November 15, 2011

1. HCRA HOSPITAL CONFERENCE November 15, 2011 Your Logo

2. INTRODUCTIONS • Phyllis Stanton, • Principal Health Care Fiscal Analyst, DOH • John Kazukenus, • Manager, KPMG • Patrick Bryant, • Manager, KPMG

3. HCRA Refresher SEMINAR OVERVIEW 1 Public Health Law on Patient Services Revenue 2 Third Party Payors Requiring an Election Decision 3 Revenue Hospitals are Responsible For 4 HCRA Topics 5 • Delinquency Process Compliance Audits 6 • Contact Information 7

4. HEALTH CARE REFORM ACT PUBLIC HEALTH LAW §2807-j The HCRA law requires Article 28 general hospitals, D&TCs providing ambulatory surgical services, and comprehensive D&TCs to pay a surcharge to the Public Goods Pool on certain net patient services revenue.

5. Patient Services Revenue : Defined as all moneys received for, or on account of, all patient services related to a preadmission, inpatient, outpatient, or post-discharge visit, including all items or services as are necessary for such care, except where excluded in §2807-j .

6. Examples of Types of Third Party Payors* That Would Be Considered Non-Electing if No Election Submitted • Any not-for-profit insurer, licensed in NYS or elsewhere, (if licensed in NYS they would be termed Article 43 Corporations); • Commercial insurers, licensed in NYS, or elsewhere; This can include HMOs • HMOs organized under Article 44 of the NYS Public Health Law • Self funded plans domiciled in NYS or elsewhere; This includes welfare plans, certain trusts • Other Insurer types, including HMOs, licensed out of state; This includes foreign insurers • State and local Government payors other than NYS; Example: Other state’s Medicaid programs *This is a list of the most common types of payors that providers receive patient revenue from and is not meant to be an all inclusive list.

7. PATIENT SERVICES REVENUE FOR WHICH THE HOSPITAL IS RESPONSIBLE TO PAY A SURCHARGE ON • Revenue received from the patient for: • 1. Coinsurance • 2. Self pay or uninsured • 3. Copays and deductibles for which the provider has not received written release from the payor stating they are paying the associated surcharge • Revenue received from non-electing payors –third party payors who have an election decision to make and have not made an election. A list of all electing payors (current or past) can be found on www.nyhealth.gov/nysdoh/hcra/hcrahome.htm or www.hcrapools.org entitled “Elector List.” Revenue received from “unspecified” payors – payors who are not obligated to make an election decision because they are not an third party “every day payor” or have been deemed by the Department to be unspecified. Example 1: Foreign countries that have nationalized healthcare making payment directly for claims. Example 2: employer paying a workers compensation claim, rather than submitting the claim to their workers compensation carrier. • Revenue received from NYS agencies/programs authorized to pay NYS Medicaid inpatient rates, NYS counties for county inmates, or NYC Corrections, that are not on the Elector List (at the current NYS Medicaid rate of 7.04%). Details discussed on the next screen.

8. PHL § § 2807-j(2)(b), (d) and 2807-c (1) (a-1) refers to those NY governmental agencies whose payments are subject to the 7.04% The only NY governmental entities that have a surcharge obligation, at 7.04%, are as follows: • Those making payments for inpatient claims and authorized to pay NYS Medicaid inpatient rates • Local correctional facilities (county inmates and NYC Corrections inmates) • All other NY governmental entities are exempt. Examples can be found on our May 27, 1997 letter: http://www.health.ny.gov/nysdoh/hcra/legis.htm • Hospitals should ensure that they assess the 7.04% on their claims if they will be billing the agency or facility and they are not listed on the Elector List. If they are billing the Medicaid Program directly, then do not assess the 7.04% since the Medicaid Program pays the surcharge directly to the PGP. A list of the known ones are found on the next screen. A list of the individuals facilities are found on subsequent screens. • If the agency is authorized to pay the Medicaid inpatient rates for services provided to eligible individuals, then all revenue received from them for both inpatient and outpatient Medicaid payments is subject to the 7.04%. Again, if the hospital is billing the Medicaid Program directly, do not assess the surcharge since the program pays the surcharge directly to the PGP. • If the agency’s program is not authorized to pay the Medicaid inpatient rates, then they are exempt from the surcharge on any inpatient or outpatient claim.

9. REVENUE FROM NYS AGENCIES/FACILITIES SUBJECT TO THE NYS MEDICAID SURCHARGE RATE OF 7.04% • NYS Dept of Corrections (DOC)- payments for prison inmates • NYS Office of Mental Health (OMH)- payments for patients residing in their facilities • NYS Counties making payment for county Inmates • NYC Corrections making payment for city Inmates • NYS Liquidation Bureau’s Security Fund – making payments for insolvent NYS licensed insurers from the Security Fund The above list is not necessarily a comprehensive listing of state governmental agencies that have programs that are only subject to the 7.04% NYS Medicaid surcharge rate. These are the known ones. The Department will research any other programs brought to our attention.

10. List of NYS Department of Corrections Prisons Adirondack Correctional Facility Eastern NY Correctional Facility Mid-State Correctional Facility Wallkill Correctional Facility Albion Correctional Facility Edgecomb Correctional Facility Mohawk Correctional Facility Washington Correctional Facility Altona Correctional Facility Elmira Correctional Facility Monterey Shock Correctional Watertown Correctional Facility Arthur Kill Correctional Facility Fishkill Correctional Facility Mt. McGregor Correctional Wende Correctional Facility Attica Correctional Facility Five Points Correctional Facility Ogdensburg Correctional Facility Willard Drug Treatment Campus Auburn Correctional Facility Franklin Correctional Facility Oneida Correctional Facility Woodbourne Correctional Facility Bare Hill Correctional Facility Fulton Correctional Facility Orleans Correctional Facility Wyoming Correctional Facility Bayview Correctional Facility Gouverneur Correctional Facility Otisville Correctional Facility Beacon Correctional Facility Gowanda Correctional Facility Queensboro Correctional Facility Bedford Hills Correctional Facility Great Meadow Correctional Facility Riverview Correctional Facility Buffalo Correctional Facility Green Haven Correctional Facility Rochester Correctional Facility Butler Correctional Facility Greene Correctional Facility Shawangunk Correctional Facility Camp Georgetown Groveland Correctional Facility Sing Sing Correctional Facility Cape Vincent Correctional Facility Hale Creek ASACTC Southport Correctional Facility Cayuga Correctional Facility Hudson Correctional Facility Sullivan Correctional Facility Chateaugay Correctional Facility Lakeview Shock Correctional Sullivan Correctional Facility Clinton Correctional Facility Lincoln Correctional Facility Summit Shock Incarceration Collins Correctional Facility Livingston Correctional Facility Taconic Correctional Facility Coxsackie Correctional Facility Marcy Correctional Facility Ulster Correctional Facility Downstate Correctional Facility Mid-Orange Correctional Facility Upstate Correctional Facility

11. List of NYS Operated Psychiatric Facilities Binghamton Psychiatric Center Rochester Psychiatric Center Bronx Children's Psychiatric Center Rockland Children's Psychiatric Center Bronx Psychiatric Center Rockland Psychiatric Center Brooklyn Children's Psychiatric Center Sagamore Children's Psychiatric Center Buffalo Psychiatric Center St. Lawrence Psychiatric Center Capital District Psychiatric Center South Beach Psychiatric Center Central New York Psychiatric Center Western NY Children's Psychiatric Center Creedmore Psychiatric Center Elmira Psychiatric Center Greater Binghamton Health Center Hudson River Psychiatric Center Hutchings Psychiatric Center Kingsboro Psychiatric Center Kirby Forensic Psychiatric Center Manhattan Psychiatric Center Mid-Hudson Forensic Psychiatric Center Mohawk Valley Psychiatric Center Nathan S. Kline Institute New York Psychiatric Institute Pilgrim Psychiatric Center Queens

12. Non-electors Subject to the GME: • Corporations Organized and Operating in Accordance with Article 43 of the NYS Insurance Law 1 • Not for Profit Insurers and HMOs 2 • Corporations Operating in Accordance with Article 44 of the NYS PHL • HMOs in NYS 3 Self Funded Plans Providing Inpatient Coverage – regardless of insurance type except when providing coverage described in the next screen • Regardless of Domicile • Insurers and HMOS Authorized to Write Accident and Health Policies (regardless of which state/country they are licensed) 4

13. Non-electors NOT Subject to the GME: • NYS governmental agencies • Workers Compensation carriers providing coverage under NYS Law • Auto no-fault carriers providing coverage under NYS Law • Volunteer Firefighters providers of coverage under NYS Law • Volunteer Ambulance Workers providers of coverage under NYS Law • Indemnity Policies that do not provide inpatient coverage on an expense incurred basis, but rather pay a fixed dollar per day for each as an inpatient. (Most of these policies pay the member rather than the hospital, and if patient has no other insurance, patient is to be treated as a self-pay with no GME.

14. Fixed Dollar Patient Portions • Hospital’s Responsibility to Determine if Obligated to Surcharge on Fixed Dollar Patient Portion 1 • In fixed dollar patient portions such as fixed dollar co-pays or deductibles, electing payors have a choice between two options on how to pay the associated surcharge • Hospitals are obligated to determine which option they’ve chosen, otherwise are obligated themselves 2 The Electing Payor’s Choices of Surcharge Payment Options: 3 • Payor pays claim by utilizing the second billing example found • on the DOH website. Hospital pays the surcharge out of fixed dollar amount and gets reimbursed by payor • Payor pays the associated surcharge on the fixed dollar • amount directly to the Public Goods Pool via payor report

15. Fixed Dollar Patient Portions (continued) 3 • Proper Reporting of Copays: • If payor chooses #1 above, hospitals will report the fixed dollar payment received from the • insured patient on Line #10 of their PGP report, entitled: “Self-Pay Uninsured…” • Hospital pays the surcharge out of the fixed dollar amount and gets reimbursed by payor • If payor chooses #2 above, and notifies hospital of such choice, the hospital will report the • fixed dollar payment received from the patient on the following lines: • On Hospital Inpatient portion of the PGP report: Line 17 • On Hospital Outpatient portion of the PGP report: Line 19 • 3. In the absence of the electing payor notifying the hospital that they have chosen option #2 • above, the hospital’s “default” is to report the fixed dollar payment on line 10 of the PGP • 4. A non-electing payor, paying for covered services, must utilize Choice #1 (under Box 2) above, and the hospital must report revenue on line 12, 12a or 12b

16. Revenue Received for Physician Billings Effective with dates of service 4/1/11, Public Health Law §2807-j (3)(a)(v) now exempts surcharges on revenue received for all discrete physician billings (M.D.s or D.Os) • Physician services MUST be billed on a separate claim form, separate from services provided (HCFA 1500 or 837P) This change in law includes discretely billed employed physician services

17. Foreign Payors and Patients • Foreign Insurance Companies and Medical Assistance Companies 1 • Foreign insurance companies are insurers licensed in other countries • Medical assistance companies act as the conduit for claim payments between the foreign • insurance company and providers in U.S.; administer travel policies for expatriates • Must make an election like any payor in order to pay current elector rate to the PGP • If no election is made, hospital must pay the nonelector rate to the PGP currently at 37.90% and if an inpatient claim and an accident and health policy, or a self funded plan (as known in U.S.), the regional GME percentage 2 • Foreign Countries with Nationalized Health Plans or Paid Directly by Foreign Governments • Deemed Unspecified payor; pay directly to hospital when billed, at self pay rate currently at 9.63% • A List of those countries with know nationalized health plans can be found on our DOH Web site under “Elector List “

18. Foreign Payors and Patients (continued) Foreign Diplomatic Agents Exempt from all surcharges if protected under their diplomatic mission Those protected by the diplomatic mission carry exemption paperwork 3

19. Surchargeability of Personal Items • Exemption of Personal Items • Revenue from billed patient personal items, not related to the medical service such as TVs, telephones, and private rooms are not subject to the HCRA surcharge since such items are not related to the medical service provided

20. Medicare • Traditional Medicare Exemptions: 1 • Revenue received for Medicare covered services is exempt from surcharge; includes revenue received from: • the Medicare program • an insurer contracted to administer on behalf of the Medicare program • a supplemental plan such as a Medigap policy, or, • the beneficiary themselves 2 • Medigap/Supplemental Policies • Pay for certain out-of-pocket expenses that Medicare covers but does not pay in full • Also can cover certain services that are not payable by Medicare due to: • Non-covered services • Exhaustion of benefits • Surcharges apply to services not covered, at rates based on election status of payor, but no GME Per Unit of Payment Surcharge (if a non-elector)

21. Medicare (continued) 3 • Medicare Advantage Part C • Medicare Advantage Part C plans supply a person with all of their Part A and Part B benefits, plus, depending on the plan chosen, may cover services that traditional Medicare will not, like dental, vision, and unlimited inpatient days • ANY service for which Medicare Advantage pays for, is exempt from the surcharge

22. DISTRIBUTION CHART Is Revenue From the Pt Services S/C 1% StatewideCash Asmt Program Distributions Sources Below Exempt From: PHL 2807-j PHL 2807-c(18) PHL 2807-d Currently Active? Y/N Y/N Y/N Y/N Health Care Initiatives Pool – includes the following: Y - Report on line 2(g) Y - Report on line 2(d) Y - Report on line (3a) Emergency Medical Services Y Commissioner’s Priority Pool N (see Note 1) Commissioner’s Emergency Assist. Y Senate and Assembly Priority Pools N Payments to Poison Control Centers Y Maternal and Child HIV Services N Health Facility Restructuring Y Health Workforce Retraining Y Primary Health Care Services N Rural Health Care Delivery – Development and Access Y Health Information and Health Care Quality Improvement N AIDS Drug Assistance Program –HIV Uninsured Care Program Y Specialty Children’s and Cancer Hospitals N General Hospital Indigent Care Pool Y - Report on line 2(i) Y - Report on line 2(f) Y - Report on line (3c) Y BDCC Regional Pool Distributions Y - Report on line 2(i) Y - Report on line 2(f) Y - Report on line (3c) N BDCC &Capital Statewide Pool Dist Y - Report on line 2(i) Y - Report on line 2(f) Y - Report on line (3c) N

23. DISTRIBUTION CHART cont 2 Is Revenue From the Pt Services S/C 1% Statewide)Cash Asmt Program Distributions Sources Below Exempt From PHL 2807-j PHL 2807-c(18) PHL 2807-d Currently Active Y/N Y/N Y/N Y/N Electronic Health Records (EHR) Grants Y - Report on 2(h) Y - Report on 2(e) Y - Report on 4(d) Y Healthy Women Partnership Program Y - Report on 2(h) Y - Report on 2(e) Y - Report on 4(d) Y General Hospital Recruitment and Retention of Health Care Workers Non-Public General Hospitals (Rate Adjustments and off-line Medicaid Payments - See Note 2 below) N - Report on line 5(a) N NN Public General Hospitals (Grants) Y - Report on line 2(h) Y - Report on line 2(e) Y - Report on line 4(d) N Tobacco Control and Insurance Initiatives Pool - includes the following:) Tobacco Use Prevention and Control Program Y - Report on line 2(g) Y - Report on line 2(d) Y - Report on line (3b) Y School Based Health Center Grants Y Workforce Retention – Public General Hospital Grants N Infertility Services Program Y NYS Community Health Care Conversion Demonstration Project Grant Funds Y - Report on line 2(g) Y - Report on line 2(d) Y - Report on line (3b) N

24. DISTRIBUTION CHART cont 3 Is Revenue From the Pt Services S/C 1% StatewideCash Asmt Program Distributions Sources Below Exempt From PHL 2807-j PHL 2807-c(18) PHL 2807-d Active In 2011 Y/N Y/N Y/N Y/N High Need Indigent Care Adjustment Pool - includes the following: Y - Report on line 2(i) Y - Report on line 2(f) Y - Report on line (3c) High Need Indigent Care Adjustment Y DSH Share Rural Hospital Adjustment Y Non-DSH Indigent Care Y Non-DSH Share Rural Hospital Adjustment Y Professional Education Pool – includes the following: Y - Report on line 2(i) N N 1.Graduate Medical Education Distributions N 2. Incentive Pool Distributions - Minority N 3. Incentive Pool Distributions - Non-Minority N 4. Empire Clinical Research Investigator Program – (ECRIP) Distributions Y Other DSH and Medicaid Payments: Public General Hospital Indigent Care Adjustment Y - Report on line 2(i) Y - Report on line 2(f) Y - Report on line (3c) IGT DSH (County and State Public Hospitals) : Y - Report on line 2(i) Y - Report on line 2(f) Y - Report on line (3c) 1. Health and Hospitals Corporation (HHC) Y 2. All Other Qualifying Hospitals Y Upper Payment Limit Payments (Public Hospitals) See Note 2 N - Report on line 5(a) Y- Report on 2(f) Y - Report on line (3c) Y Supplemental Medicaid UPL Payments to Voluntary Hospitals See Note 2 Below N - Report on line 5(a) Y - Report on 2(f) Y - Report on line (3c) Y

25. DISTRIBUTION CHART cont 4 Note 1 - Replaced by Commissioner's Emergency Assistance Distributions beginning in SFY 07/08. Note 2 - Upper Payment Limit Payments to Public and Voluntary Hospitals and Supplemental Medicaid UPL payments to Voluntary Hospitals are paid directly to the hospitals by DOH's Medicaid Management Bureau (MMIS). MMIS pays the related surcharge on these hospital payments directly to the HCRA Pool . While these revenues are not exempt from the surcharge, hospitals must report these payments on line 5(a) (“Assessable Revenue received from the Medicaid Program, including revenue received from electing HMOs or PHSPs for services provided to Medicaid patients), avoid double payment of the surcharge to the Pool. Special Note: Each of the payments listed in this chart must be reported on line 1 of the Public Goods Pool report.

26. Amnesty Provision An amendment to the Health Care Reform Act was enacted April 15, 2011, that waives statutorily required interest and penalty if delinquent obligations due, (based on estimated or actual amounts), under Public Health Law (PHL) 2807-j, 2807-s and 2807-t, for reporting periods prior to January 1, 2011, are filed and paid in full between the dates of April 1, 2011, and December 31, 2011. Who Should Take Advantage of this Opportunity: Providers who have not filed a monthly report to the Public Goods Pool for report periods prior to January 1, 2011. (Prior to collection action initiated by DOH). Providers who have not fully paid owed surcharge obligations on patient services revenue received prior to January 1, 2011. Providers who discover an additional amount due to the PGP on patient services revenue received prior to January 1, 2011. Obligations not covered by the Amnesty Provision: Any interest or penalty amount that has been paid to, or collected previously by, DOH. Any surcharge or assessment payments made in response to a final audit finding issued by DOH or its designee. Any delinquent amount (whether estimated or actual) that has been referred to NYS Medicaid for recoupment. Any delinquent amount (whether estimated or actual) that has been referred to the NYS Attorney General’s Office for collection.

27. DELINQUENCY PROCESS Delinquency Notice Estimated Billing Process Action Taken for Non-Compliance

28. Delinquency Process 1 • Delinquency Notice • Delinquency notifications are sent via email and hardcopy mailing around the 10th of each month (adjusted for weekends and holidays) 2 • Estimated Billing Process • 1. • Delinquency letters and bills are mailed on a quarterly basis. The hospital has sixty days from the date of the letter to file delinquent report(s) and submit payment • 2. • A final notice is mailed with updated bill giving hospitals thirty additional days • If delinquencies are not resolved within that time period, amount is deemed final and is not subject to revision • Action is taken on the outstanding liability • 3.

29. Delinquency Process (continued) 3 • Action Taken for Non-Compliance: • Recoup from future Medicaid claim cycle checks paid by the state • Offset against Medically Indigent/High Need distributions • Submit referral to the state’s Attorney General’s Office to pursue legal collection

30. COMPLIANCE AUDITS Key Phases/Milestones Common Challenges and Better Practices

31. Reviewee Notification Planning/Pre-Fieldwork Entrance Conference Data Extraction Testing Methodologies Payor Determinations Preliminary Results Data Exceptions Conference Draft Report Exit Conference Provider Response Final Report • Key Phases/Milestones • Kick-Off • Receive Review Notification Package with Milestones, Questionnaire and Data Blue Print • Identify appropriate professionals to be involved in review • Begin work on Questionnaire • Hold initial discussions regarding data extraction • Submit completed Questionnaire one week prior to entrance conference • Attend entrance conference • Transfer complete set of data for one year period • Provide Data Representation Letter • Provide reconciliation to tie financial statements to data • Day 1 • Day 45 • Day 85 • Day 125 • Day 195 • Day 235

32. Reviewee Notification Planning/Pre-Fieldwork Entrance Conference Data Extraction Testing Methodologies Payor Determinations Preliminary Results Data Exceptions Conference Draft Report Exit Conference Provider Response Final Report • Key Phases/Milestones (continued) • Fieldwork • Help resolve any data issues • Continue data extraction for remaining years • Review and provide feedback on testing methodologies • Approve of updated methodologies as appropriate • Review initial payor determinations (direct vs. non-direct) • Provide supporting documentation for any disagreements • Review and provide feedback on preliminary results • Provide supporting documentation for any disagreements • Participate in a conference call to discuss the preliminary results • Day 1 • Day 45 • Day 85 • Day 125 • Day 195 • Day 235

33. Reviewee Notification Planning/Pre-Fieldwork Entrance Conference Data Extraction Testing Methodologies Payor Determinations Preliminary Results Data Exceptions Conference Draft Report Exit Conference Provider Response Final Report • Key Phases/Milestones (continued) • Closeout • Review and provide feedback on the Draft Report • Participate in a final meeting with KPMG and DOH to discuss results included in the draft report • Submit formal response to be included in the final report • Receive final report from DOH • Day 1 • Day 45 • Day 85 • Day 125 • Day 195 • Day 235

34. Common Challenges and Better Practices

35. Common Challenges and Better Practices (continued)

36. Common Challenges and Better Practices (continued)

37. Common Challenges and Better Practices (continued)

38. Common Challenges and Better Practices (continued)

39. CONTACT INFORMATION 1 Contact the Office of Pool Administration: Telephone: (315) 671-3800 Email: webpools@hcrapools.org For Questions Relating To: For Questions Relating To: • Electronic website for report submission questions • Obtaining a user ID and password, or trouble with logging on • Setting up file transfer Pool payments • Questions relating to receipt of Pool payments

40. Contact Information (continued) Contact the Department of Health: 2 Telephone: (518) 474-1673 bimamail@health.state.ny.us For Questions Relating To: • The surchargeability of revenue and distributions • Interpretation of the Public Health Law on HCRA • Specific report line questions about reportable revenue and deductions • Any questions regarding the 1% Statewide Report • Any delinquencies, Medicaid recoupments or referrals to the state’s Attorney General’s Office based on HCRA delinquencies • Electing Payors or Third Party Administrators

41. QUESTIONS