Assessments on covered lives

* § 2807-t. Assessments on covered lives. 1. Definitions. (a)
"Individual" means a person for whom the specified third-party payor has
agreed to provide reimbursement for inpatient hospital services in the
period other than:

(i) any person who is eligible for payments as a beneficiary of title
XVIII of the federal social security act (medicare);

(ii) any person for whom the specified third-party payor has agreed to
provide reimbursement for inpatient hospital services contingent upon
such person's relationship to an "individual" as a spouse, child,
stepchild, adopted child, family member, or dependent, as defined by the
specified third-party payor, or as contingent upon any other similar
relationship to an "individual" as such relationship is defined by the
specified third-party payor;

(iii) any person for whom the specified third-party payor has agreed
to provide coverage for hospital confinement on other than an expense
incurred basis;

(iv) any person for whom the specified third-party payor has agreed to
provide reimbursement for inpatient hospital services pursuant to the
workers' compensation law, the volunteer firefighters' benefit law, or
the volunteer ambulance workers' benefit law;

(v) any person for whom the specified third-party payor has agreed to
provide reimbursement for inpatient hospital services pursuant to the
comprehensive motor vehicle insurance reparations act;

(vi) any person (hereinafter referred to as the "primary insured")
otherwise meeting the definition of an "individual" as set forth under
this section if the specified third-party payor has agreed to provide
reimbursement for such person as part of a "family unit"; and

(vii) effective on and after April first, two thousand five, any
person covered under a student policy issued pursuant to article
forty-three of the insurance law, or a blanket student accident, blanket
student health, or blanket student accident and health insurance policy.

(b) "Family unit" means any person for whom the specified third-party
payor has agreed to provide reimbursement for inpatient hospital
services in the period, together with one or more additional persons for
whom the specified third-party payor has agreed to provide reimbursement
for inpatient hospital services in the period contingent upon such
person's relationship to said person as a spouse, child, stepchild,
adopted child, family member, or dependent, as defined by the specified
third-party payor, or as contingent upon any other similar relationship,
as such relationship is defined by the specified third-party payor.
Excluded from the definition is any family unit where the specified
third-party payor has agreed to provide: coverage for hospital
confinement on other than an expense incurred basis; reimbursement for
inpatient hospital services pursuant to the worker's compensation law,
the volunteer firefighters' benefit law, or the volunteer ambulance
workers' benefit law; and reimbursement for inpatient hospital services
pursuant to the comprehensive motor vehicle insurance reparations act.
If a family unit of two persons includes one person who is eligible for
payments as a beneficiary of title XVIII of the social security act
(medicare), that family unit shall be deemed an individual for purposes
of this section. If a family unit of three or more persons includes one
person who is not eligible for medicare and the remaining two or more
persons are eligible for medicare, that family unit shall be deemed an
individual for purposes of this section. A family unit of two or more
persons, all of whom are eligible for medicare, shall not be considered
a family unit or an individual for purposes of this section.

(c) "Specified third-party payor", for purposes of this section, shall
have the same meaning as set forth in section twenty-eight hundred
seven-s of this article.

(d) "Region", for purposes of this section, shall have the same
meaning as set forth in section twenty-eight hundred seven-s of this
article.

2. Determination of annual regional payment amount. The sum total to
be generated each year for each region shall be referred to as the
annual regional payment amount, as determined in accordance with
subdivision six of section twenty-eight hundred seven-s of this article.

3. Election. Any specified third-party payor may make an election to
make payments for the assessments required by this section, on behalf of
the liable persons or entities pursuant to subdivision eight of this
section, directly to the commissioner or the commissioner's designee.
The election pursuant to this subdivision must be in writing, filed with
the commissioner or the commissioner's designee on such forms and in
such manner as the commissioner shall require. An election by a
specified third-party payor shall take effect for nineteen hundred
ninety-seven on the next following January first, April first, July
first, or October first not less than thirty days after the election is
filed. Beginning December first, nineteen hundred ninety-seven, an
election pursuant to this section must be made no later than December
first of the year prior to the assessment year. However, any specified
third-party payor licensed pursuant to the insurance law or certified
pursuant to article forty-four of this chapter between December first of
the year prior to the assessment year and December thirty-first of the
assessment year may make an election subsequent to such licensure or
certification and during said time period, to take effect on the next
following January first, April first, July first or October first not
less than thirty days after such election is filed. Specified
third-party payors other than those licensed pursuant to the insurance
law or certified pursuant to this chapter which have not provided
coverage prior to December first of the year prior to the assessment
year may make an election at any time from December first of the year
prior to said assessment year to December thirty-first of said
assessment year, to take effect on the next following January first,
April first, July first or October first not less than thirty days after
the election is filed. An election shall remain in effect unless revoked
in writing by a specified third-party payor, which revocation shall be
effective on the first day of the next calendar year quarter, provided
that such payor has provided notice of its intention to so revoke at
least thirty days prior to the beginning of such calendar quarter.

(a) A specified third-party payor filing an election pursuant to this
subdivision must agree: to provide the data and information required by
subdivision four of this section; to provide such certification of data
and access to individual and family unit data for audit verification
purposes as the commissioner shall require for purposes of this section;
and to the jurisdiction of the state to maintain an action in the courts
of the state of New York to enforce any provision of this section
related to payment of the assessments.

(b) If a specified third-party payor is acting in an administrative
services capacity on behalf of an organization, such as a self-insured
fund, the consent of the organization to the election and the conditions
pursuant to paragraph (a) of this subdivision must be submitted with the
election. Such consent may be set forth in writing in the agreement
between the specified third-party payor and the organization.

(c) If a specified third-party payor, including a payor operating in
accordance with the insurance law or article forty-four of this chapter,
making an election pursuant to this subdivision is acting in an
administrative services capacity on behalf of an organization or
organizations, such specified third-party payor must specify (i) whether
such election applies to payments on behalf of all such organizations,
and (ii) identify any organizations for which such specified third-party
payor is acting to which the election does not apply and establish, in
accordance with guidelines established by the superintendent of
financial services, a system through which general hospitals and the
commissioner can identify the status of a patient as a patient for whom
the election does not apply.

(d) The commissioner may deny a specified third-party payor the
opportunity to make an election pursuant to this subdivision based on
repeated late payments, failure to remit correct amounts, or failure to
provide adequate verification of the accuracy of payments.

(e) The commissioner or the commissioner's designee shall make
available to all general hospitals a list of the specified third-party
payors which have elected pursuant to this subdivision to remit payments
pursuant to this section.

4. Assessments shall be calculated as follows: (a) Every specified
third-party payor that has made an election pursuant to this section
shall report to the commissioner or the commissioner's designee the
number of individuals for a period as determined by the commissioner
during the calendar year prior to the assessment year residing within
each region ("individual member months"). Every such specified
third-party payor shall also report to the commissioner or the
commissioner's designee the number of family units for a period as
determined by the commissioner during the calendar year prior to the
assessment year residing within each region ("family member months").
For purposes of this section, the family unit is considered to reside in
the region in which the primary insured resides.

(b) The superintendent of financial services shall advise the
commissioner of the average number of persons covered under family
insurance contracts providing health care coverage approved by the
superintendent for the year two years prior to the assessment year.

(c) The commissioner shall calculate the total number of "individual
member months" for each region for all specified third-party payors to
determine "aggregate individual member months" for each region.

(d) The commissioner shall calculate the total number of "family
member months" for each region for all specified third-party payors to
determine "aggregate family member months" for each region. The
commissioner shall multiply the average number of persons covered under
family insurance contracts, as reported to the commissioner by the
superintendent of financial services, by the "aggregate family member
months" to determine "adjusted aggregate family member months" for each
region. The commissioner shall add the number of "adjusted aggregate
family member months" for each region to the total number of "aggregate
individual member months" for each region. This amount shall be known as
"total covered member months" for each region.

(e) The annual regional payment amount for nineteen hundred
ninety-seven, nineteen hundred ninety-eight, nineteen hundred
ninety-nine, two thousand and each year thereafter, respectively for
each region determined pursuant to subdivision two of this section shall
be divided by an estimate derived from population based data sources of
the total covered member months determined consistent with the
provisions of paragraphs (a), (b), (c) and (d) of this subdivision in
that region to establish the individual annual assessment for nineteen
hundred ninety-seven, nineteen hundred ninety-eight, nineteen hundred
ninety-nine, two thousand and each year thereafter, respectively. The
individual annual assessment shall be multiplied by the average family
size reported to the commissioner by the superintendent of financial
services to establish the family unit annual assessment in that region
for nineteen hundred ninety-seven, nineteen hundred ninety-eight,
nineteen hundred ninety-nine, two thousand and each year thereafter,
respectively.

(f) Effective January first, two thousand nine, a specified
third-party payor that has made an election pursuant to this section may
report to the commissioner or the commissioner's designee the number of
individuals and family units enrolled as of the last day of each month
in fulfillment of the monthly reporting requirement set forth in
paragraph (a) of this subdivision. A specified third-party payor
choosing to report monthly enrollment counts on this basis shall
indicate its choice at the beginning of a calendar year in a form and
manner specified by the commissioner and such reporting method shall
remain in effect the entire calendar year.

5. Monthly payments. (a) Within thirty days after the end of each
month, a specified third-party payor which made an election pursuant to
this section shall remit to the commissioner or the commissioner's
designee one-twelfth of the individual annual assessment for each of the
individuals residing in this state which were included on the membership
rolls of that specified third-party payor during all or any portion of
the prior month. Within thirty days after the end of each month, a
specified third-party payor which made an election pursuant to this
section shall also remit to the commissioner or the commissioner's
designee one-twelfth of the family unit annual assessment for each
family unit for which the primary insured resided in this state which
were included on the membership rolls of that specified third-party
payor during all or any portion of the prior month. Provided, however,
for assessment obligations arising out of individual and family
assessments established pursuant to this section on or after January
first, two thousand, the commissioner may permit certain specified
third-party payors which have at least one full year of pool payment
experience to submit such payments on an annual basis, based on an
annual demonstration by a payor through its prior year's pool payment
experience that total pool obligations under this section and sections
twenty-eight hundred seven-j and twenty-eight hundred seven-s of this
article are not expected to exceed ten thousand dollars in the current
pool year. If a specified third-party payor fails to make such payments
within sixty days of notification of a delinquency, the commissioner may
assess a civil penalty of up to ten thousand dollars for each failure,
provided, however, that such civil penalty shall not be imposed if the
payor demonstrates good cause for such failure to timely make such
payments, and further provided that the amount of such penalty shall not
exceed the amount of the delinquent liability.

(b) The specified third party-payor shall be entitled to rely on the
residence location information provided to the payor by an employer,
group or other party providing enrollment information to the specified
third-party payor, provided the specified third-party payor has no
reason to doubt the accuracy of the information.

(c) Specified third-party payors shall not be responsible for
remitting the monthly assessment for any individual or for any family
unit for any month in which it is subsequently determined that the
specified third-party payor had no liability to provide coverage for
inpatient hospital services for such individual or family unit.

6. Prospective adjustments. (a) The commissioner shall annually
reconcile the sum of the actual payments made to the commissioner or the
commissioner's designee for each region pursuant to section twenty-eight
hundred seven-s of this article and pursuant to this section for the
prior year with the regional allocation of the gross annual statewide
amount specified in subdivision six of section twenty-eight hundred
seven-s of this article for such prior year. The difference between the
actual amount raised for a region and the regional allocation of the
specified gross annual amount for such prior year shall be applied as a
prospective adjustment to the regional allocation of the specified gross
annual payment amount for such region for the year next following the
calculation of the reconciliation. The authorized dollar value of the
adjustments shall be the same as if calculated retrospectively.

(b) Notwithstanding the provisions of paragraph (a) of this
subdivision, for covered lives assessment rate periods on and after
January first, two thousand fifteen through December thirty-first, two
thousand twenty-one, for amounts collected in the aggregate in excess of
one billion forty-five million dollars on an annual basis, and for the
period January first, two thousand twenty-two to December thirty-first,
two thousand twenty-six for amounts collected in the aggregate in excess
of one billion eighty-five million dollars on an annual basis,
prospective adjustments shall be suspended if the annual reconciliation
calculation from the prior year would otherwise result in a decrease to
the regional allocation of the specified gross annual payment amount for
that region, provided, however, that such suspension shall be lifted
upon a determination by the commissioner, in consultation with the
director of the budget, that sixty-five million dollars in aggregate
collections on an annual basis over and above one billion forty-five
million dollars on an annual basis for the period on and after January
first, two thousand fifteen through December thirty-first, two thousand
twenty-one and for the period January first, two thousand twenty-two to
December thirty-first, two thousand twenty-six for amounts collected in
the aggregate in excess of one billion eighty-five million dollars on an
annual basis have been reserved and set aside for deposit in the HCRA
resources fund. Any amounts collected in the aggregate at or below one
billion forty-five million dollars on an annual basis for the period on
and after January first, two thousand fifteen through December
thirty-first, two thousand twenty-two, and for the period January first,
two thousand twenty-three to December thirty-first, two thousand
twenty-six for amounts collected in the aggregate in excess of one
billion eighty-five million dollars on an annual basis, shall be subject
to regional adjustments reconciling any decreases or increases to the
regional allocation in accordance with paragraph (a) of this
subdivision.

7. (a) In the case two or more specified third-party payors covering a
single contract holder where both specified third-party payors cover
separate components of the inpatient care benefits otherwise subject to
the assessment, the assessment shall be apportioned between the
insurers.

(b) With regard to assessment obligations arising out of individual
and family assessments established pursuant to this section, where a
single contract holder has separate components of the inpatient care
benefits otherwise subject to the assessment covered by two or more
entities, the assessment may be apportioned between the entities,
provided that:

(i) Apportionment agreements or arrangements may only be entered into
between or among specified third-party payers which have elected to make
direct payments to the commissioner or the commissioner's designee
pursuant to this subdivision; and

(ii) The aggregate of apportioned covered lives assessment payments
must result in the payment of one hundred percent of the applicable
covered lives assessment; and

(iii) Apportionment agreements between or among apportioning payers
and any modifications, amendments or termination of such agreements must
be in writing and signed by all such payers, provided, however, that
where one apportioning payor agrees to pay one hundred percent of the
applicable covered lives assessment, no written agreement shall be
required, provided there is other written evidence of the arrangement
and any modifications, amendments and/or terminations thereof, emanating
from the apportioning payor paying one hundred percent of the applicable
covered lives assessment to the other apportioning payor or payors or to
the particular group to which the arrangement relates, and further
provided that such written evidence contains the name of the particular
group to which the arrangement relates; and

(iv) Copies of apportionment agreements, and any modifications,
amendments and/or terminations thereof, and written evidence of
arrangements by which one apportioning payor agrees to pay one hundred
percent of the applicable covered lives assessment, and any
modifications, amendments and/or terminations thereof, must be
maintained in the files of each apportioning payor while the
apportionment is in effect and for a period of not less than six years
after termination thereof and shall be made available to the department
upon request for audit verification purposes.

8. Liability for assessments. (a) The assessments determined in
accordance with this section shall, for individuals who have paid
premiums directly to an insurer or to a health maintenance organization
certified pursuant to article forty-four of this chapter or article
forty-three of the insurance law for health care coverage which includes
coverage of inpatient hospital services, be the liability of said
individuals. The assessments determined in accordance with this section
shall, for groups and entities who have paid premiums to an insurer or
to a health maintenance organization certified pursuant to article
forty-four of this chapter or article forty-three of the insurance law
for health care coverage which includes coverage of inpatient hospital
services, be the liability of said groups and entities. The assessments
determined in accordance with this section shall, for individuals,
groups and entities who have contributed to a self-insured fund for
health care coverage which includes coverage of inpatient hospital
services, be the liability of said individuals, groups or entities.

(b) Specified third-party payors shall make payments to the
commissioner or the commissioner's designee of the full amount of the
assessments determined in accordance with this section. Specified
third-party payors may recover amounts due or paid to the commissioner
or the commissioner's designee from the parties liable in accordance
with paragraph (a) of this subdivision.

9. A specified third-party payor must either:

(a) jointly elect to pay the assessment pursuant to this section and
the allowance pursuant to paragraph (c) of subdivision two and
subdivision five of section twenty-eight hundred seven-j of this
article; or

(b) pay the surcharge for an allowance determined in accordance with
paragraph (b) of subdivision two of section twenty-eight hundred seven-j
of this article, including the allowance determined in accordance with
section twenty-eight hundred seven-s of this article.

10. (a) Payments and reports submitted or required to be submitted to
the commissioner or to the commissioner's designee pursuant to this
section by specified third-party payors shall be subject to audit by the
commissioner for a period of six years following the close of the
calendar year in which such payments and reports are due, after which
such payments shall be deemed final and not subject to further
adjustment or reconciliation, including through offset adjustments or
reconciliations made by such specified third-party payors with regard to
subsequent payments, provided, however, that nothing herein shall be
construed as precluding the commissioner from pursuing collection of any
such payments which are identified as delinquent within such six year
period, or which are identified as delinquent as a result of an audit
commenced within such six year period, or from conducting an audit of
any adjustments and reconciliation made by a specified third party payor
within such six year period, or from conducting an audit of payments
made prior to such six year period which are found to be commingled with
payments which are otherwise subject to timely audit pursuant to this
section.

(b) Specified third-party payors which, in the course of an audit
pursuant to this section fail to produce data or documentation requested
in furtherance of such an audit, within thirty days of such request, may
be assessed a civil penalty of up to ten thousand dollars for each such
failure, provided, however, that such civil penalty shall not be imposed
if such specified third-party payor demonstrates good cause for such
failure. The imposition of civil penalties pursuant to this section
shall be subject to the provisions of section twelve-a of this chapter.

(c) Records required to be retained for audit verification purposes by
specified third-party payors in accordance with this section shall
include, but not be limited to, on a monthly basis, the source records
generated by supporting information systems, financial accounting
records, relevant correspondence and the addresses and dates of coverage
for all individuals and family units, as defined by paragraphs (a) and
(b) of subdivision one of this section, and such other records as may be
required to prove compliance with, and to support reports submitted in
accordance with, this section.

(d) If a specified third-party payor fails to produce data or
documentation requested in furtherance of an audit pursuant to this
section for a month to which an assessment applies, the commissioner may
estimate, based on available financial and statistical data as
determined by the commissioner, the amount due for such month. If the
impact of the enrollment exemptions permitted pursuant to this section
cannot be determined from such available financial and statistical data,
the estimated amount due may be calculated on the basis of aggregate
data derived from such available data for the year subject to audit. The
commissioner shall take all necessary steps to collect amounts due as
determined pursuant to this paragraph, including directing the state
comptroller to offset such amounts due from any payments made by the
state to the third party payor pursuant to this article. Interest and
penalties shall be applied to such amounts due in accordance with the
provisions of subdivision eight of section twenty-eight hundred seven-j
of this article.

(e) The commissioner may, as part of a final resolution of an audit
conducted pursuant to this subdivision, waive payment of interest and
penalties otherwise applicable pursuant to subdivision eight of section
twenty-eight hundred seven-j of this article, when amounts due as a
result of such audit, other than such waived penalties and interest, are
paid in full to the commissioner or the commissioner's designee within
sixty days of the issuance of a final audit report that is mutually
agreed to by the commissioner and auditee, provided, however, that if
such final audit report is not so mutually agreed upon, then neither the
commissioner nor the auditee shall have any obligations pursuant to this
paragraph.

(f) The commissioner may enter into agreements with specified
third-party payors in regard to which audit findings or prior
settlements have been made pursuant to this section, extending and
applying such audit findings or prior settlements, or a portion thereof,
in settlement and satisfaction of potential audit liabilities for
subsequent un-audited periods. The commissioner may reduce or waive
payment of interest and penalties otherwise applicable to such
subsequent unaudited periods when such amounts due as a result of such
agreement, other than reduced or waived interest and penalties, are paid
in full to the commissioner or the commissioner's designee within sixty
days of execution of such agreement by all parties to the agreement. Any
payments made pursuant to agreements entered into in accordance with
this paragraph shall be deemed to be in full satisfaction of any
liability arising under this section, as referenced in such agreements
and for the time periods covered by such agreements, provided, however,
that the commissioner may audit future retroactive adjustments to
payments made for such periods based on reports filed by payors
subsequent to such agreements.

* NB Expires December 31, 2026