New York State Health Care Reform Act (HCRA)

February 27, 2002

Notice to Designated Providers of Services and Electing Payors Concerning Certain Exempt Clinical Laboratory Services

The Federal Centers for Medicare and Medicaid Services (CMS) has recently formally notified the Department that they will not contest the permissibility of surcharge exemptions authorized under Public Health Law Sections 2807-j (1-a) and 2807-j (3), for clinical laboratory services provided by freestanding laboratories and referred ambulatory clinical laboratory services provided by hospitals and clinics on or after October 1, 2000, under the Federal Medicaid Voluntary Contribution and Provider Specific Tax Amendments of 1991. Consequently, the repeal of such surcharges is now deemed final.

Payors that voluntarily elected to remit surcharge payments directly to the Department's pool administrator are no longer required to maintain records of payments made for or on account of such clinical laboratory services provided on or after October 1, 2000. Further, any charges or collection of HCRA surcharges for aforementioned clinical laboratory services provided after the effective date of this repeal, pending resolution of the provider tax issue, must be reconciled accordingly and any related collected surcharges must be returned to affected patients/payors.