BILL NUMBER:S1288

TITLE OF BILL:  An act to amend the public health law, in relation to
directing the commissioner of health to make recommendations relating
to increasing certain ambulatory patient group reimbursement rates

PURPOSE:  Directs the commissioner of health to make recommendations
to the governor and the legislature on increasing ambulatory patient
group rates for services provided by rural critical access hospitals.

SUMMARY OF PROVISIONS:

Section one amends Subdivision 2-a of section 2807 of the Public
Health Law by adding a new paragraph (j) directing the commissioner of
health, in conjunction with hospital industry representatives, to make
written recommendations to the Governor and the legislature, including
proposed legislation, for increasing Ambulatory Patient group rates
for rural critical access hospitals by October 1, 2015.  The
recommendations must account for increased operating expenses of
inherent to these hospitals, as well as the need to maintain access,
in rural areas. The proposed language, subject to legislative
approval, would be for inclusion in the 2016-2017 state budget, with
rate increases to be effective April 1, 2016.

Section two provides the enactment date.

              

JUSTIFICATION:  Critical access hospitals (CAB) serve medically
underserved geographically isolated communities. They provide limited
stay special care, acute care and swing bed services, as well as 24
hour emergency service capability. The maintenance of CAHs is critical
for preserving access to basic health care services for rural New
Yorkers.

Currently, Medicare reimburses CAHs on the basis of reasonable costs,
while New York State Medicaid reimbursement rates are capped at lower
than operational costs.

Because these hospitals must distribute substantial fixed costs over a
small number of visits, an enhanced Medicaid reimbursement would help
to ensure their long range financial viability and preserve access to
needed health care services for isolated communities. Further, this
maintains the States shift in policy of preserving patient care while
improving population health through shifting to outpatient care. This
legislation would support these goals.  Beginning in late 2008, the
Department of Health began to implement a new outpatient payment
system that focuses reimbursement based upon the intensity of the
services provided known as Ambulatory patient groups (APGs).

This legislation would require the Commissioner of Health and the
Hospital industry to collaboratively produce recommendations and
legislative language to provide for an enhanced APG rate that
recognizes the low volume, costly nature of a rural safety net
provider. The legislative proposal will be for inclusion in the SFY
2016/2017 Budget and effective on April 1, 2016.


Because APGs are an already existing rate structure, this legislation
provides consistency with reimbursement methodologies currently used
to pay for outpatient services performed by hospitals, negates the
needs for DOH to implement a new payment methodology specific to CAHs,
and ensures CAHs will receive crucial funding to preserving their
fiscal viability.

LEGISLATIVE HISTORY:  2014: S.4375-A Referred to Health 2013:
S.4375Reported and Committed to Finance

FISCAL IMPLICATIONS:  Undetermined

EFFECTIVE DATE:  This act shall take effect immediately.