§ 2808-C — Reimbursement of general hospital inpatient services

* § 2808-c. Reimbursement of general hospital inpatient services. 1.\nGeneral hospital rates and inpatient revenue cap. In determining\npayments from all sources for general hospital inpatient services for\nthe rate year commencing on January first, nineteen hundred eighty-three\nand ending on December thirty-first, nineteen hundred eighty-three, the\nallowances set forth in subdivision four of this section shall be\nincluded. Effective January first, nineteen hundred eighty-four, the\ncommissioner shall establish, in accordance with regulations adopted by\nthe council and approved by the commissioner, the maximum amount of\ninpatient revenue a general hospital will be authorized to receive for\nservices during a designated period not to exceed twelve months from all\npayors for the provision of inpatient services. This maximum amount will\nbe known as the inpatient revenue cap and shall be established for each\ngeneral hospital possessing a valid operating certificate issued\npursuant to section twenty-eight hundred five of this article. The\ninpatient revenue cap shall be established by projecting to anticipated\nexpense levels the reimbursable historical inpatient expenses and\nfinancial needs as defined in subdivision four of this section, of a\ngeneral hospital approved for financing through inpatient service\nrevenues. Expenses included in the inpatient revenue cap are those\ndetermined to be allowable and reasonable in the provision of authorized\ninpatient services.\n The inpatient revenue caps for the rate years nineteen hundred\neighty-four and nineteen hundred eighty-five shall be determined by\ncomputing an imputed revenue cap for the period beginning January first,\nnineteen hundred eighty-three and ending December thirty-first, nineteen\nhundred eighty-three, which has been based on the cost analysis pursuant\nto paragraphs (a) and (b) of subdivision two of this section and\nadjusted each year to reflect the trend factors developed and applied in\naccordance with paragraph (e) of subdivision two of this section,\ncapital related expenses in accordance with paragraph (c) of subdivision\ntwo of this section, redetermination of additional financial needs or\nrevenue requirements in accordance with paragraph (d) of subdivision two\nof this section, adjustments made in accordance with subdivision five of\nthis section and adjustments to reflect audit findings.\n Hospital inpatient services to patients who are not beneficiaries or\nsubscribers of corporations organized and operating in accordance with\narticle forty-three of the insurance law, subchapter XVIII of the\nfederal social security act (medicare), eligible for payments made by\nstate governmental agencies, enrolled in organizations operating in\naccordance with the provisions of article forty-four of this chapter, or\nenrolled in a self-insured and self administered group covered under the\nprovisions of subdivision six of this section shall be at charges\nestablished by the hospital in accordance with the provisions of\nsubdivision six of this section with the exception that for the period\nfrom January first, nineteen hundred eighty-three through December\nthirty-first, nineteen hundred eighty-three rates of payment pursuant to\nthe provisions of the workers' compensation law, the volunteer firemen's\nbenefit law and the comprehensive automobile insurance reparations act\nshall be established at one hundred twelve percent of trended average\nper diem reimbursable cost including allowances as specified in\nsubdivision four of this section.\n Amounts prospectively established for payments for general hospital\ninpatient services provided in rate years subsequent to nineteen hundred\neighty-three made on behalf of subscribers of corporations organized and\noperating in accordance with article forty-three of the insurance law,\nbeneficiaries of subchapter XVIII of the federal social security act\n(medicare), eligibles for payments made by state governmental agencies\nand those enrolled in organizations operating in accordance with the\nprovisions of article forty-four of this chapter shall be based on that\nportion of the prospectively established inpatient revenue cap that is\nrelated to the utilization of inpatient services by the above programs,\nprovided, however, that that share of the cost of bad debt and charity\ncare to be paid under subchapter XVIII of the federal social security\nact shall be based upon the ratio of subchapter XVIII inpatient charges\nto total inpatient and outpatient charges, except for hospitals using an\nall inclusive rate, in which case the subchapter XVIII share shall be\nbased upon the ratio of subchapter XVIII inpatient cost to total\ninpatient and outpatient hospital costs. After reducing the dollar\namount liability of all payors by subtracting the dollar amount\nliability of the subchapter XVIII payor, all other payors shall pay the\nremaining liability in proportion to the ratio of their hospital\ninpatient charges to total hospital inpatient charges less the\nsubchapter XVIII inpatient charges. These proportions shall be computed\non the basis of costs for hospitals using an all inclusive rate.\n Any adjustments in the overall revenue cap in accordance with\nsubdivision five of this section shall be reflected in an appropriate\nadjustment to this portion of the revenue cap and payment levels by\nthese programs. The year end adjustment as provided for in paragraph (d)\nof subdivision five of this section which is based on data contained in\nthe financial and statistical report filed for the effective year of the\nrevenue cap may be further adjusted within the revenue cap when actual\ndata indicates a change in payor utilization and cost apportionment\nbetween and among the above specified programs and all other payors.\nAfter such adjustments the portion of the revenue cap initially\nestablished, or as adjusted, that is related to the actual utilization\nof covered inpatient services of the above programs shall constitute\nguaranteed revenue to the general hospital. Nothing in this section\nshall prohibit the negotiation by health maintenance organizations\noperating in accordance with the provisions of article forty-three of\nthe insurance law or article forty-four of this chapter, of agreements\nwith general hospitals for rates of payment other than those provided\nherein. Such contracts shall require approval by the commissioner and\nmust include provision for special benefit packages or arrangements for\nproviding inpatient services to encourage patient management behavior\nthat will minimize the length of patient stay, such as special admission\narrangements, bed leasing or other inpatient capitation arrangements.\n 2. The inpatient revenue cap established shall include:\n (a) allowable historical inpatient operational expenses which are\ncomparable in nature and can reasonably be expected to be comparable in\namount to other general hospitals with similar cost influencing\ncharacteristics (adjusted for comparison purposes for differences in\nwage and fringe benefit levels) and which are equal to or less than\nreasonable reimbursable operational cost ceilings developed from the\naverage allowable cost per unadjusted (except for newborn days)\nappropriate unit of service of all hospitals in the comparison group.\nThe comparison group shall consist of general hospitals sharing similar\ncost influencing characteristics and classified in accordance with\nvariables defined in regulation;\n (b) allowable historical inpatient operational expenses, other than\ncapital related expenses as defined in subdivision three of this\nsection, and other than costs included in paragraph (a) hereof, which\nmay be subject to reasonable reimbursable cost standards adopted by the\ncouncil and approved by the commissioner;\n (c) capital related expenses determined in accordance with subdivision\nthree of this section;\n (d) additional financial needs or revenue requirements in accordance\nwith subdivision four of this section;\n (e) projection of reimbursable expenses identified through the\napplication of paragraphs (a) and (b) of this subdivision by a trend\nfactor established by the panel of economists as set forth in\nsubdivision eight of this section; and\n (f) an amount to reflect anticipated additional revenues resulting\nfrom the implementation of the gross charge determination formula\nprovided by the commissioner in accordance with subdivision six of this\nsection.\n The establishment of separate rates of payment for patients who\nrequire different levels or types of care shall require a reallocation\nof costs to insure that the total hospital inpatient revenue cap (or in\nthe case of the period January one, nineteen hundred eighty-three to\nDecember thirty-one, nineteen hundred eighty-three the imputed revenue\ncap), which shall include the revenue for different levels or types of\ncare, established under this subdivision remains unchanged except that\nadjustments may be made based on the cost analysis pursuant to\nparagraphs (a) and (b) of this subdivision.\n Effective January first, nineteen hundred eighty-three through\nDecember thirty-first, nineteen hundred eighty-five, the cost\nlimitations, utilization standards and limits on disallowances shall be\ncomputed in accordance with the methodology approved by the federal\ngovernment to permit the determination of all payments for inpatient\nservices provided by general hospitals to be made in accordance with the\namendments made to sections twenty-eight hundred seven and twenty-eight\nhundred seven-a of this chapter by sections three and four of a chapter\nof the laws of nineteen hundred eighty-two. Specialty hospitals shall\nnot be included in any computations relating to disallowances,\nlimitations or ceilings pursuant to this paragraph but shall receive\nreimbursement in accordance with rules and regulations adopted by the\nstate hospital review and planning council and approved by the\ncommissioner. In order to provide for a transition period for the\napplication of reimbursable cost limitations to payments authorized\nunder subchapter XVIII of the federal social security act, a reasonable\nphase-in over a three year period is to be implemented.\n 3. Capital related inpatient expenses. Effective for the year\nbeginning January first, nineteen hundred eighty-four and thereafter,\ncapital related inpatient expenses including but not limited to\ndepreciation, rentals and interest on capital debt (or for hospitals\nfinanced pursuant to article twenty-eight-B of this chapter, such\nexpenses, including amortization in lieu of depreciation, as determined\npursuant to the reimbursement regulations promulgated pursuant to that\narticle and article twenty-eight of this chapter, in the case of\npayments on behalf of other than beneficiaries under subchapter XVIII of\nthe federal social security act), shall be included in the revenue cap\non a budget basis, and subsequently reconciled to actual expenses\nthrough appropriate audit procedures. General hospitals shall submit to\nthe commissioner, at least one hundred twenty days prior to the\ncommencement of each revenue cap year, a schedule of capital related\ninpatient expenses for the forthcoming year. Any capital related\ninpatient expense generated by a capital expenditure which requires or\nrequired approval pursuant to this article, must have received such\napproval for the capital related expense to be included in the revenue\ncap. The submitted budget may include the capital related inpatient\nexpenses of all existing capital assets as well as estimates of capital\nrelated inpatient expenses for capital assets to be acquired or placed\nin use prior to the commencement of the revenue cap year. Any capital\nrelated expense generated by a capital asset acquired or placed in use\nduring a revenue cap year, provided all required approvals pursuant to\nthis article have been obtained, shall be carried forward to the\nsubsequent revenue cap year. In instances where such approvals have\nbeen obtained, the budget may include estimates for capital related\ninpatient expenses. The basis for determining capital related inpatient\nexpenses shall be the lesser of actual cost or the final amount\nspecifically approved for the construction of the capital asset. The\ncouncil shall adopt, with the approval of the commissioner, regulations\nto:\n (a) identify by type the eligible capital related inpatient expenses;\n (b) 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 (c) provide authorization to adjust the inpatient revenue cap by\nadvancing payment of depreciation as needed, in instances of capital\ndebt related financial distress of a voluntary, non-profit general\nhospital; and\n (d) provide a methodology for the reimbursement treatment of sales.\n 4. Allowances. Inpatient revenue caps established, or rates for\ngeneral hospital inpatient services, shall include for the three years\ncommencing on January first, nineteen hundred eighty-three, the\nallowances specified below in paragraphs (a), (b), (c), (d) and (e) of\nthis subdivision. For the period from January first, nineteen hundred\neighty-three through December thirty-first, nineteen hundred\neighty-three the allowances shall be computed on the basis of the\ngeneral hospital's reimbursable inpatient costs after application of the\ntrend factor. Any additional allowances for the periods January first,\nnineteen hundred eighty-four through December thirty-first, nineteen\nhundred eighty-four and from January first, nineteen hundred eighty-five\nthrough December thirty-first, nineteen hundred eighty-five shall be\nincluded in the certified inpatient revenue caps after application of\nthe trend factor and such adjustments as may be appropriate pursuant to\nsubdivision two of this section. For the purposes of this subdivision\nand subdivision nine of this section, major public general hospitals are\ndefined as all state operated general hospitals, all general hospitals\noperated by the New York city health and hospitals corporation as\nestablished 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 (a) For the period from January first, nineteen hundred eighty-three\nthrough December thirty-first, nineteen hundred eighty-five an allowance\nof one percent of the general hospital's reimbursable inpatient costs to\nprovide funds to be used at the discretion of hospital governing boards.\n (b) For public general hospitals an additional allowance of up to one\npercent for the second year and up to a further additional one percent\nin the third year of the three year period commencing January first,\nnineteen hundred eighty-three subject to the provisions of paragraph (d)\nof this subdivision.\n (c) For voluntary non-profit and private proprietary general hospitals\nan additional allowance of up to one percent for the second year of the\nthree year period commencing January first, nineteen hundred\neighty-three and continued for the third year of the three year period\nsubject to the provisions of paragraph (d) of this subdivision.\n (d) The additional allowances in paragraphs (b) and (c) of this\nsubdivision shall be available to general hospitals receiving approval\nfrom the commissioner as to the acceptable use of the allowance which\nuses shall include but be not limited to retirement of short term\nnon-capital debt, meeting costs related to bad debts and charity care\nnot met by the regional pool distributions as specified in subdivision\nnine of this section, offsetting reductions in anticipated revenue\nresulting from charge limits substantially below those applicable to the\nparticular hospital immediately prior to the enactment of subdivision\nsix of this section and needed improvement of current ratio. Allowances\nauthorized in paragraphs (b) and (c) of this subdivision are not to be\nconsidered as a substitute for operational funds that are otherwise\nreimbursable or subject to appeal.\n (e) A percentage to reflect the needs for the financing of losses\nresulting from bad debts and the costs of charity care of general\nhospitals within article forty-three insurance law regions, or such\nother regions as adopted pursuant to subdivision nine of this section,\nand within a statewide determination of financial resources to be\ncommitted for this purpose. Regional needs shall be equal to the total\nof inpatient losses from bad debts reduced to cost and the inpatient\ncosts of charity care increased by any deficit of general hospitals from\nproviding ambulatory services, excluding any portion of such deficit\nresulting from governmental payments below average visit costs and\nrevenues and expenses related to the provision of referred ambulatory\nservices. The regional amount to be included in rates approved for the\nyear commencing January first, nineteen hundred eighty-three and in the\ninpatient revenue caps established in subsequent years for each general\nhospital in the region will be equal to the result of the application of\nthe percentage of statewide need for voluntary non-profit, private\nproprietary and public general hospitals, other than major public\ngeneral hospitals that can be met from available resources computed\nwithout consideration of inpatient uncollectible amounts to the regional\nneed for voluntary non-profit, private proprietary and public general\nhospitals, other than major public general hospitals expressed in\ndollars plus the dollar amount resulting from the application of the\nratio of major public general hospitals inpatient reimbursable costs\nwithin the region to total statewide general inpatient reimbursable cost\n(as computed on the basis of nineteen hundred eighty-one financial and\nstatistical reports) to the statewide resources committed for this\npurpose computed without consideration of inpatient uncollectible\namounts and the ratio of these total dollars to the total regional\nreimbursable inpatient cost after application of the trend factor. For\nthe three year period commencing on January first, nineteen hundred\neighty-three and ending on December thirty-first, nineteen hundred\neighty-five, the percentage allowances for this purpose shall not be\nless than an average three percent of the total statewide general\nhospital reimbursable inpatient cost after application of the trend\nfactor. The allocation of resources made available under this paragraph,\nas specified in subdivision nine of this section, may be changed only as\nfollows: An annual review shall be conducted pursuant to rules and\nregulations adopted by the council and approved by the commissioner with\nrespect to bad debt and charity care need within each article\nforty-three insurance law region or such other regions as are adopted\npursuant to subdivision nine of this section. If within such a region\nthere is a definitive finding as a result of such review that there has\nbeen a change in the proportional amounts of bad debts and charity care\nprovided by (i) major public general hospitals and (ii) voluntary\nnon-profit, private proprietary and public general hospitals, other than\nmajor public general hospitals, the allocation of resources made\navailable under this paragraph shall be adjusted pursuant to the rules\nand regulations adopted pursuant to this paragraph so as to reflect this\nchange.\n (f) An additional allowance of one-fourth of one percent shall be\nincluded in each rate or revenue cap established for each voluntary\nnon-profit and private proprietary general hospital to be returned to a\nregional pool and distributed in accordance with paragraph (c) of\nsubdivision nine of this section.\n (g) An additional allowance of one-third of one percent shall be\nincluded in each rate or revenue cap established for voluntary\nnon-profit and private proprietary general hospitals to be returned to a\nregional pool and distributed in accordance with paragraph (d) of\nsubdivision nine of this section.\n 5. Adjustments. (a) The commissioner shall, on his own initiative, or\non the basis of a request from a general hospital, adjust an established\ninpatient revenue cap 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 basis of the inpatient revenue cap established; and\n (ii) the correction of errors or omissions of data or in computations.\n (b) General hospitals may request and the commissioner shall consider\nan adjustment to an established revenue cap to reflect increased\nexpenses or reconsideration of disallowed expenses based on:\n (i) justification of all or a portion of expenses not included in the\ninpatient revenue cap resulting from the cost analysis process contained\nin subparagraph (i) of paragraph (a) of this subdivision;\n (ii) additional operational expenses related to construction or\nservice changes. These changes if applicable must be approved under\nsection twenty-eight hundred two of this article;\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 or federal requirements;\n (iv) additional expenses to permit a more efficient and economical\nmethod of delivering a service; and\n (v) increased costs for compensation of employees.\n (c) In determining the reasonableness or justification of an\nadjustment to an established inpatient revenue cap based on a request\nrelated to subparagraph (v) of paragraph (b) of this subdivision the\ncommissioner 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) The commissioner shall adjust a prospectively established\ninpatient revenue cap on the basis of subsequent data that demonstrates\na significant cost influencing change in patient mix or volume of\nservice. Such adjustment will be made in conformity with regulations\nadopted by the council as approved by the commissioner.\n (e) 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 (f) 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 revenue cap 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 (g) The commissioner shall consider an adjustment to a hospital's\nreported base year costs in instances where it is demonstrated that\nrecurring costs resulting from multi-year commitments beginning late in\na base year should be calculated on an annual basis in establishing a\nrevenue cap in order to avoid a significant inequity. In making such an\nadjustment the commissioner shall consider the offset of non-recurring\nbase year costs.\n 6. Hospital charge schedules. Effective for the year beginning January\nfirst, nineteen hundred eighty-four and thereafter, each general\nhospital shall establish a charge schedule for available and authorized\nservices in accordance with a gross charge determination formula\nprovided by the commissioner which shall:\n (a) Establish gross charges sufficient to generate the inpatient\nrevenue authorized by the revenue cap; and\n (b) Establish gross charges such that (i) the payment rate to be made\non behalf of subscribers of corporations organized and operating in\naccordance with article forty-three of the insurance law, adjusted for\nuncovered services, shall be at a specified discount from the gross\ncharge rate billed to or on behalf of charge paying patients; (ii)\npermit the continuation of negotiated payment rate determination systems\nbetween self-insured and self-administered groups and hospitals which\nwere in effect on May first, nineteen hundred eighty-two; and (iii) for\ngeneral hospitals subject to the provisions of paragraph (a) or (b) of\nsubdivision twelve of this section, the costs (including all allowances\nspecified in subdivision four of this section) of services provided to\ncharge paying patients shall be at a specified discount from the gross\ncharge rate billed to or on behalf of charge paying patients.\n During the period January first, nineteen hundred eighty-four through\nDecember thirty-first, nineteen hundred eighty-five, the discount\nreferred to in subparagraphs (i) and (iii) of paragraph (b) of this\nsubdivision shall not exceed twelve percent for those hospitals which\nhad a discount of less than twelve percent during the previous year,\nshall be no greater than the discount in effect during the previous year\nfor those hospitals whose previous year's discount was between twelve\nand fifteen percent and shall not exceed fifteen percent for all others.\nSelf-insured and self-administered negotiated systems as described in\nsubparagraph (ii) of paragraph (b) of this subdivision may remain in\neffect for the period commencing January first, nineteen hundred\neighty-three and ending on December thirty-first, nineteen hundred\neighty-five and shall be incorporated in the formula methodology\nprovided by the commissioner.\n The commissioner shall effectuate direct repayment or adjustment of a\nsubsequent inpatient revenue cap to reflect actual inpatient revenues\nreceived for inpatient services provided by a general hospital that\nexceed the inpatient revenue cap initially established or adjusted in\naccordance with provisions of this section. Revenue received in excess\nof the revenue cap established as the result of the provisions of\nsubchapter XVIII of the federal social security act (medicare) phase-in\npolicies or from charges authorized under subdivision seven of this\nsection shall not be included in the adjustment.\n 7. 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.\nRevenues received from such financing or working capital charges shall\nnot be included in a revenue cap established or considered as a cost\noffset. Financing or working capital charges shall not be applied to\nhospital billings to third party payors participating in a periodic\ninterim payment system.\n 8. Trend factor. (a) The commissioner in accordance with the method-\nology developed by the consultants 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\ncharge levels and reimbursement rates in effect until December\nthirty-first, nineteen hundred eighty-three and the appropriate portion\nof the inpatient revenue cap in subsequent years. The methodology for\ndeveloping the trend factor shall include the appropriate external price\nindicators and shall also include the data from major collective\nbargaining agreements as reported quarterly by the federal department of\nlabor, bureau of labor statistics, for non-supervisory employees.\n (b) The methodology shall be developed by four independent consultants\nwith expertise in health economics appointed by the commissioner. Not\nlater than September first of each year, the consultants shall provide\nto the commissioner and the council, the methodology to be used to\ndetermine the trend factors for the subsequent twelve month period\ncommencing January first. The commissioner shall monitor the actual\nprice movement during this twelve month period of the external price\nindicators used in the methodology, shall report the results of the\nmonitoring to the consultants, and shall implement, semi-annually, the\nrecommendations of the consultants for adjustments to the trend factor\nprovided, however, that adjustments, except for the final adjustment in\nthe trend factor shall not be required unless such adjustment would\nresult in the weighted average of the operating cost component of the\nrates or charge limits differing by more than one-half of one percent\nfrom that which was previously determined.\n 9. Bad debt, charity care and transition pool. Regional pools\nconsisting of funds made available within each region through the\nallowances specified in paragraphs (e), (f) and (g) of subdivision four\nof this section shall be created. The regions are established as the\narticle forty-three insurance law plan regions, with the exception that\nthe southern sixteen counties will be divided into three regions for the\npurposes of this subdivision and subdivision four of this section with\nseparate regions consisting of Richmond, Manhattan, Bronx, Queens and\nKings counties; Nassau and Suffolk counties; and Delaware, Columbia,\nUlster, Sullivan, Orange, Dutchess, Putnam, Rockland and Westchester\ncounties. The council with the approval of the commissioner may combine\nregions, with the exception of the above specified regions for the\nsouthern sixteen counties, upon application of the article forty-three\ninsurance law plans involved and a demonstration that significant\ninequities would not occur. The commissioner is authorized to contract\nwith the article forty-three insurance law plans to receive funds for\nthe pools and distribute such funds. In the event contracts with the\narticle forty-three insurance law plans are effectuated, the\ncommissioner shall conduct annual audits of the receipt and distribution\nof pooled funds and issue an annual report on the receipt and\ndistribution of the pooled funds. In order for general hospitals to\nparticipate in the distribution of funds from the pool the general\nhospital must implement collection policies and procedures approved by\nthe commissioner. Funds available in each regional pool shall be\ndistributed or retained in the following sequence:\n (a) Each eligible major public general hospital as defined in\nsubdivision four of this section shall receive from its regional pool\ncreated by the allowance in paragraph (e) of subdivision four of this\nsection a portion of its bad debt and charity care need equal to the\nresult of the application of its percentage of statewide inpatient\nreimbursable costs developed on the basis of nineteen hundred eighty-one\nfinancial and statistical reports to the total of all regional pools.\n (b) Funds remaining in the regional pool created by the allowance in\nparagraph (e) of subdivision four of this section, after distribution in\naccordance with paragraph (a) of this subdivision, shall be distributed\nproportionately to voluntary non-profit, private proprietary and public\ngeneral hospitals, other than major public general hospitals on the\nbasis of need within the region as determined in accordance with\nparagraph (e) of subdivision four, with the exception that any funds in\na regional pool that were allocated to major public general hospitals\nand not distributed shall be distributed to each major third party payor\non the basis of its percentage of major third party payor liability for\nbad debt and charity care as described in subdivision one of this\nsection, in the specific major public general hospital to which\ndistribution was not made.\n (c) Funds in regional pools created by the allowance in paragraph (f)\nof subdivision four of this section shall not be available for immediate\ndistribution from the regional pool but shall be retained in the pool\nfor distribution by the commissioner in accordance with rules adopted by\nthe state hospital review and planning council to assist in offsetting\nlosses from bad debts and the costs of charity care of voluntary\nnon-profit and private proprietary general hospitals experiencing severe\nfiscal hardship because of insufficient resources to finance such losses\nor costs.\n (d) Funds in regional pools created by the allowance in paragraph (g)\nof subdivision four of this section shall be distributed by including\none-fourth of such funds with the funds to be distributed in accordance\nwith paragraph (c) of this subdivision and three-quarters of such funds\nto be distributed to voluntary non-profit and private proprietary\ngeneral hospitals within the region that are severely negatively\nimpacted by the inclusion of title XVIII (medicare) patients, or changes\nin the determination of payor liability, resulting from the\nimplementation of the reimbursement provisions in this section. Rules\nfor such distribution will be those adopted by the state hospital review\nand planning council and approved by the commissioner.\n (e) Any balance in the portion of regional pools created by the\nallowance in paragraph (e) of subdivision four of this section, after\ndistribution in accordance with paragraph (b) of this subdivision,\nincluding income from invested funds, shall be distributed to voluntary\nnon-profit, private proprietary and public general hospitals other than\nmajor public general hospitals within the region on a basis related to\nspecific hospital need as defined for regional purposes in paragraph (e)\nof subdivision four of this section. Any balance in the portion of\nregional pools created by the allowance in paragraph (f) of subdivision\nfour of this section and the distribution specified in paragraph (d) of\nthis subdivision after distribution in accordance with paragraph (c) of\nthis subdivision, including income from invested funds, shall be\ndistributed to voluntary non-profit and private proprietary general\nhospitals within the region on a basis related to specific hospital need\nas defined for regional purposes in paragraph (e) of subdivision four of\nthis section. Any balance in the portion of regional pools created by\nthe allowance in paragraph (g) of subdivision four of this section after\ndistribution in accordance with this paragraph and paragraph (d) of this\nsubdivision, including income from invested funds, shall be returned to\nvoluntary non-profit and private proprietary general hospitals on the\nbasis of the reimbursable costs of those hospitals within the region.\n 10. Unit of service. The unit of general hospital inpatient service on\nwhich payment shall be based should be uniform for all payors and shall\nbest identify the cost of services provided.\n 11. The commissioner shall provide to fiscal intermediaries for\nsubchapter XVIII of the federal social security act (medicare) and\narticle forty-three of the insurance law plans, the information required\nto effectuate the provisions of this section, exclusive of adjustments\nfor uncovered services.\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 superintendent of financial services or approved\nor certified by the commissioner, whichever is applicable and required\nby this section, for payments by such article forty-three insurance law\ncorporations or article forty-four organizations. No general hospital\nmay demand or request any charge for such covered services in addition\nto the charges or rates authorized by this article.\n (a) Any general hospital which terminated its contract with an article\nforty-three insurance law corporation or a comprehensive health services\nplan after 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 schedule of charges\nestablished by such hospital for patient services in effect on May\nfirst, nineteen hundred seventy-eight, adjusted for the rate year\nnineteen hundred eighty-three in accordance with the provisions of\nsubdivision thirteen of this section, and adjusted for the rate years\nthereafter in accordance with the provisions of subdivision six of this\nsection.\n (b) Any general hospital which has notified in writing an article\nforty-three corporation or a comprehensive health services plan prior to\nJune first, nineteen hundred seventy-eight of its intention to terminate\nits contract with such corporation or plan in accordance with the terms\nof such 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 schedule of charges established\nby such hospital for patient services in effect on May first, nineteen\nhundred seventy-eight, adjusted for the rate year nineteen hundred\neighty-three in accordance with the provisions of subdivision thirteen\nof this section, and adjusted for the rate years thereafter in\naccordance with the provisions of subdivision six of this section.\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 13. Charge control. For the period January first, nineteen hundred\neighty-three, and until January first, nineteen hundred eighty-four:\n (a) No general hospital shall establish charges for inpatient services\nin excess of those permitted by law immediately prior to the effective\ndate of this section adjusted by the applicable trend factor.\n (b) The commissioner shall establish an appeals board within the\ndepartment to consider and recommend action in writing on an appeal by a\ngeneral hospital of the inpatient charge limits established pursuant to\nthis subdivision. The board and the commissioner may only consider, and\nappeals shall be limited to, changes in the base charge or the allowable\nlimits because of the (i) establishment of an approved new hospital\nservice, (ii) substantial changes in the volume of services provided, or\n(iii) substantial and adverse changes in the relationship between total\naccrued inpatient revenues and total inpatient costs due to such factors\nas significant increases in cost from labor settlements or increases in\nbad debts. Expenditures resulting from such changes must be essential to\nassure the continuance of quality medical care. In the event a\ndetermination on such appeal is not made by the commissioner within\nninety days of receipt of a complete request as determined by the\ncommissioner, the hospital may increase its inpatient charges in\nconformance with such request. If the commissioner shall determine\nthereafter that all or a portion of such increase is not warranted\nhereunder, the hospital on notice of such determination shall promptly\nreduce its inpatient charges in conformance therewith. In no event shall\nthe hospital bear any liability to any payor for such interim increase.\n (c) In any proceeding under this subdivision the recognized collective\nbargaining agent shall be entitled to submit any relevant data. All data\nsubmitted hereunder shall be agency records under the freedom of\ninformation law. All proceedings and appeals hereunder shall be meetings\nof public bodies under the open meetings law.\n (d) No provision of this subdivision or subdivision twelve of this\nsection shall be construed to prohibit a general hospital from\ncontinuing the amount of inpatient charges in effect on May first,\nnineteen hundred seventy-eight.\n 14. Restitution authorization. In enforcing the provisions of\nsubdivisions twelve and thirteen of this section, the commissioner may,\nin addition to the penalties and injunctions set forth in section twelve\nof this 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 does not consent to any order of the\ncommissioner hereunder. The commissioner may direct that such a hearing\nbe held without any request by a hospital.\n * NB Expired January 1, 1986\n