Temporary adjustment to reimbursement rates

§ 2826. Temporary adjustment to reimbursement rates. (a)
Notwithstanding any provision of law to the contrary, within funds
appropriated and subject to the availability of federal financial
participation, the commissioner may grant approval of a temporary
adjustment to the non-capital components of rates, or make temporary
lump-sum Medicaid payments, to eligible general hospitals, skilled
nursing facilities, clinics and home care providers, provided however,
that should federal financial participation not be available for any
eligible provider, then payments pursuant to this subdivision may be
made as grants and shall not be deemed to be medical assistance
payments.

(b) Eligible providers shall include:

(i) providers undergoing closure;

(ii) providers impacted by the closure of other health care providers;

(iii) providers subject to mergers, acquisitions, consolidations or
restructuring; or

(iv) providers impacted by the merger, acquisition, consolidation or
restructuring of other health care providers.

(c) Providers seeking temporary rate adjustments under this section
shall demonstrate through submission of a written proposal to the
commissioner that the additional resources provided by a temporary rate
adjustment will achieve one or more of the following:

(i) protect or enhance access to care;

(ii) protect or enhance quality of care;

(iii) improve the cost effectiveness of the delivery of health care
services; or

(iv) otherwise protect or enhance the health care delivery system, as
determined by the commissioner.

(c-1) The commissioner, under applications submitted to the department
pursuant to subdivision (d) of this section, shall consider criteria
that includes, but is not limited to:

(i) Such applicant's financial condition as evidenced by operating
margins, negative fund balance or negative equity position;

(ii) The extent to which such applicant fulfills or will fulfill an
unmet health care need for acute inpatient, outpatient, primary or
residential health care services in a community;

(iii) The extent to which such application will involve savings to the
Medicaid program;

(iv) The quality of the application as evidenced by such application's
long term solutions for such applicant to achieve sustainable health
care services, improving the quality of patient care, and/or
transforming the delivery of health care services to meet community
needs;

(v) The extent to which such applicant is geographically isolated in
relation to other providers; or

(vi) The extent to which such applicant provides services to an
underserved area in relation to other providers.

(d) (i) Such written proposal shall be submitted to the commissioner
at least sixty days prior to the requested effective date of the
temporary rate adjustment, and shall include a proposed budget to
achieve the goals of the proposal. Any Medicaid payment issued pursuant
to this section shall be in effect for a specified period of time as
determined by the commissioner, of up to three years. At the end of the
specified timeframe such payments or adjustments to the non-capital
component of rates shall cease, and the provider shall be reimbursed in
accordance with the otherwise applicable rate-setting methodology as set
forth in applicable statutes and regulations. The commissioner may
establish, as a condition of receiving such temporary rate adjustments
or grants, benchmarks and goals to be achieved in conformity with the
provider's written proposal as approved by the commissioner and may also
require that the facility submit such periodic reports concerning the
achievement of such benchmarks and goals as the commissioner deems
necessary. Failure to achieve satisfactory progress, as determined by
the commissioner, in accomplishing such benchmarks and goals shall be a
basis for ending the facility's temporary rate adjustment or grant prior
to the end of the specified timeframe. (ii) The commissioner may require
that applications submitted pursuant to this section be submitted in
response to and in accordance with a Request For Applications or a
Request For Proposals issued by the commissioner.

(e) Notwithstanding any law to the contrary, general hospitals defined
as critical access hospitals pursuant to title XVIII of the federal
social security act shall be allocated no less than seven million five
hundred thousand dollars annually pursuant to this section. The
department of health shall provide a report to the governor and
legislature no later than June first, two thousand fifteen providing
recommendations on how to ensure the financial stability of, and
preserve patient access to, critical access hospitals, including an
examination of permanent Medicaid rate methodology changes.

(e-1) Thirty days prior to executing an allocation or modification to
an allocation made pursuant to this section, the commissioner shall
provide written notice to the chair of the senate finance committee and
the chair of the assembly ways and means committee with regards to the
intent to distribute such funds. Such notice shall include, but not be
limited to, information on the methodology used to distribute the funds,
the facility specific allocations of the funds, any facility specific
project descriptions or requirements for receiving such funds, the
multi-year impacts of these allocations, and the availability of federal
matching funds. The commissioner shall provide quarterly reports to the
chair of the senate finance committee and the chair of the assembly ways
and means committee on the distribution and disbursement of such funds.
Within sixty days of the effectiveness of this subdivision, the
commissioner shall provide a written report to the chair of the senate
finance committee and the chair of the assembly ways and means committee
on all awards made pursuant to this section prior to the effectiveness
of this subdivision, including all information that is required to be
included in the notice requirements of this subdivision.

(f) Notwithstanding any provision of law to the contrary, and subject
to federal financial participation, no less than ten million dollars
shall be allocated to providers described in this subdivision; provided,
however that if federal financial participation is unavailable for any
eligible provider, or for any potential investment under this
subdivision then the non-federal share of payments pursuant to this
subdivision may be made as state grants.

(i) Providers serving rural areas as such term is defined in section
two thousand nine hundred fifty-one of this chapter, including but not
limited to hospitals, residential health care facilities, diagnostic and
treatment centers, ambulatory surgery centers and clinics shall be
eligible for enhanced payments or reimbursement under a supplemental
rate methodology for the purpose of promoting access and improving the
quality of care.

(ii) Notwithstanding any provision of law to the contrary, and subject
to federal financial participation, essential community providers,
which, for the purposes of this section, shall mean a provider that
offers health services within a defined and isolated geographic region
where such services would otherwise be unavailable to the population of
such region, shall be eligible for enhanced payments or reimbursement
under a supplemental rate methodology for the purpose of promoting
access and improving quality of care. Eligible providers under this
paragraph may include, but are not limited to, hospitals, residential
health care facilities, diagnostic and treatment centers, ambulatory
surgery centers and clinics.

(iii) In making such payments the commissioner may contemplate the
extent to which any such provider receives assistance under subdivision
(a) of this section and may require such provider to submit a written
proposal demonstrating that the need for monies under this subdivision
exceeds monies otherwise distributed pursuant to this section.

(iv) Payments under this subdivision may include, but not be limited
to, temporary rate adjustments, lump sum Medicaid payments, supplemental
rate methodologies and any other payments as determined by the
commissioner.

(v) Payments under this subdivision shall be subject to approval by
the director of the budget.

(vi) The commissioner may promulgate regulations to effectuate the
provisions of this subdivision.

(vii) Thirty days prior to adopting or applying a methodology or
procedure for making an allocation or modification to an allocation made
pursuant to this subdivision, the commissioner shall provide written
notice to the chairs of the senate finance committee, the assembly ways
and means committee, and the senate and assembly health committees with
regard to the intent to adopt or apply the methodology or procedure,
including a detailed explanation of the methodology or procedure.

(viii) Thirty days prior to executing an allocation or modification to
an allocation made pursuant to this subdivision, the commissioner shall
provide written notice to the chairs of the senate finance committee,
the assembly ways and means committee, and the senate and assembly
health committees with regard to the intent to distribute such funds.
Such notice shall include, but not be limited to, information on the
methodology used to distribute the funds, the facility specific
allocations of the funds, any facility specific project descriptions or
requirements for receiving such funds, the multi-year impacts of these
allocations, and the availability of federal matching funds. The
commissioner shall provide quarterly reports to the chair of the senate
finance committee and the chair of the assembly ways and means committee
on the distribution and disbursement of such funds.

(g) Notwithstanding subdivision (a) of this section, and within
amounts appropriated for such purposes as described herein, the
commissioner may award a temporary adjustment to the non-capital
components of rates, or make temporary lump-sum Medicaid payments to
eligible facilities with serious financial instability and requiring
extraordinary financial assistance to enable such facilities to maintain
operations and vital services while such facilities establish long term
solutions to achieve sustainable health services. Provided, however, the
commissioner is authorized to make such a temporary adjustment or make
such temporary lump sum payment only pursuant to criteria, an
application, and an evaluation process acceptable to the commissioner in
consultation with the director of the division of the budget. The
department shall publish on its website the criteria, application, and
evaluation process and notification of any award recipients.

(i) Eligible facilities shall include:

(A) a public hospital, which for purposes of this subdivision, shall
mean a general hospital operated by a county, municipality or a public
benefit corporation;

(B) a federally designated critical access hospital;

(C) a federally designated sole community hospital;

(D) a residential health care facility;

(E) a general hospital that is a safety net hospital, which for
purpose of this subdivision shall mean:

(1) such hospital has at least thirty percent of its inpatient
discharges made up of Medicaid eligible individuals, uninsured
individuals or Medicaid dually eligible individuals and with at least
thirty-five percent of its outpatient visits made up of Medicaid
eligible individuals, uninsured individuals or Medicaid dually-eligible
individuals; or

(2) such hospital serves at least thirty percent of the residents of a
county or a multi-county area who are Medicaid eligible individuals,
uninsured individuals or Medicaid dually-eligible individuals; or

(3) such hospital that, in the discretion of the commissioner, serves
a significant population of Medicaid eligible individuals, uninsured
individuals or Medicaid dually-eligible individuals; or

(F) an independent practice association or accountable care
organization authorized under applicable regulations that participate in
managed care provider network arrangements with any of the provider
types in subparagraphs (A) through (F) of this paragraph; or an entity
that was formed as a preferred provider system pursuant to the delivery
system reform incentive payment (DSRIP) program and collaborated with an
independent practice association that received VBP innovator status from
the department for purposes of meeting DSRIP goals, and which preferred
provider system remains operational as an integrated care system.

(ii) Eligible applicants must demonstrate that without such award,
they will be in serious financial instability, as evidenced by:

(A) certification that such applicant has less than fifteen days cash
and equivalents;

(B) such applicant has no assets that can be monetized other than
those vital to operations; and

(C) such applicant has exhausted all efforts to obtain resources from
corporate parents and affiliated entities to sustain operations.

(iii) Awards under this subdivision shall be made upon application to
the department.

(A) Eligible applicants shall submit a completed application to the
department.

(B) The department may authorize initial award payments to eligible
applicants based solely on the criteria pursuant to paragraphs (i) and
(ii) of this subdivision.

(C) Notwithstanding subparagraph (B) of this paragraph, the department
may suspend or repeal an award if an eligible applicant fails to submit
a multi-year transformation plan pursuant to subparagraph (A) of this
paragraph that is acceptable to the department by no later than the
thirtieth day of September two thousand fifteen.

(D) Applicants under this subdivision shall detail the extent to which
the affected community has been engaged and consulted on potential
projects of such application, as well as any outreach to stakeholders
and health plans.

(E) The department shall review all applications under this
subdivision, and determine:

(1) applicant eligibility;

(2) each applicant's projected financial status;

(3) criteria or requirements upon which an award of funds shall be
conditioned, such as a transformation plan, savings plan or quality
improvement plan. In the event the department requires an applicant to
enter into an agreement or contract with a vendor or contractor, the
department shall approve the selected vendor or contractor but shall not
specify the vendor or contractor that the applicant must utilize; and

(4) the anticipated impact of the loss of such services.

(F) After review of all applications under this subdivision, and a
determination of the aggregate amount of requested funds, the department
may make awards to eligible applicants; provided, however, that such
awards may be in an amount lower than such requested funding, on a per
applicant or aggregate basis.

(iv) Awards under this subdivision may not be used for:

(A) capital expenditures, including, but not limited to: construction,
renovation and acquisition of capital equipment, including major medical
equipment; or

(B) bankruptcy-related costs.

(v) Payments made to awardees pursuant to this subdivision that are
made on a monthly basis will be based on the applicant's actual monthly
financial performance during such period and the reasonable cash amount
necessary to sustain operations for the following month. The applicant's
monthly financial performance shall be measured by such applicant's
monthly financial and activity reports, which shall include, but not be
limited to, actual revenue and expenses for the prior month, projected
cash need for the current month, and projected cash need for the
following month.

(vi) The department shall provide a report on a quarterly basis to the
chairs of the senate finance, assembly ways and means, senate health and
assembly health committees. Such reports shall be submitted no later
than sixty days after the close of the quarter, and shall include for
each award, the name of the applicant, the amount of the award, payments
to date, and a description of the status of the multi-year
transformation plan pursuant to paragraph (iii) of this subdivision.