New York State Health Care Reform Act (HCRA)

October 13, 2004

Dear Chief Executive Officer:

Section 2807-t (6) of the Public Health Law (PHL) requires that prospective adjustments be made to Professional Education Pool (PEP) covered-lives assessments to reconcile PEP regional under/over funding for a prior period. The law specifies that such adjustments be made in "...the year next following the calculation of the reconciliation". Since funding of the 2003 PEP is now considered complete, the Department has finalized the level of under/over funding within each region. Consequently, the 2005 regional covered lives assessments have been adjusted to incorporate these mandated revisions.

Please be reminded that Section 2807-s (2)(c) of the PHL stipulates that the alternative inpatient PEP surcharges for periods on and after July 1, 2003, applicable to affected non-electing third-party payors, be established at the same regional percentage allowances calculated for the period January 1, 1999 through December 31, 1999, increased by 8.19%.

The enclosed schedule provides the 2005 regional covered lives assessments and alternative inpatient surcharges. These amounts will be reflected in the 2005 service year portion of the Payor Report of Covered Lives Assessment and the Hospital Report of Patient Services Revenues for Inpatient Services.

If you use a TPA, we suggest that you contact your TPA directly concerning any questions you may have regarding this notice. Others having questions regarding the foregoing, should contact a HCRA representative at (518) 474-1673.


Mark H. Van Guysling
Assistant Director
Division of Health Care Financing