Public Health Law section 2807-c(35)(b) and section 2807-c(35)(c) provides the Commissioner of Health with authority to issue emergency regulations. These regulations are required in order to continue the utilization of the 2013 Service Intensity Weights (SIWs) and average length-of-stay (ALOS) beginning January 1, 2014 due to the delay the implementation of the acute inpatient hospital cost base year update. In addition, these regulations provide for an appeal mechanism for new teaching hospitals and to revise the downstate definition for out-of-state providers. Emergency adoption of the proposed amendment for the continuation of the 2013 SIWs and ALOS is necessary to meet the change in the effective date of the cost base year update which is currently for discharges on or after January 1, 2014. The effective date is being amended to no sooner than April 1, 2014 but no later than July 1, 2014. These proposed amendments also provide for additional reimbursement for new teaching hospitals as required in statute and also provide for additional reimbursement for out-of-state hospitals in cities comparable to New York State’s downstate providers. The additional reimbursement for new teaching hospitals and out-of-state providers is effective for discharges on or after January 1, 2014.

Subdivision (d) of section 86-1.32 of 10 NYCRR is amended by adding a new paragraph (3), to read as follows:

(3)(i) Direct medical education (DME) and indirect medical education (IME) costs, as defined in sections 86-1.15(f)(1) and (f)(2) of this Subpart, for hospitals where the teaching status has changed from non-teaching to teaching.

(ii) The effective date of the initial rate adjustment shall be the later of the first of the month following 60 days from the department's receipt of the written notification with documentation requesting a rate adjustment or July 1st of the program year.

Paragraph (1) of subdivision (a) of section 86-1.33 of 10 NYCRR is amended to read as follows:

(1)(i) The weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the downstate region of New York State shall apply with regard to services provided by out-of-state providers located in the New Jersey counties of Sussex, Passaic, Bergin, Hudson, Essex, Union, Middlesex and Monmouth, in the Pennsylvania county of Pike, and in the Connecticut counties of Fairfield and Litchfield. [; and]

(ii) For rates effective beginning January 1, 2014, the weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the downstate region of New York State shall also apply with regard to services provided by out-of-state providers located in cities where the city's population census is 500,000 or greater based on the U. S. Department of Commerce United States Census Bureau; and

Statutory Authority:

The statutory authority for this regulation is contained in Section 2807-c(35)(c) of the Public Health Law (PHL) which authorizes the Commissioner to promulgate regulations, including emergency regulations, with regard to Medicaid reimbursement rates for Hospital services. Such rate regulations are set forth in Subpart 86-1 of Title 10 (Health) of the Official Compilation of Codes, Rules, and Regulations of the State of New York (NYCRR).

Legislative Objectives:

Currently, 2014 Service Intensity Weights (SIWs) and average length-of-stay (ALOS) were to be utilized effective on or after January 1, 2014. The 2014 SIWs and ALOS were to be implemented at the time the acute hospital inpatient rates were revised for a new cost base year. This amendment delays the implementation of the 2014 SIWs and ALOS and continues the 2013 SIWs and ALOS due to the delay of the implementation of a new cost base year. In addition, the amendment provides for an appeal mechanism for new teaching hospitals to receive reimbursement for a change in teaching status. Further, out-of-state hospitals in cities comparable to New York State’s downstate providers will be considered downstate providers and receive the downstate reimbursement payment.

Needs and Benefits:

The amendment to 10 NYCRR 86-1.18 regulations are required in order to continue the utilization of the 2013 Service Intensity Weights (SIWs) and average length-of-stay (ALOS) beginning January 1, 2014 due to the delay, to up to July 1, 2014, of the implementation of the acute inpatient hospital cost base year update, as authorized by the recently enacted 2014-15 budget. The amendment to 10 NYCRR 86-1.32 provides for an appeal mechanism for adjusting hospital inpatient rates to reflect costs associated with new teaching hospital programs, as authorized by an amendment to Public Health Law § 2807-c(35)(b) enacted as part of the 2013-14 budget. The amendment to 10 NYCRR 86-1.33 makes certain out-of-state providers located in large urban areas eligible for inclusion in the downstate peer group for rate-setting purposes.

COSTS:

Costs to Private Regulated Parties:

There will be no additional costs to private regulated parties.

Costs to State Government:

The continuation of the 2013 SIWs and ALOS will not affect State Government costs. However, the reimbursement for new teaching hospitals and the change of the downstate designation for out-of-state providers will result in an increased payment. These costs are minimal as the number of providers impacted are limited.

Costs of 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:

No additional paperwork is required of providers.

Duplication:

This regulation does not duplicate any existing federal, state or local government regulation.

Alternatives:

No significant alternatives are available.

Federal Standards:

The proposed regulation does not exceed any minimum standards of the federal government for the same or similar subject areas.

Compliance Schedule:

The proposed regulations requires the Department to use a more current cost base year for discharges on or after April 1, 2014 but no later than July 1, 2014.

Effect of Rule:

Currently, 2014 Service Intensity Weights (SIWs) and average length-of-stay (ALOS) were to be utilized effective for discharges on or after January 1, 2014. The 2014 SIWs and ALOS were to be implemented at the time the acute hospital inpatient rates were revised for a new cost base year. This amendment delays the implementation of the 2014 SIWs and ALOS and continues the 2013 SIWs and ALOS due to the delay of the implementation of a new cost base year. In addition, the amendment provides for an appeal mechanism for new teaching hospitals to receive reimbursement for a change in teaching status. Further, out-of-state hospitals in cities comparable to New York State’s downstate providers will be considered downstate providers and receive the downstate reimbursement payment.

Compliance Requirements:

No new reporting, recordkeeping or other compliance requirements are being imposed as a result of the proposed regulation.

Professional Services:

No new or additional professional services are required in order to comply with the proposed regulation.

Compliance Costs:

No initial capital cost will be imposed as a result of this rule, nor is there an annual cost of compliance.

Economic and Technological Feasibility:

As the proposed rule affects only the amounts reimbursed for existing services, compliance by small businesses and local governments is not expected to have any economic or technological implications.

Minimizing Adverse Impact:

This regulation will not have any adverse impact on the providers as the delay will reduce the adverse impact of processing retroactive rates and provides for additional reimbursement for new teaching hospitals and out-of-state hospitals comparable to New York State’s downstate providers.

Small Business and Local Government Participation:

The regulation provides for the delay in the 2014 SIWs and ALOS due to the delay of the implementation of update to the cost base for acute hospital inpatient rates. As this delay will be implemented statewide, this will result in small providers benefiting also from the delay.

Effect on Rural Areas:

The proposed amendments to continue the utilization of the 2013 Service Intensity Weights (SIWs) and average length-of-stay (ALOS) due to the delay of the update of the cost base year for the acute hospital inpatient rates and the additional reimbursement for new teaching hospitals applies to all hospitals throughout the state, including those located in rural areas. Rural areas are defined as counties with a population less than 200,000 and counties with a population of 200,000 or greater that have towns with population densities of 150 persons or fewer per square mile. The following 43 counties have a population of less than 200,000 based upon the 2010 United States Decennial Census data (http://2010.census.gov).

The following eleven counties have certain townships with population densities of 150 persons or less per square mile:

Compliance Requirements:

No new reporting, recordkeeping, or other compliance requirements are being imposed as a result of the proposed regulation.

Professional Services:

No new additional professional services are required in order for providers in rural areas to comply with the proposed regulation.

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:

The regulation provides for the continuation of the 2013 SIWs and ALOS due to the delay of the update of the cost base year which will assist hospitals with budgeting since there will be no retroactive effect on providers. In addition, reimbursement for new teaching hospitals will assist providers with the cost of the new teaching program.

Rural Area Participation:

The delay and the opportunity for additional reimbursement for new teaching hospitals applies to all New York State hospitals.

A Job Impact Statement is not required pursuant to Section 201-a(2)(a) of the State Administrative Procedure Act. The proposed rule will not have a substantial adverse impact on jobs or employment opportunities nor does it have adverse implications for job opportunities. The proposed amendments continue the utilization of the 2013 Service Intensity Weights (SIWs) and average length-of-stay (ALOS) due to the delay of the implementation of the updated cost base year in the acute hospital inpatient rates; provide for an appeal mechanism for new teaching hospitals; and expand the definition of the downstate region for out-of-state providers. The continuation of the 2013 SIWs and ALOS due to the delay will assist hospitals with budgeting as there will be no retroactive effect on providers. In addition, new teaching hospitals will be reimbursed for the additional teaching costs. Further, the revision to the definition of the downstate region will provide out-of-state hospitals, which are in cities which are comparable to New York State’s downstate providers, with more appropriate reimbursement.