* § 2808-c. Reimbursement of general hospital inpatient services. 1.
General hospital rates and inpatient revenue cap. In determining
payments from all sources for general hospital inpatient services for
the rate year commencing on January first, nineteen hundred eighty-three
and ending on December thirty-first, nineteen hundred eighty-three, the
allowances set forth in subdivision four of this section shall be
included. Effective January first, nineteen hundred eighty-four, the
commissioner shall establish, in accordance with regulations adopted by
the council and approved by the commissioner, the maximum amount of
inpatient revenue a general hospital will be authorized to receive for
services during a designated period not to exceed twelve months from all
payors for the provision of inpatient services. This maximum amount will
be known as the inpatient revenue cap and shall be established for each
general hospital possessing a valid operating certificate issued
pursuant to section twenty-eight hundred five of this article. The
inpatient revenue cap shall be established by projecting to anticipated
expense levels the reimbursable historical inpatient expenses and
financial needs as defined in subdivision four of this section, of a
general hospital approved for financing through inpatient service
revenues. Expenses included in the inpatient revenue cap are those
determined to be allowable and reasonable in the provision of authorized
inpatient services.

The inpatient revenue caps for the rate years nineteen hundred
eighty-four and nineteen hundred eighty-five shall be determined by
computing an imputed revenue cap for the period beginning January first,
nineteen hundred eighty-three and ending December thirty-first, nineteen
hundred eighty-three, which has been based on the cost analysis pursuant
to paragraphs (a) and (b) of subdivision two of this section and
adjusted each year to reflect the trend factors developed and applied in
accordance with paragraph (e) of subdivision two of this section,
capital related expenses in accordance with paragraph (c) of subdivision
two of this section, redetermination of additional financial needs or
revenue requirements in accordance with paragraph (d) of subdivision two
of this section, adjustments made in accordance with subdivision five of
this section and adjustments to reflect audit findings.

Hospital inpatient services to patients who are not beneficiaries or
subscribers of corporations organized and operating in accordance with
article forty-three of the insurance law, subchapter XVIII of the
federal social security act (medicare), eligible for payments made by
state governmental agencies, enrolled in organizations operating in
accordance with the provisions of article forty-four of this chapter, or
enrolled in a self-insured and self administered group covered under the
provisions of subdivision six of this section shall be at charges
established by the hospital in accordance with the provisions of
subdivision six of this section with the exception that for the period
from January first, nineteen hundred eighty-three through December
thirty-first, nineteen hundred eighty-three rates of payment pursuant to
the provisions of the workers' compensation law, the volunteer firemen's
benefit law and the comprehensive automobile insurance reparations act
shall be established at one hundred twelve percent of trended average
per diem reimbursable cost including allowances as specified in
subdivision four of this section.

Amounts prospectively established for payments for general hospital
inpatient services provided in rate years subsequent to nineteen hundred
eighty-three made on behalf of subscribers of corporations organized and
operating in accordance with article forty-three of the insurance law,
beneficiaries of subchapter XVIII of the federal social security act
(medicare), eligibles for payments made by state governmental agencies
and those enrolled in organizations operating in accordance with the
provisions of article forty-four of this chapter shall be based on that
portion of the prospectively established inpatient revenue cap that is
related to the utilization of inpatient services by the above programs,
provided, however, that that share of the cost of bad debt and charity
care to be paid under subchapter XVIII of the federal social security
act shall be based upon the ratio of subchapter XVIII inpatient charges
to total inpatient and outpatient charges, except for hospitals using an
all inclusive rate, in which case the subchapter XVIII share shall be
based upon the ratio of subchapter XVIII inpatient cost to total
inpatient and outpatient hospital costs. After reducing the dollar
amount liability of all payors by subtracting the dollar amount
liability of the subchapter XVIII payor, all other payors shall pay the
remaining liability in proportion to the ratio of their hospital
inpatient charges to total hospital inpatient charges less the
subchapter XVIII inpatient charges. These proportions shall be computed
on the basis of costs for hospitals using an all inclusive rate.

Any adjustments in the overall revenue cap in accordance with
subdivision five of this section shall be reflected in an appropriate
adjustment to this portion of the revenue cap and payment levels by
these programs. The year end adjustment as provided for in paragraph (d)
of subdivision five of this section which is based on data contained in
the financial and statistical report filed for the effective year of the
revenue cap may be further adjusted within the revenue cap when actual
data indicates a change in payor utilization and cost apportionment
between and among the above specified programs and all other payors.
After such adjustments the portion of the revenue cap initially
established, or as adjusted, that is related to the actual utilization
of covered inpatient services of the above programs shall constitute
guaranteed revenue to the general hospital. Nothing in this section
shall prohibit the negotiation by health maintenance organizations
operating in accordance with the provisions of article forty-three of
the insurance law or article forty-four of this chapter, of agreements
with general hospitals for rates of payment other than those provided
herein. Such contracts shall require approval by the commissioner and
must include provision for special benefit packages or arrangements for
providing inpatient services to encourage patient management behavior
that will minimize the length of patient stay, such as special admission
arrangements, bed leasing or other inpatient capitation arrangements.

2. The inpatient revenue cap established shall include:

(a) allowable historical inpatient operational expenses which are
comparable in nature and can reasonably be expected to be comparable in
amount to other general hospitals with similar cost influencing
characteristics (adjusted for comparison purposes for differences in
wage and fringe benefit levels) and which are equal to or less than
reasonable reimbursable operational cost ceilings developed from the
average allowable cost per unadjusted (except for newborn days)
appropriate unit of service of all hospitals in the comparison group.
The comparison group shall consist of general hospitals sharing similar
cost influencing characteristics and classified in accordance with
variables defined in regulation;

(b) allowable historical inpatient operational expenses, other than
capital related expenses as defined in subdivision three of this
section, and other than costs included in paragraph (a) hereof, which
may be subject to reasonable reimbursable cost standards adopted by the
council and approved by the commissioner;

(c) capital related expenses determined in accordance with subdivision
three of this section;

(d) additional financial needs or revenue requirements in accordance
with subdivision four of this section;

(e) projection of reimbursable expenses identified through the
application of paragraphs (a) and (b) of this subdivision by a trend
factor established by the panel of economists as set forth in
subdivision eight of this section; and

(f) an amount to reflect anticipated additional revenues resulting
from the implementation of the gross charge determination formula
provided by the commissioner in accordance with subdivision six of this
section.

The establishment of separate rates of payment for patients who
require different levels or types of care shall require a reallocation
of costs to insure that the total hospital inpatient revenue cap (or in
the case of the period January one, nineteen hundred eighty-three to
December thirty-one, nineteen hundred eighty-three the imputed revenue
cap), which shall include the revenue for different levels or types of
care, established under this subdivision remains unchanged except that
adjustments may be made based on the cost analysis pursuant to
paragraphs (a) and (b) of this subdivision.

Effective January first, nineteen hundred eighty-three through
December thirty-first, nineteen hundred eighty-five, the cost
limitations, utilization standards and limits on disallowances shall be
computed in accordance with the methodology approved by the federal
government to permit the determination of all payments for inpatient
services provided by general hospitals to be made in accordance with the
amendments made to sections twenty-eight hundred seven and twenty-eight
hundred seven-a of this chapter by sections three and four of a chapter
of the laws of nineteen hundred eighty-two. Specialty hospitals shall
not be included in any computations relating to disallowances,
limitations or ceilings pursuant to this paragraph but shall receive
reimbursement in accordance with rules and regulations adopted by the
state hospital review and planning council and approved by the
commissioner. In order to provide for a transition period for the
application of reimbursable cost limitations to payments authorized
under subchapter XVIII of the federal social security act, a reasonable
phase-in over a three year period is to be implemented.

3. Capital related inpatient expenses. Effective for the year
beginning January first, nineteen hundred eighty-four and thereafter,
capital related inpatient expenses including but not limited to
depreciation, rentals and interest on capital debt (or for hospitals
financed pursuant to article twenty-eight-B of this chapter, such
expenses, including amortization in lieu of depreciation, as determined
pursuant to the reimbursement regulations promulgated pursuant to that
article and article twenty-eight of this chapter, in the case of
payments on behalf of other than beneficiaries under subchapter XVIII of
the federal social security act), shall be included in the revenue cap
on a budget basis, and subsequently reconciled to actual expenses
through appropriate audit procedures. General hospitals shall submit to
the commissioner, at least one hundred twenty days prior to the
commencement of each revenue cap year, a schedule of capital related
inpatient expenses for the forthcoming year. Any capital related
inpatient expense generated by a capital expenditure which requires or
required approval pursuant to this article, must have received such
approval for the capital related expense to be included in the revenue
cap. The submitted budget may include the capital related inpatient
expenses of all existing capital assets as well as estimates of capital
related inpatient expenses for capital assets to be acquired or placed
in use prior to the commencement of the revenue cap year. Any capital
related expense generated by a capital asset acquired or placed in use
during a revenue cap year, provided all required approvals pursuant to
this article have been obtained, shall be carried forward to the
subsequent revenue cap year. In instances where such approvals have
been obtained, the budget may include estimates for capital related
inpatient expenses. The basis for determining capital related inpatient
expenses shall be the lesser of actual cost or the final amount
specifically approved for the construction of the capital asset. The
council shall adopt, with the approval of the commissioner, regulations
to:

(a) identify by type the eligible capital related inpatient expenses;

(b) safeguard the future financial viability of voluntary, non-profit
general hospitals by requiring funding of inpatient depreciation on
building and fixed and movable equipment;

(c) provide authorization to adjust the inpatient revenue cap by
advancing payment of depreciation as needed, in instances of capital
debt related financial distress of a voluntary, non-profit general
hospital; and

(d) provide a methodology for the reimbursement treatment of sales.

4. Allowances. Inpatient revenue caps established, or rates for
general hospital inpatient services, shall include for the three years
commencing on January first, nineteen hundred eighty-three, the
allowances specified below in paragraphs (a), (b), (c), (d) and (e) of
this subdivision. For the period from January first, nineteen hundred
eighty-three through December thirty-first, nineteen hundred
eighty-three the allowances shall be computed on the basis of the
general hospital's reimbursable inpatient costs after application of the
trend factor. Any additional allowances for the periods January first,
nineteen hundred eighty-four through December thirty-first, nineteen
hundred eighty-four and from January first, nineteen hundred eighty-five
through December thirty-first, nineteen hundred eighty-five shall be
included in the certified inpatient revenue caps after application of
the trend factor and such adjustments as may be appropriate pursuant to
subdivision two of this section. For the purposes of this subdivision
and subdivision nine of this section, major public general hospitals are
defined as all state operated general hospitals, all general hospitals
operated by the New York city health and hospitals corporation as
established by chapter one thousand sixteen of the laws of nineteen
hundred sixty-nine, as amended and all other public general hospitals
having annual inpatient operating costs in excess of twenty-five million
dollars.

(a) For the period from January first, nineteen hundred eighty-three
through December thirty-first, nineteen hundred eighty-five an allowance
of one percent of the general hospital's reimbursable inpatient costs to
provide funds to be used at the discretion of hospital governing boards.

(b) For public general hospitals an additional allowance of up to one
percent for the second year and up to a further additional one percent
in the third year of the three year period commencing January first,
nineteen hundred eighty-three subject to the provisions of paragraph (d)
of this subdivision.

(c) For voluntary non-profit and private proprietary general hospitals
an additional allowance of up to one percent for the second year of the
three year period commencing January first, nineteen hundred
eighty-three and continued for the third year of the three year period
subject to the provisions of paragraph (d) of this subdivision.

(d) The additional allowances in paragraphs (b) and (c) of this
subdivision shall be available to general hospitals receiving approval
from the commissioner as to the acceptable use of the allowance which
uses shall include but be not limited to retirement of short term
non-capital debt, meeting costs related to bad debts and charity care
not met by the regional pool distributions as specified in subdivision
nine of this section, offsetting reductions in anticipated revenue
resulting from charge limits substantially below those applicable to the
particular hospital immediately prior to the enactment of subdivision
six of this section and needed improvement of current ratio. Allowances
authorized in paragraphs (b) and (c) of this subdivision are not to be
considered as a substitute for operational funds that are otherwise
reimbursable or subject to appeal.

(e) A percentage to reflect the needs for the financing of losses
resulting from bad debts and the costs of charity care of general
hospitals within article forty-three insurance law regions, or such
other regions as adopted pursuant to subdivision nine of this section,
and within a statewide determination of financial resources to be
committed for this purpose. Regional needs shall be equal to the total
of inpatient losses from bad debts reduced to cost and the inpatient
costs of charity care increased by any deficit of general hospitals from
providing ambulatory services, excluding any portion of such deficit
resulting from governmental payments below average visit costs and
revenues and expenses related to the provision of referred ambulatory
services. The regional amount to be included in rates approved for the
year commencing January first, nineteen hundred eighty-three and in the
inpatient revenue caps established in subsequent years for each general
hospital in the region will be equal to the result of the application of
the percentage of statewide need for voluntary non-profit, private
proprietary and public general hospitals, other than major public
general hospitals that can be met from available resources computed
without consideration of inpatient uncollectible amounts to the regional
need for voluntary non-profit, private proprietary and public general
hospitals, other than major public general hospitals expressed in
dollars plus the dollar amount resulting from the application of the
ratio of major public general hospitals inpatient reimbursable costs
within the region to total statewide general inpatient reimbursable cost
(as computed on the basis of nineteen hundred eighty-one financial and
statistical reports) to the statewide resources committed for this
purpose computed without consideration of inpatient uncollectible
amounts and the ratio of these total dollars to the total regional
reimbursable inpatient cost after application of the trend factor. For
the three year period commencing on January first, nineteen hundred
eighty-three and ending on December thirty-first, nineteen hundred
eighty-five, the percentage allowances for this purpose shall not be
less than an average three percent of the total statewide general
hospital reimbursable inpatient cost after application of the trend
factor. The allocation of resources made available under this paragraph,
as specified in subdivision nine of this section, may be changed only as
follows: An annual review shall be conducted pursuant to rules and
regulations adopted by the council and approved by the commissioner with
respect to bad debt and charity care need within each article
forty-three insurance law region or such other regions as are adopted
pursuant to subdivision nine of this section. If within such a region
there is a definitive finding as a result of such review that there has
been a change in the proportional amounts of bad debts and charity care
provided by (i) major public general hospitals and (ii) voluntary
non-profit, private proprietary and public general hospitals, other than
major public general hospitals, the allocation of resources made
available under this paragraph shall be adjusted pursuant to the rules
and regulations adopted pursuant to this paragraph so as to reflect this
change.

(f) An additional allowance of one-fourth of one percent shall be
included in each rate or revenue cap established for each voluntary
non-profit and private proprietary general hospital to be returned to a
regional pool and distributed in accordance with paragraph (c) of
subdivision nine of this section.

(g) An additional allowance of one-third of one percent shall be
included in each rate or revenue cap established for voluntary
non-profit and private proprietary general hospitals to be returned to a
regional pool and distributed in accordance with paragraph (d) of
subdivision nine of this section.

5. Adjustments. (a) The commissioner shall, on his own initiative, or
on the basis of a request from a general hospital, adjust an established
inpatient revenue cap to reflect:

(i) the reduction of costs related to the elimination of a general
hospital inpatient service in instances where the costs of such service
were included in the basis of the inpatient revenue cap established; and

(ii) the correction of errors or omissions of data or in computations.

(b) General hospitals may request and the commissioner shall consider
an adjustment to an established revenue cap to reflect increased
expenses or reconsideration of disallowed expenses based on:

(i) justification of all or a portion of expenses not included in the
inpatient revenue cap resulting from the cost analysis process contained
in subparagraph (i) of paragraph (a) of this subdivision;

(ii) additional operational expenses related to construction or
service changes. These changes if applicable must be approved under
section twenty-eight hundred two of this article;

(iii) the addition of costs related to a state requirement for
additional services to be provided or additional costs to be incurred in
meeting state or federal requirements;

(iv) additional expenses to permit a more efficient and economical
method of delivering a service; and

(v) increased costs for compensation of employees.

(c) In determining the reasonableness or justification of an
adjustment to an established inpatient revenue cap based on a request
related to subparagraph (v) of paragraph (b) of this subdivision the
commissioner shall consider:

(i) the fiscal capability of the general hospital to finance such
increases from its own resources;

(ii) the past history of the general hospital with respect to
compensation increases and allowed compensation trend factors; and

(iii) the economy in the area in which the general hospital is
located.

(d) The commissioner shall adjust a prospectively established
inpatient revenue cap on the basis of subsequent data that demonstrates
a significant cost influencing change in patient mix or volume of
service. Such adjustment will be made in conformity with regulations
adopted by the council as approved by the commissioner.

(e) All appeals shall be submitted to the commissioner, who may submit
a copy of the appeal to interested parties for the purpose of providing
an opportunity for comment within a specified time period.

(f) The commissioner shall act upon all properly documented appeals
for adjustments concerning base year costs by November first of the
calendar year for which the revenue cap is effective provided that all
information necessary to determine whether an adjustment is justified is
submitted by the facility prior to May first of such year. In the event
such an appeal is filed by May first, but information necessary to
determine whether an adjustment is justified is submitted after such
date, the commissioner shall act on the appeal within six months after
receiving the necessary information.

(g) The commissioner shall consider an adjustment to a hospital's
reported base year costs in instances where it is demonstrated that
recurring costs resulting from multi-year commitments beginning late in
a base year should be calculated on an annual basis in establishing a
revenue cap in order to avoid a significant inequity. In making such an
adjustment the commissioner shall consider the offset of non-recurring
base year costs.

6. Hospital charge schedules. Effective for the year beginning January
first, nineteen hundred eighty-four and thereafter, each general
hospital shall establish a charge schedule for available and authorized
services in accordance with a gross charge determination formula
provided by the commissioner which shall:

(a) Establish gross charges sufficient to generate the inpatient
revenue authorized by the revenue cap; and

(b) Establish gross charges such that (i) the payment rate to be made
on behalf of subscribers of corporations organized and operating in
accordance with article forty-three of the insurance law, adjusted for
uncovered services, shall be at a specified discount from the gross
charge rate billed to or on behalf of charge paying patients; (ii)
permit the continuation of negotiated payment rate determination systems
between self-insured and self-administered groups and hospitals which
were in effect on May first, nineteen hundred eighty-two; and (iii) for
general hospitals subject to the provisions of paragraph (a) or (b) of
subdivision twelve of this section, the costs (including all allowances
specified in subdivision four of this section) of services provided to
charge paying patients shall be at a specified discount from the gross
charge rate billed to or on behalf of charge paying patients.

During the period January first, nineteen hundred eighty-four through
December thirty-first, nineteen hundred eighty-five, the discount
referred to in subparagraphs (i) and (iii) of paragraph (b) of this
subdivision shall not exceed twelve percent for those hospitals which
had a discount of less than twelve percent during the previous year,
shall be no greater than the discount in effect during the previous year
for those hospitals whose previous year's discount was between twelve
and fifteen percent and shall not exceed fifteen percent for all others.
Self-insured and self-administered negotiated systems as described in
subparagraph (ii) of paragraph (b) of this subdivision may remain in
effect for the period commencing January first, nineteen hundred
eighty-three and ending on December thirty-first, nineteen hundred
eighty-five and shall be incorporated in the formula methodology
provided by the commissioner.

The commissioner shall effectuate direct repayment or adjustment of a
subsequent inpatient revenue cap to reflect actual inpatient revenues
received for inpatient services provided by a general hospital that
exceed the inpatient revenue cap initially established or adjusted in
accordance with provisions of this section. Revenue received in excess
of the revenue cap established as the result of the provisions of
subchapter XVIII of the federal social security act (medicare) phase-in
policies or from charges authorized under subdivision seven of this
section shall not be included in the adjustment.

7. Working capital. General hospitals may include as a financing or
working capital charge an addition of two percent of any valid claim not
paid within thirty days of submission or determination of payor
liability, whichever is later, and one percent per month thereafter.
Revenues received from such financing or working capital charges shall
not be included in a revenue cap established or considered as a cost
offset. Financing or working capital charges shall not be applied to
hospital billings to third party payors participating in a periodic
interim payment system.

8. Trend factor. (a) The commissioner in accordance with the method-
ology developed by the consultants pursuant to paragraph (b) of this
subdivision shall establish trend factors to project for the effects of
inflation. The factors shall be applied to the appropriate portion of
charge levels and reimbursement rates in effect until December
thirty-first, nineteen hundred eighty-three and the appropriate portion
of the inpatient revenue cap in subsequent years. The methodology for
developing the trend factor shall include the appropriate external price
indicators and shall also include the data from major collective
bargaining agreements as reported quarterly by the federal department of
labor, bureau of labor statistics, for non-supervisory employees.

(b) The methodology shall be developed by four independent consultants
with expertise in health economics appointed by the commissioner. Not
later than September first of each year, the consultants shall provide
to the commissioner and the council, the methodology to be used to
determine the trend factors for the subsequent twelve month period
commencing January first. The commissioner shall monitor the actual
price movement during this twelve month period of the external price
indicators used in the methodology, shall report the results of the
monitoring to the consultants, and shall implement, semi-annually, the
recommendations of the consultants for adjustments to the trend factor
provided, however, that adjustments, except for the final adjustment in
the trend factor shall not be required unless such adjustment would
result in the weighted average of the operating cost component of the
rates or charge limits differing by more than one-half of one percent
from that which was previously determined.

9. Bad debt, charity care and transition pool. Regional pools
consisting of funds made available within each region through the
allowances specified in paragraphs (e), (f) and (g) of subdivision four
of this section shall be created. The regions are established as the
article forty-three insurance law plan regions, with the exception that
the southern sixteen counties will be divided into three regions for the
purposes of this subdivision and subdivision four of this section with
separate regions consisting of Richmond, Manhattan, Bronx, Queens and
Kings counties; Nassau and Suffolk counties; and Delaware, Columbia,
Ulster, Sullivan, Orange, Dutchess, Putnam, Rockland and Westchester
counties. The council with the approval of the commissioner may combine
regions, with the exception of the above specified regions for the
southern sixteen counties, upon application of the article forty-three
insurance law plans involved and a demonstration that significant
inequities would not occur. The commissioner is authorized to contract
with the article forty-three insurance law plans to receive funds for
the pools and distribute such funds. In the event contracts with the
article forty-three insurance law plans are effectuated, the
commissioner shall conduct annual audits of the receipt and distribution
of pooled funds and issue an annual report on the receipt and
distribution of the pooled funds. In order for general hospitals to
participate in the distribution of funds from the pool the general
hospital must implement collection policies and procedures approved by
the commissioner. Funds available in each regional pool shall be
distributed or retained in the following sequence:

(a) Each eligible major public general hospital as defined in
subdivision four of this section shall receive from its regional pool
created by the allowance in paragraph (e) of subdivision four of this
section a portion of its bad debt and charity care need equal to the
result of the application of its percentage of statewide inpatient
reimbursable costs developed on the basis of nineteen hundred eighty-one
financial and statistical reports to the total of all regional pools.

(b) Funds remaining in the regional pool created by the allowance in
paragraph (e) of subdivision four of this section, after distribution in
accordance with paragraph (a) of this subdivision, shall be distributed
proportionately to voluntary non-profit, private proprietary and public
general hospitals, other than major public general hospitals on the
basis of need within the region as determined in accordance with
paragraph (e) of subdivision four, with the exception that any funds in
a regional pool that were allocated to major public general hospitals
and not distributed shall be distributed to each major third party payor
on the basis of its percentage of major third party payor liability for
bad debt and charity care as described in subdivision one of this
section, in the specific major public general hospital to which
distribution was not made.

(c) Funds in regional pools created by the allowance in paragraph (f)
of subdivision four of this section shall not be available for immediate
distribution from the regional pool but shall be retained in the pool
for distribution by the commissioner in accordance with rules adopted by
the state hospital review and planning council to assist in offsetting
losses from bad debts and the costs of charity care of voluntary
non-profit and private proprietary general hospitals experiencing severe
fiscal hardship because of insufficient resources to finance such losses
or costs.

(d) Funds in regional pools created by the allowance in paragraph (g)
of subdivision four of this section shall be distributed by including
one-fourth of such funds with the funds to be distributed in accordance
with paragraph (c) of this subdivision and three-quarters of such funds
to be distributed to voluntary non-profit and private proprietary
general hospitals within the region that are severely negatively
impacted by the inclusion of title XVIII (medicare) patients, or changes
in the determination of payor liability, resulting from the
implementation of the reimbursement provisions in this section. Rules
for such distribution will be those adopted by the state hospital review
and planning council and approved by the commissioner.

(e) Any balance in the portion of regional pools created by the
allowance in paragraph (e) of subdivision four of this section, after
distribution in accordance with paragraph (b) of this subdivision,
including income from invested funds, shall be distributed to voluntary
non-profit, private proprietary and public general hospitals other than
major public general hospitals within the region on a basis related to
specific hospital need as defined for regional purposes in paragraph (e)
of subdivision four of this section. Any balance in the portion of
regional pools created by the allowance in paragraph (f) of subdivision
four of this section and the distribution specified in paragraph (d) of
this subdivision after distribution in accordance with paragraph (c) of
this subdivision, including income from invested funds, shall be
distributed to voluntary non-profit and private proprietary general
hospitals within the region on a basis related to specific hospital need
as defined for regional purposes in paragraph (e) of subdivision four of
this section. Any balance in the portion of regional pools created by
the allowance in paragraph (g) of subdivision four of this section after
distribution in accordance with this paragraph and paragraph (d) of this
subdivision, including income from invested funds, shall be returned to
voluntary non-profit and private proprietary general hospitals on the
basis of the reimbursable costs of those hospitals within the region.

10. Unit of service. The unit of general hospital inpatient service on
which payment shall be based should be uniform for all payors and shall
best identify the cost of services provided.

11. The commissioner shall provide to fiscal intermediaries for
subchapter XVIII of the federal social security act (medicare) and
article forty-three of the insurance law plans, the information required
to effectuate the provisions of this section, exclusive of adjustments
for uncovered services.

12. Provisions for article forty-three insurance law corporations and
article forty-four of this chapter organizations. Except as provided in
paragraphs (a) and (b) of this subdivision, general hospital charges for
inpatient and outpatient services to subscribers or beneficiaries of
contracts entered into pursuant to the provisions of article forty-three
of the insurance law or to members of a comprehensive health services
plan operating pursuant to the provisions of article forty-four of this
chapter for patient services rendered shall not exceed the rates of
payment approved by the superintendent of financial services or approved
or certified by the commissioner, whichever is applicable and required
by this section, for payments by such article forty-three insurance law
corporations or article forty-four organizations. No general hospital
may demand or request any charge for such covered services in addition
to the charges or rates authorized by this article.

(a) Any general hospital which terminated its contract with an article
forty-three insurance law corporation or a comprehensive health services
plan after October first, nineteen hundred seventy-six and prior to May
first, nineteen hundred seventy-eight, may not charge subscribers or
beneficiaries of contracts entered into pursuant to the provisions of
article forty-three of the insurance law, or members of a comprehensive
health services plan operating pursuant to the provisions of article
forty-four of this chapter, amounts in excess of the schedule of charges
established by such hospital for patient services in effect on May
first, nineteen hundred seventy-eight, adjusted for the rate year
nineteen hundred eighty-three in accordance with the provisions of
subdivision thirteen of this section, and adjusted for the rate years
thereafter in accordance with the provisions of subdivision six of this
section.

(b) Any general hospital which has notified in writing an article
forty-three corporation or a comprehensive health services plan prior to
June first, nineteen hundred seventy-eight of its intention to terminate
its contract with such corporation or plan in accordance with the terms
of such contract, except a general hospital subject to the provisions of
paragraph (a) of this subdivision may not charge a subscriber or
beneficiary of a contract entered into pursuant to the provisions of
article forty-three of the insurance law, or a member of a comprehensive
health services plan operating pursuant to the provisions of article
forty-four of this chapter, after the effective date of termination of
such contract, amounts in excess of the schedule of charges established
by such hospital for patient services in effect on May first, nineteen
hundred seventy-eight, adjusted for the rate year nineteen hundred
eighty-three in accordance with the provisions of subdivision thirteen
of this section, and adjusted for the rate years thereafter in
accordance with the provisions of subdivision six of this section.

(c) No general hospital shall refuse to provide patient services to
such subscribers or beneficiaries solely on the grounds of such
subscription or membership.

13. Charge control. For the period January first, nineteen hundred
eighty-three, and until January first, nineteen hundred eighty-four:

(a) No general hospital shall establish charges for inpatient services
in excess of those permitted by law immediately prior to the effective
date of this section adjusted by the applicable trend factor.

(b) The commissioner shall establish an appeals board within the
department to consider and recommend action in writing on an appeal by a
general hospital of the inpatient charge limits established pursuant to
this subdivision. The board and the commissioner may only consider, and
appeals shall be limited to, changes in the base charge or the allowable
limits because of the (i) establishment of an approved new hospital
service, (ii) substantial changes in the volume of services provided, or
(iii) substantial and adverse changes in the relationship between total
accrued inpatient revenues and total inpatient costs due to such factors
as significant increases in cost from labor settlements or increases in
bad debts. Expenditures resulting from such changes must be essential to
assure the continuance of quality medical care. In the event a
determination on such appeal is not made by the commissioner within
ninety days of receipt of a complete request as determined by the
commissioner, the hospital may increase its inpatient charges in
conformance with such request. If the commissioner shall determine
thereafter that all or a portion of such increase is not warranted
hereunder, the hospital on notice of such determination shall promptly
reduce its inpatient charges in conformance therewith. In no event shall
the hospital bear any liability to any payor for such interim increase.

(c) In any proceeding under this subdivision the recognized collective
bargaining agent shall be entitled to submit any relevant data. All data
submitted hereunder shall be agency records under the freedom of
information law. All proceedings and appeals hereunder shall be meetings
of public bodies under the open meetings law.

(d) No provision of this subdivision or subdivision twelve of this
section shall be construed to prohibit a general hospital from
continuing the amount of inpatient charges in effect on May first,
nineteen hundred seventy-eight.

14. Restitution authorization. In enforcing the provisions of
subdivisions twelve and thirteen of this section, the commissioner may,
in addition to the penalties and injunctions set forth in section twelve
of this chapter, order that any general hospital provide restitution for
any overpayments made by any party. Any hospital may request a formal
hearing pursuant to the provisions of section twelve-a of this chapter
in the event the hospital does not consent to any order of the
commissioner hereunder. The commissioner may direct that such a hearing
be held without any request by a hospital.

* NB Expired January 1, 1986