VI. Covered Lives


Question 1: If a New York resident uses a New Jersey hospital, does the covered lives assessment apply to the electing payor even though the HCRA surcharge percentage does not apply to the New Jersey hospital claim?

Question 2: When multiple payors provide coverage for non-duplicated, inpatient hospital services, the covered lives assessment may be apportioned between/among payors. How should apportionment be calculated?

Question 3: Are Integrated Delivery Systems treated as payors, providers or both for purposes of the patient services surcharge and the covered lives assessment?

Question 4: If a single card-holder has insurance from one insurer that provides hospital inpatient medical and surgical coverage, and has insurance from a second insurer that provides inpatient mental health and substance abuse coverage, can the two insurers apportion for the card-holder?

Question 5: Do covered lives payment obligations apply to foreign students attending school in New York and students studying abroad?

Question 6: How does the HCRA apply to accident-only policies (e.g., some little league, travel and homeowners policies)?

Question 7: Do specified third party payors have a covered lives obligation when the annual maximum benefits of a plan have been reached for an individual prior to the termination of the plan year?

Question 8: Is there a covered lives assessment or regional GME percentage surcharge obligation on student health or student accident policies?



Question 1: If a New York resident uses a New Jersey hospital, does the covered lives assessment apply to the electing payor even though the HCRA surcharge percentage does not apply to the New Jersey hospital claim?

Answer 1: The imposition of covered lives assessments is completely unrelated to claims and is applicable without regard to whether services are rendered at all. Pursuant to Public Health Law §2807-t, covered lives assessments are based on the number of primary insured, individual/family units residing in New York State who are on a payor's membership roles for whom inpatient coverage is provided on an expense incurred basis. The primary insured's legal residence will determine which of the eight regions of the state a covered lives per diem is owed.

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Question 2: When multiple payors provide coverage for non-duplicated, inpatient hospital services, the covered lives assessment may be apportioned between/among payors. How should apportionment be calculated?

Answer 2: Apportionment is entirely the responsibility of the payors. The Department requires each payor to pay 100 percent of the covered lives assessment unless two or more electing specified third-party payors covering separate components of inpatient care benefits for a single contract holder have entered into a written agreement to apportion the covered lives assessment. The aggregate of the apportioned covered lives assessment payments must result in the payment of 100 percent of the required assessment. Further, apportioning may occur only between payors that have elected; apportioning payors must maintain a copy of their written apportionment agreement(s) on file while the apportionment is in effect and for a minimum period of six years from the end of the year following termination thereof; apportioning payors are required to provide certified reports to the Department regarding their apportionment agreements and arrangements upon audit.

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Question 3: Are Integrated Delivery Systems treated as payors, providers or both for purposes of the patient services surcharge and the covered lives assessment?

Answer 3: IDSs operate under Article 44 of the Public Health Law and, as such, are payors that have the option of electing to make payments directly to the Department's Office of Pool Administration (OPA). IDSs must meet all HCRA requirements applicable to payors. General hospitals and clinics providing IDS services are providers for purposes of the net patient service revenue assessment provisions of HCRA. As such, they must make payments against net patient service revenue received from any non-electing payor, including the IDS.

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Question 4: If a single card-holder has insurance from one insurer that provides hospital inpatient medical and surgical coverage, and has insurance from a second insurer that provides inpatient mental health and substance abuse coverage, can the two insurers apportion for the card-holder?

Answer 4: Yes, as long as the two insurers have timely reached a mutual agreement in writing to such apportionment and provide unduplicated coverage for different components of inpatient coverage. The percentage of liability between the insurers must total 100%.

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Question 5: Do covered lives payment obligations apply to foreign students attending school in New York and students studying abroad?

Answer 5: No. Foreign students attending school in New York State on student visas and students studying abroad whose legal residence is not NYS, but rather their foreign country, are not considered New York State residents for purposes of establishing covered lives obligations. It should be noted that this situation applies only to covered lives payments and not to the regional GME percentage surcharge. If the foreign insurer providing coverage to the student is a non-elector, a regional GME surcharge percentage will be applicable to inpatient hospital claims, when billed if they are a specified third party payor pursuant to PHL 2807-s(1-a).

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Question 6: How does the HCRA apply to accident-only policies (e.g., some little league, travel and homeowners policies)?

Answer 6: Accident-only policies that provide inpatient coverage on an expense incurred basis are NOT required to participate in the Professional Education Pool established by HCRA. This exemption applies to both the covered lives assessment (if an elector) and the regional GME percentage surcharge on inpatient claims (if a non-elector).

This exemption does NOT apply to HCRA surcharges on claims for the Indigent Care and Health Care Initiatives Pool. These policies are subject to the HCRA surcharge at rates based on the payor's election status. Further, this exemption applies to accident-only policies; it does not apply to policies that provide health coverage for sickness, illness, and disease related medical claims.

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Question 7: Do specified third party payors have a covered lives obligation when the annual maximum benefits of a plan have been reached for an individual prior to the termination of the plan year?

Answer 7: Yes. PHL §2807-t(5)(a) does not provide for an exclusion or exemption from covered lives obligations if annual maximum plan benefits are reached before the end of the plan year. Specified third party payors must continue to remit the appropriate monthly assessment amount for each individual and family unit appearing on its membership roles during any part of a given month.

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Question 8: Is there a covered lives assessment or regional GME percentage surcharge obligation on student health or student accident policies?

Answer 8: Effective for dates of service April 1, 2005 and forward, payors providing coverage to a person covered under a student policy issued pursuant to Article 43 of the NYS Insurance Law (generally, non-profit medical and dental indemnity insurers), or a blanket student accident, blanket student health, or blanket student accident and health, are exempt from covered lives assessments, when an elector with the Public Goods Pool. "Blanket" refers to policies issued to colleges/schools as the policyholder. This exemption applies to either third party payors or self funded plans providing such coverage. This exemption does NOT apply to the Indigent Care and Health Care Initiatives Pool surcharge, which is paid by surcharges assessed on claims from designated HCRA providers, at rates based on the election status of the payor.

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