PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of section 86-1.31 of Title 10 NYCRR.
Statutory authority:
Public Health Law, section 2807-c(35)
Finding of necessity for emergency rule:
Preservation of public health.
Specific reasons underlying the finding of necessity:
Paragraph (b) of subdivision 35 of section 2807-c of the Public Health Law (as added by Section 2 of Part C of Chapter 58 of the Laws of 2009) specifically provides the Commissioner of Health with authority, effective for periods on and after December 1, 2009, to issue emergency regulations in order to compute hospital inpatient rates as authorized in accordance with the provisions of such subdivision 35.
Subject:
Hospital Temporary Rate Adjustments.
Purpose:
No longer require that a merger, acquisition or consolidation needs to occur on or after the year the rate is based upon.
Text of emergency rule:
Subdivision (b) of section 86-1.31 of title 10 of NYCRR is hereby REPEALED and a new subdivision (b) is added, to read as follows:
(b) Closures, mergers, acquisitions, consolidations and restructurings.
(1) The commissioner may grant approval of a temporary adjustment to the non-capital components of rates calculated pursuant to this subpart for eligible general hospitals.
(2) Eligible facilities shall include:
(i) facilities undergoing closure;
(ii) facilities impacted by the closure of other health care providers;
(iii) facilities subject to mergers, acquisitions, consolidations or restructuring; or
(iv) facilities impacted by the merger, acquisition, consolidation or restructuring of other health care providers.
(3) Facilities seeking rate adjustments under this section shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:
(i) protect or enhance access to care;
(ii) protect or enhance quality of care;
(iii) improve the cost effectiveness of the delivery of health care services; or
(iv) otherwise protect or enhance the health care delivery system, as determined by the commissioner.
(4) (i) Such written proposal shall be submitted to the commissioner at least sixty days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this section shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the facility shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the facility's written proposal as approved by the commissioner and may also require that the facility submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the facility's temporary rate adjustment prior to the end of the specified timeframe.
(ii) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a Request For Applications or a Request For Proposals issued by the commissioner.
This notice is intended
to serve only as a notice of emergency adoption. This agency intends to adopt the provisions of this emergency rule as a permanent rule, having previously submitted to the Department of State a notice of proposed rule making, I.D. No. HLT-14-12-00006-P. Issue of April 4, 2012. The emergency rule will expire July 9, 2012.
Text of rule and any required statements and analyses may be obtained from:
Katherine Ceroalo, DOH, Bureau of House Counsel, Reg. Affairs Unit, Room 2438, ESP Tower Building, Albany, NY 12237, (518) 473-7488, email: regsqna@health.state.ny.us
Regulatory Impact Statement
Statutory Authority:
The statutory authority for this regulation is contained in Section 2807-c (35)(b) of the Public Health Law (PHL) which authorizes the Commissioner to promulgate regulations, including emergency regulations, with regard to Medicaid reimbursement rates for general hospital inpatient services. Such rate regulations are set forth in Subpart 86-1 of Title 10 (Health) of the Official Compilation of Codes, Rules, and Regulation of the State of New York.
Legislative Objectives:
Subpart 86-1 of Title 10 (Health) of the Official Compilation of Codes, Rules and Regulation of the State of New York, paragraph (1) of subdivision (b) of section 1.31 will be amended to expand this temporary adjustment to eligible general hospitals that are subject to or impacted by the closure, merger, acquisition, consolidation, or restructuring of a health care provider in their service delivery area. In addition, the proposed regulation sets forth the conditions under which a provider will be considered eligible, the requirements for requesting a temporary rate adjustment, and the conditions that must be met in order to receive a temporary rate adjustment. The temporary rate adjustment shall be in effect for a specified period of time, as approved by the Commissioner, of up to three years. This regulation is necessary in order to maintain beneficiaries' access to services by providing needed relief to providers who meet the criteria.
Proposed section 86-1.31(b) requires providers seeking a temporary rate adjustment to submit a written proposal demonstrating that the additional resources provided by a temporary rate adjustment will achieve one or more of the following: (i) protect or enhance access to care; (ii) protect or enhance quality of care; (iii) improve the cost effectiveness of the delivery of health care services; or (iv) otherwise protect or enhance the health care delivery system, as determined by the Commissioner. The proposed amendment permits the Commissioner to establish benchmarks and goals, in conformity with a provider's written proposal as approved by the Commissioner, and to require the provider to submit periodic reports concerning the provider's progress toward achievement of such. Failure to achieve satisfactory progress in accomplishing such benchmarks and goals, as determined by the Commissioner, shall be a basis for ending the provider's temporary rate adjustment prior to the end of the specified timeframe.
Needs and Benefits:
In the center of a changing health care delivery system, the closure of a health care provider within a community often happens without adequate planning of resources for the remaining health care providers in the service delivery area. In addition, maintaining access to needed services while also maintaining or improving quality becomes challenging for the remaining providers. The additional reimbursement provided by this adjustment will support the remaining providers in achieving these goals, thus improving quality while reducing health care costs.
Costs:
Costs to Private Regulated Parties:
There will be no additional costs to private regulated parties. The only additional data requested from providers would be periodic reports demonstrating progress against benchmarks and goals.
Costs to State Government:
There is no additional aggregate increase in Medicaid expenditures anticipated as a result of these regulations, as the cost of the temporary rate adjustment will be offset by the overall reduction in Medicaid expenditures due to the closure, merger, acquisition, consolidation, or restructuring.
Costs to Local Government:
Local districts' share of Medicaid costs is statutorily capped; therefore, there will be no additional costs to local governments as a result of this proposed regulation.
Costs to the Department of Health:
There will be no additional costs to the Department of Health as a result of this proposed regulation.
Local Government Mandates:
The proposed regulation does not impose any new programs, services, duties or responsibilities upon any county, city, town, village, school district, fire district or other special district.
Paperwork:
An eligible provider must submit a written proposal, including a proposed budget. If a temporary rate adjustment is approved for a provider, the provider must submit periodic reports, as determined by the Commissioner, concerning the achievement of benchmarks and goals that are established by the Commissioner and are in conformity with the provider's approved written proposal.
Duplication:
This is an amendment to an existing State regulation and does not duplicate any existing federal, state or local regulations.
Alternatives:
No significant alternatives are available. Any potential projects that would otherwise qualify for funding pursuant to the revised regulation would, in the absence of this amendment, either not proceed or would require the use of existing provider resources.
Federal Standards:
The proposed regulation does not exceed any minimum standards of the federal government for the same or similar subject area.
Compliance Schedule:
The proposed regulation provides the Commissioner of Health the authority to grant approval of temporary adjustments to rates calculated for general hospitals that are subject to or impacted by the closure, merger, acquisition, consolidation, or restructuring of a health care provider, for a specified period of time, as determined by the Commissioner, of up to three years.
Regulatory Flexibility Analysis
Effect of Rule:
For the purpose of this regulatory flexibility analysis, small businesses were considered to be general hospitals with 100 or fewer full-time equivalents. Based on recent financial and statistical data extracted from the Institutional Cost Report, seven hospitals were identified as employing fewer than 100 employees.
No health care providers subject to this regulation will see a decrease in average per-discharge Medicaid funding as a result of this regulation.
This rule will have no direct effect on local governments.
Compliance Requirements:
Providers that are granted a temporary rate adjustment must submit periodic reports, as determined by the Commissioner, concerning the achievement of benchmarks and goals that are established by the Commissioner and are in conformity with the provider's approved written proposal.
The rule will have no direct effect on local governments.
Professional Services:
No new or additional professional services are required in order to comply with the proposed amendments.
Compliance Costs:
No initial capital costs will be imposed as a result of this rule, nor is there an annual cost of compliance.
Economic and Technological Feasibility:
Small businesses will be able to comply with the economic and technological aspects of this rule because there are no technological requirements other than the use of existing technology, and the overall economic aspect of complying with the requirements is expected to be minimal.
Minimizing Adverse Impact:
This regulation seeks to provide needed relief to eligible providers, thus a positive impact for small businesses that are eligible and no impact for the remainder. In addition, local districts' share of Medicaid costs is statutorily capped; therefore, there will be no adverse impact to local governments as a result of this proposal.
Small Business and Local Government Participation:
The State filed a Federal Public Notice, published in the State Register, prior to the effective date of the change. The Notice provided a summary of the action to be taken and instructions as to where the public, including small businesses and local governments, could locate copies of the corresponding proposed State Plan Amendment. The Notice further invited the public to review and comment on the related proposed State Plan Amendment. In addition, contact information for the Department of Health was provided for anyone interested in further information.
Rural Area Flexibility Analysis
Effect on Rural Areas:
Rural areas are defined as counties with populations less than 200,000 and, for counties with populations greater than 200,000, include towns with population densities of 150 persons or less per square mile. The following 43 counties have populations of less than 200,000:
Allegany
Hamilton
Schenectady
Cattaraugus
Herkimer
Schoharie
Cayuga
Jefferson
Schuyler
Chautauqua
Lewis
Seneca
Chemung
Livingston
Steuben
Chenango
Madison
Sullivan
Clinton
Montgomery
Tioga
Columbia
Ontario
Tompkins
Cortland
Orleans
Ulster
Delaware
Oswego
Warren
Essex
Otsego
Washington
Franklin
Putnam
Wayne
Fulton
Rensselaer
Wyoming
Genesee
St. Lawrence
Yates
Greene
The following nine counties have certain townships with population densities of 150 persons or less per square mile:
Albany
Erie
Oneida
Broome
Monroe
Onondaga
Dutchess
Niagara
Orange
Compliance Requirements:
For hospitals that receive the temporary rate adjustment, periodic reports must be submitted concerning the achievement of benchmarks and goals as approved by the Commissioner.
Professional Services:
No new additional professional services are required in order for providers in rural areas to comply with the proposed amendments.
Compliance Costs:
No initial capital costs will be imposed as a result of this rule, nor is there an annual cost of compliance.
Minimizing Adverse Impact:
This regulation provides needed relief to eligible providers, thus a positive impact for small businesses that are eligible and no impact for the remainder. In addition, local districts' share of Medicaid costs is statutorily capped; therefore, there will be no adverse impact to local governments as a result of this proposal.
Rural Area Participation:
A concept paper was shared with the hospital industry associations, which include members from rural areas. Comments were received and taken into consideration while drafting the regulations. In addition, a Federal Public Notice, published in the New York State Register invited comments and questions from the general public.
Job Impact Statement
A Job Impact Statement is not required pursuant to Section 201-a(2)(a) of the State Administrative Procedure Act. It is apparent, from the nature and purpose of the proposed rule, that it will not have a substantial adverse impact on jobs or employment opportunities. The proposed regulation expands the temporary rate adjustment to eligible hospitals that are subject to or impacted by the closure, merger, acquisition, consolidation, or restructuring of a health care provider in its service delivery area. In addition, the proposed regulation sets forth the conditions under which a provider will be considered eligible, the requirements for requesting a temporary rate adjustment, and the conditions that must be met in order to receive a temporary rate adjustment. The proposed regulation has no implications for job opportunities.
