2007 HCRA Legislative Enactments

May 14, 2007

Dear Payor/Provider:

Re: New York State Health Care Reform Act ( HCRA) of 2000

This letter provides a summary of the major statutory changes made to the New York State Health Care Reform Act (HCRA) of 2000 as part of the enacted 2007-2008 State Fiscal Year Budget (i.e., Budget Bill).

The Budget Bill extends many of the critical provisions of HCRA through December 31, 2008. It continues the deregulated hospital ratesetting system which allows most payors to negotiate rates for inpatient hospital services and the existing statutorily based ratesetting methodology for inpatient hospital services paid by New York State Medicaid, other New York State governmental agencies, New York State's local county governments for services provided to inmates of local correctional facilities, and payments made for such services under the New York State Worker's Compensation Law, Comprehensive Motor Vehicle Insurance Reparations Act, Volunteer Firefighters' Benefit Law and Ambulance Worker's Benefit Law.

The Budget Bill also continues surcharge, assessment, and covered lives obligations authorized through Sections 2807-c, 2807-j, 2807-s, and 2807-t of the Public Health Law. The enclosed overview provides a summary of the specific statutory revisions which are important to payors and providers of health services regarding their HCRA pool funding obligations. For additional information, please refer to the Department's website at: www.health.state.ny.us/regulations/hcra/index.htm

Further clarification may also be obtained by contacting:

Mr. Richard Pellegrini, Director
Bureau of Financial Management and Information Support
Room 984, Corning Tower
Albany, New York 12237-0719
(518) 473-4653


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


Overview of Recently Enacted HCRA Revisions Impacting Payor and Provider
Pool Payment Obligations/Responsibilities

  • HCRA Surcharges/Assessments
    The surcharge/assessment percentages imposed on payments made to New York State general hospitals and diagnostic and treatment centers providing comprehensive primary care or ambulatory surgery services have been extended through December 31, 2008. These surcharge/assessment percentages remain at the levels established for periods on and after January 1, 2006. To view the percentages for various periods, please visit the following address: www.health.state.ny.us/regulations/hcra/surcharge.htm
  • Professional Education Pool (PEP) Covered Lives Assessments
    The covered-lives assessments applicable to third-party payors who have elected to pay their HCRA surcharge obligations directly to the State's HCRA Pool Administrator has also been extended through December 31, 2008. Enacted provisions have also increased the annual collection target for this assessment from $775 million to $850 million effective on April 1, 2007. A separate correspondence has been recently released identifying the resultant revised assessment rates which will be applicable for April 1, 2007, through December 31, 2007, coverage periods. These revised assessment rates can also be viewed by visiting: www.health.state.ny.us/regulations/hcra/gmecl.htm
  • Alternative Per Unit of Service PEP Surcharges
    Section 2807-s (2)(c)(iv) of the PHL stipulates that the alternative inpatient PEP surcharges for periods on and after July 1, 2007, applicable to affected non-electing third-party payors, be established at the same regional percentage allowances calculated for the period January 1, 2006, through June 30, 2007.
  • 1% Hospital Statewide Assessment
    The 1% assessment on hospital gross inpatient care services revenue imposed pursuant to PHL Section 2807-c (18) has been extended through December 31, 2008.
  • HCRA Compliance Audits
    Sections 2807-j and 2807-t of the PHL have been amended to include language that allows the Department, as part of a final HCRA compliance audit resolution, to waive any applicable interest and penalties if the balance of such findings are mutually agreed upon and paid in full within sixty days of the issuance of a final audit report.