Exempts monthly assessments due from residential health facilities located in any area designated as a Health Professional Shortage Area or serving a medically underserved population and experiencing a medical assistance utilization rate of eighty-five percent or greater from interest or penalties for any period prior to October 1, 2014.

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S1405-2013 Actions

• Jan 9, 2013: REFERRED TO HEALTH

S1405-2013 Memo

BILL NUMBER:S1405

TITLE OF BILL:
An act
in relation to exempting monthly assessments due from residential health
facilities located in any area designated as a Health Professional
Shortage Area or serving a medically underserved population and
experiencing a medical assistance utilization rate of eighty-five
percent or greater from interest or penalties for any period prior to
October 1, 2014

PURPOSE OR GENERAL IDEA OF BILL:
This bill would provide an opportunity for residential health
facilities which are otherwise unable to satisfy their obligations to
New York State to fulfill their responsibility.

SUMMARY OF SPECIFIC PROVISIONS:
This bill would allow a residential health facility which is located
in a federally designated Health Professional Shortage Area or a
medically underserved population area and which is paid by Medicaid
or Medicare for more than 85% of its patients, to negotiate an
agreement with the Commissioner of Health to enter into reasonable
payment schedule on allowed taxes and fees, including all accumulated
interest and penalties.

JUSTIFICATION:
The Health Facilities Cash Receipts Assessment requires hospitals and
nursing homes to pay an assessment on gross receipts on a monthly
basis. This assessment was enacted in 2002 in order to close gaps in
the State spending plan.

Under this tax, nursing homes and hospitals pay 6% of their gross
revenue to the State, including revenue from Medicaid and Medicare
patients. Those facilities then apply to the federal government to be
compensated for the tax, a process which takes months. Health
facilities which have a high proportion of Medicaid and Medicare
patients have found it especially difficult to balance their books
because of the delay inherent in this system.

This difficulty has been exacerbated by a state policy which is
designed to encourage prompt payment of the tax by assessing a 25%
penalty on overdue payments. There is no exception made for the delay
caused by the reimbursement from the federal health care programs. As
a result there are nursing homes and hospitals, particularly those
with high Medicare and Medicaid caseloads, which owe as much in
penalties and fees as they do under the original Cash Receipts
Assessment.

Each month, as the penalties and fees compound, it becomes less
feasible to make the payment to the State while providing health care
services to the community. The recession has caused costs for medical
supplies and the like to escalate, which consumes a greater share of
the gross revenues which the Cash Receipts Assessment is based upon.
The situation is untenable. If current trends continue, and there is
no reason to expect that they will not, these facilities will be
forced to enter receivership or bankruptcy within months, the State's


prospects at collecting these, funds will dim, and the people of New
York will suffer.

This bill gets at the heart of the problem by requiring these
facilities to pay their tax bill in full, including all interest and
other penalties, which brings needed revenue into the state, but it
also allows the Department of Health to negotiate with these
facilities to come up with a payment plan which prevents these
facilities from having to shutter their doors. The bill is narrowly
tailored to those facilities which a) receive more than 85% of their
revenue from Medicaid and Medicare, b) are in a health professional
shortage or medically underserved area, which means that their costs
are likely substantially higher. These are the facilities that are,
at this instant, on the precipice of disaster, unless this
legislature steps in and addresses this problem.

PRIOR LEGISLATIVE HISTORY:
First introduced in 2009. Passed Senate in 2010.
2011-2012: S.404 - Died in Committee

FISCAL IMPLICATIONS:
This bill, if enacted will earn money for the State, which will
collect the cash receipts tax from hospitals which cannot currently
meet their obligation.

EFFECTIVE DATE: Immediately.

S1405-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    1405

                         2013-2014 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 9, 2013
                                 ___________

  Introduced  by  Sen.  MONTGOMERY  -- read twice and ordered printed, and
    when printed to be committed to the Committee on Health

  AN ACT in relation to exempting monthly assessments due from residential
    health facilities located in any area designated as a  Health  Profes-
    sional Shortage Area or serving a medically underserved population and
    experiencing  a  medical  assistance  utilization  rate of eighty-five
    percent or greater from interest or penalties for any period prior  to
    October 1, 2014

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. Notwithstanding any provision of law, rule or regulation to
  the contrary, monthly assessments due for any period prior to October 1,
  2014, from residential health facilities located in any area  designated
  as  a  Health  Professional  Shortage Area or serving a medically under-
  served population and experiencing a medical assistance utilization rate
  of eighty-five percent or greater as appropriately reported pursuant  to
  section  2807-d of the public health law on or before December 31, 2014,
  shall not be subject to interest or penalties as otherwise  provided  in
  such section 2807-d; provided, however, that the residential health care
  facility  must  either pay such amounts or enter into a repayment agree-
  ment for said amount with the commissioner of health under terms accept-
  able to such commissioner on or before March 31, 2015; provided further,
  however, that with  regard  to  all  assessment,  interest  and  penalty
  amounts collected by the commissioner of health by the effective date of
  this  act  the  interest and penalty provisions of section 2807-d of the
  public health law shall remain in full force and effect and such amounts
  collected shall not be subject to further reconciliation or  adjustment.
  Health Professional Shortage Areas and medically underserved populations
  shall  be  established  based  on  designations  of  areas as such under
  section 3320(b)(3) of the Federal Public Health Service Act  as  amended

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD00147-01-3

 S. 1405                             2

  by the Health Care Safety Net Amendments of 2002, Public Law 107-251 and
  shall  include  those  areas  designated  by the secretary of health and
  human services as an area with a shortage of personal  health  services,
  or a population group designated by the commissioner of  health as being
  underserved in the area of residential health care facility services.
    S 2. This act shall take effect immediately.