rate period January first, nineteen hundred ninety-five\nthrough December thirty-first, nineteen hundred ninety-five, such\npercentage shall be twenty-one and eight-tenths percent, and for the\nrate period January first, nineteen hundred ninety-six through June\nthirtieth, nineteen hundred ninety-six, such percentage shall be\ntwenty-one and eight-tenths percent.\n (e) If on September thirtieth, nineteen hundred ninety-seven, any\nfunds accumulated over the period January first, nineteen hundred\nninety-four through June thirtieth, nineteen hundred ninety-six in the\nregional pools established pursuant to paragraph (a) of this subdivision\nare unused or uncommitted for the allocations provided for, such unused\nor uncommitted funds shall be reallocated for use in accordance with the\nprovisions of subdivision seventeen of this section.\n (f) Distributions from the pools created in accordance with this\nsubdivision and subdivision fourteen-b of this section, and the\ncomponents of rates of payment or charges related to the allowances\nprovided in accordance with subdivision fourteen-b of this section shall\nnot be included in gross revenue received for purposes of the\nassessments pursuant to subdivision eighteen of this section, subject to\nthe provisions of paragraph (e) of subdivision eighteen of this section,\nand shall not be included in gross receipts received for purposes of the\nassessments pursuant to section twenty-eight hundred seven-d of this\narticle, subject to the provisions of subdivision twelve of section\ntwenty-eight hundred seven-d of this article.\n (g) Notwithstanding any inconsistent provisions of law, the\ncommissioner may borrow from regional or statewide pool reserves for\npools established pursuant to sections twenty-eight hundred eight-c,\ntwenty-eight hundred seven-a or this section of this article such funds\nas shall be necessary, not to exceed the amounts projected to be\navailable pursuant to paragraph (d) of subdivision fourteen-b of this\nsection, annually for distributions in accordance with paragraphs (a),\n(b), (c), (d) and (h) of this subdivision for a rate year and shall\nrefund such moneys when pool funds become available pursuant to\nparagraphs (a), (b), (c), (d) and (h) of this subdivision for such rate\nyear.\n (h) Notwithstanding any inconsistent provision of this subdivision,\nprior to allocation of funds in accordance with paragraphs (a), (b), (c)\nand (d) of this subdivision from the allowance for the period July\nfirst, nineteen hundred ninety-five through December thirty-first,\nnineteen hundred ninety-five and from the allowance for the period\nJanuary first, nineteen hundred ninety-six through June thirtieth,\nnineteen hundred ninety-six, thirty-nine million five hundred thousand\ndollars from the nineteen hundred ninety-five pool and twenty-two\nmillion two hundred fifty thousand dollars from the nineteen hundred\nninety-six pool respectively shall be reserved by the commissioner from\nthe amount accumulated in the statewide pool, proportionally based on\nthe total amount of funds projected to be accumulated in the pool for\nthe year, for additional distributions in accordance with paragraph\n(b-1) of subdivision nineteen of this section to programs to provide\nhealth care coverage for uninsured or underinsured children, and the\nbalance of funds accumulated in the statewide pool shall be\nproportionally allocated in accordance with paragraphs (a), (b),(c) and\n(d) of this subdivision.\n * NB Effective December 31, 2026\n * 19-b. Funds accumulated in the statewide pool created by the\nassessment authorized in accordance with subdivision eighteen of this\nsection for a period during the period January first, nineteen hundred\nninety-seven through December thirty-first, nineteen hundred ninety-nine\nand periods on and after January first, two thousand, including income\nfrom invested funds, shall be transferred by the commissioner and\nconsolidated with funds accumulated from the allowance pursuant to\nsubdivision two of section twenty-eight hundred seven-j of this article\nfor such period and allocated in accordance with subdivision nine of\nsection twenty-eight hundred seven-j of this article.\n * NB Effective until December 31, 2026\n * 19-b. Funds accumulated in the statewide pool created by the\nassessment authorized in accordance with subdivision eighteen of this\nsection for a period during the period January first, nineteen hundred\nninety-seven through December thirty-first, nineteen hundred\nninety-nine, including income from invested funds, shall be transferred\nby the commissioner and consolidated with funds accumulated from the\nallowance pursuant to subdivision two of section twenty-eight hundred\nseven-j of this article for such period and allocated in accordance with\nsubdivision nine of section twenty-eight hundred seven-j of this\narticle.\n * NB Effective and repealed December 31, 2026\n 20. Payments to pools. (a) Payments by or on behalf of general\nhospitals to bad debt and charity care regional pools of funds due based\non the allowance included in rates and charges in accordance with\nparagraph (c) of subdivision fourteen of this section and to regional\npools created pursuant to paragraph (b) of subdivision fourteen-b and to\na statewide pool created pursuant to paragraph (b) of subdivision\nfourteen-c of this section shall be made on a time schedule established\nby the council, subject to the approval of the commissioner, by\nregulation; provided, however, that estimated payments of amounts due\nfor patients discharged in a calendar month commencing on or after\nOctober first, nineteen hundred ninety-one must be made within sixty\ndays of the end of each month unless payments of actual amounts due for\nsuch calendar months have been made within such sixty day time period.\nUpon receipt of notification from the commissioner, the comptroller, or\na fiscal intermediary designated by the director of the budget, or the\ncommissioner of social services, or a corporation organized and\noperating in accordance with article forty-three of the insurance law or\nan organization operating in accordance with article forty-four of this\nchapter shall withhold from the amount of any payment to be made by the\nstate or such article forty-three corporation or article forty-four\norganization to a general hospital the amount of any arrearage resulting\nfrom such general hospital's failure to make a timely payment to the\npools of funds due based on the allowances included in rates and charges\nin accordance with paragraph (c) of subdivision fourteen, paragraph (a)\nof subdivision fourteen-b and paragraph (a) of subdivision fourteen-c of\nthis section. Upon withholding such amount, the comptroller, or a\ndesignated fiscal intermediary, or the commissioner of social services,\nor a corporation organized and operating in accordance with article\nforty-three of the insurance law or an organization operating in\naccordance with article forty-four of this chapter shall pay the\ncommissioner, or his designee, such amount withheld for deposit into the\napplicable pool. Any general hospital in arrears resulting from failure\nto make a timely payment to a pool shall not be eligible for a\ndistribution from a bad debt and charity care regional pool in\naccordance with subdivision seventeen of this section until such\narrearage is satisfied.\n (b) (i) Payments by or on behalf of general hospitals to the bad debt\nand charity care and capital statewide pool of funds due from the\nassessments pursuant to subdivision eighteen of this section shall be\nmade on a time schedule established by the council, subject to the\napproval of the commissioner, by regulation; provided, however, that\nestimated payments of amounts due for patients discharged in a calendar\nmonth commencing on or after October first, nineteen hundred ninety-one\nmust be made within sixty days of the end of each month unless payments\nof actual amounts due for such calendar months have been made within\nsuch sixty day time period. Upon receipt of notification from the\ncommissioner, the comptroller, or a fiscal intermediary designated by\nthe director of the budget, or a corporation organized and operating in\naccordance with article forty-three of the insurance law or an\norganization operating in accordance with article forty-four of this\nchapter shall withhold from the amount of any payment to be made by the\nstate or such article forty-three corporation or article forty-four\norganization to a general hospital the amount of any arrearage resulting\nfrom such general hospital's failure to make a timely payment to the bad\ndebt and charity care and capital statewide pool of funds due from the\nassessments. Upon withholding such amount, the comptroller, or a\ndesignated fiscal intermediary, or a corporation organized and operating\nin accordance with article forty-three of the insurance law or an\norganization operating in accordance with article forty-four of this\nchapter shall pay the commissioner, or his designee, such amount\nwithheld for deposit into the applicable pool. Any general hospital in\narrears resulting from failure to make a timely payment to the bad debt\nand charity care and capital statewide pool shall not be eligible for a\ndistribution from the bad debt and charity care regional pools in\naccordance with subdivision seventeen of this section or the bad debt\nand charity care and capital statewide pool in accordance with\nsubdivision nineteen of this section until such arrearage is satisfied.\n (ii) For periods on and after January first, two thousand five,\nreports submitted by general hospitals to implement the assessment set\nforth in subdivision eighteen of this section shall be submitted\nelectronically in a form as may be required by the commissioner;\nprovided, however, general hospitals are not prohibited from submitting\nreports electronically on a voluntary basis prior to such date, and\nprovided further, however, that all such electronic submissions\nsubmitted on and after July first, two thousand twelve shall be verified\nwith an electronic signature as prescribed by the commissioner.\n (c) (i) Interest shall be due and payable to the commissioner by a\ngeneral hospital or by a payor paying directly to a pool on the\ndifference between the amount paid to a pool and the amount due to such\npool by the hospital or payor from the day of the month the payment was\ndue until the date of payment. The rate of interest shall be twelve\npercent per annum or at the rate of interest set by the commissioner of\ntaxation and finance with respect to underpayments of tax pursuant to\nsubsection (e) of section one thousand ninety-six of the tax law minus\nfour percentage points. Interest under this paragraph shall not be paid\nif the amount thereof is less than one dollar. Interest may be collected\nby the commissioner in the same manner as an arrearage pursuant to this\nsubdivision.\n (ii) If a payment by a general hospital or by a payor paying directly\nto a pool is less than seventy percent of the amount due to such pool by\nthe hospital or payor, a penalty shall be due and payable to the\ncommissioner by the hospital or payor of five percent of the difference\nbetween the amount paid to the pool and the amount due to such pool when\nthe failure to pay is for a duration of not more than one month after\nthe due date of the payment with an additional five percent for each\nadditional month or fraction thereof during which such failure\ncontinues, not exceeding twenty-five percent in the aggregate. A penalty\nmay be collected by the commissioner in the same manner as an arrearage\npursuant to this subdivision.\n 21. Maximum distributions. (a) No general hospital may receive in\ntotal from the distributions made in accordance with paragraph (b) of\nsubdivision fourteen-c, paragraphs (a) and (b) of subdivision seventeen\nand paragraphs (c), (d) and (e) of subdivision nineteen of this section\nan amount which exceeds its need for financing losses related to bad\ndebts and the costs of charity care as defined in paragraph (b) of\nsubdivision fourteen of this section.\n * (b)(i) No public general hospital may receive in total from\ndisproportionate share payment distributions made in accordance with\nsubdivision seventeen of this section and adjustments in accordance with\nsubdivisions fourteen-a and fourteen-d of this section for the period\nApril first, nineteen hundred ninety-four through December thirty-first,\nnineteen hundred ninety-four or for annual rate periods beginning on\nJanuary first on or after January first, nineteen hundred ninety-five\nthrough December thirty-first, nineteen hundred ninety-six, or made in\naccordance with section twenty-eight hundred seven-k of this article and\nadjustments in accordance with subdivision fourteen-f of this section\nfor annual periods beginning on January first on and after January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine and on and after January first, two\nthousand an amount which exceeds the costs incurred during such period\nof furnishing inpatient and ambulatory hospital services, net of medical\nassistance payments pursuant to title eleven of article five of the\nsocial services law, other than disproportionate share payments pursuant\nto subdivision twenty-six of this section or subdivision thirteen of\nsection twenty-eight hundred seven-k of this article, and payments by\nuninsured patients, by the hospital to individuals who either are\neligible for medical assistance pursuant to title eleven of article five\nof the social services law or have no health insurance or other source\nof third party coverage; provided, however, that the commissioner shall\nmake such increase to such maximum or to the manner in which the\nlimitation on disproportionate share payments is applied as shall\nincrease the maximum limit for a period or part of a period as\nauthorized by federal law or regulation or the secretary of the\ndepartment of health and human services for purposes of federal\nfinancial participation pursuant to title XIX of the federal social\nsecurity act. For purposes of this paragraph, payments to a general\nhospital for services provided to indigent patients made by the state or\na unit of local government within the state shall not be considered to\nbe a source of third party payment.\n (ii) Reductions pursuant to this paragraph shall be made in the\nfollowing sequence:\n (A) for periods through December thirty-first, nineteen hundred\nninety-six, adjustments in accordance with subdivision fourteen-d of\nthis section; adjustments in accordance with subdivision fourteen-a of\nthis section; and distributions in accordance with subdivision seventeen\nof this section, and\n (B) for periods during the period January first, nineteen hundred\nninety-seven through December thirty-first, nineteen hundred ninety-nine\nand on and after January first, two thousand, adjustments in accordance\nwith subdivision fourteen-f of this section; and distributions in\naccordance with section twenty-eight hundred seven-k of this article.\n (iii) (A) In the event a reduction pursuant to subparagraphs (i) and\n(ii) of this paragraph is effective for distributions in accordance with\nsubdivision seventeen of this section for a general hospital, such\ngeneral hospital shall receive a supplementary distribution not as a\ndisproportionate share payment and not subject to federal financial\nparticipation from funds available pursuant to subdivision seventeen of\nthis section for periods through December thirty-first, nineteen hundred\nninety-six equal to one-half of such reduction.\n (B) In the event a reduction pursuant to subparagraphs (i) and (ii) of\nthis paragraph is effective for distributions in accordance with section\ntwenty-eight hundred seven-k of this article for a general hospital,\nsuch general hospital shall receive a supplementary distribution not as\na disproportionate share payment and not subject to federal financial\nparticipation from funds available pursuant to section twenty-eight\nhundred seven-k of this article for periods during the period January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine and on and after January first, two\nthousand equal to one-half of such reduction.\n * NB Effective until December 31, 2026\n * (b)(i) No public general hospital may receive in total from\ndisproportionate share payment distributions made in accordance with\nsubdivision seventeen of this section and adjustments in accordance with\nsubdivisions fourteen-a and fourteen-d of this section for the period\nApril first, nineteen hundred ninety-four through December thirty-first,\nnineteen hundred ninety-four or for annual rate periods beginning on\nJanuary first on or after January first, nineteen hundred ninety-five\nthrough December thirty-first, nineteen hundred ninety-six, or made in\naccordance with section twenty-eight hundred seven-k of this article and\nadjustments in accordance with subdivision fourteen-f of this section\nfor annual periods beginning on January first on and after January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine an amount which exceeds the costs incurred\nduring such period of furnishing inpatient and ambulatory hospital\nservices, net of medical assistance payments pursuant to title eleven of\narticle five of the social services law, other than disproportionate\nshare payments pursuant to subdivision twenty-six of this section or\nsubdivision thirteen of section twenty-eight hundred seven-k of this\narticle, and payments by uninsured patients, by the hospital to\nindividuals who either are eligible for medical assistance pursuant to\ntitle eleven of article five of the social services law or have no\nhealth insurance or other source of third party coverage; provided,\nhowever, that the commissioner shall make such increase to such maximum\nor to the manner in which the limitation on disproportionate share\npayments is applied as shall increase the maximum limit for a period or\npart of a period as authorized by federal law or regulation or the\nsecretary of the department of health and human services for purposes of\nfederal financial participation pursuant to title XIX of the federal\nsocial security act. For purposes of this paragraph, payments to a\ngeneral hospital for services provided to indigent patients made by the\nstate or a unit of local government within the state shall not be\nconsidered to be a source of third party payment.\n (ii) Reductions pursuant to this paragraph shall be made in the\nfollowing sequence:\n (A) for periods through December thirty-first, nineteen hundred\nninety-six, adjustments in accordance with subdivision fourteen-d of\nthis section; adjustments in accordance with subdivision fourteen-a of\nthis section; and distributions in accordance with subdivision seventeen\nof this section, and\n (B) for periods during the period January first, nineteen hundred\nninety-seven through December thirty-first, nineteen hundred\nninety-nine, adjustments in accordance with subdivision fourteen-f of\nthis section; and distributions in accordance with section twenty-eight\nhundred seven-k of this article.\n (iii) (A) In the event a reduction pursuant to subparagraphs (i) and\n(ii) of this paragraph is effective for distributions in accordance with\nsubdivision seventeen of this section for a general hospital, such\ngeneral hospital shall receive a supplementary distribution not as a\ndisproportionate share payment and not subject to federal financial\nparticipation from funds available pursuant to subdivision seventeen of\nthis section for periods through December thirty-first, nineteen hundred\nninety-six.\n (B) In the event a reduction pursuant to subparagraphs (i) and (ii) of\nthis paragraph is effective for distributions in accordance with section\ntwenty-eight hundred seven-k of this article for a general hospital,\nsuch general hospital shall receive a supplementary distribution not as\na disproportionate share payment and not subject to federal financial\nparticipation from funds available pursuant to section twenty-eight\nhundred seven-k of this article for periods during the period January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine equal to one-half of such reduction.\n * NB Effective and expires December 31, 2026\n * (b) (i) No public general hospital may receive in total from\ndisproportionate share payment distributions made in accordance with\nsubdivision seventeen of this section and adjustments in accordance with\nsubdivisions fourteen-a and fourteen-d of this section for the period\nApril first, nineteen hundred ninety-four through December thirty-first,\nnineteen hundred ninety-four or for annual rate period beginning on\nJanuary first on or after January first, nineteen hundred ninety-five an\namount which exceeds the costs incurred during such period of furnishing\ninpatient and ambulatory hospital services, net of medical assistance\npayments pursuant to title eleven of article five of the social services\nlaw, other than disproportionate share payments pursuant to subdivision\ntwenty-six of this section, and payments by uninsured patients, by the\nhospital to individuals who either are eligible for medical assistance\npursuant to title eleven of article five of the social services law or\nhave no health insurance or other source of third party coverage;\nprovided, however, that the commissioner shall make such increase to\nsuch maximum or to the manner in which the limitation on\ndisproportionate share payments is applied as shall increase the maximum\nlimit for a period or part of a period as authorized by federal law or\nregulation or the secretary of the department of health and human\nservices for purposes of federal financial participation pursuant to\ntitle XIX of the federal social security act. For purposes of this\nparagraph, payments to a general hospital for services provided to\nindigent patients made by the state or a unit of local government within\nthe state shall not be considered to be a source of third party payment.\n (ii) Reductions pursuant to this paragraph shall be made in the\nfollowing sequence: adjustments in accordance with subdivision\nfourteen-d of this section; adjustments in accordance with subdivision\nfourteen-a of this section; and distributions in accordance with\nsubdivision seventeen of this section.\n (iii) In the event a reduction pursuant to subparagraphs (i) and (ii)\nof this paragraph is effective for distributions in accordance with\nsubdivision seventeen of this section for a general hospital, such\ngeneral hospital shall receive a supplementary distribution not as a\ndisproportionate share payment and not subject to federal financial\nparticipation from funds available pursuant to subdivision seventeen of\nthis section equal to one-half of such reduction.\n * NB Effective December 31, 2026\n * (c)(i) No general hospital other than a public general hospital may\nreceive in total from disproportionate share payment distributions made\nin accordance with paragraph (b) of subdivision fourteen-c, subdivision\nseventeen and paragraphs (c) and (d) of subdivision nineteen of this\nsection and adjustments in accordance with subdivision fourteen-d of\nthis section for the period April first, nineteen hundred ninety-five\nthrough December thirty-first, nineteen hundred ninety-five or for the\nannual rate period beginning on January first, nineteen hundred\nninety-six through December thirty-first, nineteen hundred ninety-six,\nor made in accordance with section twenty-eight hundred seven-k of this\narticle for annual periods beginning on January first on and after\nJanuary first, nineteen hundred ninety-seven through December\nthirty-first, nineteen hundred ninety-nine and on and after January\nfirst, two thousand an amount which exceeds the costs incurred during\nsuch period of furnishing inpatient and ambulatory hospital services,\nnet of medical assistance payments pursuant to title eleven of article\nfive of the social services law, other than disproportionate share\npayments pursuant to subdivision twenty-six of this section or\nsubdivision thirteen of section twenty-eight hundred seven-k of this\narticle, and payments by uninsured patients, by the hospital to\nindividuals who either are eligible for medical assistance pursuant to\ntitle eleven of article five of the social services law or have no\nhealth insurance or other source of third party coverage; provided,\nhowever, that the commissioner shall make such modifications to the\nmanner in which the limitation on disproportionate share payments is\napplied to such hospitals as shall increase the maximum limit for a\nperiod or part of a period as authorized by federal law or regulation or\nthe secretary of the department of health and human services for\npurposes of federal financial participation pursuant to title XIX of the\nfederal social security act. For purposes of this paragraph, payments to\na general hospital for services provided to indigent patients made by\nthe state or a unit of local government within the state shall not be\nconsidered to be a source of third party payment.\n (ii)(A) Reductions pursuant to this paragraph for periods through\nDecember thirty-first, nineteen hundred ninety-six shall be made in the\nfollowing sequence for general hospitals other than financially\ndistressed hospitals: adjustments in accordance with subdivision\nfourteen-d of this section; and distributions in accordance with\nsubdivision seventeen of this section.\n (B) Reductions pursuant to this paragraph for periods through December\nthirty-first, nineteen hundred ninety-six shall be made in the following\nsequence for general hospitals designated as financially distressed\nhospitals: distributions in accordance with paragraph (b) of subdivision\nfourteen-c of this section; distributions in accordance with paragraphs\n(c) and (d) of subdivision nineteen of this section; and distributions\nin accordance with subdivision seventeen of this section.\n (C) Reductions pursuant to this paragraph for periods during the\nperiod January first, nineteen hundred ninety-seven through December\nthirty-first, nineteen hundred ninety-nine and on and after January\nfirst, two thousand, shall be made from distributions in accordance with\nsection twenty-eight hundred seven-k of this article.\n (iii) (A) In the event a reduction pursuant to subparagraphs (i) and\n(ii) of this paragraph is effective for distributions in accordance with\nparagraph (b) of subdivision fourteen-c of this section, paragraph (c)\nor (d) of subdivision nineteen of this section, subdivision fourteen-d\nof this section or subdivision seventeen of this section for a general\nhospital, such general hospital shall receive a supplementary\ndistribution not as a disproportionate share payment and not subject to\nfederal financial participation from funds available pursuant to such\nsubdivisions equal to one-half of such reduction for periods through\nDecember thirty-first, nineteen hundred ninety-six.\n (B) In the event a reduction pursuant to subparagraphs (i) and (ii) of\nthis paragraph is effective for distributions in accordance with section\ntwenty-eight hundred seven-k of this article for a general hospital,\nsuch general hospital shall receive a supplementary distribution not as\na disproportionate share payment and not subject to federal financial\nparticipation from funds available pursuant to section twenty-eight\nhundred seven-k of this article for periods during the period January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine and on and after January first, two\nthousand equal to one-half of such reduction.\n * NB Effective until December 31, 2026\n * (c)(i) No general hospital other than a public general hospital may\nreceive in total from disproportionate share payment distributions made\nin accordance with paragraph (b) of subdivision fourteen-c, subdivision\nseventeen and paragraphs (c) and (d) of subdivision nineteen of this\nsection and adjustments in accordance with subdivision fourteen-d of\nthis section for the period April first, nineteen hundred ninety-five\nthrough December thirty-first, nineteen hundred ninety-five or for the\nannual rate period beginning on January first, nineteen hundred\nninety-six through December thirty-first, nineteen hundred ninety-six,\nor made in accordance with section twenty-eight hundred seven-k of this\narticle for annual periods beginning on January first on and after\nJanuary first, nineteen hundred ninety-seven through December\nthirty-first, nineteen hundred ninety-nine an amount which exceeds the\ncosts incurred during such period of furnishing inpatient and ambulatory\nhospital services, net of medical assistance payments pursuant to title\neleven of article five of the social services law, other than\ndisproportionate share payments pursuant to subdivision twenty-six of\nthis section or subdivision thirteen of section twenty-eight hundred\nseven-k of this article, and payments by uninsured patients, by the\nhospital to individuals who either are eligible for medical assistance\npursuant to title eleven of article five of the social services law or\nhave no health insurance or other source of third party coverage;\nprovided, however, that the commissioner shall make such modifications\nto the manner in which the limitation on disproportionate share payments\nis applied to such hospitals as shall increase the maximum limit for a\nperiod or part of a period as authorized by federal law or regulation or\nthe secretary of the department of health and human services for\npurposes of federal financial participation pursuant to title XIX of the\nfederal social security act. For purposes of this paragraph, payments to\na general hospital for services provided to indigent patients made by\nthe state or a unit of local government within the state shall not be\nconsidered to be a source of third party payment.\n (ii)(A) Reductions pursuant to this paragraph for periods through\nDecember thirty-first, nineteen hundred ninety-six shall be made in the\nfollowing sequence for general hospitals other than financially\ndistressed hospitals: adjustments in accordance with subdivision\nfourteen-d of this section; and distributions in accordance with\nsubdivision seventeen of this section.\n (B) Reductions pursuant to this paragraph for periods through December\nthirty-first, nineteen hundred ninety-six shall be made in the following\nsequence for general hospitals designated as financially distressed\nhospitals: distributions in accordance with paragraph (b) of subdivision\nfourteen-c of this section; distributions in accordance with paragraphs\n(c) and (d) of subdivision nineteen of this section; and distributions\nin accordance with subdivision seventeen of this section.\n (C) Reductions pursuant to this paragraph for periods during the\nperiod January first, nineteen hundred ninety-seven through December\nthirty-first, nineteen hundred ninety-nine, shall be made from\ndistributions in accordance with section twenty-eight hundred seven-k of\nthis article.\n (iii) (A) In the event a reduction pursuant to subparagraphs (i) and\n(ii) of this paragraph is effective for distributions in accordance with\nparagraph (b) of subdivision fourteen-c of this section, paragraph (c)\nor (d) of subdivision nineteen of this section, subdivision fourteen-d\nof this section or subdivision seventeen of this section for a general\nhospital, such general hospital shall receive a supplementary\ndistribution not as a disproportionate share payment and not subject to\nfederal financial participation from funds available pursuant to such\nsubdivisions equal to one-half of such reduction for periods through\nDecember thirty-first, nineteen hundred ninety-six.\n (B) In the event a reduction pursuant to subparagraphs (i) and (ii) of\nthis paragraph is effective for distributions in accordance with section\ntwenty-eight hundred seven-k of this article for a general hospital,\nsuch general hospital shall receive a supplementary distribution not as\na disproportionate share payment and not subject to federal financial\nparticipation from funds available pursuant to section twenty-eight\nhundred seven-k of this article for periods during the period January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine equal to one-half of such reduction.\n * NB Effective and expires December 31, 2026\n * (c) (i) No general hospital other than a public general hospital may\nreceive in total from disproportionate share payment distributions made\nin accordance with paragraph (b) of subdivision fourteen-c, subdivision\nseventeen and paragraphs (c) and (d) of subdivision nineteen of this\nsection and adjustments in accordance with subdivision fourteen-d of\nthis section for the period April first, nineteen hundred ninety-five\nthrough December thirty-first, nineteen hundred ninety-five or for the\nannual rate period beginning on January first, nineteen hundred\nninety-six an amount which exceeds the costs incurred during such period\nof furnishing inpatient and ambulatory hospital services, net of medical\nassistance payments pursuant to title eleven of article five of the\nsocial services law, other than disproportionate share payments pursuant\nto subdivision twenty-six of this section, and payments by uninsured\npatients, by the hospital to individuals who either are eligible for\nmedical assistance pursuant to title eleven of article five of the\nsocial services law or have no health insurance or other source of third\nparty coverage; provided, however, that the commissioner shall make such\nmodifications to the manner in which the limitation on disproportionate\nshare payments is applied to such hospitals as shall increase the\nmaximum limit for a period or part of a period as authorized by federal\nlaw or regulation or the secretary of the department of health and human\nservices for purposes of federal financial participation pursuant to\ntitle XIX of the federal social security act. For purposes of this\nparagraph, payments to a general hospital for services provided to\nindigent patients made by the state or a unit of local government within\nthe state shall not be considered to be a source of third party payment.\n (ii)(A) Reductions pursuant to this paragraph shall be made in the\nfollowing sequence for general hospitals other than financially\ndistressed hospitals: adjustments in accordance with subdivision\nfourteen-d of this section; and distributions in accordance with\nsubdivision seventeen of this section.\n (B) Reductions pursuant to this paragraph shall be made in the\nfollowing sequence for general hospitals designated as financially\ndistressed hospitals: distributions in accordance with paragraph (b) of\nsubdivision fourteen-c of this section; distributions in accordance with\nparagraphs (c) and (d) of subdivision nineteen of this section; and\ndistributions in accordance with subdivision seventeen of this section.\n (iii) In the event a reduction pursuant to subparagraphs (i) and (ii)\nof this paragraph is effective for distributions in accordance with\nparagraph (b) of subdivision fourteen-c of this section, paragraph (c)\nor (d) of subdivision nineteen of this section, subdivision fourteen-d\nof this section or subdivision seventeen of this section for a general\nhospital, such general hospital shall receive a supplementary\ndistribution not as a disproportionate share payment and not subject to\nfederal financial participation from funds available pursuant to such\nsubdivisions equal to one-half of such reduction.\n * NB Effective December 31, 2026\n * (d)(i) Commencing April first, nineteen hundred ninety-four, no\ngeneral hospital may be eligible to receive disproportionate share\npayments determined in accordance with subdivision twenty-six of this\nsection through December thirty-first, nineteen hundred ninety-six or in\naccordance with section twenty-eight hundred seven-k of this article for\nperiods during the period January first, nineteen hundred ninety-seven\nthrough December thirty-first, nineteen hundred ninety-nine and on and\nafter January first, two thousand unless the hospital has an inpatient\nutilization rate for patients eligible for payments pursuant to title\neleven of article five of the social services law eligible for federal\nfinancial participation pursuant to title nineteen of the federal social\nsecurity act of not less than one percent.\n (ii) In the event a general hospital is disqualified pursuant to\nsubparagraph (i) of this paragraph from receiving disproportionate share\npayments for a period, such general hospital shall receive distributions\nnot as disproportionate share payments and not subject to federal\nfinancial participation from funds available pursuant to subdivision\nseventeen of this section for periods through December thirty-first,\nnineteen hundred ninety-six, and pursuant to section twenty-eight\nhundred seven-k of this article for periods during the period January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine and on and after January first, two\nthousand equal to one-half of the distributions for which such general\nhospital would have been qualified pursuant to subdivision seventeen of\nthis section for periods through December thirty-first, nineteen hundred\nninety-six, and pursuant to section twenty-eight hundred seven-k of this\narticle for periods during the period January first, nineteen hundred\nninety-seven through December thirty-first, nineteen hundred ninety-nine\nand on and after January first, two thousand without consideration of\nsubparagraph (i) of this paragraph.\n * NB Effective until December 31, 2026\n * (d)(i) Commencing April first, nineteen hundred ninety-four, no\ngeneral hospital may be eligible to receive disproportionate share\npayments determined in accordance with subdivision twenty-six of this\nsection through December thirty-first, nineteen hundred ninety-six or in\naccordance with section twenty-eight hundred seven-k of this article for\nperiods during the period January first, nineteen hundred ninety-seven\nthrough December thirty-first, nineteen hundred ninety-nine unless the\nhospital has an inpatient utilization rate for patients eligible for\npayments pursuant to title eleven of article five of the social services\nlaw eligible for federal financial participation pursuant to title\nnineteen of the federal social security act of not less than one\npercent.\n (ii) In the event a general hospital is disqualified pursuant to\nsubparagraph (i) of this paragraph from receiving disproportionate share\npayments for a period, such general hospital shall receive distributions\nnot as disproportionate share payments and not subject to federal\nfinancial participation from funds available pursuant to subdivision\nseventeen of this section for periods through December thirty-first,\nnineteen hundred ninety-six, and pursuant to section twenty-eight\nhundred seven-k of this article for periods during the period January\nfirst, nineteen hundred ninety-seven through December thirty-first,\nnineteen hundred ninety-nine equal to one-half of the distributions for\nwhich such general hospital would have been qualified pursuant to\nsubdivision seventeen of this section for periods through December\nthirty-first, nineteen hundred ninety-six, and pursuant to section\ntwenty-eight hundred seven-k of this article for periods during the\nperiod January first, nineteen hundred ninety-seven through December\nthirty-first, nineteen hundred ninety-nine without consideration of\nsubparagraph (i) of this paragraph.\n * NB Effective and expires December 31, 2026\n * (d)(i) Commencing April first, nineteen hundred ninety-four, no\ngeneral hospital may be eligible to receive disproportionate share\npayments determined in accordance with subdivision twenty-six of this\nsection unless the hospital has an inpatient utilization rate for\npatients eligible for payments pursuant to title eleven of article five\nof the social services law eligible for federal financial participation\npursuant to title nineteen of the federal social security act of not\nless than one percent.\n (ii) In the event a general hospital is disqualified pursuant to\nsubparagraph (i) of this paragraph from receiving disproportionate share\npayments for a period, such general hospital shall receive distributions\nnot as disproportionate share payments and not subject to federal\nfinancial participation from funds available pursuant to subdivision\nseventeen of this section equal to one-half of the distributions for\nwhich such general hospital would have been qualified pursuant to\nsubdivision seventeen of this section without consideration of\nsubparagraph (i) of this paragraph.\n * NB Effective December 31, 2026\n * (e) For purposes of calculations pursuant to paragraphs (b) and (c)\nof this subdivision of maximum disproportionate share payment\ndistributions for a year or part thereof, costs incurred of furnishing\nhospital services net of medical assistance payments, other than\ndisproportionate share payments, and payments by uninsured patients\nshall be determined initially based on base year data and statistics for\nthe base year two years immediately preceding the year projected to the\nyear by the trend factor determined in accordance with subdivision ten\nof this section and shall be subsequently revised to reflect actual\nperiod data and statistics. For purposes of calculations pursuant to\nparagraph (d) of this subdivision of eligibility to receive\ndisproportionate share payments for a year or part thereof, the hospital\ninpatient utilization rate shall be determined based on base year\nstatistics in accordance with a methodology established by the\ncommissioner, and costs incurred of furnishing hospital services shall\nbe determined in accordance with a methodology established by the\ncommissioner consistent with requirements of the secretary of the\ndepartment of health and human services for purposes of federal\nfinancial participation pursuant to title XIX of the federal social\nsecurity act in disproportionate share payments.\n * NB Effective until December 31, 2026\n * (e) For purposes of calculations pursuant to paragraphs (b) and (c)\nof this subdivision of maximum disproportionate share payment\ndistributions for a rate year or part thereof, costs incurred of\nfurnishing hospital services net of medical assistance payments, other\nthan disproportionate share payments, and payments by uninsured patients\nshall be determined initially based on base year data and statistics for\nthe base year two years immediately preceding the rate year projected to\nthe rate year by the trend factor determined in accordance with\nsubdivision ten of this section and shall be subsequently revised to\nreflect actual rate period data and statistics. For purposes of\ncalculations pursuant to paragraph (d) of this subdivision of\neligibility to receive disproportionate share payments for a rate year\nor part thereof, the hospital inpatient utilization rate shall be\ndetermined based on base year statistics in accordance with a\nmethodology established by the commissioner, and costs incurred of\nfurnishing hospital services shall be determined in accordance with a\nmethodology established by the commissioner consistent with requirements\nof the secretary of the department of health and human services for\npurposes of federal financial participation pursuant to title XIX of the\nfederal social security act in disproportionate share payments.\n * NB Effective December 31, 2026\n (e-1) For periods on and after January first, two thousand eleven, for\npurposes of calculations pursuant to paragraphs (b) and (c) of this\nsubdivision of maximum disproportionate share payment distributions for\na rate year or part thereof, costs incurred of furnishing hospital\nservices net of medical assistance payments, other than disproportionate\nshare payments, and payments by uninsured patients shall for the two\nthousand eleven calendar year, shall be determined initially based on\neach hospital's submission of a fully completed two thousand eight\ndisproportionate share hospital data collection tool, which is required\nto be submitted to the department by March thirty-first, two thousand\neleven, and shall be subsequently revised to reflect each hospital's\nsubmission of a fully completed two thousand nine disproportionate share\nhospital data collection tool, which is required to be submitted to the\ndepartment by October first, two thousand eleven.\n For calendar years on and after two thousand twelve, such initial\ndeterminations shall reflect submission of data as required by the\ncommissioner on a specified date. All such initial determinations shall\nsubsequently be revised to reflect actual rate period data and\nstatistics. Indigent care payments will be withheld in instances when a\nhospital has not submitted required information by the due dates\nprescribed in this paragraph, provided, however, that such payments\nshall be made upon submission of such required data. For purposes of\ncalculations pursuant to paragraph (d) of this subdivision of\neligibility to receive disproportionate share payments for a rate year\nor part thereof, the hospital inpatient utilization rate shall be\ndetermined based on the base year statistics in accordance with the\nmethodology established by the commissioner, and costs incurred of\nfurnishing hospital services shall be determined in accordance with a\nmethodology established by the commissioner consistent with requirements\nof the secretary of the department of health and human services for\npurposes of federal financial participation pursuant to the title XIX of\nthe federal social security act in disproportionate share payments.\n (f) The commissioner may recover any amounts paid in excess of maximum\npermissible distributions and adjustments determined pursuant to this\nsubdivision by retroactive adjustment and recoupment from payments made\nfor beneficiaries eligible for payments pursuant to title eleven of\narticle five of the social services law.\n (g) Notwithstanding any inconsistent provision of this subdivision,\nthe provision of subparagraph (iii) of paragraph (b), subparagraph (iii)\nof paragraph (c) or subparagraph (ii) of paragraph (d) of this\nsubdivision shall be of no force and effect and shall be deemed to have\nbeen null and void as of January first, nineteen hundred ninety-four in\nthe event the secretary of the department of health and human services\ndetermines that distributions based on such provisions would render a\nhealth care related tax on general hospitals an impermissible health\ncare related tax for purposes of the federal medicaid voluntary\ncontribution and provider specific tax amendments of nineteen hundred\nninety-one for purposes of such health care related tax receipts\nreducing the amount deemed expended by the state as medical assistance\nfor purposes of federal financial participation.\n 22. Undistributed funds. Any funds, including income from invested\nfunds, remaining in the bad debt and charity care and capital statewide\npool after distributions in accordance with paragraphs (a), (b), (b-1),\n(c), (d), (e) and (f) of subdivision nineteen of this section shall be\ndistributed proportionately to voluntary non-profit, private proprietary\nand public general hospitals, excluding major public general hospitals,\non the basis of hospital specific assessments submitted to the pool.\n 23. Reimbursement rates. The assessments pursuant to subdivision\neighteen of this section shall not be an allowable cost in the\ndetermination of general hospital inpatient reimbursement rates in\naccordance with this section and section twenty-eight hundred seven of\nthis article.\n 24. Federal financial participation. The council may adopt rules and\nregulations, subject to the approval of the commissioner, to adjust\nrates of payment by governmental agencies for general hospital inpatient\nservices determined in accordance with this section as necessary to meet\nfederal requirements for securing federal financial participation\npursuant to title XIX of the federal social security act in the event\nthe state cannot provide assurances satisfactory to the secretary of\nhealth and human services related to a comparison of rates of payment in\nthe aggregate to maximum aggregate payments determined in accordance\nwith federal law and regulation which are substantially the same as such\nassurances as in effect on October twenty-sixth, nineteen hundred\neighty-seven for securing such federal financial participation.\nNotwithstanding any other law, the state reserves the right to recoup\nany payments by governmental agencies for general hospital inpatient\nservices authorized by this section for which federal financial\nparticipation has been denied in connection with that determination by\nthe department of health and human services.\n 25. Medical education expenses. (a) Notwithstanding any inconsistent\nprovision of this section, to encourage the training of more primary\ncare physicians, for annual rate periods beginning on or after January\nfirst, nineteen hundred ninety-two, indirect medical education expenses,\nas defined in subparagraph (ii) of paragraph (c) of subdivision seven of\nthis section, of a general hospital included in the determination of the\noperating cost component of general hospital rates of payment for a rate\nperiod in accordance with subdivisions six and seven of this section or\nin accordance with paragraph (e), (g) or (i) of subdivision four of this\nsection for general hospitals or distinct units of general hospitals not\nreimbursed on the basis of case based payments per discharge shall be\nadjusted to reflect the following modifications:\n (i) the calculation of interns and residents to bed ratios for\npurposes of determining indirect reimbursement shall include residents\nin non-hospital ambulatory settings. The sum in total for all general\nhospitals of the indirect medical education expenses shall equal the sum\nin total for each general hospital determined as if the provisions of\nthis section were applied without consideration of residents in\nnon-hospital ambulatory settings; and\n (ii) for annual rate periods beginning on or after January first,\nnineteen hundred ninety-two, residencies shall be weighted to provide\nhigher weights for primary care and emergency medicine physicians.\nPrimary care residents specialties shall include family medicine,\ngeneral pediatrics, primary care internal medicine and primary care\nobstetrics and gynecology. In determining whether a residency is in\nprimary care, the commissioner shall consult with the New York state\ncouncil on graduate medical education and the state hospital review and\nplanning council. Reimbursable indirect expenses of medical education of\na general hospital for a rate period shall be weighted based on\nprojected medical education statistics for such general hospital for\nsuch rate period, and subsequently reconciled through appropriate audit\nprocedures to actual statistics by a prospective adjustment to rates of\npayment. The weighting factors shall be determined based on nineteen\nhundred ninety data and statistics and shall include residents\nidentified in subparagraph (i) of this paragraph not previously included\nin such calculations such that the sum in total for all general\nhospitals of the results of the weighting factors multiplied by the\nindirect medical education expenses for each general hospital shall\nequal, approximately, the sum in total for all general hospitals of the\nindirect medical education expenses for each general hospital determined\nas if the provisions of this section were applied without consideration\nof the weighting factors or residents in non-hospital ambulatory\nsettings determined pursuant to this subdivision. Residency positions in\nany specialty shall be weighted to equal no less than nine-tenths of\nwhat such position would have equaled if reimbursement were to have been\ncalculated without regard to the weighting factors. If a general\nhospital is reimbursed by this provision in excess of the amount such\nhospital would have been reimbursed without regard to the weighting\nfactors, such general hospital shall apply such additional funds to\nencourage the training of primary care physicians. The provisions of\nthis subparagraph shall not apply to those four specialty eye and ear,\nspecial surgery and orthopedic and joint disease hospitals, specified by\nthe commissioner, whose primary mission is to engage in research,\ntraining, and clinical care in the above-named areas.\n (b) Hospitals shall furnish to the department such reports and\ninformation as may be required by the commissioner to assess the cost,\nquality and health system needs for medical education provided.\n (c) For purposes of determining how such weighting factors have\nresulted in the increased training of physicians in primary care\nspecialties, the council on graduate medical education shall prepare a\nreport on or before March thirty-first, nineteen hundred ninety-five.\nSuch report shall include, but shall not be limited to: an evaluation of\nthe effectiveness such weighting factors have had on the number of\nresidents matched in primary care specialties; the degree to which such\nweighting factors have impacted general hospitals to redirect their\nresidency programs toward training primary care physicians; and the\nimpact such weighting factors have had on graduate medical education\nwithin general hospitals. Such report shall also include recommendations\nto the governor and the legislature on the continuation, expiration or\nmodification of such weighting factors.\n (d) Notwithstanding any inconsistent provision of this section and\nsubject to the availability of federal financial participation:\n (i) For periods on and after April first, two thousand four, the\ncommissioner shall adjust inpatient medical assistance rates of payment\nestablished pursuant to this section, including discrete rates of\npayment calculated pursuant to paragraph a-three of subdivision one of\nthis section, for non-public general hospitals, and for periods on and\nafter April first, two thousand seven, for public and non-public general\nhospitals, in accordance with subparagraph (ii) of this paragraph, for\npurposes of reimbursing graduate medical education costs based on the\nfollowing methodology:\n (ii) Rate adjustments for each general hospital shall be based on the\ndifference between the graduate medical education component, direct and\nindirect, of the two thousand three medical assistance inpatient rates\nof payment, including exempt unit per diem rates, and an estimate of\nwhat the graduate medical education component, direct and indirect, of\nsuch medical assistance inpatient rates of payment, including exempt\nunit per diem rates would be, stated at two thousand three levels and\ncalculated as follows:\n (A) Each general hospital's total direct medical education costs as\nreported in the two thousand one institutional cost report submitted as\nof December thirty-first, two thousand three, and\n (B) An estimate of the total indirect medical education costs for two\nthousand one calculated in accordance with the methodology applicable\nfor purposes of determining an estimate of indirect medical education\ncosts pursuant to subparagraph (ii) of paragraph (c) of subdivision\nseven of this section. The indirect medical education costs shall equal\nthe product of two thousand one hospital specific inpatient operating\ncosts, including exempt unit costs, and the indirect teaching cost\npercentage determined by the following formula:\n 1-(1/(1+1.89(((1+r)^.405)-1)))\nwhere r equals the ratio of residents and fellows to beds for two\nthousand one adjusted to reflect the projected two thousand three\nresident counts.\n (C) Each hospital's rate adjustment shall be limited to seventy-five\npercent of the graduate medical education component included in its two\nthousand three medical assistance inpatient rates of payment, including\nexempt unit rates. For periods on and after April first, two thousand\nseven, the seventy-five percent limit shall not apply to rate decreases\ncalculated pursuant to this paragraph.\n (D) For the period April first, two thousand four through March\nthirty-first, two thousand seven, no hospital shall receive a rate\nadjustment pursuant to this paragraph if such rate adjustment would be a\nnegative amount. For periods on and after April first, two thousand\nseven, no public general hospital shall receive a rate increase\ncalculated pursuant to this paragraph.\n (iii) If the aggregate amount of rate adjustments calculated pursuant\nto this paragraph exceeds the upper payment limit calculated pursuant to\nfederal regulations, such rate adjustments shall be reduced\nproportionally by the amount in excess of the federal upper payment\nlimit. Such reduction, if applicable, shall be calculated on an annual\nbasis.\n (iv) Such rate adjustment shall be included as an add-on to medical\nassistance inpatient rates of payment, excluding exempt unit rates, but\nincluding inpatient rates of payment established in accordance with\nparagraph a-three of subdivision one of this section. Such rate add-on\nshall be based on medical assistance data reported in each hospital's\nannual cost report submitted for the period two years prior to the rate\nyear and filed with the department by November first of the year prior\nto the rate year. Such amounts shall not be reconciled to reflect\nchanges in medical assistance utilization between the year two years\nprior to the rate year and the rate year.\n (e) From amounts available pursuant to paragraph (oo) of subdivision\none of section twenty-eight hundred seven-v of this article, allocations\nshall be made to non-public general hospitals receiving a rate\nadjustment pursuant to paragraph (d) of this subdivision when the rate\nadjustment pursuant to paragraph (d) of this subdivision results in the\ngeneral hospital exceeding its applicable disproportionate share payment\nlimit in the year in which the adjustment is made and the amount of the\nassociated reduction in the hospital's disproportionate share payments\nwould result in the hospital receiving less than its total distribution\namount in that year. A hospital's "total distribution amount" shall be\nthe amount that the hospital would have received pursuant to paragraphs\n(c) and (d) of subdivision three of section twenty-eight hundred seven-m\nof this article prior to the effective date of this paragraph. A\nhospital's eligible loss for purposes of this paragraph shall be the\namount of the loss in such total distribution amount. Each eligible\nhospital's allocation of available funds pursuant to this paragraph\nwithin a year shall be determined based on its proportionate share of\nthe aggregate eligible losses for all such hospitals, limited by the\namount of the rate adjustment pursuant to paragraph (d) of this\nsubdivision.\n 26. Disproportionate share payments. Distributions to general\nhospitals from bad debt and charity care regional pools pursuant to\nsubdivision seventeen of this section, distributions to general\nhospitals from the bad debt and charity care and capital statewide pool\npursuant to paragraphs (c) and (d) of subdivision nineteen of this\nsection, distributions to general hospitals from the bad debt and\ncharity care for financially distressed hospitals statewide pool\npursuant to subdivision fourteen-c of this section and the adjustment\nprovided in accordance with subdivision fourteen-a of this section and\nthe adjustment provided in accordance with subdivision fourteen-d of\nthis section shall be considered disproportionate share payments for\ninpatient hospital services to general hospitals serving a\ndisproportionate number of low income patients with special needs for\npurposes of providing assurances to the secretary of health and human\nservices as necessary to meet federal requirements for securing federal\nfinancial participation pursuant to title XIX of the federal social\nsecurity act.\n 27. Reports. (a) The commissioner of health shall submit a report to\nthe legislature and the council on health care financing on or before\nFebruary first, nineteen hundred eighty-eight detailing the objective,\nimpact, design and computation for an inpatient pricing component. In\nterms of the design and computation for a pricing system such report\nshall include but not be limited to: a description and methodology for\ndeveloping peer groups, identification of costs included in the\ncalculation of a group average and any adjustments made to such costs,\nthe methodology developed to reflect outliers, any teaching or\ndisproportionate share adjustments made, the calculation of wage and\npower equalization factors, and identification of any adjustments made\nto the service intensity weights or diagnosis-related group categories.\nThe commissioner shall explore methodologies for the inclusion of\nseverity of illness considerations in determining group average costs\nand rates and shall include all details of his analysis in the report\nrequired under this subparagraph. If it is determined that a severity of\nillness adjustment cannot be developed for incorporation in the\ncomputations, the report filed shall include the specific reasons for\nthis conclusion. With regard to a fiscal impact analysis such report\nshall include but not be limited to the impact on major types of general\nhospitals including rural, urban, teaching, non-teaching, plus a\nregional analysis; and should indicate any characteristics which can be\nobserved regarding general hospitals which would be significantly\nimpacted by the introduction of a pricing component. The commissioner\nshall expeditiously make available for inspection by interested parties\npertinent data used in the development of the inpatient pricing\ncomponent consistent with appropriate department procedures for the\nrelease and protection of confidential data.\n (b) The commissioner shall submit a report to the governor and the\nlegislature on or before February first, nineteen hundred ninety-five\nregarding the objective, impact, design and implementation of the case\nbased payment system for inpatient hospital services based on\ndiagnosis-related groups created pursuant to this section including, in\nparticular, an analysis of the group price component of case based rates\nof payment and the appropriateness and effectiveness of the provisions\nrelating to financing of uncompensated care. The reports shall include\nbut not be limited to a fiscal impact analysis of the impact of the case\nbased payment system on major types of general hospitals including\nrural, urban, teaching and non-teaching, plus a regional analysis. Such\nreports shall evaluate the impact of the case based payment system on\ngeneral hospital inpatient medical and clinical care and the quality of\nhospital services. The reports shall also include recommendations for\ncontinuation or modification of the case based payment system for\ninpatient hospital services provided on or after January first, nineteen\nhundred ninety-six.\n ** (c) The commissioner shall report to the governor and the\nlegislature on or before December first, nineteen hundred eighty-eight\nwith a plan relating to the structure and financing of graduate medical\neducation. Such plan shall include an evaluation of and recommendations\nfor graduate medical education with respect to health services delivery\nand educational goals including but not limited to the following:\nappropriate supply and distribution of primary care providers by\ngeographic area; adequate supply and distribution of medical specialists\naccording to projected population needs; educational opportunities\nrepresentative of current and future practice settings; the impact of\nsuch plan on health care delivery in currently underserved and rural\nareas; and reimbursement changes to effectuate the recommendations\nincluded in the plan. Such plan shall be developed with substantial\nparticipation by the department of education, the medical schools,\nresidency training programs, health systems agencies, health care\ninstitutions, and physicians.\n ** NB Inadvertently omitted from 731/93 amendment\n * 28. Notwithstanding any inconsistent provision of this section:\n (a) the commissioner may adjust, on a per unit of service basis,\ngeneral hospital inpatient services rates of payment established\npursuant to this section as in effect on and before December\nthirty-first, nineteen hundred ninety-six prospectively as an additional\nfactor to be paid, including the impact of payment differentials as were\nin effect pursuant to this section, in addition to, or as a reduction\nto, any hospital charges or negotiated rate (the adjustment may not be\nnegotiated by the payor); including, but not limited to, capital related\ninpatient expenses reconciliation adjustments pursuant to subdivision\neight of this section, rate adjustments for corrections, appeals and\nvolume changes pursuant to subdivision nine of this section, rate\nadjustments to reflect trend factor adjustments pursuant to subdivision\nten of this section, maximum case mix change adjustments pursuant to\nparagraph (f) of subdivision eleven of this section, and adjustments\nbased on audits;\n (b) the allowances percentages established pursuant to this article in\neffect for a rate period shall be applied to hospital charges or\nnegotiated rates plus the prospectively adjusted payment of rates of\npayment of a general hospital in accordance with paragraph (a) of this\nsubdivision;\n (c) no recalculation of the basis for distribution of funds from\nregional or statewide pools established pursuant to this section shall\nbe made based on the impact of a prospective adjustment to rates of\npayment authorized pursuant to this subdivision; and\n (d) prospective rate adjustments authorized pursuant to this\nsubdivision for a general hospital based on appeals approved after\nJanuary first, nineteen hundred ninety-eight shall be included in rates\nof payment as a one hundred percent facility specific adjustment and\nshall not affect the calculation of the group category average inpatient\nreimbursable operating cost per discharge for such retrospective period\nfor any other general hospital.\n * NB Expires December 31, 2026\n * 29. Coinsurance and deductibles. (a) If a general hospital and a\nthird-party payor agree to a negotiated payment methodology for a period\non or after January first, nineteen hundred ninety-seven that is based\non a discount from hospital charges, such discount shall apply to the\ncalculation of the charge basis for deductible and coinsurance amounts\nfor such period owed for any patient covered by such third-party payor\nas the primary payor.\n (b) If a general hospital and a third-party payor agree to a\nnegotiated payment methodology for a period on or after January first,\nnineteen hundred ninety-seven that is not based on a discount from\nhospital charges, excluding capitation arrangements, the maximum amount\nto be charged for deductible and coinsurance amounts for such period for\nany patient covered by such third-party payor as the primary payor shall\nnot exceed the amount calculated by applying the deductible and\ncoinsurance amounts to the amount due on the basis of such negotiated\npayment arrangement.\n * NB Expires December 31, 2026\n 30. General hospital recruitment and retention of health care workers.\nNotwithstanding any inconsistent provision of this section and subject\nto the availability of federal financial participation:\n (a) (i) The commissioner shall adjust inpatient medical assistance\nrates of payment established pursuant to this section for non-public\ngeneral hospitals in accordance with subparagraph (ii) of this paragraph\nfor purposes of recruitment and retention of health care workers in the\nfollowing aggregate amounts for the following periods:\n (A) ninety-three million two hundred thousand dollars on an annualized\nbasis for the period April first, two thousand two through December\nthirty-first, two thousand two; one hundred eighty-seven million eight\nhundred thousand dollars on an annualized basis for the period January\nfirst, two thousand three through December thirty-first, two thousand\nthree; two hundred sixty-two million one hundred thousand dollars on an\nannualized basis for the period January first, two thousand four through\nDecember thirty-first, two thousand six; one hundred thirty-one million\none hundred thousand dollars for the period January first, two thousand\nseven through June thirtieth, two thousand seven, and two hundred\nforty-three million five hundred thousand dollars for the period July\nfirst, two thousand seven through March thirty-first, two thousand\neight, two hundred forty-three million five hundred thousand dollars for\nthe period April first, two thousand eight through March thirty-first,\ntwo thousand nine; one hundred sixty-three million one hundred\nforty-five thousand dollars for the period April first, two thousand\nnine through November thirtieth, two thousand nine.\n (ii) Such increases shall be allocated proportionally based on each\nnon-public general hospital's reported total gross salary and fringe\nbenefit costs as reported on exhibit 11 of the 1999 institutional cost\nreport submitted as of November first, two thousand one to the total of\nsuch reported costs for all non-public general hospitals, provided,\nhowever, that for periods on and after July first, two thousand seven,\nfifty percent of such increases shall be allocated proportionally, based\non each non-public hospital's reported total gross salary and fringe\nbenefit costs, as reported on exhibit 11 of the nineteen hundred\nninety-nine institutional cost report as submitted to the department\nprior to November first, two thousand one, to the total of such reported\ncosts for all non-public general hospitals, and fifty percent of such\nincreases shall be allocated proportionally, based on each such\nhospital's total reported medicaid inpatient discharges, as reported in\nthe two thousand four institutional cost report as submitted to the\ndepartment prior to November first, two thousand six, to the total of\nsuch reported medicaid inpatient discharges for all non-public general\nhospitals, as weighted proportionally to reflect the relative medicaid\ncase mix of each such hospital. These amounts shall be included as a\nreimbursable cost add-on to medical assistance inpatient rates of\npayment established pursuant to this section for non-public general\nhospitals based on medical assistance utilization data in each\nhospital's annual cost report submitted two years prior to the rate\nyear. Such amounts shall be reconciled to reflect changes in medical\nassistance utilization between the year two years prior to the rate year\nand the rate year based on data reported in each hospital's cost report\nfor the respective rate year. These amounts shall be included as a\nreimbursable cost add-on to medical assistance inpatient rates of\npayment established pursuant to this section for non-public general\nhospitals based on medical assistance utilization data in each\nfacility's annual cost report submitted two years prior to the rate\nyear. For rate adjustments effective May first, two thousand five and\nthereafter such amounts shall be reconciled to reflect changes in\nmedical assistance utilization between the year two years prior to the\nrate year and the rate year based upon data reported in each hospital's\ninstitutional cost report for the respective rate year.\n (b) (i) Notwithstanding sections one hundred twelve and one hundred\nsixty-three of the state finance law and any other inconsistent\nprovision of law, the commissioner shall make grants to public general\nhospitals without a competitive bid or request for proposal process for\npurposes of recruitment and retention of health care workers in the\nfollowing aggregate amounts for the following periods:\n (A) eighteen million five hundred thousand dollars on an annualized\nbasis for the period April first, two thousand two through December\nthirty-first, two thousand two; thirty-seven million four hundred\nthousand dollars on an annualized basis for the period January first,\ntwo thousand three through December thirty-first, two thousand three;\nfifty-two million two hundred thousand dollars on an annualized basis\nfor the period January first, two thousand four through December\nthirty-first, two thousand six; twenty-six million one hundred thousand\ndollars for the period January first, two thousand seven through June\nthirtieth, two thousand seven, forty-nine million dollars for the period\nJuly first, two thousand seven through March thirty-first, two thousand\neight, and forty-nine million dollars for the period April first, two\nthousand eight through March thirty-first, two thousand nine.\n (ii) Such grants shall be allocated proportionally based on each\npublic general hospital's reported total gross salary and fringe benefit\ncosts as reported on exhibit 11 of the 1999 institutional cost report\nsubmitted as of November first, two thousand one to the total of such\nreported costs for all public general hospitals.\n (c) From amounts available pursuant to paragraph (gg) of subdivision\none of section twenty-eight hundred seven-v of this article, allocations\nshall be made to non-public general hospitals whose allocated labor\nadjustments pursuant to paragraphs (a) and (e) of this subdivision and\nadjustment pursuant to subdivision thirty-two of this section results in\nthe general hospital exceeding its applicable disproportionate share\npayment limit. Each such hospital's allocation of available funds\npursuant to this paragraph within a year shall be determined based on\nits proportionate share of the aggregate reduction of federal\ndisproportionate share funding for all such hospitals for the year\nresulting from the allocated labor adjustments pursuant to paragraphs\n(a) and (e) of this subdivision and from the adjustment pursuant to\nsubdivision thirty-two of this section.\n (d) General hospitals which have their rates adjusted or receive\ngrants pursuant to paragraphs (a) and (b) of this subdivision,\nrespectively, shall use such funds for the purpose of recruitment and\nretention of non-supervisory workers at health care facilities or any\nworker with direct patient care responsibility and are prohibited from\nusing such funds for any other purpose. Funds under this subdivision are\nnot intended to supplant support provided by a local government. Each\nsuch general hospital shall submit, at a time and in a manner to be\ndetermined by the commissioner, a written certification attesting that\nsuch funds will be used solely for the purpose of recruitment and\nretention of non-supervisory workers at health care facilities or any\nworker with direct patient care responsibility. The commissioner is\nauthorized to audit each general hospital to ensure compliance with the\nwritten certification required by this paragraph and shall recoup any\nfunds determined to have been used for purposes other than recruitment\nand retention of non-supervisory workers at health care facilities or\nany worker with direct patient care responsibility. Such recoupment\nshall be in addition to applicable penalties under sections twelve and\ntwelve-b of this chapter.\n (e)(i) The commissioner shall adjust inpatient medical assistance\nrates of payment established pursuant to this section for general\nhospitals in accordance with subparagraph (ii) of this paragraph and\nshall establish discrete rates of payment for such hospitals in\naccordance with subparagraph (iii) of this paragraph, for purposes of\nadditional support of recruitment and retention of health care workers\nin the following aggregate amounts for the following periods:\n (A) one hundred twenty-one million dollars for the period May first,\ntwo thousand five through December thirty-first, two thousand five and\none hundred twenty-one million dollars for the period January first, two\nthousand six through December thirty-first, two thousand six.\n (ii) Such increases shall be allocated proportionally based on each\ngeneral hospital's reported gross salary and fringe benefit costs as\nreported on exhibit 11 of the 1999 institutional cost report submitted\nas of November first, two thousand one to the total of such reported\ncosts for all general hospitals. These amounts shall be included as a\nreimbursable cost add-on to medical assistance inpatient rates of\npayment established pursuant to this section for general hospitals based\non medical assistance utilization data in each facility's annual cost\nreport submitted two years prior to the rate year. Such amounts shall be\nreconciled to reflect changes in medical assistance utilization between\nthe year two years prior to the rate year and the rate year based upon\ndata reported in each hospital's institutional cost report for the\nrespective rate year.\n (iii) The commissioner shall establish, subject to the approval of the\ndirector of the budget, discrete rates of payment for general hospitals\nfor payments under the medical assistance program pursuant to titles\neleven and eleven-D of article five of the social services law for\npersons eligible for medical assistance and family health plus who are\nenrolled in health maintenance organizations based on the calculation\nset forth in subparagraph (ii) of this paragraph for such general\nhospitals. If discrete rates of payment under this subparagraph are not\nestablished, the commissioner shall adjust the calculation established\npursuant to subparagraph (ii) of this paragraph to account for medical\nassistance utilization described under this subparagraph for such\nnon-public general hospital.\n (iv) Payment of the non-federal share of the medical assistance\npayments made pursuant to this paragraph shall be the responsibility of\nthe state and shall not include a local share. Payments made pursuant to\nthis paragraph or pursuant to paragraph (a) of this subdivision may be\nadded to rates of payment or made as aggregate payments to eligible\ngeneral hospitals.\n (f) In the event that a hospital entitled to an adjustment pursuant to\nparagraph (a) or (e) of this subdivision closes or otherwise experiences\na change in status that eliminates its ability to continue to receive\nsuch adjustments, the commissioner shall allocate the amount determined\nunder subparagraph (ii) of paragraph (a) and subparagraph (ii) of\nparagraph (e) of this subdivision for such hospital to hospitals in the\nimmediate region of the closing hospital based upon the remaining\nhospitals' reported gross salary and fringe benefit costs as reported on\nexhibit eleven of the two thousand four institutional cost report\nsubmitted as of November first, two thousand five to the total of such\nreported costs for all general hospitals in the region, provided,\nhowever, that for periods on and after July first, two thousand seven,\nsuch allocations shall be based on such remaining hospitals' reported\nmedicaid inpatient discharges, as reported in the two thousand four\ninstitutional cost report submitted to the department prior to November\nfirst, two thousand six, to the total of such reported medicaid\ninpatient discharges for all such remaining hospitals. The commissioner\nshall define the immediate region as the county or counties within which\nworkers displaced from the closing hospital are likely to seek\nre-employment.\n 31. Supplemental general hospital recruitment and retention\nadjustment. (a) Notwithstanding any law, rule or regulation to the\ncontrary, the commissioner shall, within amounts appropriated, and\ncontingent on the availability of federal financial participation, make\nMedicaid rate adjustments for non-public general hospitals to address\nextraordinary costs associated with recruitment and retention of\nnon-supervisory workers at health care facilities or any worker with\ndirect patient care responsibility at such general hospitals. Eligible\nhospitals shall be selected by the commissioner pursuant to a\ncompetitive process. Requests for proposals for eligible projects shall\nbe issued by the commissioner.\n (b) Such eligible projects may include:\n (i) an increase in non-supervisory staff, either facility wide or\ntargeted at a particular area of care or shift;\n (ii) increased training and education of non-supervisory staff,\nincluding allowing non-supervisory staff to increase their level of\nlicensure relevant to general hospital care;\n (iii) efforts to decrease staff turn-over; and\n (iv) other efforts related to the recruitment and retention of\nnon-supervisory staff or any worker with direct patient care\nresponsibility that will affect the quality of care at such facility.\n (c) The commissioner shall consider, in selecting eligible projects,\nthe likelihood that such project will provide needed resources to meet\nlegal commitments for increased labor costs, the financial need of the\nfacility, the existence of a shortage of qualified hospital workers in\nthe geographic area in which the facility is located, the existence of\nhigh employee turn-over at the facility and such other matters as the\ncommissioner deems appropriate.\n (d) In implementing rate adjustments authorized under this\nsubdivision, the commissioner shall establish, subject to the approval\nof the director of the budget, discrete rates of payment for non-public\ngeneral hospitals for payments under the medical assistance program\npursuant to titles eleven and eleven-D of article five of the social\nservices law for persons eligible for medical assistance and family\nhealth plus who are enrolled in health maintenance organizations.\n (e) Adjustments to Medicaid rates of payment made pursuant to this\nsection shall not be subject to subsequent adjustment or reconciliation.\n (f) Adjustments to Medicaid rates of payment made pursuant to this\nsection shall not, in aggregate, exceed fifteen million dollars for the\nperiod beginning April first, two thousand two and ending December\nthirty-first, two thousand two and, on an annualized basis, for each\nannual period thereafter beginning January first, two thousand three and\nending December thirty-first, two thousand six, and shall not, in\naggregate, exceed seven million five hundred thousand dollars for the\nperiod January first, two thousand seven through June thirtieth, two\nthousand seven.\n 32. Rural hospital supplemental rate adjustment. Notwithstanding any\ninconsistent provision of this section:\n (a) The commissioner shall adjust inpatient medical assistance rates\nof payment established pursuant to this section for rural hospitals as\ndefined in paragraph (c) of subdivision one of section twenty-eight\nhundred seven-w of this article in accordance with paragraph (b) of this\nsubdivision for purposes of supporting critically needed health care\nservices in rural areas in the following aggregate amounts for the\nfollowing periods:\n seven million dollars for the period May first, two thousand five\nthrough December thirty-first, two thousand five, seven million dollars\nfor the period January first, two thousand six through December\nthirty-first, two thousand six, seven million dollars for the period\nApril first, two thousand seven through December thirty-first, two\nthousand seven, seven million dollars for calendar year two thousand\neight, and six million four hundred seventeen thousand dollars for the\nperiod January first, two thousand nine through November thirtieth, two\nthousand nine.\n (b) Such increases shall be allocated proportionately based on each\nsuch rural hospital's total reported medicaid inpatient discharges as\nreported in the two thousand two institutional cost report to the total\nof such discharges for all rural hospitals. These amounts shall be\nincluded as a reimbursable cost add-on to medical assistance inpatient\nrates of payment established pursuant to this section for rural\nhospitals based on medical assistance utilization data in each\nfacility's annual cost report submitted two years prior to the rate\nyear. Such amounts shall be reconciled to reflect changes in medical\nassistance utilization between the year two years prior to the rate year\nand the rate year based upon data reported in each hospital's\ninstitutional cost report for the respective rate year.\n (c) Payment of the non-federal share of the medical assistance\npayments made pursuant to this subdivision shall be the responsibility\nof the state and shall not include a local share. Payments made pursuant\nto this subdivision may be added to rates of payment or made as\naggregate payments to eligible general hospitals.\n 33. Notwithstanding any provision of law which is inconsistent with or\ncontrary to the structure established by this subdivision and\nsubdivision two-a of section twenty-eight hundred seven of this article\nin order to transition from nineteen hundred eighty-one base year costs\nto two thousand five base year costs by no later than December\nthirty-first, two thousand twelve, and subject to the availability of\nfederal financial participation, medicaid per diem and per discharge\nrates of payment for general hospital inpatient services for discharges\nand days occurring on and after December first, two thousand eight,\nshall be computed in accordance with the following:\n (a)(i) for the period December first, two thousand eight through March\nthirty-first, two thousand nine, such rates shall be subject to a\nuniform transition adjustment which shall be based on each general\nhospital's proportional share of projected medicaid reimbursable\ninpatient operating costs and result in an aggregate reduction in such\nrates equal to fifty-one million five hundred thousand dollars, as\ndetermined by the commissioner, provided, however, that such transition\nadjustment shall not apply to rates computed pursuant to paragraph (1)\nof subdivision four of this section; and\n (ii) for the period April first, two thousand nine through March\nthirty-first, two thousand ten, such rates shall be revised pursuant to\na chapter of the laws of two thousand nine and as reflecting the\nfindings and recommendations of the commissioner as issued pursuant to\nthe provisions of paragraph (b) of this subdivision, provided, however,\nthat such revisions shall reflect an aggregate reduction in such rates\nof no less than one hundred fifty-four million five hundred thousand\ndollars, provided further, however, that, notwithstanding any contrary\nprovision of law, as determined by the commissioner, to the extent that\na chapter of the laws of two thousand nine is not enacted resulting in\nsuch an aggregate annual reduction of no less than one hundred\nfifty-four million five hundred thousand dollars in such rates, the\ncommissioner shall implement a uniform reduction of such rates in\naccordance with the methodology described in subparagraph (i) of this\nparagraph to the extent necessary, as determined by the commissioner, to\nachieve such an aggregate reduction in such rates for the state fiscal\nyear beginning April first, two thousand nine and each state fiscal year\nthereafter; and\n (iii) for the periods April first, two thousand ten through March\nthirty-first, two thousand twelve, rates shall reflect prior year rate\nreductions and such additional reductions as are required to establish\nrates based on two thousand five reported allowable Medicaid costs\npursuant to a chapter of the laws of two thousand ten.\n (b) In consultation with the chairs of the senate and assembly health\ncommittees, the commissioner shall, by no later than July first, two\nthousand eight, establish a technical advisory committee for the\npurposes of examining data and evaluating rate-setting methodological\nissues, including the impact on hospitals of different methodologies in\npreparation for the phased transition to the utilization of reported\nallowable two thousand five operating costs for the purpose of setting\ninpatient rates of payment for periods on and after April first, two\nthousand nine, which phased transition shall be authorized in accordance\nwith a chapter of the laws of two thousand nine. The technical advisory\ncommittee shall consist of three representatives of hospital\nassociations, two representatives of the health care industry and three\nrepresentatives of community providers and consumers as determined by\nthe commissioner. By no later than August first, two thousand eight, the\ncommissioner shall make available to the technical advisory committee\nupdated data and documentation relevant to the projected phased\ntransition to utilization of reported allowable two thousand five\noperating costs for rate-setting purposes. The issues to be examined by\nthe technical advisory committee shall include, but not be limited to,\nhospital re-basing, workforce recruitment and retention funding,\ngraduate medical education funding, peer group pricing, wage\nequalization factors, case mix and such other related elements of the\ngeneral hospital inpatient reimbursement system as deemed appropriate by\nthe commissioner. The technical advisory committee shall also examine\nthe scope and volume of hospital out-patient services. By no later than\nNovember first, two thousand eight the commissioner shall issue a report\nsetting forth findings and recommendations, including divergent views of\nmembers of the technical advisory committee members concerning the\nmatters examined by the technical advisory committee and the projected\nphased transition to utilization of two thousand five base year reported\nallowable operating costs for inpatient rates of payments on and after\nApril first, two thousand nine.\n (c) Paragraph (a) of this subdivision shall be effective the later of:\n(i) December first, two thousand eight; (ii) after the commissioner\nreceives final approval of federal financial participation in payments\nmade for beneficiaries eligible for medical assistance under title XIX\nof the federal social security act for the rate methodology established\npursuant to subdivision two-a of section twenty-eight hundred seven of\nthis article; or (iii) after the commissioner determines that the\ndepartment of health has the capability, for payments made pursuant to\nsubdivision two-a of section twenty-eight hundred seven of this article,\nto electronically receive and process claims and transmit payments with\nremittance statements. Prior to the commissioner making such a\ndetermination, the department shall provide training sessions on the\nrate methodology and billing requirements for services pursuant to\nsubdivision two-a of section twenty-eight hundred seven of this article\nand opportunity for hospitals to perform end-to-end testing on claims\nsubmission, processing and payment.\n 34. Enhanced safety net hospital program. (a) For the purposes of this\nsubdivision, "enhanced safety net hospital" shall mean a hospital which:\n (i) in any of the previous three calendar years, has met the following\ncriteria:\n (A) not less than fifty percent of the patients it treats receive\nmedicaid or are medically uninsured;\n (B) not less than forty percent of its inpatient discharges are\ncovered by medicaid;\n (C) twenty-five percent or less of its discharged patients are\ncommercially insured;\n (D) not less than three percent of the patients it provides services\nto are attributed to the care of uninsured patients; and\n (E) provides care to uninsured patients in its emergency room,\nhospital based clinics and community based clinics, including the\nprovision of important community services, such as dental care and\nprenatal care;\n (ii) is a public hospital operated by a county, municipality, public\nbenefit corporation or the state university of New York;\n (iii) is an acute children's hospital licensed by the department\nprimarily for the provision of pediatric and neonatal services for which\na discrete institutional cost report was filed for the past three\ncalendar years, and which has medicaid discharges in excess of fifty\npercent of its total discharges;\n (iv) is federally designated as a critical access hospital; or\n (v) is federally designated as a sole community hospital.\n (b) Within amounts appropriated, the commissioner shall adjust medical\nassistance rates to enhanced safety net hospitals for the purposes of\nsupporting critically needed health care services and to ensure the\ncontinued maintenance and operation of such hospitals.\n (c) Payments made pursuant to this subdivision may be added to rates\nof payment or made as aggregate payments to eligible general hospitals.\n 35. Notwithstanding any inconsistent provision of this section, or any\nother contrary provision of law and subject to the availability of\nfederal financial participation, rates of payment by governmental\nagencies for general hospital inpatient services with regard to\ndischarges occurring on and after December first, two thousand nine\nshall be in accordance with the following:\n (a) For periods on and after December first, two thousand nine the\noperating cost component of such rates of payments shall reflect the use\nof two thousand five operating costs as reported by each facility to the\ndepartment prior to July first, two thousand nine and as otherwise\ncomputed in accordance with the provisions of this subdivision;\n (b) The commissioner shall promulgate regulations, and may promulgate\nemergency regulations, establishing methodologies for the computation of\ngeneral hospital inpatient rates and such regulations shall include, but\nnot be limited to, the following:\n (i) The computation of a case-mix neutral statewide base price,\napplicable to each rate period, but excluding adjustments for graduate\nmedical education costs, high cost outlier costs, costs related to\npatient transfers, and other non-comparable costs as determined by the\ncommissioner, such statewide base prices may be periodically adjusted to\nreflect changes in provider coding patterns and case-mix and such other\nfactors as may be determined by the commissioner;\n (ii) Only those two thousand five base year costs which relate to the\ncost of services provided to Medicaid inpatients, as determined by the\napplicable ratio of costs to charges methodology, shall be utilized for\nrate-setting purposes, provided, however, that the commissioner may\nutilize updated Medicaid inpatient related base year costs and\nstatistics as necessary to adjust inpatient rates in accordance with\nclause (C) of subparagraph (x) of this paragraph;\n (iii) Such rates shall reflect the application of hospital specific\nwage equalization factors reflecting differences in wage rates;\n (iv) Such rates shall reflect the utilization of the all patient\nrefined (APR) case mix methodology, utilizing diagnostic related groups\nwith assigned weights that incorporate differing levels of severity of\npatient condition and the associated risk of mortality, and as may be\nperiodically updated by the commissioner;\n * (iv-a) Effective April first, two thousand twenty, such rates for\npublic general hospitals or public health systems, other than those\noperated by the state of New York or the state university of New York,\nlocated in a city having a population of one million or more shall\ninclude a rate add-on that reflects reimbursement for costs, to the\nextent permitted under 42 CFR 447.272(b)(1) and based on actual\nutilization of services. Such rate add-on shall be contingent upon\nfederal financial participation and approval, and subject to the terms\nof a binding memorandum of understanding executed between the department\nof health and the public general hospital or public health system\nreceiving the rate add-on. If payment of such rate add-on is projected\nto cause Medicaid disbursements for such period to exceed the projected\ndepartment of health Medicaid state funds in the enacted budget\nfinancial plan pursuant to subdivision three of section twenty-three of\nthe state finance law, as determined by the director of the budget, or\nmemorandum of understanding is not executed or is breached, the\ncommissioner, in consultation with the director of budget, may either\ncancel or reduce payment of such rate add-on to achieve compliance with\nthe enacted budget financial plan.\n * NB Repealed March 31, 2026\n (v) such regulations shall incorporate quality related measures,\nincluding, but not limited to, potentially preventable re-admissions\n(PPRs) and provide for rate adjustments or payment disallowances related\nto PPRs and other potentially preventable negative outcomes (PPNOs),\nwhich shall be calculated in accordance with methodologies as determined\nby the commissioner, provided, however, that such methodologies shall be\nbased on a comparison of the actual and risk adjusted expected number of\nPPRs and other PPNOs in a given hospital and with benchmarks established\nby the commissioner and provided further that such rate adjustments or\npayment disallowances shall result in an aggregate reduction in Medicaid\npayments of no less than thirty-five million dollars for the period July\nfirst, two thousand ten through March thirty-first, two thousand eleven\nand no less than fifty-one million dollars for annual periods beginning\nApril first, two thousand eleven through March thirty-first, two\nthousand fifteen, provided further that such aggregate reductions shall\nbe offset by Medicaid payment reductions occurring as a result of\ndecreased PPRs during the period July first, two thousand ten through\nMarch thirty-first, two thousand eleven and the period April first, two\nthousand eleven through March thirty-first, two thousand fifteen and as\na result of decreased PPNOs during the period April first, two thousand\neleven through March thirty-first, two thousand fifteen; and provided\nfurther that for the period July first, two thousand ten through March\nthirty-first, two thousand fifteen, such rate adjustments or payment\ndisallowances shall not apply to behavioral health PPRs; or to\nreadmissions that occur on or after fifteen days following an initial\nadmission. By no later than July first, two thousand eleven the\ncommissioner shall enter into consultations with representatives of the\nhealth care facilities subject to this section regarding potential\nprospective revisions to applicable methodologies and benchmarks set\nforth in regulations issued pursuant to this subparagraph;\n (vi) Such regulations shall address adjustments based on the costs of\nhigh cost outlier patients;\n (vii) Such rates shall continue to reflect trend factor adjustments as\notherwise provided in paragraph (c) of subdivision ten of this section;\n (viii) Such rates shall not include any adjustments pursuant to\nsubdivision nine of this section;\n (ix) Rates for non-public, not for profit general hospitals which have\nnot, as of the effective date of this subdivision, published an\nancillary charges schedule as provided in paragraph (j) of subdivision\none of section twenty-eight hundred three of this article shall have\ntheir inlier payments increased by an amount equal to the average of\ncost outlier payments for comparable hospitals or by a methodology that\nuses a statewide or regional ratio of cost to charges applied to\nstatewide or regional comparable charges for those cases determined by\nthe commissioner;\n (x) Such regulations shall provide for administrative rate appeals,\nbut only with regard to: (A) the correction of computational errors or\nomissions of data, including with regard to the hospital specific\ncomputations pertaining to graduate medical education, wage equalization\nfactor adjustments, (B) capital cost reimbursement, and, (C) changes to\nthe base year statistics and costs used to determine the direct and\nindirect graduate medical education components of the rates as a result\nof new teaching programs at new teaching hospitals and/or as a result of\nresidents displaced and transferred as a result of teaching hospital\nclosures;\n (xi) Rates for teaching general hospitals shall include reimbursement\nfor direct and indirect graduate medical education as defined and\ncalculated pursuant to such regulations. In addition, such regulations\nshall specify the reports and information required by the commissioner\nto assess the cost, quality and health system needs for medical\neducation provided;\n (xii) Such regulations may incorporate quality related measures\npertaining to the inappropriate use of certain medical procedures,\nincluding, but not limited to, cesarean deliveries, coronary artery\nbypass grafts and percutaneous coronary interventions;\n (xiii) Such regulations may impose a fee on general hospital\nsufficient to cover the costs of auditing the institutional cost reports\nsubmitted by general hospitals, which shall be deposited in the Health\nCare Reform Act (HCRA) resources account.\n (c) 1. The base period reported costs and statistics used for\nrate-setting for operating cost components, including the weights\nassigned to diagnostic related groups, shall be updated no less\nfrequently than every four years and the new base period shall be no\nmore than four years prior to the first applicable rate period that\nutilizes such new base period provided, however, that the first updated\nbase period shall begin on or after April first, two thousand fourteen,\nbut no later than July first, two thousand fourteen; and further\nprovided that the updated base period subsequent to July first, two\nthousand eighteen shall begin on or after January first, two thousand\ntwenty-four.\n 2. In the event of a declaration of a federal public health emergency,\nas defined in 42 USC § 247d, or a state disaster emergency, as defined\nin section twenty of the executive law, that severely impacts general\nhospitals within the state, the department may exclude, for purposes of\nthis paragraph, the audited reported costs and statistics during such\ndeclaration.\n (d) Capital cost reimbursement for general hospitals otherwise subject\nto the provisions of this subdivision shall remain subject to the\nprovisions of subdivision eight of this section.\n (e) The provisions of this subdivision shall not apply to those\ngeneral hospitals or distinct units of general hospitals whose inpatient\nreimbursement does not, as of November thirtieth, two thousand nine,\nreflect case based payment per diagnosis-related group or whose\ninpatient reimbursement is, for periods on and after July first, two\nthousand nine, governed by the provisions of paragraphs (e-1) or (e-2)\nof subdivision four of this section.\n (f) Notwithstanding section one hundred twelve or one hundred\nsixty-three of the state finance law or any other law, rule or\nregulation to the contrary, the commissioner may contract with a vendor\nfor consideration to develop the specifications for the\ndiagnosis-related groups methodology as provided for in regulations\npromulgated pursuant to paragraph (b) of this subdivision if the\ncommissioner certifies to the comptroller that such contract is in the\nbest interest of the health of the people of the state. Notwithstanding\nthat such specifications shall be available pursuant to article six of\nthe public officers law, such contract may provide that the\nspecifications for such adjusted or additional diagnosis-related groups\nprovided by the vendor shall be subject to copyright protection pursuant\nto federal copyright law.\n (g) Notwithstanding any inconsistent provision of this subdivision or\nany other contrary provision of law, the commissioner may, for rate\nperiods on and after December first, two thousand nine and subject to\nthe availability of federal financial participation, make additional\nadjustments to the inpatient rates of payment of eligible general\nhospitals, to facilitate improvements in hospital operations and\nfinances, in accordance with the following:\n (i) General hospitals eligible for distributions pursuant to this\nparagraph shall be those non public hospitals with Medicaid discharges\nequal to or greater than seventeen and one-half percent for two thousand\nseven.\n (ii) Funds distributed pursuant to this paragraph shall be allocated\nto eligible hospitals pursuant to a formula such that, to the extent of\nfunds available, no hospital's reduction in Medicaid inpatient revenue\nas a result of the application of the provisions of paragraphs (a) and\n(b) of this subdivision exceeds a percentage reduction as determined by\nthe commissioner.\n (iii) Funding pursuant to this paragraph shall be available for the\nfollowing periods and in the following amounts:\n (A) for the period December first, two thousand nine through March\nthirty-first, two thousand ten, up to thirty-three million five hundred\nthousand dollars;\n (B) for the period April first, two thousand ten through March\nthirty-first, two thousand eleven, up to seventy-five million dollars,\nprovided, however, that, notwithstanding subparagraph (ii) of this\nparagraph, no facility shall receive an amount pursuant to this clause\nthat is less than such facility received pursuant to clause (A) of this\nsubparagraph;\n (C) for the period April first, two thousand eleven through March\nthirty-first, two thousand twelve, up to fifty million dollars;\n (D) for the period April first, two thousand twelve through March\nthirty-first, two thousand thirteen, up to twenty-five million dollars.\n (iv) Payments made pursuant to this paragraph shall be added to rates\nof payments and not be subject to retroactive adjustment or\nreconciliation.\n (v) Each hospital receiving funds pursuant to this paragraph shall, as\na condition for eligibility for such funds, adopt a resolution of the\nboard of directors of each such hospital setting forth its current\nfinancial condition and a plan for reforming and improving such\nfinancial condition, including ongoing board oversight, and shall, after\ntwo years, issue a report as adopted by each such board of directors\nsetting forth what progress has been achieved regarding such\nimprovement, provided, however, if such report is not issued and adopted\nby each such board of directors, or if such report fails to set forth\nadequate progress, as determined by the commissioner, the commissioner\nmay deem such facility ineligible for further distributions pursuant to\nthis paragraph and may redistribute such further distributions to other\neligible facilities in accordance with the provisions of this paragraph.\nThe commissioner shall be provided with copies of all such resolutions\nand reports.\n (h) Inpatient rate adjustments made pursuant to paragraphs (a) through\n(f) of this subdivision after application of adjustments authorized\npursuant to subdivision thirty-three of this section shall result in a\nnet statewide decrease in aggregate Medicaid payments of no less than\nseventy-five million dollars for the period December first, two thousand\nnine through March thirty-first, two thousand ten, and no less than two\nhundred twenty-five million dollars for the period April first, two\nthousand ten through March thirty-first, two thousand eleven and each\nstate fiscal year thereafter, provided, however, that such reductions\nshall be in addition to the reductions required pursuant to subparagraph\n(ii) of paragraph (a) of subdivision thirty-three of this section.\n (i) (i) Notwithstanding any inconsistent provision of this subdivision\nor any other contrary provision of law and subject to the availability\nof federal financial participation, for each state fiscal year from July\nfirst, two thousand ten through December thirty-first, two thousand\ntwenty-four; and for the calendar year January first, two thousand\ntwenty-five through December thirty-first, two thousand twenty-five, the\ncommissioner shall make additional inpatient hospital payments up to the\naggregate upper payment limit for inpatient hospital services after all\nother medical assistance payments, but not to exceed two hundred\nthirty-five million five hundred thousand dollars for the period July\nfirst, two thousand ten through March thirty-first, two thousand eleven,\nthree hundred fourteen million dollars for each state fiscal year\nbeginning April first, two thousand eleven, through March thirty-first,\ntwo thousand thirteen, and no less than three hundred thirty-nine\nmillion dollars for each state fiscal year until December thirty-first,\ntwo thousand twenty-four; and then from calendar year January first, two\nthousand twenty-five through December thirty-first, two thousand\ntwenty-five, to general hospitals, other than major public general\nhospitals, providing emergency room services and including safety net\nhospitals, which shall, for the purpose of this paragraph, be defined as\nhaving either: a Medicaid share of total inpatient hospital discharges\nof at least thirty-five percent, including both fee-for-service and\nmanaged care discharges for acute and exempt services; or a Medicaid\nshare of total discharges of at least thirty percent, including both\nfee-for-service and managed care discharges for acute and exempt\nservices, and also providing obstetrical services. Eligibility to\nreceive such additional payments shall be based on data from the period\ntwo years prior to the rate year, as reported on the institutional cost\nreport submitted to the department as of October first of the prior rate\nyear. Such payments shall be made as medical assistance payments for\nfee-for-service inpatient hospital services pursuant to title eleven of\narticle five of the social services law for patients eligible for\nfederal financial participation under title XIX of the federal social\nsecurity act and in accordance with the following:\n (A) Thirty percent of such payments shall be allocated to safety net\nhospitals based on each eligible hospital's proportionate share of all\neligible safety net hospitals' Medicaid discharges for inpatient\nhospital services, including both Medicaid fee-for-service and managed\ncare discharges for acute and exempt services, based on data from the\nperiod two years prior to the rate year, as reported on the\ninstitutional cost report submitted to the department as of October\nfirst of the prior rate year;\n (B) Seventy percent of such payments shall be allocated to eligible\ngeneral hospitals based on each such hospital's proportionate share of\nall eligible hospitals' Medicaid discharges for inpatient hospital\nservices, including both Medicaid fee-for-service and managed care\ndischarges for acute and exempt services, based on data from the period\ntwo years prior to the rate year, as reported on the institutional cost\nreport submitted to the department as of October first of the prior rate\nyear;\n (C) No eligible general hospital's annual payment amount pursuant to\nthis paragraph shall exceed the lower of the sum of the annual amounts\ndue that hospital pursuant to section twenty-eight hundred seven-k and\nsection twenty-eight hundred seven-w of this article; or the hospital's\nfacility specific projected disproportionate share hospital payment\nceiling established pursuant to federal law, provided, however, that\npayment amounts to eligible hospitals pursuant to clauses (A) and (B) of\nthis subparagraph in excess of the lower of such sum or payment ceiling\nshall be reallocated to eligible hospitals that do not have excess\npayment amounts. Such reallocations shall be proportional to each such\nhospital's aggregate payment amount pursuant to clauses (A) and (B) of\nthis subparagraph to the total of all payment amounts for such eligible\nhospitals;\n (D) Subject to the availability of federal financial participation,\nthe payment methodology set forth in this subparagraph may be further\nrevised by the commissioner on an annual basis pursuant to regulations\nissued pursuant to this subdivision for periods on and after April\nfirst, two thousand eleven; and\n (E) Subject to the availability of federal financial participation and\nin conformance with all applicable federal statutes and regulations,\nsuch payments shall be made as upper payment limit payments and,\nfurther, such payments shall be made as aggregate monthly payments to\neligible general hospitals.\n (ii) In the event that the commissioner determines that federal\nfinancial participation will not be available for aggregate payments\nmade in accordance with clause (E) of subparagraph (i) of this\nparagraph, payments pursuant to this paragraph shall be included as rate\nadd-ons to medical assistance inpatient rates of payment established\npursuant to this subdivision based on data from the period two years\nprior to the rate year, as reported on the institutional cost report\nsubmitted to the department as of October first of the prior rate year,\nprovided, however, that if such payments are made as rate add-ons, the\ncommissioner shall establish a procedure to reconcile payment amounts to\nreflect changes in medical assistance utilization from the period two\nyears prior to the rate year and the actual rate year based on data as\nreported on each hospital's annual institutional cost report for the\nrespective rate year, as submitted to the department as of October first\nof the year following the rate year.\n (iii) Notwithstanding any other law, rule or regulation to the\ncontrary, projections of each general hospital's disproportionate share\nlimitations as computed by the commissioner pursuant to applicable\nregulations shall be adjusted to reflect any additional revenue received\nor anticipated to be received by each such general hospital pursuant to\nthis paragraph.\n (j) Notwithstanding any contrary provision of law, with regard to\ninpatient and outpatient Medicaid rates of payment for general hospital\nservices, the commissioner may make such adjustments to such rates and\nto the methodology for computing such rates as is necessary to achieve\nno aggregate, net increase or decrease in overall Medicaid expenditures\nrelated to the implementation of the International Classification of\nDiseases Version 10 (ICD-10) coding system on or about October first,\ntwo thousand fourteen, as compared to such aggregate expenditures from\nthe twelve-month period immediately prior to such implementation.\n