Relates to payments to rural critical access hospitals

2 Co-sponsors

• John J. Bonacic
• Patty Ritchie

BILL NUMBER:S5431A

Title of bill

An act to amend the public health law, in relation to payments to rural hospitals designated as critical access hospitals

Purpose

To allow that on and after April 1, 2012, rural hospitals designated as critical access hospitals are paid by Medicaid in the same manner that Medicare pays critical access hospitals, which is on the basis of reasonable costs.

Summary of provisions

Amends Subdivision 2-a of section 2807 of the Public Health Law by adding a new paragraph (j) that on and after April 1, 2012, a rural hospital designated as a critical access hospital 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.

Justification

Critical access 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 critical access hospitals 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 critical access hospitals because of the need to spread substantial fixed costs over a small number of visits and admissions. Medicare reimburses such hospitals (called critical access hospitals under Medicare) on the basis of reasonable costs. This line 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.

Legislative history

2007-2008: A.8783-A/S.7232 (Winner) 2009-2010: A.5347-A/S.4108-A (Aubertine)

Fiscal implications

This legislation is expected to cost the state $1.24 million and will ensure the financial viability of its thirteen critical access hospitals.

Effective date

This act shall take effect immediately.