§ 2807. Hospital reimbursement provisions; generally. 1. Valid
operating certificate requirement. No government agency and no
corporation organized and operating in accordance with article
forty-three of the insurance law and no health maintenance organization
organized and operating in accordance with article forty-four of this
chapter, shall purchase, pay for or make reimbursement or grants-in-aid
for any hospital or health-related service, unless, at the time the
service was provided, the hospital possessed a valid operating
certificate authorizing such service. No government agency shall
purchase, pay for or make reimbursement or grants-in-aid for any
hospital or health-related service that has been determined by the
commissioner of health to be unauthorized for payment under the medical
assistance program pursuant to section twenty-eight hundred three of
this article.

2. (a) Rate approvals. Payments for hospital service and
health-related service made by government agencies or for services
provided prior to January first, nineteen hundred ninety-seven by
organizations operating in accordance with the provisions of article
forty-four of this chapter shall be at rates approved by the state
director of the budget in the case of government agencies and approved
by the commissioner in the case of plans, organized and operating under
the provisions of article forty-four of this chapter, under which such
payments are made by agencies other than government agencies or
corporations organized and operating in accordance with article
forty-three of the insurance law. Payments for hospital service and
health-related service by corporations organized and operating in
accordance with article forty-three of the insurance law for services
provided prior to January first, nineteen hundred ninety-seven shall be
at rates approved by the commissioner of health.

(a-1) Notwithstanding any inconsistent provision of law, rates of
payment by governmental agencies for the operating cost component of
general hospital out-patient and emergency services, and for the
operating cost component of treatment or diagnostic center services
shall not require a certification by the commissioner that they are
reasonably related to the costs of efficient production of such services
nor that they are reasonable and adequate to meet the costs which must
be incurred by efficiently and economically operated facilities.

(b) During the period October first, nineteen hundred ninety-four
through September thirtieth, nineteen hundred ninety-five and for each
twelve month rate period commencing on October first thereafter, rates
of payment by governmental agencies for the operating cost component of
treatment or diagnostic center services shall be based on operating
costs in the base year cost report adjusted by a trend factor determined
in accordance with rules and regulations promulgated pursuant to
paragraph (b) of subdivision two of section twenty-eight hundred three
of this article; provided, however, that prior to such adjustment,
allowable operating costs shall be established by the commissioner after
taking into account the cost of services provided in facilities offering
similar services and regional economic factors, plus the addition of the
capital cost per visit. The capital cost per visit shall be based on the
base year cost report except that the capital cost per visit may be
adjusted for major outpatient capital expenditures, incurred subsequent
to the reporting year, when such expenditures have received the
requisite approvals and the facility has provided the commissioner with
a certified statement of expenditures. The base year for the rate period
commencing on October first, nineteen hundred ninety-four shall be
nineteen hundred ninety-two and shall be advanced one year thereafter
for each subsequent rate period.

(c) Notwithstanding any other provision of law to the contrary, for a
diagnostic and treatment center licensed pursuant to this article that
provides, as its principal mission, services to individuals with
developmental disabilities, the commissioner may fully or partially
waive or modify recoupment of medical assistance payments based on
retroactive changes to the applicable formula for capital costs for the
period of September first, two thousand nine to December thirty-first,
two thousand twelve.

* (e) Notwithstanding any inconsistent provisions of this subdivision
or any other law, payments made by governmental agencies for ambulatory
surgical services provided by a hospital, including general hospitals
and diagnostic and treatment centers, during the period June first,
nineteen hundred eighty-nine through December thirty-first, nineteen
hundred eighty-nine and the period January first, nineteen hundred
ninety through December thirty-first, nineteen hundred ninety and every
twelve month rate period thereafter shall be at case based rates of
reimbursement established by the commissioner and approved by the state
director of the budget. Ambulatory surgical services case based rates of
payment shall be established prospectively and shall include operating
costs and capital costs. Factors considered in establishing such case
based rates shall include, but not be limited to: a classification of
procedures with individual or combined rates established for each
services classification; operating and capital costs of ambulatory
surgical services efficiently and economically provided, considering
regional economic factors, trended to the rate period; and the need for
incentives to improve services and institute economies.

* NB Expired April 1, 2011

* (f) (i) During the period July first, nineteen hundred ninety
through March thirty-first, nineteen hundred ninety-one, the rate
periods during the period April first, nineteen hundred ninety-one
through September thirtieth, nineteen hundred ninety-four and for each
fiscal year period commencing on October first thereafter, comprehensive
clinic rates of payment by governmental agencies established in
accordance with paragraph (b) of this subdivision, applicable for
services provided to individuals eligible for medical assistance
pursuant to title eleven of article five of the social services law for
voluntary non-profit or publicly sponsored diagnostic and treatment
centers providing a comprehensive range of primary health care services
which can demonstrate, on forms provided by the commissioner, losses
from a disproportionate share of bad debt and charity care during a base
year period established by regulation may include an allowance
determined in accordance with this paragraph to reflect the needs of the
diagnostic and treatment center for the financing of losses resulting
from bad debt and the costs of charity care. Losses resulting from bad
debt and the costs of charity care shall be determined by the
commissioner considering, but not limited to, such factors as the losses
resulting from bad debt and the costs of charity care provided by the
diagnostic and treatment center and the availability of other financial
support, including state and local assistance public health aid, to meet
the losses resulting from bad debt and the costs of charity care of the
diagnostic and treatment center. The bad debt and charity care allowance
for a diagnostic and treatment center for a rate period shall be
determined by the commissioner in accordance with rules and regulations
adopted by the council and approved by the commissioner, and shall be
consistent with the purposes for which such allowances are authorized
for general hospitals pursuant to the provisions of article twenty-eight
of this chapter and rules and regulations promulgated by the
commissioner. A diagnostic and treatment center applying for a bad debt
and charity care allowance pursuant to this paragraph shall provide
assurances satisfactory to the commissioner that it shall undertake
reasonable efforts to maintain financial support from community and
public funding sources and reasonable efforts to collect payments for
services from third party insurance payors, governmental payors and
self-paying patients. To be eligible for an allowance pursuant to this
paragraph, a diagnostic and treatment center must provide a
comprehensive range of primary health care services and must demonstrate
that a minimum of fifteen percent of total clinic visits reported during
the applicable base year period were to uninsured individuals. The
commissioner may retrospectively reduce the bad debt and charity care
allowance of a diagnostic and treatment center if it is determined that
provider management actions or decisions have caused a significant
reduction for the rate period in the delivery of comprehensive primary
health care services to bad debt and charity care residents of the
community.

(ii) The total amount of funds to be allocated and distributed for bad
debt and charity care allowances to eligible voluntary and nonprofit
diagnostic and treatment centers for a rate period in accordance with
this paragraph shall be limited to an annual aggregate amount of seven
million three hundred thousand dollars. The total amount of funds to be
allocated and distributed for bad debt and charity care allowances to
eligible publicly sponsored diagnostic and treatment centers for a rate
period in accordance with this paragraph shall be limited to an annual
aggregate amount of seven million seven hundred thousand dollars;
provided, however, that twenty percent of the amount of funds allocated
for distribution to eligible publicly sponsored diagnostic and treatment
centers shall be available for clinics operating under the auspices of
the Health and Hospitals Corporation. Notwithstanding the foregoing and
any other provision of this chapter municipalities which received state
aid, pursuant to article two of the public health law and prior to the
effective date of this chapter, in support of non-hospital based
free-standing or local health department operated general medical
clinics, shall receive a bad debt and charity care allowance of not less
than the amount received in the nineteen hundred eighty-nine--nineteen
hundred ninety state fiscal year for general medical clinics, plus the
applicable local share for medical assistance expenditures under title
XIX of the federal social security act. Funds to be distributed pursuant
to this subparagraph shall be based on losses associated with the
delivery of bad debt and charity care excluding the amount of such
losses determined in accordance with subparagraph (ix) of this paragraph
as the incremental loss basis for a supplemental allowance for a
diagnostic and treatment center designated as a preferred primary care
provider.

(iii) No diagnostic and treatment center may receive a bad debt and
charity care allowance in accordance with this paragraph in an amount
which exceeds its need for the financing of losses associated with the
delivery of bad debt and charity care.

(iv) A nominal payment amount for the financing of losses associated
with the delivery of bad debt and charity care will be established for
each eligible diagnostic and treatment center. The nominal payment
amount shall be calculated as the sum of the dollars attributable to the
application of an incrementally increasing nominal coverage percentage
of base year period losses associated with the delivery of bad debt and
charity care for percentage increases in the relationship between base
year period eligible bad debt and charity care clinic visits and base
year period total clinic visits according to the following scale:
% of eligible bad debt and charity care % of nominal financial

clinic visits to total visits loss coverage

up to 15% 50%

15 - 30% 75%

30%+ 100%
If the sum of the nominal payment amounts for all eligible voluntary
non-profit diagnostic and treatment centers or for all eligible public
diagnostic and treatment centers is less than the amount allocated for
bad debt and charity care allowances pursuant to subparagraph (ii) or
(ix) respectively of this paragraph for such diagnostic and treatment
centers respectively, the nominal coverage percentages of base year
period losses associated with the delivery of bad debt and charity care
pursuant to this scale may be increased to not more than one hundred
percent for voluntary non-profit diagnostic and treatment centers or for
public diagnostic and treatment centers in accordance with rules and
regulations adopted by the council and approved by the commissioner.

(v) The bad debt and charity care allowance for each eligible
voluntary non-profit diagnostic and treatment center shall be based on
the dollar value of the result of the ratio of total funds allocated for
bad debt and charity care allowances for voluntary non-profit diagnostic
and treatment centers pursuant to subparagraph (ii) of this paragraph to
the total statewide nominal payment amounts for all eligible voluntary
non-profit diagnostic and treatment centers determined in accordance
with subparagraph (iv) of this paragraph applied to the nominal payment
amount for each such diagnostic and treatment center.

(vi) The bad debt and charity care allowance for each eligible public
diagnostic and treatment center shall be based on the dollar value of
the result of the ratio of total funds allocated for bad debt and
charity care allowances for public diagnostic and treatment centers
pursuant to subparagraph (ii) of this paragraph to the total statewide
nominal payment amounts for all eligible public diagnostic and treatment
centers determined in accordance with subparagraph (iv) of this
paragraph applied to the nominal payment amount for each such diagnostic
and treatment center.

(vii) Diagnostic and treatment centers shall furnish to the department
such reports and information as may be required by the commissioner to
assess the cost, quality, access to, effectiveness and efficiency of bad
debt and charity care provided. The council shall adopt rules and
regulations, subject to the approval of the commissioner, to establish
uniform reporting and accounting principles designed to enable
diagnostic and treatment centers to fairly and accurately determine and
report bad debt and charity care visits and the costs of bad debt and
charity care. In order to be eligible for an allowance pursuant to this
paragraph, a diagnostic and treatment center must be in compliance with
bad debt and charity care reporting requirements.

(viii) Of the funds allocated and distributed for bad debt and charity
care allowances to eligible voluntary and non-profit diagnostic and
treatment centers for a rate period in accordance with subparagraph (ii)
of this paragraph, an annual aggregate amount not to exceed three
million eight hundred thousand dollars within a rate period shall be
paid by or on behalf of diagnostic and treatment centers into a primary
care initiative pool established by the commissioner. Such funds shall
be distributed to diagnostic and treatment centers in accordance with
the provisions of subdivisions one through six of section twenty-eight
hundred seven-b of this article.

(ix) During the period January first, nineteen hundred ninety-four
through September thirtieth, nineteen hundred ninety-four and for each
twelve month rate period commencing on October first thereafter, to the
extent of funds available therefor, a diagnostic and treatment center
which is approved as a preferred primary care provider pursuant to
subdivision twelve of section twenty-eight hundred seven of this article
and meets the requirements of this paragraph may be eligible for a
supplemental allowance determined in accordance with this paragraph. The
supplemental allowance shall be based on losses associated with the
delivery of bad debt and charity care incurred by a preferred primary
care provider to the extent such losses exceed any losses associated
with the delivery of bad debt and charity care incurred for nineteen
hundred ninety-three or, if later, the year immediately preceding the
year in which the diagnostic and treatment center is first designated a
preferred primary care provider.

(x) This paragraph shall be effective if, and as long as, federal
financial participation is available for expenditures made for
beneficiaries eligible for medical assistance under title XIX of the
federal social security act based upon the allowances determined in
accordance with this paragraph.

(xi) Notwithstanding any inconsistent provision of this paragraph,
adjustments to rates of payment for diagnostic and treatment centers
determined in accordance with subparagraphs (i) through (x) of this
paragraph shall apply only for services provided on or before December
thirty-first, nineteen hundred ninety-six.

* NB Expired December 31, 1996

(g)(i) During the period April first, nineteen hundred ninety-four
through December thirty-first, nineteen hundred ninety-four and for each
calendar year rate period commencing on January first thereafter, rates
of payment by governmental agencies for the operating cost component of
general hospital outpatient services shall be based on the operating
costs reported in the base year cost report adjusted by the trend factor
applicable to the general hospital in which the services were provided;
provided, however, that the maximum payment for the operating cost
component of outpatient services shall be sixty-seven dollars and fifty
cents plus the addition of the capital cost per visit. The capital cost
per visit shall be based on the base year cost report except that the
capital cost per visit may be adjusted for major outpatient capital
expenditures incurred subsequent to the reporting year, when such
expenditures have received the requisite approvals and the facility has
provided the commissioner with a certified statement of the
expenditures. The base year for the period April first, nineteen hundred
ninety-four through December thirty-first, nineteen hundred ninety-four
shall be nineteen hundred ninety-two and shall be advanced one year
thereafter for each subsequent calendar year rate period. Further, the
provisions of subdivision seven of this section shall not apply. The
commissioner may waive the maximum allowable payment and limitations on
the rate of payment as prescribed herein to provide for the
reimbursement of offering and arranging services eligible for ninety
percent federal funds as set forth in section nineteen hundred three of
the federal social security act, and to provide for the reimbursement of
specialized services having separately identifiable costs and
statistics, including but not limited to hemodialysis services and
surgical services provided on an outpatient basis. Such waiver shall be
granted only when the commissioner finds that the services are being
provided efficiently and at minimum cost. The commissioner shall
promptly promulgate rules and regulations necessary to identify such
services. Among the criteria which the commissioner shall consider in
the case of specialized services are whether the services require highly
specialized staff, equipment or facilities, thereby generating a cost
that substantially exceeds that of more routine diagnostic or treatment
services; whether the facility in which the services are provided is
presently providing the services to the population in need; and, whether
the services may be provided safely and effectively on an outpatient
basis at a lower cost than through inpatient admission. In addition the
commissioner shall provide for a waiver of the maximum allowable payment
for those outpatient services medically necessary which include surgical
procedures where delay in surgical intervention would substantially
increase the medical risk associated with such surgical intervention.
Where the commissioner waives the maximum allowable payment for any
specified service he may, in accordance with the foregoing criteria and
such other criteria as he deems appropriate, establish a maximum
allowable payment for such specified service.

(ii) During the period April first, nineteen hundred ninety-four
through December thirty-first, nineteen hundred ninety-four and for each
calendar year rate period commencing on January first thereafter, rates
of payment by governmental agencies for the operating cost component of
general hospital emergency services shall be based on the operating
costs reported in the base year cost report adjusted by the trend factor
applicable to the general hospital in which the services were provided,
and in addition shall include that portion of the reasonable incremental
emergency service operating costs incurred by such hospital in excess of
emergency service costs reported in the nineteen hundred eighty-eight
cost report, after application of the trend factor, attributable to
meeting additional quality of care standards for emergency services that
became effective on or after January first, nineteen hundred
eighty-nine; provided, however, that the maximum payment for the
operating component shall be ninety-five dollars, provided further,
however, that for the period January first, two thousand seven through
December thirty-first, two thousand seven the maximum payment for the
operating component shall be one hundred twenty-five dollars, and during
the period January first, two thousand eight through December
thirty-first, two thousand eight, the maximum payment for the operating
component shall be one hundred forty dollars; and during the period
January first, two thousand nine through December thirty-first, two
thousand nine and for each calendar year thereafter, the maximum payment
for the operating component shall be one hundred fifty dollars. A
capital cost per visit shall be based on the base year cost report
except that the capital cost per visit may be adjusted for the major
outpatient capital expenditures incurred subsequent to the report year,
when such expenditures have received the requisite approvals and the
facility has provided the commissioner with a certified statement of
expenditures. The base year for the period April first, nineteen hundred
ninety-four through December thirty-first, nineteen hundred ninety-four
shall be nineteen hundred ninety-two and shall be advanced one year
thereafter for each subsequent calendar year rate period. Further, the
provisions of subdivision seven of this section shall not apply prior to
January first, two thousand seven.

* (iii) (A) For purposes of this subparagraph:

(1) "Children with medical fragility" shall mean an individual who is
under twenty-one years of age and has a chronic debilitating condition
or conditions, who may or may not be hospitalized or institutionalized,
and who meets one or more of the following criteria: (I) is
technology-dependent for life or health sustaining functions; (II)
requires complex medication regimens or medical interventions to
maintain or to improve their health status; or (III) is in need of
ongoing assessment or intervention to prevent serious deterioration of
their health status or medical complications that place their life,
health or development at risk.

(2) "Pediatric residential health care facility" shall mean a
free-standing facility or discrete unit within a facility authorized by
the commissioner to provide extensive nursing, medical, psychological,
and counseling support services solely to children under the age of
twenty-one.

(3) "Pediatric diagnostic and treatment center" shall mean a
diagnostic and treatment center established pursuant to this article,
which as of April first, two thousand twenty-four, has been
participating in the demonstration program authorized under subdivision
one of section twenty-eight hundred eight-e of this article, for which
at least eighty percent of its total Medicaid fee-for-service
reimbursements derive from the provision of services to children under
the age of twenty-one with medical fragility and is affiliated with a
pediatric residential health care facility.

(B) (1) Notwithstanding any law, rule, or regulation to the contrary,
the commissioner shall establish rates of reimbursement for pediatric
diagnostic and treatment centers for all services provided on or after
April first, two thousand twenty-four, to children eligible for medical
assistance that reflect the costs necessary to provide care and services
to children with medical fragility being treated at such pediatric
diagnostic and treatment center.

(2) For the period April first, two thousand twenty-four, to December
thirty-first, two thousand twenty-four, and until such time as a
certified annual cost report for such period is received and verified by
the department, the operating component of such rate shall reflect
budgeted costs for the period January first, two thousand twenty-four,
through December thirty-first, two thousand twenty-four, as submitted to
the department and adjusted as the commissioner deems appropriate. Upon
submission and subsequent verification of the cost report, the operating
component of the rate shall be reflective of actual costs for the period
January first, two thousand twenty-four, through December thirty-first,
two thousand twenty-four, subject to further adjustments as the
commissioner deems appropriate. Thereafter, the base period reported
operating costs used to establish rates pursuant to this subparagraph
shall be updated no less frequently than every two years. In addition to
required annual cost reports, pediatric diagnostic and treatment
centers, as defined by this subparagraph, shall submit additional data
as the commissioner requires.

(3) Notwithstanding any law, rule, or regulation to the contrary,
pediatric diagnostic and treatment centers shall be reimbursed for
services provided to children enrolled in Medicaid managed care plans at
the rates of reimbursement promulgated pursuant to this subparagraph.

(4) The capital component of the rate shall reflect actual base year
costs.

(5) All rates established under this subparagraph shall be subject to
the availability of federal financial participation.

(6) The commissioner may promulgate or amend regulations as the
commissioner determines appropriate and necessary to establish the rates
provided for in this subparagraph and/or exempt pediatric diagnostic and
treatment centers from the ambulatory payment group reimbursement
methodology applicable to diagnostic and treatment centers.

* NB Repealed April 1, 2027

(h) Notwithstanding any inconsistent provisions of this subdivision or
any other law, except as provided in section 43.02 of the mental hygiene
law, the commissioner may, in accordance with rules and regulations
adopted by the council and approved by the commissioner, establish rates
of reimbursement for payments made by governmental agencies, subject to
the approval of the state director of the budget, for services provided
on an outpatient basis by a general hospital or diagnostic and treatment
center designated as a preferred primary care provider pursuant to
subdivision twelve of this section or providing specialty services
including hemo and peritoneal dialysis, outpatient rehabilitative and
psychiatric services, methadone maintenance, and other organized
outpatient or clinic services which are structured to address extensive
and complex medical needs for patients with chronic or infectious
medical conditions based on factors other than those prescribed by
paragraph (b) or subparagraph (i) of paragraph (g) of this subdivision
or subdivision three of this section provided, however, that the use of
such an alternative approach will not result in any increase to other
rates of reimbursement established pursuant to this article. During the
initial rate period such rates of payment for preferred primary care
providers shall be at least equal to the average rate of payment per
visit which would otherwise be provided pursuant to subparagraph (i) of
paragraph (g) or paragraph (b) of this subdivision. Factors used to
establish rates shall include a reasonable classification of medical
procedures with individual or combined rates established for each
service classification group which will be prospectively determined
based upon an estimate of the costs of such outpatient services
efficiently and economically provided by general hospitals and
diagnostic and treatment centers, considering regional economic factors
and the need for incentives to improve services and institute economies.
Notwithstanding any inconsistent provisions of law, rates of payment by
governmental agencies for outpatient services provided by a general
hospital or diagnostic and treatment center, shall not require a
certification by the commissioner that they are reasonable and adequate
to meet the costs which must be incurred by efficiently and economically
operated facilities.

2-a. Notwithstanding any provision of which is inconsistent with or
contrary to the structure established by this subdivision and
subdivision thirty-three of section twenty-eight hundred seven-c of this
article, and subject to the availability of federal financial
participation, rates of payment by governmental agencies, established
pursuant to this article, for general hospital outpatient services,
general hospital emergency services, ambulatory surgical services
provided by a hospital as defined by subdivision one of section
twenty-eight hundred one of this article, and diagnostic and treatment
center services, but excepting any facility whose reimbursement is
governed by subdivision eight of this section or any payments made on
behalf of persons enrolled in Medicaid managed care or in the family
health plus program, shall be in accordance with the following:

(a)(i) for the period December first, two thousand eight through
November thirtieth, two thousand nine, seventy-five percent of such
rates of payment for each general hospital's outpatient services shall
reflect the average Medicaid payment per claim, as determined by the
commissioner, for services provided by that facility in the two thousand
seven calendar year, but excluding any payments for services covered by
the facility's licensure, if any, under the mental hygiene law, and
twenty-five percent of such rates of payment shall, for the operating
cost component, reflect the utilization of the ambulatory patient groups
reimbursement methodology described in paragraph (e) of this
subdivision;

(ii) for the period December first, two thousand nine through December
thirty-first, two thousand ten, fifty percent of such rates for each
facility shall reflect the average Medicaid payment per claim, as
determined by the commissioner, for services provided by that facility
in the two thousand seven calendar year, but excluding any payments for
services covered by the facility's licensure, if any, under the mental
hygiene law, and fifty percent of such rates of payment shall, for the
operating cost component, reflect the utilization of the ambulatory
patient groups reimbursement methodology described in paragraph (e) of
this subdivision;

(iii) for the period January first, two thousand eleven through
December thirty-first, two thousand eleven, twenty-five percent of such
rates shall reflect the average Medicaid payment per claim, as
determined by the commissioner, for services provided by that facility
for the two thousand seven calendar year, but excluding any payments for
services covered by the facility's licensure, if any, under the mental
hygiene law, and seventy-five percent of such rates of payment shall,
for the operating cost component, reflect the utilization of the
ambulatory patient groups reimbursement methodology described in
paragraph (e) of this subdivision; and

(iv) for periods on and after January first, two thousand twelve, one
hundred percent of such rates of payment shall reflect the utilization
of the ambulatory patient groups reimbursement methodology described in
paragraph (e) of this subdivision.

(v) This paragraph shall be effective the later of: (i) December
first, two thousand eight, or (ii) after the commissioner receives final
approval of federal financial participation in payments made for
beneficiaries eligible for medical assistance under title XIX of the
federal social security act for the rate methodology established
pursuant to subparagraph (i) of paragraph (a) of subdivision
thirty-three of section twenty-eight hundred seven-c of this article.

(b) (i) for the period September first, two thousand nine through
November thirtieth, two thousand nine, seventy-five percent of such
rates of payment for services provided by each diagnostic and treatment
center and each free-standing ambulatory surgery center shall reflect
the average Medicaid payment per claim, as determined by the
commissioner, for services provided by that facility in the two thousand
seven calendar year, but excluding any payments for services covered by
the facility's licensure, if any, under the mental hygiene law, and
twenty-five percent of such rates of payment shall, for the operating
cost component, reflect the utilization of the ambulatory patient groups
reimbursement methodology described in paragraph (e) of this
subdivision;

(ii) for the period December first, two thousand nine through December
thirty-first, two thousand ten, fifty percent of such rates for each
facility shall reflect the average Medicaid payment per claim, as
determined by the commissioner, for services provided by that facility
in the two thousand seven calendar year, but excluding any payments for
services covered by the facility's licensure, if any, under the mental
hygiene law, and fifty percent of such rates of payment shall, for the
operating cost component, reflect the utilization of the ambulatory
patient groups reimbursement methodology described in paragraph (e) of
this subdivision;

(iii) for the period January first, two thousand eleven through
December thirty-first, two thousand eleven, twenty-five percent of such
rates for each facility shall reflect the average Medicaid payment per
claim, as determined by the commissioner, for services provided by that
facility in the two thousand seven calendar year, but excluding any
payments for services covered by the facility's licensure, if any, under
the mental hygiene law, and seventy-five percent of such rates of
payment shall, for the operating cost component, reflect the utilization
of the ambulatory patient groups reimbursement methodology described in
paragraph (e) of this subdivision; and

(iv) for periods on and after January first, two thousand twelve, one
hundred percent of such rates of payment shall reflect the utilization
of the ambulatory patient groups reimbursement methodology described in
paragraph (e) of this subdivision.

(c) for periods on and after December first, two thousand eight, such
rates of payment for ambulatory surgical services provided by general
hospitals shall reflect the utilization of the ambulatory patient groups
reimbursement methodology described in paragraph (e) of this
subdivision, provided however, that the capital cost component for such
rates shall be separately computed in accordance with regulations
promulgated in accordance with paragraph (e) of this subdivision.

(d) for periods on and after January first, two thousand nine, the
operating cost component of such rates of payment for general hospital
emergency services shall reflect the utilization of the ambulatory
patient groups reimbursement methodology described in paragraph (e) of
this subdivision and shall not reflect any maximum payment amount as
otherwise provided for in subparagraph (ii) of paragraph (g) of
subdivision two of this section.

(e) (i) notwithstanding any inconsistent provisions of this
subdivision, the commissioner shall promulgate regulations establishing,
subject to the approval of the state director of the budget,
methodologies for determining rates of payment for the services
described in this subdivision. Such regulations shall reflect
utilization of the ambulatory patient group (APG) methodology, in which
patients are grouped based on their diagnosis, the intensity of the
services provided and the medical procedures performed, and with each
APG assigned a weight reflecting the projected utilization of resources.
Such regulations shall provide for the development of one or more base
rates and the multiplication of such base rates by the assigned weight
for each APG to establish the appropriate payment level for each such
APG. Such regulations may also utilize bundling, packaging and
discounting mechanisms.

If the commissioner determines that the use of the APG methodology is
not, or is not yet, appropriate or practical for specified services, the
commissioner may utilize existing payment methodologies for such
services or may promulgate regulations, and may promulgate emergency
regulations, establishing alternative payment methodologies for such
services.

(ii) Notwithstanding this subdivision and any other contrary provision
of law, the commissioner may incorporate within the payment methodology
described in subparagraph (i) of this paragraph payment for services
provided by facilities pursuant to licensure under the mental hygiene
law, provided, however, that such APG payment methodology may be phased
into effect in accordance with a schedule or schedules as jointly
determined by the commissioner, the commissioner of mental health, the
commissioner of alcoholism and substance abuse services, and the
commissioner of the office for people with developmental disabilities.

(iii) Regulations issued pursuant to this paragraph may incorporate
quality related measures limiting or excluding reimbursement related to
potentially preventable conditions and complications; provided however,
such quality related measures shall not include any preventable
conditions and complications not identified for Medicare nonpayment or
limited payment.

* (iv) Effective April first, two thousand twenty, regulations issued
pursuant to this paragraph for public general hospitals or public health
systems, other than those operated by the state of New York or the state
university of New York, located in a city having a population of one
million or more shall reflect additional reimbursement for costs, to the
extent permitted under 42 CFR 447.321(b)(1) and based on actual
utilization of services. Such rate add-on shall be contingent upon
federal financial participation and approval, and subject to the terms
of a binding memorandum of understanding executed between the department
of health and the public general hospital or public health system
receiving the rate add-on. If payment of such rate add-on is projected
to cause Medicaid disbursements for such period to exceed the projected
department of health Medicaid state funds in the enacted budget
financial plan pursuant to subdivision three of section twenty-three of
the state finance law, as determined by the director of the budget, or
the memorandum of understanding is not executed or is breached, the
commissioner, in consultation with the director of the budget, may
either cancel or reduce payment of such rate add-on to achieve
compliance with the enacted budget financial plan.

* NB Repealed March 31, 2026

(f)(i) The commissioner shall periodically measure the utilization and
intensity of services provided to medical assistance recipients in
ambulatory settings. Such analysis shall include, but not be limited to:
measurement of the shift of surgical procedures from the inpatient
hospital setting to the ambulatory setting including measurement of the
impact of any such shift on quality of care and outcomes; changes in the
utilization and intensity of services provided in the outpatient
hospital department and in diagnostic and treatment centers; and the
change in the utilization and intensity of services provided in the
emergency department.

(ii) notwithstanding the provisions of paragraphs (a) and (b) of this
subdivision, for periods on and after January first, two thousand nine,
the following services provided by general hospital outpatient
departments and diagnostic and treatment centers shall be reimbursed
with rates of payment based entirely upon the ambulatory patient group
methodology as described in paragraph (e) of this subdivision, provided,
however, that the commissioner may utilize existing payment
methodologies or may promulgate regulations establishing alternative
payment methodologies for one or more of the services specified in this
subparagraph, effective for periods on and after March first, two
thousand nine:

(A) services provided in accordance with the provisions of paragraphs
(q), (r), and (ll) of subdivision two of section three hundred
sixty-five-a of the social services law; and

(B) all services, but only with regard to additional payment amounts,
as determined in accordance with regulations issued in accordance with
paragraph (e) of this subdivision, for the provision of such services
during times outside the facility's normal hours of operation, as
determined in accordance with criteria set forth in such regulations;
and

(C) services provided by licensed social workers, licensed mental
health counselors, and licensed marriage and family therapists, in
accordance with licensing criteria set forth in applicable regulations;
and

(D) individual psychotherapy services provided by licensed social
workers, in accordance with licensing criteria set forth in applicable
regulations, at diagnostic and treatment centers that provided, billed
for, and received payment for these services between January first, two
thousand seven and December thirty-first, two thousand seven;

(E) services provided to pregnant women pursuant to paragraph (s) of
subdivision two of section three hundred sixty-five-a of the social
services law and, for periods on and after January first, two thousand
ten, all other services provided pursuant to such paragraph (s) and
services provided pursuant to paragraph (t) of subdivision two of
section three hundred sixty-five-a of the social services law;

(F) wheelchair evaluation services and eyeglass dispensing services;
and

(G) immunization services, effective for services rendered on and
after June tenth, two thousand nine.

(f-1) Notwithstanding any inconsistent provision of this section or
any other contrary provision of law, the commissioner may with the
approval of the director of the budget, for periods prior to two
thousand twelve, establish rates of payments for selected patient
service categories that are based entirely upon the ambulatory patient
groups methodology as authorized pursuant to paragraph (e) of this
subdivision.

(g) for the purposes set forth in paragraphs (a) and (b) of this
subdivision, rates described as in effect for the two thousand seven
calendar year shall mean those rates which are in effect for that year
on the date this subdivision becomes effective and such rates shall not
thereafter, for the purposes set forth in such paragraphs (a) and (b),
be subject to further adjustment.

(h)(i) To the degree that rates of payment computed in accordance with
paragraphs (a) and (d) of this subdivision reflect utilization of the
ambulatory patient groups reimbursement methodology described in
paragraph (e) of this subdivision for purposes of computing the
operating component of such rates, the computation of the capital cost
component of such rates shall remain subject to the provisions of
subparagraphs (i) and (ii) of paragraph (g) of subdivision two of this
section, provided, however, that this subparagraph shall not be
understood as applying to those portions of rates of payment computed
pursuant to paragraph (a) of this subdivision which are based on average
Medicaid payments per claim.

(ii) To the degree that rates of payment computed in accordance with
paragraph (b) of this subdivision reflect utilization of the ambulatory
patient groups reimbursement methodology described in paragraph (e) of
this subdivision for purposes of computing the operating component of
such rates, the computation of the capital cost component of such rates
shall, for diagnostic and treatment centers, remain subject to the
provisions of paragraph (b) of subdivision two of this section and
shall, for free-standing ambulatory surgery centers, be separately
computed in accordance with regulations promulgated in accordance with
paragraph (e) of this subdivision, provided, however, that this
subparagraph shall not be understood as applying to those portions of
rates of payment which are based on average Medicaid payments per claim.

(i) Notwithstanding any provision of law to the contrary, rates of
payment by governmental agencies for general hospital outpatient
services, general hospital emergency services and ambulatory surgical
services provided by a general hospital established pursuant to
paragraphs (a), (c) and (d) of this subdivision shall result in an
aggregate increase in such rates of payment of fifty-six million dollars
for the period December first, two thousand eight through March
thirty-first, two thousand nine and one hundred seventy-eight million
dollars for periods after April first, two thousand nine, through March
thirty-first, two thousand thirteen, and one hundred fifty-three million
dollars for state fiscal year periods on and after April first, two
thousand thirteen, provided, however, that for periods on and after
April first, two thousand nine, such amounts may be adjusted to reflect
projected decreases in fee-for-service Medicaid utilization and changes
in case-mix with regard to such services from the two thousand seven
calendar year to the applicable rate year, and provided further,
however, that funds made available as a result of any such decreases may
be utilized by the commissioner to increase capitation rates paid to
Medicaid managed care plans and family health plus plans to cover
increased payments to health care providers for ambulatory care services
and to increase such other ambulatory care payment rates as the
commissioner determines necessary to facilitate access to quality
ambulatory care services.

3. Commissioner rate certification, governmental payments. Prior to
the approval of such rates, as provided in subdivision two of this
section, the commissioner shall determine, and in the case of approvals
by the state director of the budget, certify to such official that the
proposed rate schedules for payments to hospitals for hospital and
health-related services are reasonable and adequate to meet the costs
which must be incurred by efficiently and economically operated
facilities. In making such certification, the commissioner shall take
into consideration the elements of cost, geographical differentials in
the elements of cost considered, economic factors in the area in which
the hospital is located, the rate of increase or decrease of the economy
in the area in which the hospital is located, costs of hospitals of
comparable size, and the need for incentives to improve services and
institute economies. The commissioner shall also take into
consideration the economies and improvements in service to be
anticipated from the operation of joint central service or use of
facilities or services which may serve as alternatives or substitutes
for the whole or any part of in-hospital service, including, but not
limited to, obstetrical, pediatric, laboratory, training, radiology,
pharmacy, laundry, purchasing, preadmission, nursing home, ambulatory or
home care services. The commissioner shall exclude costs for research
and those parts of the costs for educational salaries which the
commissioner shall determine to be not directly related to hospital
service, and allowances for costs which are not specifically identified
except for allowances authorized under section twenty-eight hundred
seven-a or twenty-eight hundred seven-c of this article. In determining
and certifying to the state director of the budget rates of payment,
including rates of payment for residential health care facilities, the
commissioner shall take into consideration the different levels of care
authorized to be provided in such hospital or health-related service and
determine and certify distinct rates of payment for each such level of
care. If the modification of an operating certificate of a hospital
pursuant to subdivision six of section twenty-eight hundred six of this
article requires the establishment of a rate for a level of service not
previously provided in such hospital during the rate period existing at
the time of such modification, a new rate period for that portion of the
hospital reclassified as a result of such modification may be
established upon sixty days' prior notice.

4. Commissioner rate certifications, payments pursuant to the
provisions of the workers' compensation law, the volunteer firefighters'
benefit law, the volunteer ambulance workers' benefit law and the
comprehensive motor vehicle insurance reparations act. For the rate
years commencing January first, nineteen hundred eighty-six and January
first, nineteen hundred eighty-seven the commissioner shall submit to
the chairman of the workers' compensation board a schedule of hospital
inpatient reimbursement rates computed in accordance with subdivision
two of section twenty-eight hundred seven-a of this article or as
revised pursuant to subdivisions eleven and fourteen of section
twenty-eight hundred seven-a of this article. Beginning with the rate
period commencing January first, nineteen hundred eighty-eight the
commissioner shall submit, and beginning with the rate period January
first, nineteen hundred ninety-seven and certify, to the chairman of the
workers' compensation board for an established rate period a schedule of
hospital inpatient reimbursement rates computed in accordance with
subdivision one of section twenty-eight hundred seven-c of this article
for payments pursuant to the workers' compensation law, the volunteer
firefighters' benefit law and the comprehensive motor vehicle insurance
reparations act and beginning with the rate year commencing January
first, nineteen hundred ninety-one including payments pursuant to the
volunteer ambulance workers' benefit law.

5. Audit authority. The commissioner shall make available to the
commissioner of social services, in a mutually satisfactory manner, all
information necessary to conduct or have conducted, on a cost sharing
basis among payors, an appropriate review or audit of the fiscal and
statistical records of a hospital necessary to implement the provisions
of this article.

6. Consideration of economic status in certain cases. Notwithstanding
the provisions of this section, the commissioner, in determining and
certifying rates of payment for services provided by a party to a
contract entered into pursuant to the provisions of subdivision three of
section twenty-eight hundred three of this article, shall take into
consideration the economic status of the patients receiving such
services.

7. Reimbursement rate promulgation. The commissioner shall notify each
residential health care facility and health-related service of its
approved rates of payment which shall be used in reimbursing for
services provided to persons eligible for payments made by state
governmental agencies at least sixty days prior to the beginning of an
established rate period for which the rate is to become effective and
for general hospitals at least thirty days prior to the beginning of an
established rate period for which the rate is to become effective.
Notification shall be made only after approval of rate schedules by the
state director of the budget. The sixty and thirty day notice
provisions, herein, shall not apply to rates issued following judicial
annulment or invalidation of any previously issued rates, or rates
issued pursuant to changes in the methodology used to compute rates
which changes are promulgated following the judicial annulment or
invalidation of previously issued rates. Notwithstanding any provision
of law to the contrary, nothing in this subdivision shall prohibit the
recalculation and payment of rates, including both positive and negative
adjustments, based on a reconciliation of amounts paid by residential
health care facilities beginning April first, nineteen hundred
ninety-seven for additional assessments or further additional
assessments pursuant to section twenty-eight hundred seven-d of this
article with the amounts originally recognized for reimbursement
purposes.

7-a. Notwithstanding any inconsistent provision of law, with regard to
a general hospital the provisions of subdivisions four and seven of this
section and the provisions of section eighteen of chapter two of the
laws of nineteen hundred eighty-eight relating to the requirement of
prior notice and the time frames for notice, approval or certification
of rates of payment, maximum rates of payment or maximum charges where
not otherwise waived pursuant to law shall be applicable only to such
rates of payment or maximum charges prospectively established for an
annual rate period and such provisions shall not be applicable to a
general hospital with regard to prospective adjustments or retrospective
adjustments of established rates of payment or maximum charges for or
during an annual rate period based on correction of errors or omissions
of data or in computation, rate appeals, audits or other rate
adjustments authorized by law or regulations adopted pursuant to section
twenty-eight hundred three of this article.

7-b. Notification of diagnostic and treatment center approved rates.
(a) For rate periods or portions of rate periods beginning on or after
October first, nineteen hundred ninety-four, the commissioner shall
notify each diagnostic and treatment center of its approved rates of
payment, which shall be used in the reimbursement for services provided
to persons eligible for payments made by state governmental agencies at
least thirty days prior to the beginning of the period for which such
rates are to become effective.

(b) Notwithstanding any contrary provision of law, all diagnostic and
treatment centers certified on or before September second, nineteen
hundred ninety-seven shall, not later than September second, nineteen
hundred ninety-seven, notify the commissioner whether they intend to
maintain all books and records utilized by the diagnostic and treatment
center for cost reporting and reimbursement purposes on a calendar year
basis or, commencing on July first, nineteen hundred ninety-six, on a
July first through June thirtieth basis, and shall thereafter maintain
all books and records on such basis. All diagnostic and treatment
centers certified after September second, nineteen hundred ninety-seven
shall notify the commissioner at the time of certification whether they
intend to maintain all books and records on a calendar year basis or on
or a July first through June thirtieth basis, and shall thereafter
maintain all books and records on such a basis.

(c) The books and records maintained pursuant to paragraph (b) of this
subdivision shall be utilized and made available to the commissioner in
promulgating rates of payment for annual rate periods beginning on or
after October first, nineteen hundred ninety-seven.

(d) Notwithstanding any provision of the law to the contrary, rates of
payment established in accordance with paragraph (b) as amended, and
paragraph (f) of subdivision two of this section for the rate period
beginning April first, nineteen hundred ninety-three shall continue in
effect through September thirtieth, nineteen hundred ninety-four, and
applicable trend factors shall be applied to that portion of such rates
of payment for the rate period which begins April first, nineteen
hundred ninety-four.

8. Rates for federally qualified health centers and rural health
centers. Notwithstanding section four of chapter eighty-one of the laws
of nineteen hundred ninety-five, as amended by section twenty-seven of
chapter one of the laws of nineteen hundred ninety-nine, and any other
law, rule or regulation to the contrary, for periods on and after
January first, two thousand one, rates of payment made by governmental
agencies for services provided by diagnostic and treatment centers or
general hospital outpatient clinics licensed under this article to
individuals eligible for medical assistance pursuant to title eleven of
article five of the social services law which are also designated, in
accordance with 42 USC § 1396a(aa), as federally qualified health
centers or rural health centers shall be established in accordance with
the following:

(a) For periods on and after January first, two thousand one, and
prior to October first, two thousand one, such rates of payment shall be
computed in accordance with paragraph (b) of subdivision two of this
section, provided, however, that the operating and capital cost
components of such rates and the applicable ceilings on allowable
operating costs shall reflect an average of nineteen hundred ninety-nine
and two thousand base year costs as reported to the department.

(b) For each twelve month period following September thirtieth, two
thousand one, the operating cost component of such rates of payment
shall reflect the operating cost component in effect on September
thirtieth of the prior period as increased by the percentage increase in
the Medicare Economic Index as computed in accordance with the
requirements of 42 USC § 1396a(aa)(3) and as adjusted pursuant to
applicable regulations to take into account any increase or decrease in
the scope of services furnished by the facility.

(c) Rates of payments to facilities which first qualify as federally
qualified health centers or rural health centers on or after October
first, two thousand shall be computed in accordance with the provisions
of paragraph (b) of subdivision two of this section, provided, however,
that the operating cost component of such rates shall reflect an average
of the operating cost component of rates of payments issued to other
facilities subject to this subdivision during the same rate period,
located in the same geographic region and with a similar case load, and
further provided that the capital cost component of such rates shall
reflect the most recently available capital cost data as reported to the
department. For each twelve month period following the rate period in
which such facilities commence operation, the operating cost component
of rates of payment for such facilities shall be computed in accordance
with paragraph (b) of this subdivision. In calculating the operating
cost component of such rates for facilities which first qualify as
federally qualified health care centers on or after October first, two
thousand, the counties comprising the geographic region known as
downstate shall be the same as the counties comprising the downstate
region for purposes of reimbursing diagnostic and treatment centers
under ambulatory patient groups, which counties are specified in the
regulations adopted by the commissioner implementing section 18 of part
C of chapter fifty-eight of the laws of two thousand eight.

(d) Subject to receipt of all necessary federal approvals, rates of
payment computed in accordance with this subdivision may be further
adjusted in accordance with the provisions of subdivision seventeen of
this section, provided, however, that such adjustments shall not be
subject to trend adjustments as provided in paragraph (b) of this
subdivision.

(e) Diagnostic and treatment centers eligible for rates of payment
computed pursuant to paragraphs (a) and (b) of this subdivision, which
were, on December thirty-first, two thousand, receiving rates of payment
as preferred primary care providers computed pursuant to paragraph (h)
of subdivision two of this section, may elect to continue to receive
rates of payment computed in accordance with such paragraph (h),
provided that in no event shall such rates of payment be less than the
rates of payment computed pursuant to paragraphs (a) and (b) of this
subdivision.

(f) For any rate periods after March thirty-first, two thousand eight,
subject to the availability of federal financial participation, the
commissioner may prospectively adjust rates of payment for facilities
otherwise subject to this subdivision to reflect alternative
rate-setting methodologies, provided, however, that such alternative
rate-setting methodologies must: (i) be authorized by applicable state
law, (ii) be agreed to by the commissioner and each facility to which
they are applied and (iii) in no event result in rates that are, in
aggregate, less than the rates of payment otherwise provided for in this
subdivision.

9. Payments under this section not to preclude other lawful payments.
Any payments made under the authority of this section or section
twenty-eight hundred seven-c of this article shall not preclude payments
under any other section of law.

10. Notwithstanding the provisions of this article, the commissioner
may waive, subject to the approval of the state director of the budget,
the requirements of any provisions of this section, section twenty-eight
hundred seven-a or twenty-eight hundred seven-c of this article to
permit the development and/or continuation of limited pilot
reimbursement programs to provide additional knowledge and experience in
different types of reimbursement mechanisms for general hospitals.

* 11. Notwithstanding the provisions of this article, the commissioner
may waive, subject to the approval of the state director of the budget,
the requirements of any provision of this section, section twenty-eight
hundred seven-a or twenty-eight hundred seven-c of this article to
permit the development, implementation and operation of limited pilot
reimbursement programs for general hospital outpatient services and
diagnostic and treatment center services that would be prospective and
associated to the resource use patterns in rendering ambulatory care
services.

* NB Expired April 1, 2020

12. (a) Notwithstanding any inconsistent provision of this article or
any other law, for the purpose of improving access to and availability
of comprehensive primary health care to persons receiving medical
assistance pursuant to title eleven of article five of the social
services law, the commissioner, upon application by a health care
provider, may designate such provider as a preferred primary care
provider in accordance with the provisions of this subdivision.

(b) Health care providers designated as preferred primary care
providers pursuant to this subdivision shall meet such requirements as
may be established by the commissioner in regulation, including, but not
limited to:

(i) access by the medically indigent and medicaid eligible to
ambulatory services;

(ii) provision, to the maximum extent practicable, of continuity of
care;

(iii) arrangements for specialty physician care and necessary
ancillary services;

(iv) reasonably accessible hours of operation;

(v) services which are accessible to medically underserved populations
and communities including, to the maximum extent feasible, offering such
services within the medically underserved community; and

(vi) participation in local social services district managed care
programs established pursuant to section three hundred sixty-four-j of
the social services law, provided that the commissioner, in consultation
with the commissioner of social services, may exempt a health care
provider from such participation for good cause. Good cause shall
include but not be limited to geographic inaccessibility to managed care
programs, inability to coordinate services of managed care programs, or
that participation in the managed care program would significantly
affect the provider's financial ability to provide services.

(c) For the purposes of this subdivision, a health care provider
eligible to be designated as a preferred primary care provider shall
mean a general hospital, a diagnostic and treatment center, a private
physician, a nurse practitioner, a midwife, a professional corporation
or a group of physicians or nurse practitioners. The designation of any
general hospital or a diagnostic and treatment center as a preferred
primary care provider shall apply only to the specific site where the
entity provides comprehensive primary health care services.

* 13. Subject to the availability of funds, the commissioner shall
authorize health occupation development and workplace demonstration
programs pursuant to the provisions of section two thousand eight
hundred seven-h of this article for diagnostic and treatment centers,
and the commissioner is hereby directed to make rate adjustments to
cover the cost of such programs.

* NB Expired July 1, 2017

* 14. Notwithstanding any inconsistent provision of law or regulation,
for purposes of establishing rates of payment by governmental agencies
for diagnostic and treatment centers for services provided on or after
April first, nineteen hundred ninety-five, the reimbursable base year
administrative and general costs of a provider, excluding a provider
reimbursed on an initial budget basis, shall not exceed the statewide
average of total reimbursable base year administrative and general costs
of diagnostic and treatment centers. For the purposes of this
subdivision, reimbursable base year administrative and general costs
shall mean those base year administrative and general costs remaining
after application of all other efficiency standards, including, but not
limited to, peer group cost ceilings or guidelines. The limitation on
reimbursement for provider administrative and general expenses provided
by this subdivision shall be expressed as a percentage reduction of the
operating cost component of the rate promulgated by the commissioner for
each diagnostic and treatment center with base year administrative and
general costs exceeding the average.

* NB Expired March 31, 2011

15. Notwithstanding any inconsistent provision of law, including
subdivision fourteen of this section, the facility-specific impact of
eliminating the statewide cap on administrative and general costs, as
imposed pursuant to subdivision fourteen of this section, for the period
April first, nineteen hundred ninety-nine through June thirtieth,
nineteen hundred ninety-nine pursuant to a chapter of the laws of
nineteen hundred ninety-nine, shall be included in rates of payment for
facilities affected by such elimination for the period October first,
nineteen hundred ninety-nine through December thirty-first, nineteen
hundred ninety-nine. In addition, rates for diagnostic and treatment
centers for the period October first, nineteen hundred ninety-nine
through December thirty-first, nineteen hundred ninety-nine shall
include, in the aggregate, the sum of fourteen million dollars which
shall be added to rates of payment established in accordance with
paragraphs (b) and (h) of subdivision two of this section based on an
apportionment of such amount using a ratio of each individual provider's
estimated medicaid expenditures to total estimated medicaid expenditures
for diagnostic and treatment centers, as determined by the commissioner,
for the October first, nineteen hundred ninety-nine through September
thirtieth, two thousand rate period.

16. Notwithstanding any inconsistent provision of law, payment for
drugs which may not be dispensed without a prescription as required by
section sixty-eight hundred ten of the education law provided to persons
receiving medical assistance pursuant to title eleven of article five of
the social services law by any non-hospital based diagnostic and
treatment center licensed under this article in existence on the
effective date of this subdivision providing comprehensive primary
medical care services and registered by the state board of pharmacy
pursuant to section sixty-eight hundred eight of the education law shall
be on a fee-for-service basis and shall not be included in any
comprehensive clinic rate paid to such facility by governmental agencies
established in accordance with paragraph (b) of subdivision two of this
section.

17. (a) Notwithstanding any contrary provision of law or regulation,
the commissioner shall, subject to the availability of federal financial
participation, adjust medical assistance rates of payment established
pursuant to paragraph (b) of subdivision two of this section for
free-standing diagnostic and treatment centers licensed pursuant to this
article and which are: a "covered provider" as defined in subdivision
one of section three hundred sixty-four-j-two of the social services
law; or eligible for an allocation under paragraph (a-1) of subdivision
two of section three hundred sixty-four-j-two of the social services
law; or which provides services to individuals with developmental
disabilities as their principal mission, in accordance with paragraphs
(b) and (c) of this subdivision for purposes of improving recruitment
and retention of non-supervisory workers at health care facilities or
any worker with direct patient care responsibility in the following
aggregate amounts for the following periods:

(i) for the period April first, two thousand two through December
thirty-first, two thousand two, thirteen million dollars;

(ii) for the period January first, two thousand three through December
thirty-first, two thousand three, thirteen million dollars;

(iii) for the period January first, two thousand four through December
thirty-first, two thousand four, thirteen million dollars;

(iv) for the period January first, two thousand five through December
thirty-first, two thousand five, thirteen million dollars;

(v) for the period January first, two thousand six through December
thirty-first, two thousand six, thirteen million dollars;

(vi) for the period January first, two thousand seven through June
thirtieth, two thousand seven, six million five hundred thousand
dollars;

(vii) for the period July first, two thousand seven through March
thirty-first, two thousand eight, nine million seven hundred fifty
thousand dollars; and

(viii) thirteen million dollars for the period April first, two
thousand eight through March thirty-first, two thousand nine;

(ix) thirteen million dollars for the period April first, two thousand
nine through March thirty-first, two thousand ten; and

(x) thirteen million dollars for the period April first, two thousand
ten through March thirty-first, two thousand eleven.

(b) Such adjustments to rates of payments shall be allocated
proportionally based on each diagnostic and treatment center's total
annual gross salary and fringe benefit costs, as reported in each such
diagnostic and treatment center's nineteen hundred ninety-nine cost
report as submitted to the department prior to November first, two
thousand one, provided, however, that for periods on and after July
first, two thousand seven, such adjustments to rates of payment shall be
allocated proportionally, based on each such diagnostic and treatment
center's total reported medicaid visits, as reported in each such
diagnostic and treatment center's two thousand four cost report as
submitted to the department prior to January thirty-first, two thousand
seven, to the total of such medicaid visits for all diagnostic and
treatment centers.

(c) Rate adjustments made pursuant to this subdivision shall not be
subject to subsequent adjustment or reconciliation.

(d) Diagnostic and treatment centers which have their rates adjusted
pursuant to this subdivision shall use such funds for the purpose of
recruitment and retention of non-supervisory workers at health care
facilities or any worker with direct patient care responsibility and are
prohibited from using such funds for any other purpose. Each such
diagnostic and treatment center shall submit, at a time and in a manner
to be determined by the commissioner, a written certification attesting
that such funds will be used solely for the purpose of recruitment and
retention of non-supervisory workers at health care facilities or any
worker with direct patient care responsibility. The commissioner is
authorized to audit each such diagnostic and treatment center to ensure
compliance with the written certification required by this paragraph and
shall recoup any funds determined to have been used for purposes other
than recruitment and retention of non-supervisory workers at health care
facilities or any worker with direct patient care responsibility. Such
recoupment shall be in addition to any other penalties provided by law.

18. (a) Notwithstanding any contrary provision of law or regulation,
the commissioner shall, subject to the provisions of paragraph (c) of
this subdivision and to the availability of federal financial
participation, increase medical assistance rates of payment established
pursuant to paragraph (b) of subdivision two of this section for
eligible diagnostic and treatment centers by three percent for services
provided on and after December first, two thousand two for purposes of
improving recruitment and retention of non-supervisory workers or any
worker with direct patient care responsibility.

(b) For the purposes of this subdivision, "eligible diagnostic and
treatment center" shall mean a voluntary, not-for-profit diagnostic and
treatment center licensed under this article that received medical
assistance rates of payment reflecting assignment to limited primary
care or drug free peer groups as established pursuant to applicable
rate-setting regulations and that provides primary health care services
to a patient population primarily comprised of substance abuse patients
and that is ineligible for an adjustment to medical assistance rates of
payment under subdivision seventeen of this section.

(c) Diagnostic and treatment centers which have their rates adjusted
pursuant to this subdivision shall use such funds solely for the purpose
of recruitment and retention of non-supervisory workers or any worker
with direct patient care responsibility and are prohibited from using
such funds for any other purpose. Each such diagnostic and treatment
center shall submit, at a time and in a manner to be determined by the
commissioner, a written certification attesting that such funds will be
used solely for the purpose of recruitment and retention of
non-supervisory workers or any worker with direct patient care
responsibility. The commissioner is authorized to audit each such
diagnostic and treatment center to ensure compliance with the written
certification required by this paragraph and shall recoup any funds
determined to have been used for purposes other than recruitment and
retention of non-supervisory workers or any worker with direct patient
care responsibility. Such recoupment shall be in addition to any other
penalties provided by law.

19. (a) Notwithstanding any provision of law, rule or regulation to
the contrary and subject to the provisions of paragraph (b) of this
subdivision and to the availability of federal financial participation,
the commissioner shall increase medical assistance rates of payment by
three percent for services provided on and after December first, two
thousand two by freestanding methadone maintenance service and program
providers issued operating certificates pursuant to this article and
section 32.09 of the mental hygiene law for the purposes of improving
recruitment and retention of methadone maintenance workers.

(b) Freestanding methadone maintenance services and program providers
which are eligible for rate adjustments pursuant to this subdivision and
which are also eligible for rate adjustments pursuant to subdivision
seventeen of this section, shall, on or before July first, two thousand
two, submit, in a form and manner determined by the commissioner,
amendments to designated sections of their AHCF-1 cost report
segregating wages and fringe benefit costs associated with methadone
maintenance services from all other services for the purposes of
determining awards made pursuant to subdivision seventeen of this
section for rate periods ending in two thousand three and in two
thousand four.

(c) Freestanding methadone maintenance service and program providers
which have their rates adjusted pursuant to this subdivision shall use
such funds solely for the purpose of recruitment and retention of
non-supervisory workers or any worker with direct patient care
responsibility and are prohibited from using such funds for any other
purpose. Each such methadone maintenance service and program provider
shall submit, at a time and in a manner to be determined by the
commissioner, a written certification attesting that such funds will be
used solely for the purpose of recruitment and retention of
non-supervisory workers at such programs or any worker with direct
patient care responsibility. The commissioner is authorized to audit
each such methadone maintenance service and program provider to ensure
compliance with the written certification required by this paragraph and
shall recoup any funds determined to have been used for purposes other
than recruitment and retention of non-supervisory workers or any worker
with direct patient care responsibility. Such recoupment shall be in
addition to any other penalties provided by law.

20. (a) Notwithstanding any contrary provision of law and subject to
the receipt of all necessary federal approvals and the availability of
federal financial participation, the commissioner is authorized to enter
into agreements with SUNY downstate medical center, other public general
hospitals, and/or with the sponsoring local governments of such other
public general hospitals, under which such facilities and/or such local
government shall, by intergovernmental transfer, fund the non-federal
share of Medicaid funds made available for Delivery System Reform
Incentive Payments ("DSRIP") to such facilities. Such non-federal share
payments shall be deemed voluntary and, further, such payments shall be
excluded from computations made pursuant to section one of part C of
chapter fifty-eight of the laws of two thousand five, as amended. In
addition, the facilities, and/or the sponsoring local governments of
such facilities or the state may, by written notification to the other
parties to the agreement, cancel such agreement at any time prior to the
payment of the DSRIP funds. The commissioner shall, to the maximum
degree practicable, and to the extent permitted by the federal Centers
for Medicare and Medicaid Services ("CMS"), ensure that the DSRIP
program is implemented throughout the entire state.

(b) The commissioner shall establish an advisory panel to provide
assistance with regard to the DSRIP program. The panel shall be charged
with reviewing recommendations for DSRIP funding made by the state's
contracted DSRIP assessor and advising the commissioner regarding the
results of such review. Such panel shall also review applications under
paragraph (b) of subdivision two of section twenty-eight hundred
twenty-five of this article. Panel membership shall be comprised of
individuals with significant health care system experience. Members may
not be elected officials or employed by providers that would benefit
from DSRIP funding, and must not have any conflict of interest that
would prevent them from providing an impartial review of DSRIP assessor
recommendations. The panel shall consist of members appointed by the
commissioner and shall in addition consist of one member appointed by
the majority leader of the New York state senate, and one member
appointed by the speaker of the New York state assembly. The panel shall
carry out the review of DSRIP recommendations in strict accordance with
all requirements set forth in the state's federal 1115 Medicaid waiver
standard terms and conditions. The panel shall submit its
recommendations to the commissioner for final determination, in
accordance with all requirements set forth in the state's federal 1115
Medicaid waiver standard terms and conditions. The commissioner may
modify the requirements of this paragraph and paragraph (c) of this
subdivision if such modifications are required by the federal CMS.

(c)(i) Project advisory committees. 1. Lead entities of systems
established under the Medicaid delivery system reform incentive payment
("DSRIP") program shall establish a project advisory committee. The
committee shall consider and advise the entity on matters concerning
system operations, service delivery issues, elimination of health care
disparities, measurement of project outcomes, the degree to which
project goals are being reached and the development of any plans or
programs. The entity may establish rules with respect to its project
advisory committee.

(ii) The members of the committee shall be representatives of the
community, or geographic service areas, served by the system, including
Medicaid consumers attributed to that system, and any other members
required by the terms and conditions of the DSRIP program. The lead
entity shall file with the commissioner, and from time to time update,
an up-to-date list of the members of the committee, which shall be made
available to the public by the department on its website.

(iii) Notwithstanding any inconsistent provision of law, no officer or
employee of the state or of any civil division thereof, shall be deemed
to have forfeited or shall forfeit his or her office or employment by
reason of his or her acceptance of membership on a project advisory
committee. No member of a project advisory committee shall receive
compensation or allowance for services rendered on the committee,
except, however, that members of a committee may be reimbursed by the
entity or system for necessary expenses incurred in relation to service
on a project advisory committee.

(d) For periods on and after April first, two thousand fourteen, the
commissioner shall provide a report on a quarterly basis to the chairs
of the senate finance, assembly ways and means, senate health and
assembly health committees with regard to the status of the DSRIP
program. Such reports shall be submitted no later than sixty days after
the close of the quarter, and shall include the most current information
submitted by providers to the state and the federal CMS. The reports
shall include:

(i) analysis of progress made toward DSRIP goals;

(ii) the impact on the state's health care delivery system;

(iii) information on the number and types of providers who
participate;

(iv) plans and progress for monitoring provider compliance with
requirements;

(v) a status update on project milestone progress;

(vi) information on project spending and budget;

(vii) analysis of impact on Medicaid beneficiaries served;

(viii) a summary of public engagement and public comments received;

(ix) a description of DSRIP funding applications that were denied;

(x) a description of all regulation waivers issued pursuant to
paragraph (f) of this subdivision; and

(xi) a summary of the statewide geographic distribution of funds.

(e) For periods on and after April first, two thousand fourteen the
commissioner shall promptly make all DSRIP governing documents,
including 1115 waiver standard terms and conditions, supporting
attachments and detailed project descriptions, and all materials made
available to the legislature pursuant to paragraph (d) of this
subdivision, available on the department's website. The commissioner
shall also provide a detailed overview on the department's website of
the opportunities for public comment on the DSRIP program.

(f) Notwithstanding any provision of law to the contrary, the
commissioners of the department of health, the office of mental health,
the office for people with developmental disabilities, and the office of
alcoholism and substance abuse services are authorized to waive any
regulatory requirements as are necessary, consistent with applicable
law, to allow applicants under this subdivision and paragraph (a) of
subdivision two of section twenty-eight hundred twenty-five of this
article to avoid duplication of requirements and to allow the efficient
implementation of the proposed project; provided, however, that
regulations pertaining to patient safety may not be waived, nor shall
any regulations be waived if such waiver would risk patient safety. Such
waiver shall not exceed the life of the project or such shorter time
periods as the authorizing commissioner may determine. Any regulatory
relief granted pursuant to this subdivision shall be described,
including each regulation waived and the project it relates to, in the
report provided pursuant to paragraph (d) of this subdivision.

* 20-a. Notwithstanding any provision of law to the contrary, the
commissioners of the department of health, the office of mental health,
the office of people with developmental disabilities, and the office of
alcoholism and substance abuse services are authorized to waive any
regulatory requirements as are necessary, consistent with applicable
law, to allow providers that are involved in DSRIP projects or
replication and scaling activities, as approved by the authorizing
commissioner, to avoid duplication of requirements and to allow the
efficient scaling and replication of DSRIP promising practices, as
determined by the authorizing commissioner; provided however, that
regulations pertaining to patient safety, patient autonomy, patient
privacy, patient rights, due process, scope of practice, professional
licensure, environmental protections, provider reimbursement
methodologies, or occupational standards and employee rights may not be
waived, nor shall any regulations be waived if such waiver would risk
patient safety. Any regulatory action under this subdivision shall be
published on the applicable website of the authorizing commissioner and
shall include a description of each waiver, including a citation of each
regulation waived, and a description of the project of which such relief
was granted.

* NB Expires April 1, 2026

21. (a) Notwithstanding any contrary provision of law and subject to
the receipt of all necessary federal approvals and the availability of
federal financial participation, the commissioner is authorized to enter
into agreements with SUNY downstate medical center, other public general
hospitals, and/or with the sponsoring local governments of such other
public general hospitals, under which such facilities and/or such local
government shall, by intergovernmental transfer, fund the non-federal
share of Medicaid funds made available for implementation of Medicaid
Redesign Team initiatives. Such non-federal share payments shall be
deemed voluntary and, further, such payments shall be excluded from
computations made pursuant to section one of part C of chapter
fifty-eight of the laws of two thousand five, as amended. In addition,
the facilities, and/or the sponsoring local governments of such
facilities or the state may, by written notification to the other
parties to the agreement, cancel such agreement at any time prior to the
payment of the Medicaid Redesign Team initiatives funds.

(b) Applications by eligible applicants for Medicaid Redesign Team
initiatives funded by monies made available pursuant to paragraph (a) of
this subdivision shall be submitted for review to the advisory panel
established pursuant to paragraph (b) of subdivision twenty of this
section and such panel shall submit their recommendations to the
commissioner for final determination. For periods on and after April
first, two thousand fourteen, the commissioner shall provide a report on
a quarterly basis to the majority leader of the New York state senate
and to the speaker of the New York state assembly with regard to the
status of such applications and approved projects. Such reports shall be
submitted no later than sixty days after the close of the quarter, and
shall include the most current information submitted by applicants to
the state. The reports shall be submitted in conjunction with and as a
part of the reports submitted pursuant to paragraph (c) of subdivision
twenty of this section and shall include:

(i) analysis of progress made toward project goals;

(ii) the impact on the state's health care delivery system;

(iii) information on the number and types of providers who
participate;

(iv) plans and progress for monitoring provider compliance with
requirements;

(v) a status update on project milestone progress;

(vi) information on project spending and budget;

(vii) analysis of impact on Medicaid beneficiaries served;

(viii) a summary of public engagement and public comments received;

(ix) a description of applications that were denied;

(x) a description of all regulation waivers issued pursuant to
paragraph (e) of this subdivision; and

(xi) a summary of the statewide geographic distribution of funds.

(c) The commissioner shall make all reports prepared pursuant to
paragraph (b) of this subdivision and all supporting attachments and
materials available on the department's website.

(d) Notwithstanding any inconsistent law to the contrary, and subject
to federal financial participation, and subject to amounts appropriated
for purposes herein, the department may distribute funds to make rate
adjustments for health home providers as described in section three
hundred sixty-five-l of the social services law for member engagement,
staff training and retraining, health information technology
implementation, joint governance technical assistance, and other such
purposes as the commissioner, in consultation with the commissioners of
the office of mental health and the office of alcoholism and substance
abuse services determines.

(e) Notwithstanding any provisions of law to the contrary, the
commissioners of the department of health, the office of mental health,
the office for people with developmental disabilities, and the office of
alcoholism and substance abuse services are authorized to waive any
regulatory requirements as are necessary, consistent with applicable
law, to allow applicants under this subdivision and paragraph (a) of
subdivision two of section twenty-eight hundred twenty-five of this
article to avoid duplication of requirements and to allow the efficient
implementation of the proposed project; provided, however, that
regulations pertaining to patient safety may not be waived, not shall
any regulation be waived if such waiver would risk patient safety. Such
waiver shall not exceed the life of the project or such shorter time
period as the authorizing commissioner any determine. Any regulatory
relief granted pursuant to this subdivision shall be described,
including each regulation waived and the project it relates to, in the
report provided pursuant to paragraph (b) of this subdivision.