VIII. State and Local Governmental Payments


Question 1: Clarify whether and how the surcharges apply to state and county governmental agencies?

Question 2: Are New York State local governmental agencies or their programs subject to the HCRA surcharge or covered lives/regional GME percentage surcharge?

Question 3: What entities are defined as local correctional facilities, within NYS, for purposes of the surcharge and negotiated rate provisions of the HCRA?

Question 4: Are payments made to designated providers on behalf of persons enrolled in the Regional Pilot Projects subject to the HCRA surcharge?

Question 5: Are payments made to designated providers on behalf of persons enrolled in the Child Health Plus insurance program subject to HCRA surcharges?

Question 6: Do the HCRA surcharges apply to payments made to designated HCRA providers for services provided under the NYS Medicaid Prenatal Care Assistance Program (PCAP)?

Question 7: Do the HCRA surcharges apply to payments made to designated providers by the NYS Liquidation Bureau from funds collected and maintained in the following "Security Fund" accounts : the New York Property/Casualty Insurance Security Fund, the Public Motor Vehicle Liability Security Fund and the Workers' Compensation Security Fund?

Question 8: How do the HCRA surcharges apply to payments made by managed care organizations to HCRA designated providers on behalf of NYS prison inmates under a contract with the NYS Department of Corrections?

Question 9: Do the HCRA surcharges apply to payments made to designated providers by NY public benefit corporations?

Question 10: Do the surcharges apply to revenue a designated provider receives from the New York State Office of Temporary and Disability Assistance for medical services provided in connection with disability determinations?

Question 11: Does the HCRA surcharge apply to revenue received by designated providers from the New York State Office of Temporary and Disability Assistance for services provided in connection with paternity testing to establish child support obligations?

Question 12: Does the HCRA surcharge apply to revenue received from a municipality for durable medical equipment?



Question 1: Clarify whether and how the surcharges apply to state and county governmental agencies?

Answer 1: Not all patient services revenue received directly from New York State and its local governmental agencies are subject to a surcharge when paying HCRA providers for services. Only patient services revenue received from New York State and its local governmental subdivisions that are specifically assigned pursuant to Public Health Law §2807-j(2)(d) are subject to a HCRA surcharge. The assigned obligations are identified as:

  1. New York State local governmental agencies for services provided to local correctional facility inmates (services provided to inmates in confinement facilities operated by any NYS county), (all other NYS local governmental programs are exempt from the HCRA surcharge on payments made, (this does NOT include local governments acting in their role as an employer for medical coverage for their employees).
  2. New York City Corrections, (services provided to inmates in confinement facilities operated by the City of New York), and,
  3. New York State governmental agencies making state administered payments that reimburse New York hospitals for rendered inpatient services to eligible individuals (NYS programs making state administered payments and authorized to pay NYS Medicaid inpatient rates in accordance with PHL §2807-c(1)(a)). This includes, but may not be limited to, NYS governmental programs making payments for eligible individuals under NYS Medicaid, NYS Department of Corrections for prison inmates, NYS Office of Mental Health for residents of state operated psychiatric centers, and, the NYS Office for People With Developmental Disabilities for residents of state operated developmental centers.

Patient services revenue received from the above mentioned entities are subject to a reduced rate (Medicaid/State Governmental Agencies rate). If the NYS governmental agency is an electing payor with the Public Goods Pool, the agency must pay their surcharge obligations directly to the Pool*. If the NYS agency is not an elector, the provider is responsible for remitting the NYS Medicaid/State Governmental Agencies surcharge percentage rate to the Pool and should bill the surcharge on the claim to the program/agency.

Note that payments made to designated provider by private insurance coverage purchased through NY government programs, or by self-insured NY governmental agencies for employee health benefits are fully subject to surcharge and covered lives/GME obligations (with inpatient coverage) based upon the election decision of the organization providing coverage. Electing payors for such coverage must pay their surcharge and covered lives obligations directly to the Public Goods Pool. Providers receiving patient services revenue from non-electors are obligated to pay the higher surcharge percentage and for, inpatient services, a regional GME percentage, to the Public Goods Pool, and should assess the surcharge percentages on their claims to the non-elector.

∗ This directive does not necessarily apply to counties in NYS that have elected. If the NYS county shows payor type of "6" on the Elector List, that indicates that the county has elected in for surcharge payments attributable to medical claims for their inmates residing in county operated confinement facilities. If so, the county will pay their surcharge obligation on these claims directly to the Public Goods Pool. If the county is on the Elector List but is not a payor type "6," then some other department within that county has elected for some other program, not related to the payment of claims for their county inmates. If this is the case, providers are responsible for remitting the NYS Medicaid/State Governmental Agencies surcharge percentage rate to the Pool and should bill the surcharge on the claim to the county operated correctional facility.

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Question 2: Are New York State local governmental agencies or their programs subject to the HCRA surcharge or covered lives/regional GME percentage surcharge?

Answer 2: There are only two instances where a New York State local government is subject to HCRA surcharges:

  1. When making payments for inmates in confinement facilities operated by any NYS county. The surcharge percentage is the "NYS Medicaid/State Governmental Agencies" rate, and no covered lives assessment, if an elector or regional GME percentage on inpatient claims, if a non-elector.
  2. When acting as an employer for the local government´s self funded employee benefit plan (i.e. workers compensation coverage or employee health insurance coverage). In this instance, the local government is treated like any other self funded plan for their employees' benefits and must make an election decision to elect in and pay their HCRA surcharge obligations and covered lives (no covered lives obligation for providing coverage pursuant to the NYS Workers Compensation Law) directly to the Public Goods Pool, or not elect and pay higher HCRA surcharge percentage and regional GME percentage obligations directly to the provider when billed.
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Question 3: What entities are defined as local correctional facilities, within NYS, for purposes of the surcharge and negotiated rate provisions of the HCRA?

Answer 3: NYS county-sponsored correctional agencies, including those sponsored by the City of New York (the five boroughs), are subject to HCRA surcharges and reimburse designated providers in accordance with the Medicaid fee schedule. The HCRA surcharge rate is at the reduced Medicaid/State Governmental Agencies rate, (and no regional GME percentage) regardless of whether the county correctional office, or the City of New York´s correctional office elects into the Public Goods Pool or not. If the county or the City is an electing payor with the Public Goods Pool AND our Elector List on our web sites indicate payor type "6," then the county-sponsored correctional agency submitted the election application themselves (rather than another office within the county unrelated to inmate patient care) and the correctional agency will be responsible to pay their surcharge obligations directly to the Pool via Public Goods Pool payor reports. If the county is an elector, but not payor type "6", or is not on the Elector List, then the provider is responsible for remitting the surcharge to the Pool and should bill the surcharge on the claim to the county.

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Question 4: Are payments made to designated providers on behalf of persons enrolled in the Regional Pilot Projects subject to the HCRA surcharge?

Answer 4: Payments made as the result of private insurance coverage purchased through government programs such as the Regional Pilot Projects programs are subject to the HCRA surcharge and, where inpatient hospital coverage is provided, the regional GME percentage surcharge or covered lives assessment, if applicable. The surcharge rate is based on the election decision of the organization providing coverage. The Regional Pilot Project ended March 31, 2009.

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Question 5: Are payments made to designated providers on behalf of persons enrolled in the Child Health Plus insurance program subject to HCRA surcharges?

Answer 5: Yes. Child Health Plus (CHPlus) is a NYS public health insurance program for children under 19 years of age without health insurance and who do not qualify for Medicaid. There are multiple insurers approved to enroll children into the CHPlus program.

Payments made by CHPlus insurers to HCRA designated providers for services provided to CHPlus enrollees are subject to surcharges and a covered lives assessment for inpatient coverage*, if the payor is an elector obligated to pay the surcharges directly to the Public Goods Pool. If the CHPlus insurer is a non-elector, it would be obligated to pay the higher non-elector surcharge percentage rate directly to the provider when billed, and, where an inpatient claim is paid, a regional GME percentage surcharge.

∗ Please note that each CHPlus enrollee stands as an individual for purposes of the covered lives calculation. All policies issued under the program are individual policies and currently there is no family coverage. As such, for CHPlus electing payors providing inpatient coverage to more than one child within a family, a separate "individual unit" covered lives assessment is owed for each child.

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Question 6: Do the HCRA surcharges apply to payments made to designated HCRA providers for services provided under the NYS Medicaid Prenatal Care Assistance Program (PCAP)?

Answer 6: Yes. The PCAP is a NYS Medicaid program. Just as with any other NYS Medicaid payment coming directly from the NYS Medicaid Program, associated surcharge payments are issued by the program to the Public Goods Pool, if the HCRA provider (Article 28 hospital, comprehensive D&TC, or ambulatory surgical center) has completed form DOH-4405, authorizing the Medicaid Program to pay the surcharges directly to the Public Goods Pool on their behalf. If the provider has not submitted form DOH-4405, associated surcharge payments are issued to the provider instead, in a check issued separately from the Medicaid payments. The provider is then statutorily obligated to remit the surcharges to the Public Goods Pool within 5 days of receipt, via the Report of Medical Assistance Surcharge, Payments for Non-Electing Providers. This report form is sent with the surcharge check(s). Failure to remit the surcharges to the Public Goods Pool within 5 days of receipt of receiving the surcharges subjects the provider to penalty and interest.

Please note that for NYS governmental entities making payments for NYS programs other than the NYS Medicaid program, and that are authorized to pay the NYS Medicaid rates for services, these governmental entities should be checked against the HCRA Elector List, found on either the Department´s Web site: www.nyhealth.gov/regulations/hcra/ or, on the Office of Pool Administration´s (OPA) Web site: www.hcrapools.org to determine if the NYS governmental entity is an elector. Providers who find the entity on the Elector List know that the program is obligated to pay their surcharge obligations directly to the Public Goods Pool. Those not listed on the Elector List should be billed the surcharge, at the reduced NYS Medicaid surcharge percentage, if they are subject to a HCRA surcharge. If providers are not sure if the NYS governmental program is subject to a HCRA surcharge, they may send an email to: bimamail@health.state.ny.us

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Question 7: Do the HCRA surcharges apply to payments made to designated providers by the NYS Liquidation Bureau from funds collected and maintained in the following "Security Fund" accounts : the New York Property/Casualty Insurance Security Fund, the Public Motor Vehicle Liability Security Fund and the Workers´ Compensation Security Fund?

Answer 7: Yes. The Security Funds are maintained to pay claims covered by policies issued by insolvent NY insurers. The Security Fund is funded by assessments on insurance premiums, and dividends from insolvent insurers' estates'. The Security Funds pay claims covered by workers compensation, property/casualty policies, and auto no-fault policies pursuant to NYS Insurance Law.

For purposes of the HCRA, the Security Fund´s surcharge obligation when billed by a HCRA designated provider is at the NYS Medicaid/State governmental agencies rate, payable directly to the HCRA designated provider. There is no covered lives obligation or regional GME percentage.

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Question 8: How do the HCRA surcharges apply to payments made by managed care organizations to HCRA designated providers on behalf of NYS prison inmates under a contract with the NYS Department of Corrections?

Answer 8: Solely for the purposes of the HCRA surcharges, managed care organizations in such situations are considered to be acting as the agent for the state or municipality and therefore are subject to the NYS Medicaid/State Governmental Agencies surcharge rate. There is no covered lives obligation or regional GME percentage surcharge.

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Question 9: Do the HCRA surcharges apply to payments made to designated providers by NY public benefit corporations?

Answer 9: Yes, but different obligations apply depending on the role played by the corporation. Payments made by public benefit corporations which qualify for designation as a "state government agency" (as defined in Section 1299-a (13) of the Public Authorities Law and in PHL Section 2801(7)), are subject to the NYS Medicaid/State Governmental Agencies surcharge rate when the entity is acting in its role as a state government agency. For example, payments made to a designated provider by a public transportation authority for injuries sustained by passengers using the authority´s transportation system are subject to the NYS Medicaid/State Governmental Agencies surcharge rate since such payments are being made in the authority´s role as a government agency. Some examples of a public transportation authority include passenger services provided by Metropolitan Transportation Authority (MTA), Amtrak, Capital District Transportation Authority (CDTA), and the NYS Thruway. Public transportation does not include services of a taxi cab, limousine, or a privately owned bus service.

However, payments made by public benefit corporations in connection with employee health is fully subject to the HCRA surcharges at a rate based upon the election decision of the organization providing coverage, AND where inpatient hospital coverage is provided, a covered lives obligation or regional GME surcharge. Payments made by public benefit corporations in connection with coverage for workers compensation or auto no-fault are also fully subject to the HCRA surcharges at a rate based upon the election decision of the organization providing coverage, but do not pay a covered lives or regional GME directly to the Public Goods or to a provider. Under the HCRA provisions, public benefit corporations, in these situations, are acting in their role as an employer rather than a governmental agency.

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Question 10: Do the surcharges apply to revenue a designated provider receives from the New York State Office of Temporary and Disability Assistance for medical services provided in connection with disability determinations?

Answer 10: Payments made by the New York State Office of Temporary and Disability Assistance for medical services provided in connection with disability determinations are exempt from the HCRA surcharges since such medical services are performed for the primary purpose of determining eligibility for payments under the Social Security Act, not for the purpose of medical treatment.

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Question 11: Does the HCRA surcharge apply to revenue received by designated providers from the New York State Office of Temporary and Disability Assistance for services provided in connection with paternity testing to establish child support obligations?

Answer 11: Payments made by the New York State Office of Temporary and Disability Assistance for medical services provided to establish child support obligations are exempt from the HCRA surcharges since such medical services are performed for the primary purpose of establishing child support obligations, not for the purpose of medical treatment.

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Question 12: Does the HCRA surcharge apply to revenue received from a municipality for durable medical equipment?

Answer 12: When a designated provider of services receives revenue from a municipality for durable medical equipment purchased for a specific patient, the revenue is patient services revenue subject to the surcharges. When a designated provider of services receives revenue from a municipality for a bulk purchase of durable medical equipment for the county´s clinic the surcharges do not apply since such revenue is not considered to be patient services revenue.

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