Relates to reimbursements to rural health care facilities

Title of bill

An act to amend the public health law, in relation to reimbursements to rural health care facilities

Purpose

To allow that on and after January 1, 2008, primary care hospitals and upgraded diagnostic and treatment centers be reimbursed by Medicaid in the same manner that Medicare reimburses critical access hospitals, which is on the basis of reasonable costs.

Summary of provisions

Amends section 2807 of the Public Health Law by adding a new provision that on and after January 1, 2008, primary care hospitals and upgraded diagnostic and treatment centers shall have Medicaid payments for emergency services and all outpatient services equal to one hundred and one percent of the reasonable costs of such facility in providing these services.

Subdivision four of Section 2807-c of the Public Health Law is amended to add a new provision that sets the Medicaid acute care inpatient payment for primary care hospitals at one hundred and one percent of the reasonable costs of such hospital in providing such services.

Justification

Primary care hospitals 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 primary care hospital emergency and inpatient capacity is critical for preserving access to basic health care services for rural New Yorkers.

Cost based Medicaid reimbursement would help ensure the long range financial viability of primary care hospitals. New York State Medicaid reimbursement rates are presently capped at lower than operational costs. The problem is exacerbated for primary care hospitals because of the need to spread substantial fixed costs over a small number of emergency room visits and inpatient admissions. Medicare reimburses such hospitals (called critical access hospitals under Medicare) on the basis of reasonable costs. This has helped stabilize such hospitals and ensure that isolated communities continue to have access to needed health care services. Having Medicaid payments also equal reasonable costs will further ensure the financial viability of such hospitals.

Upgraded diagnostic and treatment centers are currently provided for in law. However, an inadequate Medicaid reimbursement system has effectively not allowed them to become a reality. In addition to a range of outpatient services, up-graded diagnostic and treatment centers can provide emergency services similar to the emergency services provided by primary care hospitals. They are intended to serve rural underserved areas. By providing for cost based Medicaid reimbursement, upgraded diagnostic and treatment centers can become a viable resource available to serve rural areas.

Legislative history

2007-2008: A.8783-A/S.7232 (Winner)

Fiscal implications

To be determined.

Effective date

Immediately.