Relates to directing the commissioner of health to make recommendations relating to increasing certain ambulatory patient group reimbursement

5 Co-sponsors

• Catharine Young
• Fredrick J. Akshar II
• Rich Funke
• Thomas F. O'Mara
• David J. Valesky

Title of bill

An act to amend the public health law, in relation to directing the commissioner of health to make recommendations relating to increasing certain ambulatory patient group reimbursement rates

Purpose

Directs the commissioner of health to make recommendations to the governor and the legislature on increasing ambulatory patient group rates for services provided by rural critical access hospitals.

Summary of provisions

Section one amends Subdivision 2-a of section 2807 of the Public Health Law by adding a new paragraph (j) directing the commissioner of health, in conjunction with hospital industry representatives, to make written recommendations to the Governor and the legislature, including proposed legislation, for increasing Ambulatory Patient group rates for rural critical access hospitals by October 1, 2016. The recommendations must account for increased operating expenses of inherent to these hospitals, as well as the need to maintain access, in rural areas. The proposed language, subject to legislative approval, would be for inclusion in the 2017-2018 state budget, with rate increases to be effective April 1, 2017.

Section two provides the enactment date.

Justification

Critical access hospitals (CAH) 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 CAHs is critical for preserving access to basic health care services for rural New Yorkers.

Currently, Medicare reimburses CAHs on the basis of reasonable costs, while New York State Medicaid reimbursement rates are capped at lower than operational costs.

Because these hospitals must distribute substantial fixed costs over a small number of visits, an enhanced Medicaid reimbursement would help to ensure their long range financial viability and preserve access to needed health care services for isolated communities. Further, this maintains the States shift in policy of preserving patient care while improving population health through shifting to outpatient care. This legislation would support these goals.

Beginning in late 2008, the Department of Health began to implement a new outpatient payment system that focuses reimbursement based upon the intensity of the services provided known as Ambulatory patient groups (APGs).

This legislation would require the Commissioner of Health and the Hospital industry to collaboratively produce recommendations and legislative language to provide for an enhanced APG rate that recognizes the low volume, costly nature of a rural safety net provider.The legislative proposal will be for inclusion in the SFY 2016/2017 Budget and effective on April 1, 2016.

Because APGs are an already existing rate structure, this legislation provides consistency with reimbursement methodologies currently used to pay for outpatient services performed by hospitals, negates the needs for DOH to implement a new payment methodology specific to CAHs, and ensures CAHs will receive crucial funding to preserving their fiscal viability.

Legislative history

2015: S.1288 Referred to Health 2014: S.4375-A Referred to Health 2013: S.4375 Reported and Committed to Finance

Fiscal implications

Undetermined

Effective date

This act shall take effect immediately.