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.
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.
STATE OF NEW YORK ________________________________________________________________________ 1405 2013-2014 Regular Sessions IN 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 amendedEXPLANATION--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.