Financial Aid Law (FAL)

February 16, 2007

DPACS: 07-04

To All Article 28 General Hospitals

Dear CEO:

As previously communicated, Chapter 57 of the Laws of 2006 has added a new Subdivision 9-a to Section 2807-k of the NYS Public Health Law requiring all general hospitals to implement patient financial aid policies and procedures that are in conformance with the provisions of this law. Such policies and procedures were required to be in place by January 1, 2007, and are a condition for receipt of Hospital Indigent Care and High Need funding for awards applicable to periods on and after January 1, 2009.

Under the provisions of this law, the Department of Health was directed to complete three tasks to assist hospitals in fully implementing its statutory requirements. Below is a description of these tasks and actions required by hospitals to address related issues.

Designation of Primary Service Areas

Paragraph (f) of this new Subdivision, requires each general hospital to provide prescribed financial aid to all qualifying patients who are New York State residents in need of emergency services. For all other medically necessary hospital services, medical care and prescribed financial aid must be provided to qualifying patients who reside in each hospital´s primary service area as determined according to criteria established by the Department and may be provided to other patients.

In developing such criteria, the Department was required to consult with representatives of the hospital industry, health care consumer advocates, and local public health officials. On December 6, 2006, proposed criteria were issued for such review and comment. Based upon receipt of these comments, these proposed criteria have been substantially modified to respond to a number of concerns raised to the Department as part of this process.

Enclosed with this letter are two attachments: 1) Hospital Financial Assistance Policies and Procedures - Primary Service Area Criteria and; 2) Hospital Primary Service Areas by Counties of Location. Specifically, the Primary Service Area criteria outline the policies and procedures which must be followed by hospitals in implementing their assigned Primary Service Area designations. The list of Hospital Primary Service Areas by County of Location identifies the areas that must be covered by a hospital´s financial aid policies and procedures.

To fully implement such criteria, each hospital must submit a letter to the Department describing any residency requirements it will use to extend discounted financial aid to patients deemed eligible pursuant to the hospital´s conforming financial aid policies and procedures. Please be aware, that discounts prescribed by law must be available to all patients residing in your assigned Primary Service Area for those receiving medically necessary treatment.

This letter is due to the Department on March 2, 2007 and should be sent to:

Martin Conroy
Director, Division of Primary and Acute Care Services
Hedley Building
6th Floor, 433 River Street
Troy, New York 12180-2299

Nominal Payment Guidelines

Paragraph (b)(i) of this new Subdivision, prohibits hospitals from collecting any amount in excess of a nominal payment amount for eligible patients at or below 100% of the Federal Poverty Level as established pursuant to guidelines issued by the Department. Hospitals are free to charge less.

Based upon a review of the maximum amounts charged to patients in this income category by our largest public provider of uninsured services, the Department has concluded that all other hospitals throughout the State should charge no amount in excess of such levels. Consequently, the guidelines below represent the maximum total amount which can be charged by the hospital, to eligible patients at or below 100% of the Federal Poverty Level by major service category:

Nominal Payment Guidelines:
Inpatient Services - $150/Discharge
Ambulatory Surgery - $150/Procedure
MRI Testing - $150/Procedure
Adult ER/Clinic Services - $15/Visit
Prenatal and Pediatric ER/Clinic Services - No Charge

Asset Consideration

Paragraph (b)(vi) of this new Subdivision, permits a hospital to consider, on a case by case basis, the existence of significant assets owned by a patient, and/or legally responsible individual, when determining the mandated level of discounts to be applied to patients at or below 150% of the Federal Poverty Level.

A December 5, 2006, letter was issued to all hospitals by the Department requiring the completion of an enclosed survey asking if such asset consideration was to be incorporated in your established policies and procedures and, if so, requiring the submission of a certification agreeing to compliance with conditions specified in this enclosed survey. The letter directed that a response be due to the Department by December 29, 2006.

To date, ninety-seven hospitals responded that such asset considerations would not be incorporated in their financial aid policies and procedures. Fifty-six hospitals responded they would, and submitted the prerequisite signed certification. Responses for sixty-one hospitals remain outstanding.

As stated in the December 5, 2006 correspondence, failure to properly submit this survey/certification prohibits your hospital from considering assets in determining the level of discounts applicable to eligible patients at or below 150% of the Federal Poverty Level. If such consideration is to be made, your hospital must submit this prerequisite survey to:

Mr. Richard Pellegrini
Director
Bureau of Financial Management & Information Support
New York State Department of Health
Rm 984, Corning Tower Building
Empire State Plaza
Albany, New York 12237

Through implementation of the above referenced requirements, hospitals should now be able to effectuate financial aid policies and procedures which are in full compliance with the provisions of this new mandate. Should you have any questions on the Primary Service Area requirements and related reporting procedures, please contact Martin Conroy at (518) 402-1004. Any questions regarding the nominal payment guidelines or asset considerations should be directed to Mr. Rick Pellegrini at (518) 474-1673.

Sincerely,

David Wollner
Office of Health Systems Management

Enclosures (Policy), (Service Area)