2008 HCRA Legislative Enactments

June 9, 2008

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 2008-2009 State Fiscal Year Budget (i.e., Budget Bill).

The Budget Bill extends many of the critical provisions of HCRA through December 31, 2011, including the continuation of a deregulated hospital ratesetting system that allows most payors to negotiate rates for inpatient hospital services. It 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


John E. Ulberg, Jr.
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, 2011. 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.nyhealth.gov/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 have been revised. A separate additional PEP assessment, that is required to achieve statewide targeted collections of $64.2 million, will apply for the October 1, 2008, through March 31, 2009, period. Each region's proportional share of this additional assessment collection target will be based on the same allocation formula specified in statute for the Graduate Medical Education component of the 2008 PEP assessment (i.e., PHL 2807-s (6) (b)). The law requires that this additional assessment be reported separately and paid in six monthly installments by the 10th day of each affected month. Initial payments are to be based on each payors' monthly enrollment count for the preceding month and, subsequently reconciled on a month to month basis to reflect actual enrollment counts for each applicable month.

    The regular annual PEP assessments will also be modified for periods commencing January 1, 2009 - March 31, 2011, to reflect a $70 million annual increase in the related statewide aggregate collection target. Also effective on January 1, 2009, electing third-party payors will have the option to continue to establish covered-lives enrollment obligations on membership during all or any portion of the month or, through the number of applicable units enrolled as of the last day of each month. Payors choosing to use the last day of the month's enrollment must indicate its choice to the Department at the beginning of an applicable calendar year and understand that it must remain in effect for the entire year. The Department will provide further instructions on related procedures under separate cover. These revised assessment rates can also be viewed by visiting: www.nyhealth.gov/regulations/hcra/gmecl.htm
  • Alternative Per Unit of Service PEP Surcharges
    PEP surcharges applicable to inpatient hospital payments made by affected non-electing payors will remain at the same regional percentage allowances currently in effect.
  • Web Posting of Payor and Provider Federal Employer Identification Numbers (FEIN's)
    For periods on and after January 1, 2009, every HCRA designated provider of services and electing payor will be required to provide the Department, or its designee, its FEIN for posting on the secured HCRA website. The purpose for this posting is to improve identification of electing payors and surchargable provider services. The law also requires the website to include the date that designated providers and electing payors were first posted to the Department's website. The Department is required to use this initial posting date to waive payment of interest and penalties otherwise applicable when a Department audit conclusively determines that the liability for such interest and penalties were the result of a delay in the listing of a new designated provider of services on the secure website. The Department will post this information on our existing secured website upon completing verification procedures which have already been initiated.
  • 1% Hospital Statewide Assessment
    The 1% assessment on hospital gross inpatient care services revenue imposed pursuant to Public Health Law Section 2807-c (18) has been extended through December 31, 2011.
  • HCRA Compliance Audits - Settlement of Future Years
    Sections 2807-j (8-a)(f) and 2807-t (10) (f) have been added to the Public Health Law authorizing the Department to enter into agreements with designated providers of services and third-party payors allowing us to use audit findings that have already been reached to settle potential audit liabilities for subsequent unaudited years through 2005. The Department is in the process of finalizing procedures and settlement offers that will be made to selected organizations that participated in prior HCRA compliance audits.
  • Finalizing Delinquency Estimates Sent to Recoupment or Referral
    The Public Health Law has been amended to include a new Section 2807-j (6) (g) which states that delinquent Public Goods Pool amounts that have been referred for recoupment or offset pursuant to Section 2807-j (6) (c), or referred to the Office of the New York State Attorney General for collection, will be deemed final and not subject to further revision or reconciliation based on any additional reports or other information submitted by designated providers of services contingent upon the facility receiving prior written notification to submit such delinquent reports in no less than thirty days.

    The same parameters have been established in a newly created Section 2807-c (18) (h) in regard to the 1% Statewide Assessment. This new paragraph also authorizes the Department to resolve 1% Statewide Assessment delinquencies by direct recoupments or offsets against other payments made by the State.