Waives interest and penalties due on surcharges and assessments due prior to January 1, 2012, relating to payments to health care providers

BILL NUMBER:S7083

Title of bill

An act to amend chapter 58 of the laws of 2010, amending the public health law relating to audits for service providers, in relation to interest and penalties on certain surcharges and assessments due prior to January 1, 2012

Purpose

This bill would provide an amnesty period during calendar year 2012 to relieve providers of interest and penalty charges arising from HCRA surcharges calculated based on audits of prior years.

Summary of provisions

Section 1 of the bill amends section 18 of part B of chapter 58 of the laws of 2010, as amended by section 67 part H of chapter 59 of 2011, to extend amnesty periods for certain HCRA surcharges and assessments due from periods prior to January 1, 2011 to periods prior to January 1,2012 and paid before December 31, 2012.

Section 2 of the bill provides for an effective date.

Justification

This bill will provide some relief from interest and penalty charges to providers who take advantage of the amnesty period and will likely provide the state with payments sooner thus producing a financial bene- fit to the state. There are a multitude of insurance payors, electing different methods of making payments and an enormous accounting and reconciliation process that goes on to try and determine the correct amount that a particular provider needs to pay into the HCRA surcharge pool. Misunderstandings and the complicated nature of how to implement the surcharge have existed for many years and, as a result, an amnesty period has been provided in prior years.

Education/clarification to providers on the implementation of the HCRA Surcharge has been relatively recent. The first in-depth educational sessions sponsored by DOH along with KPMG (auditors) for providers started in the fall of 2010 and have continued with other sessions in the spring and winter of 2011 the most recent being in April 2012.

Continuing amnesty related to interest and penalties associated with surcharge audits would provide some relief. This is especially important given the logistical nightmare and hurculean tasks associated with this process.

Prior legislative history

New bill.

Fiscal implications

Possible savings as providers make payments to the state sooner in order to avoid interest and penalty charges during the amnesty period.

Effective date

Immediately.