§ 2807-c. General hospital inpatient reimbursement for annual rate periods beginning on or after January first, nineteen hundred eighty-eight. 1. Payor payments. Payments to general hospitals for inpatient hospital services provided to persons who are not eligible for payments as beneficiaries of title XVIII of the federal social security act (medicare) shall be determined pursuant to this section. Payor payments shall be as follows unless an alternative reimbursement methodology is authorized in accordance with paragraph (e), (f), (g), (h) or (i) of subdivision four of this section. * (a) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments made by state governmental agencies for patients discharged prior to January first, two thousand and on and after January first, two thousand; or for patients discharged prior to January first, nineteen hundred ninety-seven provided in accordance with policies written by corporations organized and operating in accordance with article forty-three of the insurance law, or payment by such a corporation on behalf of subscribers of a foreign corporation as described in paragraph (d) of subdivision twelve of this section, which provide for reimbursement on an expense incurred basis; or for patients discharged prior to January first, nineteen hundred ninety-seven provided to subscribers of organizations operating in accordance with the provisions of article forty-four of this chapter, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and shall include: (i) a reimbursable inpatient operating cost component determined in accordance with subdivision five of this section; (ii) capital related inpatient expenses determined in accordance with subdivision eight of this section; (iii) for patients discharged prior to January first, nineteen hundred ninety-seven (A) a bad debt and charity care allowance determined in accordance with subdivision fourteen of this section, (B) a general health care services allowance determined in accordance with subdivision fourteen-b of this section, and (C) a bad debt and charity care allowance for financially distressed hospitals determined in accordance with subdivision fourteen-c of this section; (iv) a projection of reimbursable inpatient operating costs to the rate year by the trend factor determined in accordance with subdivision ten of this section; and (v) adjustments for any modifications to the case payments determined in accordance with paragraph (a), (b), (c) or (d) of subdivision four of this section. * NB Effective until December 31, 2011 * (a) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments made by state governmental agencies; or provided in accordance with policies written by corporations organized and operating in accordance with article forty-three of the insurance law, or payment by such a corporation on behalf of subscribers of a foreign corporation as described in paragraph (d) of subdivision twelve of this section, which provide for reimbursement on an expense incurred basis; or provided to subscribers of organizations operating in accordance with the provisions of article forty-four of this chapter, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and shall include:(i) a reimbursable inpatient operating cost component determined in accordance with subdivision five of this section; (ii) capital related inpatient expenses determined in accordance with subdivision eight of this section; (iii) (A) a bad debt and charity care allowance determined in accordance with subdivision fourteen of this section, (B) a general health care services allowance determined in accordance with subdivision fourteen-b of this section, and (C) a bad debt and charity care allowance for financially distressed hospitals determined in accordance with subdivision fourteen-c of this section; (iv) a projection of reimbursable inpatient operating costs to the rate year by the trend factor determined in accordance with subdivision ten of this section; and (v) adjustments for any modifications to the case payments determined in accordance with paragraph (a), (b), (c) or (d) of subdivision four of this section. * NB Effective December 31, 2011 * (a-1) Payments made by local governmental agencies to general hospitals for reimbursement of inpatient hospital services provided to inmates of local correctional facilities as defined in subdivision sixteen of section two of the correction law shall be at the rates of payment determined pursuant to this section for state governmental agencies, excluding adjustments pursuant to subdivision fourteen-f of this section. * NB Effective until December 31, 2011 * (a-1) Payments made by local governmental agencies to general hospitals for reimbursement of inpatient hospital services provided to inmates of local correctional facilities as defined in subdivision sixteen of section two of the correction law shall be at the rates of payment determined pursuant to this section for state governmental agencies. * NB Effective December 31, 2011 * (a-2) (i) With the exception of those enrollees covered under a payment rate methodology agreement negotiated with a general hospital, payments for inpatient hospital services provided to patients eligible for medical assistance pursuant to title eleven of article five of the social services law made by organizations operating in accordance with the provisions of article forty-four of this chapter or by health maintenance organizations organized and operating in accordance with article forty-three of the insurance law shall be the rates of payment that would be paid for such patients under the medical assistance program, (i) determined pursuant to this section, excluding adjustments pursuant to subdivision fourteen-f of this section, and (ii) excluding medical education costs that are reimbursed directly to the general hospital in accordance with paragraph (a-3) of this subdivision. (ii) Effective July first, two thousand seven, with the exception of those enrollees covered under a payment rate methodology agreement negotiated with a general hospital, payment for inpatient hospital services provided to patients enrolled in the child health insurance program pursuant to title one-A of article twenty-five of this chapter made by organizations operating in accordance with the provisions of article forty-four of this chapter or by health maintenance organizations organized and operating in accordance with article forty-three of the insurance law shall be the rates of payment that would be paid under the medical assistance program determined pursuant to this section, excluding adjustments pursuant to subdivision fourteen-f of this section. * NB Expires December 31, 2011* (a-3) Notwithstanding any inconsistent provision of law: (i) the commissioner shall establish, subject to the approval of the director of the budget, discrete rates of payment for general hospitals for the period July first, nineteen hundred ninety-six through December thirty-first, nineteen hundred ninety-nine and periods on and after January first, two thousand for payments under the medical assistance program pursuant to title eleven of article five of the social services law for persons eligible for medical assistance who are enrolled in health maintenance organizations and for payments under the family health plus program for persons enrolled in approved organizations pursuant to title eleven-D of article five of the social services law based on the components of rates of payment established pursuant to this section for persons eligible for medical assistance who are not enrolled in health maintenance organizations for a general hospital for such rate period that reflect the estimated reimbursable costs of direct medical education expenses and indirect medical education expenses in the determination of: (A) the hospital-specific average reimbursable inpatient operating cost per discharge pursuant to subdivision six of this section, and (B) group category average inpatient reimbursable operating cost per discharge pursuant to subdivision seven of this section, and (C) the operating cost component of rates of payment pursuant to paragraphs (f) and (k) of subdivision four of this section, and (D) the operating cost component of rates of payment in accordance with paragraphs (e), (g) and (i) of subdivision four of this section for general hospitals or distinct units of general hospitals not reimbursed on the basis of case based payments per discharge; and (E) notwithstanding clauses (A) through (D) of this subparagraph, for periods on and after December first, two thousand nine, the operating cost component of rates of payment subject to subdivision thirty-five of this section, and (F) notwithstanding clauses (A) through (D) of this subparagraph, for periods on and after December first, two thousand nine, the operating cost component of rates of payment subject to paragraphs (e-1), (e-2) and (1) of subdivision four of this section for general hospitals or distinct units of general hospitals not reimbursed on the basis of case based payments per discharge; and (ii) such rates of payment may be established by the commissioner on any appropriate payment basis, including a case mix adjusted per discharge basis. * NB Expires December 31, 2011 * (b) For patients discharged prior to January first, nineteen hundred ninety-seven, payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the comprehensive motor vehicle insurance reparations act; or enrolled in a self-insured fund which provides for reimbursement directly to general hospitals on an expense incurred basis, with the exception of those enrollees covered under a payment rate methodology agreement in accordance with the provisions of paragraph (a) of subdivision two of this section; or insured under a commercial insurer licensed to do business in this state and authorized to write accident and health insurance and whose policy provides inpatient hospital coverage on an expense incurred basis; or receiving inpatient hospital services pursuant to an out-of-plan benefits system authorized pursuant to section four thousand four hundred six of this chapter, except where such out-of-plan, inpatient hospital services are offered by an organization organized pursuant to the not-for-profit corporation law or which meets the qualifications of section 501(c) of the internal revenuecode, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and equal to the case payments to general hospitals provided in accordance with paragraph (a) of this subdivision for services provided to subscribers of corporations organized and operating in accordance with article forty-three of the insurance law, adjusted for uncovered services, and increased by thirteen percent or, for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law and the volunteer ambulance workers' benefit law, increased by five percent. Funds received by a general hospital based on the payment differential applied pursuant to this paragraph shall be hospital funds for patient care purposes. Without due cause general hospitals shall not refuse to accept direct payments from a payor who would otherwise be eligible to reimburse hospitals for inpatient services on a case based payment per discharge in accordance with this subdivision. (b-1) (i) For patients discharged on and after January first, nineteen hundred ninety-seven and prior to January first, two thousand and on and after January first, two thousand, payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law, the volunteer ambulance workers' benefit law, and the comprehensive motor vehicle insurance reparations act shall be at the rates of payment determined pursuant to this section for state governmental agencies, excluding adjustments pursuant to subdivision fourteen-f of this section and subdivision thirty-three of this section and excluding such further reductions to such payments as are enacted as part of the state budget for the state fiscal year commencing April first, two thousand ten. (ii) The provisions of paragraph (d) of subdivision eleven of this section shall continue to apply to such payors for payments determined pursuant to this paragraph. (b-2) A payor included in the payor categories specified in paragraph (a) or (b-1) of this subdivision shall not be provided the option of payment to a general hospital for inpatient services based on the lower of hospital charges or the case based payment per discharge determined in accordance with this section for a patient or apportioning the appropriate case based payment per discharge for a patient by excluding payment for a preexisting condition or acquired condition which has to be treated along with the reason for the admission or, except as may affect qualification for payments in accordance with paragraph (b) or (d) of subdivision four of this section, for days within the inlier stay determined to be medically unnecessary. * NB Effective until December 31, 2011 * (b) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the comprehensive motor vehicle insurance reparations act; or enrolled in a self-insured fund which provides for reimbursement directly to general hospitals on an expense incurred basis, with the exception of those enrollees covered under a payment rate methodology agreement in accordance with the provisions of paragraph (a) of subdivision two of this section; or insured under a commercial insurer licensed to do business in this state and authorized to write accident and health insurance and whose policy provides inpatient hospital coverage on an expense incurred basis; or receiving inpatient hospital services pursuant to an out-of-plan benefits system authorized pursuant to section four thousand four hundred six of this chapter, except where such out-of-plan, inpatient hospital services are offered by anorganization organized pursuant to the not-for-profit corporation law or which meets the qualifications of section 501 (c) of the internal revenue code, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and equal to the case payments to general hospitals provided in accordance with paragraph (a) of this subdivision for services provided to subscribers of corporations organized and operating in accordance with article forty-three of the insurance law, adjusted for uncovered services, and increased by thirteen percent or, for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law and the volunteer ambulance workers' benefit law, increased by five percent. Funds received by a general hospital based on the payment differential applied pursuant to this paragraph shall be hospital funds for patient care purposes. Without due cause general hospitals shall not refuse to accept direct payments from a payor who would otherwise be eligible to reimburse hospitals for inpatient services on a case based payment per discharge in accordance with this subdivision. A payor included in the payor categories specified in this paragraph or in paragraph (a) of this subdivision shall not be provided the option of payment to a general hospital for inpatient services based on the lower of hospital charges or the case based payment per discharge determined in accordance with this section for a patient or apportioning the appropriate case based payment per discharge for a patient by excluding payment for a preexisting condition or acquired condition which has to be treated along with the reason for the admission or, except as may affect qualification for payments in accordance with paragraph (b) or (d) of subdivision four of this section, for days within the inlier stay determined to be medically unnecessary. * NB Effective December 31, 2011 * (c) Charge based payments. For patients discharged prior to January first, nineteen hundred ninety-seven, payments to general hospitals for reimbursement of inpatient hospital services provided to those for whom a case based payment per discharge system is not authorized by paragraph (a) or (b) of this subdivision, or who are not covered under the provisions of paragraph (a) of subdivision two of this section, shall be on the basis of the hospital's charges; provided, however, for these patients the definition of a short stay patient pursuant to paragraph (d) of subdivision four of this section shall apply, and reimbursement to hospitals for such patients shall be at payments developed in accordance with paragraph (d) of subdivision four of this section, increased by thirteen percent. The maximum amount to be charged to any charge paying patient for a case shall be one hundred twenty percent of the case based payment per discharge as determined under paragraph (b) of this subdivision for the diagnosis-related group with which the patient is identified. Each general hospital shall establish a charge schedule and inpatient charges from this schedule shall be applied uniformly for all inpatient charge based payments made in accordance with this section. * NB Effective until December 31, 2011 * (c) Charge based payments. Payments to general hospitals for reimbursement of inpatient hospital services provided to those for whom a case based payment per discharge system is not authorized by paragraph (a) or (b) of this subdivision, or who are not covered under the provisions of paragraph (a) of subdivision two of this section, shall be on the basis of the hospital's charges; provided, however, for these patients the definition of a short stay patient pursuant to paragraph (d) of subdivision four of this section shall apply, and reimbursementto hospitals for such patients shall be at payments developed in accordance with paragraph (d) of subdivision four of this section, increased by thirteen percent. The maximum amount to be charged to any charge paying patient for a case shall be one hundred twenty percent of the case based payment per discharge as determined under paragraph (b) of this subdivision for the diagnosis-related group with which the patient is identified. Each general hospital shall establish a charge schedule and inpatient charges from this schedule shall be applied uniformly for all inpatient charge based payments made in accordance with this section. * NB Effective December 31, 2011 (d) The components of rates of payment calculated in accordance with this section related to inpatient operating costs shall be based on general hospital reimbursable inpatient operating costs used in determining payments for services pursuant to section twenty-eight hundred seven-a of this article during the rate period January first, nineteen hundred eighty-seven through December thirty-first, nineteen hundred eighty-seven (or for a distinct unit of a general hospital excluded from case based payments pursuant to paragraph (e) or (g) of subdivision four of this section such distinct unit reimbursable inpatient operating costs), excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) in accordance with paragraph (g) of subdivision eleven of this section and adjusted to reflect the annualized cost impact of rate revisions or adjustments, including the volume adjustment and case mix adjustment for the nineteen hundred eighty-seven rate period, made with respect to such services, which shall be defined as a general hospital's or distinct unit's reimbursable inpatient operating cost base; a projection to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and an increase to reflect special additional inpatient operating costs determined and allocated in accordance with paragraph (e) of this subdivision. (e) General hospital special additional inpatient operating costs shall be determined and allocated among general hospitals in accordance with subparagraphs (i), (iii) and (iv) of this paragraph. For purposes of computing group category average inpatient reimbursable operating costs in accordance with paragraph (a) of subdivision seven of this section and an equivalent cost component for general hospitals that are excluded from the case based payment per diagnosis-related group system in accordance with paragraph (e) or (g) of subdivision four of this section special additional inpatient operating costs shall include an additional increase determined and allocated among general hospitals in accordance with subparagraph (ii) of this paragraph. (i) The total cost increases pursuant to this subparagraph for all general hospitals shall in the aggregate be one hundred thirty million dollars for the nineteen hundred eighty-eight rate period to reflect nineteen hundred eighty-five costs incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five, such cost increases to be projected from nineteen hundred eighty-eight to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals in accordance with the following methodology: Five hundred dollars per bed shall be allocated to costs of each general hospital based on the total number of inpatient beds for which the hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eighthundred five of this article in effect on January first, nineteen hundred eighty-eight. A factor of one quarter of one percent of a general hospital's reimbursable inpatient operating cost base as defined in paragraph (d) of this subdivision, trended through nineteen hundred eighty-eight, shall be allocated to costs of general hospitals for technology advances and a further one quarter of one percent of such costs shall be allocated to costs of general hospitals for increased activities related to quality assurance and patient discharge planning. The balance of one hundred thirty million dollars after deducting the dollar value of the per bed cost enhancement and the dollar value of the percentage cost enhancements shall be allocated to costs of general hospitals based on the ratio of each general hospital's nineteen hundred eighty-five cost incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five in the following discrete areas, summed, to the total sum of such cost over trend of all general hospitals applied to such balance: malpractice insurance costs, infectious and other waste disposal costs, water charges, direct medical education expenses, working capital interest costs of hospitals that qualified for distributions made in accordance with paragraph (b) of subdivision sixteen of section twenty-eight hundred seven-a of this article, costs of distinct psychiatric units excluded from case based payments per diagnosis-related group, and ambulance costs. For purposes of this subparagraph, nineteen hundred eighty-five cost incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five shall be calculated for each such discrete area based on a general hospital's inpatient operating costs for the fiscal year ending in nineteen hundred eighty-five, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), for such discrete area in excess of the hospital's comparable component of reimbursable inpatient operating costs for its fiscal year ending in nineteen hundred eighty-one, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), trended through nineteen hundred eighty-five by the appropriate component of the trend factors and adjusted to reflect approved decreases or increases in inpatient operating costs resulting from all rate adjustments. (ii) The total additional cost increases pursuant to this subparagraph for all general hospitals shall in the aggregate be forty million dollars for the nineteen hundred eighty-eight rate period, such additional cost increases to be projected from nineteen hundred eighty-eight to the rate period by the applicable trend factor, to be allocated among general hospitals in accordance with the following methodology: The additional increase of forty million dollars shall be allocated to costs of general hospitals that are included in group categories established pursuant to paragraph (b) of subdivision seven of this section based on the ratio of the nineteen hundred eighty-eight intermediate group operating costs of each such general hospital, and to costs of general hospitals that are excluded from the case based payment per diagnosis-related group system in accordance with paragraph (e) or (g) of subdivision four of this section based on the ratio of the nineteen hundred eighty-eight intermediate operating costs of each such general hospital, to the total sum of such intermediate group operating costs and intermediate operating costs applied to the forty million dollars. For purposes of this subparagraph, intermediate group operating costs of a general hospital shall be calculated in accordance with rulesand regulations adopted by the council and approved by the commissioner based on the reimbursable inpatient operating cost base determined in accordance with paragraph (d) of this subdivision of such general hospital; adjusted to exclude operating costs related to specialized hospital services for which an alternative reimbursement methodology is adopted pursuant to paragraph (e) or (g) or, if effective, (i) of subdivision four of this section; and trended to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and increased to reflect special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph; and adjusted to exclude a factor for operating costs of patients who required an alternate level of care in accordance with paragraph (h) of subdivision four of this section; and adjusted to exclude the components of the trended reimbursable inpatient operating cost base related to education, physician, ambulance services and organ acquisition costs determined in accordance with subparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven of this section and malpractice insurance costs, and the components of special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph associated with cost increases in such costs. For purposes of this subparagraph, intermediate operating costs of a general hospital excluded from the case based payment per diagnosis-related group system shall be calculated in accordance with rules and regulations adopted by the council and approved by the commissioner based on the reimbursable inpatient operating cost base determined in accordance with paragraph (d) of this subdivision of such general hospital; trended to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and increased to reflect special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph; and adjusted to exclude a factor for operating costs of patients who required an alternate level of care developed consistent with the provisions of paragraph (h) of subdivision four of this section; and adjusted to exclude the components of the trended reimbursable inpatient operating cost base related to education, physician, ambulance services and organ acquisition costs determined consistent with the provisions of subparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven of this section and malpractice insurance costs, and the components of special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph associated with cost increases in such costs. (iii) Cost increases pursuant to this subparagraph shall be made for the nineteen hundred ninety-one rate period to reflect cost increases incurred in excess of the trend factor and not included in the costs used in determining payments in accordance with paragraph (d) of this subdivision and subparagraphs (i) and (ii) of this paragraph. Such costs shall in the aggregate be three hundred twenty-nine million dollars exclusive of costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare). Such costs increases shall be projected from nineteen hundred ninety-one to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals, except those general hospitals whose base year for determining payments for services in such facilities is nineteen hundred eighty-seven, in accordance with the following methodology: (A) Up to two hundred twenty-two million dollars shall be allocated for labor adjustments. If the total of the adjustments is less than twohundred twenty-two million dollars, then the adjustments shall be fully funded. If the total of the adjustments is more than two hundred twenty-two million dollars, then the adjustment specified in accordance with item (II) of this clause shall be funded at the lower of twenty percent of the total amount allocated for labor adjustments or its proportional share of the labor adjustments unless the labor adjustment specified in item (I) of this clause is less than eighty percent of the total amount allocated for labor adjustments in which case the adjustment specified in item (II) of this clause shall be equal to the difference between two hundred twenty-two million dollars and the total amount of the adjustment specified in item (I) of this clause. (I) A portion of the amount allocated for labor adjustments shall be for labor cost increases related to registered nurses' salaries and fringes (twenty percent of salaries) and an add-on for the ripple effect on other health care professionals of at least thirty-five percent. Such adjustment shall cover both inpatient and outpatient cost incurred, based on costs reported in a survey conducted by the department for the period January first, nineteen hundred ninety through June thirtieth, nineteen hundred ninety on forms specified by the commissioner and received by the department no later than November first, nineteen hundred ninety, annualized, in excess of nineteen hundred eighty-five labor costs related to registered nurses' salaries and fringes trended to nineteen hundred ninety and the nineteen hundred eighty-eight statewide nurse salary adjustment trended to nineteen hundred ninety by the appropriate components of the trend factors adjusted to reflect the effect of the annualization of nineteen hundred ninety data and the result trended to nineteen hundred ninety-one and shall be based exclusively on regional experience. Such regional adjustment shall not be less than zero. Each individual hospital within a region shall receive a portion of the regional adjustment equal to its share of the total inpatient and outpatient reimbursable operating costs for the region excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (II) A portion of the amount allocated for labor adjustments shall be for personnel costs other than those related to registered nurses' salaries and fringes and the ripple effect on other health care professionals. Such adjustment shall cover both inpatient and outpatient costs incurred, based on costs reported in a survey conducted by the department for the period January first, nineteen hundred ninety through June thirtieth, nineteen hundred ninety on forms specified by the commissioner and received by the department no later than November first, nineteen hundred ninety, annualized, in excess of nineteen hundred eighty-five personnel costs covered by this adjustment trended to nineteen hundred ninety and the annualized rate adjustments approved in nineteen hundred eighty-nine for personnel costs covered by this adjustment for increased hospital costs to meet additional state requirements that became effective July first, nineteen hundred eighty-nine trended to nineteen hundred ninety by the appropriate components of the trend factors adjusted to reflect the effect of the annualization of nineteen hundred ninety data and the result trended to nineteen hundred ninety-one and shall be based exclusively on regional data. (III) In the event that federal financial participation in payments made for beneficiaries eligible for medical assistance under title XIX of the federal social security act based upon the allocation and adjustment specified in items (I) and (II) of this clause related to outpatient costs as a component of such payments is not approved by thefederal government then such outpatient costs shall not be considered in calculating such adjustment. (B) Health personnel development. Four million five hundred thousand dollars shall be allocated for labor adjustments to be made available for health occupation development and workplace demonstration programs authorized pursuant to section twenty-eight hundred seven-h of this article. The commissioner is directed to make rate adjustments subject to the approval of the director of the budget to cover the cost of such programs, which shall be made available for the duration of such programs. (C) Thirty-three million dollars shall be allocated for technology advances and changes in medical practice. A fixed amount per bed shall be allocated to the costs of each general hospital based on the total number of inpatient beds for which the general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety. (D) Thirty-four million dollars shall be allocated to those general hospitals providing comprehensive health care to the communities they serve as determined by the commissioner pursuant to regulations approved by the council. Comprehensive health care includes providing and/or accommodating patients' health care needs at the appropriate levels and settings of care, and reaches outside of traditional inpatient services to outpatient and other services. Factors to be considered in deciding which general hospitals are providing comprehensive health care and the size of the adjustment shall include but not be limited to: clinic and emergency room volume compared to inpatient volume (measured using total volume and/or volume related to medicaid and medically indigent patients); number and type of clinic services offered; availability of services; whether the general hospital is an AIDS designated center, prenatal care assistance program provider, home health care provider, trauma center, burn center; whether the general hospital offers neonatal intensive care services, dialysis services, birthing center backup agreements, AIDS outpatient programs, specific mental health, drug and alcohol programs including outpatient and emergency services and those designated pursuant to section 9.39 of the mental hygiene law; and whether the general hospital's emergency room is designated as a 911 receiving hospital. In the event that federal financial participation in payments made for beneficiaries eligible for medical assistance under title XIX of the federal social security act based upon the adjustment specified in this clause as a component of such payments is not approved by the federal government because of the inclusion of outpatient services then such outpatient services shall not be considered in calculating such adjustment. If such exclusion results in the allocation for this adjustment not being spent, then any unspent portion shall be reallocated to further fund the adjustments specified in clauses (D) and (E) of this subparagraph in the same proportion as their original funding. (E)(I) Twenty-six million dollars shall be allocated to the costs of general hospitals based on the ratio of each general hospital's nineteen hundred eighty-nine cost incurred in excess of the trend factor between nineteen hundred eighty-five and nineteen hundred eighty-nine in the certain discrete areas, summed, to the total sum of such cost over trend of all general hospitals applied to the total funds under this allocation. Such discrete cost areas shall include but not be limited to: infectious and other waste disposal costs, universal precautions, working capital interest costs, costs for asbestos removal, costs of low osmolality contrast media, malpractice costs, water and sewer charges,ambulance costs and costs related to designation as a trauma center. For purposes of this clause, nineteen hundred eighty-nine cost incurred in excess of the trend factor between nineteen hundred eighty-five and nineteen hundred eighty-nine shall be calculated for each such discrete area based on a general hospital's inpatient operating costs for the fiscal year ending in nineteen hundred eighty-nine, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), for such discrete area in excess of the hospital's comparable component of reimbursable inpatient operating costs for its fiscal year ending in nineteen hundred eighty-five, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), trended through nineteen hundred eighty-nine by the appropriate component of the trend factors and adjusted to reflect approved decreases or increases in inpatient operating costs resulting from all rate adjustments. (II) Any funds allocated under this clause and not distributed pursuant to item (I) of this clause shall be allocated for the following: to reimburse for a portion of the cost increases incurred above the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five for those discrete cost areas specified in the last paragraph of subparagraph (i) of paragraph (e) of this subdivision as added by chapter two of the laws of nineteen hundred eighty-eight and not reimbursed in accordance with such paragraph. Such funds shall be allocated to general hospitals in the same manner as specified in such paragraph. (F) Seven million two hundred thousand dollars shall be allocated to account for the increase in the number of patients admitted through the emergency room and the high costs of treating such patients which has resulted in an increase in severity within diagnosis related groups. Such funds shall be allocated to general hospitals based on the nineteen hundred eighty-nine hospital-specific data on increased admissions through the emergency room since nineteen hundred eighty-one, excluding those admissions related to providing services to beneficiaries of title XVIII of the federal social security act (medicare). (G) Two hundred fifty dollars per bed shall be allocated to the costs of each general hospital having two hundred or less certified acute care beds and classified as a rural hospital for purposes of determining payment for inpatient acute care services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, for recruiting and retaining health care personnel, based on the total number of inpatient acute care beds for which such general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety. (H) One million dollars shall be allocated to assist general hospitals involved in a merger, acquisition, or consolidation in meeting the costs associated with such merger, acquisition, or consolidation on or after January first, nineteen hundred ninety-one. The commissioner shall make rate adjustments for such allocations. (I) Five hundred thousand dollars shall be allocated for a practitioner placement program to assist general hospitals in the placement of physicians and other health care practitioners to practice primary health care and/or dentistry in underserved areas, to serve the medically needy, and including services with affiliated community based providers. The commissioner shall make rate adjustments for such allocations. Notwithstanding any inconsistent provision of thissubdivision, this clause shall not apply in rate periods commencing on or after January first, nineteen hundred ninety-four. (iv) Cost increases pursuant to this subparagraph shall be made for the nineteen hundred ninety-four rate period to reflect cost increases incurred in excess of the trend factor and not included in the costs used in determining payments in accordance with paragraph (d) of this subdivision and subparagraphs (i), (ii) and (iii) of this paragraph. Such costs shall in the aggregate be one hundred seventy-three million dollars exclusive of costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare). Such cost increases shall be projected from nineteen hundred ninety-four to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals in accordance with the following methodology: (A) Forty-six million dollars shall be allocated to the costs of general hospitals for treating tuberculosis patients. Each general hospital shall receive a portion of this total equal to its share of the statewide total of inpatient tuberculosis discharges based on the most recent twelve month period for which data is available. (B) Sixty-three million dollars shall be allocated for labor adjustments in accordance with the following methodology: (I) Fifty-five million dollars shall be for labor cost increases incurred prior to June thirtieth, nineteen hundred ninety-three. Each general hospital shall receive a portion of this total equal to its share of the statewide total of inpatient and outpatient reimbursable operating costs based on nineteen hundred ninety data excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (II) Eight million dollars of the amount to be allocated for labor adjustments pursuant to this clause shall be distributed to general hospitals located in the counties of Ulster, Sullivan, Orange, Dutchess, Putnam, Rockland, Columbia, Delaware and Westchester, to account for prior disproportionate increases in unreimbursed labor costs. Each individual hospital shall receive a portion of the eight million dollars equal to its share of the total inpatient and outpatient reimbursable operating costs based on nineteen hundred ninety data for all hospitals located in the above-referenced counties excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (C) Fifty-five million dollars shall be allocated to the costs of increased activities related to regulatory compliance, universal precautions and infection control related to AIDS, tuberculosis, and other infectious diseases, including the training of employees with regard to infection control, and for infectious and other waste disposal costs. A fixed amount per bed shall be allocated to the costs of each general hospital based on the total number of inpatient beds for which the general hospital is certified pursuant to the operating certificate issued for each general hospital in accordance with section twenty-eight hundred five of this article in effect on August twenty-fourth, nineteen hundred ninety-three. (D) Three million dollars shall be allocated as follows: (I) Two hundred fifty dollars per bed shall be allocated to the costs of each general hospital having two hundred or less certified acute care beds and classified as a rural hospital for purposes of determining payment for inpatient services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, in recognition of the unique costs incurred by thesefacilities in complying with state regulations, based on the total number of inpatient acute care beds for which such general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on August twenty-fourth, nineteen hundred ninety-three. (II) The remainder shall be allocated on a proportional basis to the costs of each general hospital classified as a rural hospital for purposes of determining payment for inpatient services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, in recognition of the unique costs incurred by these facilities to provide hospital services in remote or sparsely populated areas, according to the following methodology: (1) the net income, or the net loss expressed as a negative, as a proportion of the net patient revenue, of each such hospital, based on operating results for the nineteen hundred ninety and nineteen hundred ninety-one rate years, shall be computed and averaged, and expressed as a percentage; (2) each such resulting percentage average shall be multiplied by each such hospital's number of inpatient beds for which such hospital is certified pursuant to the operating certificate issued for such hospital in accordance with section two thousand eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety, and such resulting products for all such hospitals shall be summed, and such sum shall be divided by the total of all such beds for all such hospitals, and the resulting quotient shall be the weighted average rural operating margin expressed as a percentage; and (3) one percentage point shall be subtracted from each such hospital's average net operating margin, and the resulting difference shall be divided by the weighted average rural operating margin; and (4) (a) if the quotient resulting from the computation in subitem three above is less than zero, then the absolute value of such quotient shall be multiplied by each such hospital's number of inpatient beds for which such hospital is certified pursuant to the operating certificate issued for such hospital in accordance with section two thousand eight hundred five of this chapter in effect on June thirtieth, nineteen hundred ninety, such product shall be multiplied by one hundred fifty dollars, and such resulting amount shall be such hospital's adjustment pursuant to this clause; (b) if the quotient resulting from the computation in subitem three above is zero or greater, such hospital's adjustment pursuant to this clause shall be zero; and (c) provided, however, that if the total of all such adjustments so computed exceeds the amount to be allocated in accordance with this item, each such hospital's adjustment shall be proportionately reduced. (E) Three million dollars shall be allocated to assist general hospitals involved in a merger, acquisition, or consolidation in meeting the costs associated with such merger, acquisition, or consolidation on or after January first, nineteen hundred ninety-four. The commissioner shall make rate adjustments for such allocations. (F) (I) One million five hundred thousand dollars shall be allocated for enhanced rates for general hospitals participating within a rural health network as defined in subdivision two of section twenty-nine hundred fifty-one of this chapter. Such rate enhancements shall be established only for inpatient services provided by such hospitals through the written rural health network agreement, where such services have been approved for enhanced rates by the commissioner.Notwithstanding any inconsistent provision of law, such enhanced rates shall be subject to the availability of federal financial participation pursuant to title XIX of the federal social security act in expenditures made for eligible patients, including pooling arrangements and volume adjustments, provided, however that such enhanced rates shall not affect the calculation for any other general hospital of the group price component calculated pursuant to subparagraph (i) of paragraph (a) of subdivision seven of this section. (II) One million five hundred thousand dollars shall be allocated for enhanced rates for general hospitals participating within a central services facility rural health network as defined in subdivision three of section twenty-nine hundred fifty-one of this chapter. Such rate enhancements shall be established only for inpatient services provided by such hospitals through the network operational plan, where such services have been approved for enhanced rates by the commissioner. Notwithstanding any inconsistent provision of law, such enhanced rates shall be subject to the availability of federal financial participation pursuant to title XIX of the federal social security act in expenditures made for eligible patients, including pooling arrangements and volume adjustments, provided, however that such enhanced rates shall not affect the calculation for any other general hospital of the group price component calculated pursuant to subparagraph (i) of paragraph (a) of subdivision seven of this section. (f) The commissioner and the state director of the budget shall consider providing a supplementary increase to general hospital reimbursable inpatient operating costs for purposes of computing rates of payment for annual rate periods beginning on or after January first, nineteen hundred eighty-nine in accordance with this section for reasonable and necessary supplementary cost increases in general hospital operating costs for such rate period or periods based on increased minimum standards and procedures relating to general hospital operating certificates adopted by the council and approved by the commissioner or state initiatives related to recruitment or maintenance of an appropriate level of personnel providing professional services to patients. Any such supplementary increase shall be allocated to costs of general hospitals in accordance with rules and regulations adopted by the council and approved by the commissioner. (g) Hospital discharges for purposes of computing case based payments per discharge pursuant to this section shall be based on the number of patient discharges during the rate period from January first, nineteen hundred eighty-seven through December thirty-first, nineteen hundred eighty-seven excluding discharges of beneficiaries of title XVIII of the federal social security act (medicare) and adjusted as provided in specific provisions of this section, or the number of such patient discharges during a recent twelve month period prior thereto established by regulation for which data are available subsequently reconciled by an adjustment to reflect nineteen hundred eighty-seven discharge data. * (h) Notwithstanding any inconsistent provision of this section, commencing April first, nineteen hundred ninety-five: (i) rates of payment for patients eligible for payments made by state governmental agencies shall be reduced by the commissioner to reflect an exclusion from reimbursable inpatient operating costs commencing April first, nineteen hundred ninety-five of the special additional inpatient operating costs determined and allocated among general hospitals in accordance with clause (C) of subparagraph (iii) and clause (C) of subparagraph (iv) of paragraph (e) of this subdivision and the factor of one quarter of one percent of general hospitals' reimbursable inpatient operating cost base allocated to costs of general hospitals fortechnology advances in accordance with subparagraph (i) of paragraph (e) of this subdivision; and (ii) general hospitals may not request and the commissioner shall not consider any pending or further appeals for an adjustment to rates of payment based on costs associated with technology advances and changes in medical practice and such adjustments to reimbursable inpatient operating costs pursuant to clause (C) of subparagraph (iv) of paragraph (e) of this subdivision. (iii) Notwithstanding the foregoing, or any other provision of this section, the commissioner may establish pass through payments, or other appropriate methodologies, for the period ending December thirty-first, two thousand three for innovative medical device advances for which the federal centers for medicare and medicaid services adopts new codes to the hospital inpatient prospective payment system prior to the federal food and drug administration's approval of such medical device. * NB Effective through March 31, 2011 (i) For the rate period July first, two thousand seven through March thirty-first, two thousand eight and for rates applicable to the state fiscal year commencing April first, two thousand eight, and each state fiscal year thereafter through March thirty-first, two thousand nine, and for the period April first, two thousand nine through November thirtieth, two thousand nine, provided, however, that for the period April first, two thousand nine through November thirtieth, two thousand nine the aggregate rate adjustments calculated pursuant to subparagraph (ii) of this paragraph shall not exceed four million dollars, and contingent upon the availability of federal financial participation: (i) The commissioner shall adjust inpatient medical assistance rates of payment calculated pursuant to this section for public hospitals other than non-state public hospitals located in a city with a population of more than one million persons, that meet the targeted medicaid discharge percentage in accordance with the methodology set forth in subparagraph (ii) of this paragraph. For purposes of this paragraph, "targeted medicaid discharge percentage" shall mean that at least seventeen and one-half percent of a public hospital's total discharges were patients eligible for payments under the medical assistance program pursuant to title eleven of article five of the social services law, including those enrolled in health maintenance organizations, and patients eligible for payments under the family health plus program pursuant to title eleven-D of article five of the social services law, based on data reported in such hospital's institutional cost report submitted for the two thousand four period and filed with the department by November first, two thousand six. Any hospital that meets the filing deadline shall have until June first, two thousand seven to submit revised and corrected data schedules in such institutional cost report which established eligibility for such adjusted rate. (ii) The aggregate amount of rate adjustments calculated pursuant to this paragraph shall not exceed six million dollars for each rate period. Such amount shall be allocated proportionally based on the relative numbers of medicaid discharges among those public hospitals eligible for rate adjustments in accordance with subparagraph (i) of this paragraph based on each such hospital's reported medical assistance data specified in subparagraph (i) of this paragraph. Such amounts shall be included as an add-on to medical assistance inpatient rates of payment, excluding exempt unit rates, and shall not be reconciled to reflect changes in medical assistance utilization between two thousand four and the current rate year.(j) For the rate period July first, two thousand seven through March thirty-first, two thousand eight and for rates applicable to the state fiscal year commencing April first, two thousand eight, and each state fiscal year thereafter through March thirty-first, two thousand nine and for the period April first, two thousand nine through November thirtieth, two thousand nine, provided, however, that for the period April first, two thousand nine through November thirtieth, two thousand nine the aggregate rate adjustments calculated pursuant to subparagraph (ii) of this paragraph shall not exceed twenty-eight million dollars, and contingent upon the availability of federal financial participation: (i) The commissioner shall adjust inpatient medical assistance rates of payment calculated pursuant to this section for voluntary hospitals other than voluntary hospitals located in a city with a population of more than one million persons that meet the targeted medicaid discharge percentage in accordance with the methodology set forth in subparagraph (ii) of this paragraph. For purposes of this paragraph, "targeted Medicaid discharge percentage" shall mean between seventeen and one-half percent and thirty-five percent of a voluntary hospital's total discharges were patients eligible for payments under the medical assistance program pursuant to title eleven of article five of the social services law, including those enrolled in health maintenance organizations, and patients eligible for payments under the family health plus program pursuant to title eleven-D of article five of the social services law, based on data reported in such hospital's institutional cost report submitted for the two thousand four period and filed with the department by November first, two thousand six. Any hospital that meets the filing deadline shall have until June first, two thousand seven to submit revised and corrected data schedules in such institutional cost report which established eligibility for such adjusted rate. (ii) The aggregate amount of rate adjustments calculated pursuant to this paragraph shall not exceed forty-two million dollars for each rate period. Such amount shall be allocated proportionally based on relative numbers of medicaid discharges among those voluntary hospitals eligible for rate adjustments in accordance with subparagraph (i) of this paragraph based on each such hospital's reported medical assistance data specified in subparagraph (i) of this paragraph. Such amounts shall be included as an add-on to medical assistance inpatient rates of payment, excluding exempt unit rates, and shall not be reconciled to reflect changes in medical assistance utilization between two thousand four and the rate year. (k) Subject to the availability of federal financial participation, the commissioner shall adjust inpatient rates of payment for non-public general hospitals located in a city with a population of more than one million persons for the following periods and in the following amounts in order to ensure meaningful access to the hospital's services and reasonable accommodation for all medicaid patients who require language assistance: (i) for the period July first, two thousand seven through December thirty-first, two thousand seven, thirty-eight million dollars shall be allocated proportionally to such hospitals based on fifty percent of each such hospital's reported general clinic medicaid visits and fifty percent on each such hospital's reported medicaid inpatient discharges, as reported in each hospital's two thousand four institutional cost report, as submitted to the department prior to November first, two thousand six, to the total of all such general clinic visits reported by all such hospitals.(ii) for the period April first, two thousand eight through March thirty-first, two thousand nine, and each state fiscal year thereafter through November thirtieth, two thousand nine, thirty-eight million dollars shall be allocated on an annualized basis for such purpose to such hospitals in accordance with the methodology set forth in subparagraph (i) of this paragraph, provided, however, that thirty percent of such funds shall be allocated proportionally, based on the number of foreign languages utilized by one or more percent of the residents in each hospital total service area population, provided, howeve
§ 2807-c. General hospital inpatient reimbursement for annual rate periods beginning on or after January first, nineteen hundred eighty-eight. 1. Payor payments. Payments to general hospitals for inpatient hospital services provided to persons who are not eligible for payments as beneficiaries of title XVIII of the federal social security act (medicare) shall be determined pursuant to this section. Payor payments shall be as follows unless an alternative reimbursement methodology is authorized in accordance with paragraph (e), (f), (g), (h) or (i) of subdivision four of this section. * (a) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments made by state governmental agencies for patients discharged prior to January first, two thousand and on and after January first, two thousand; or for patients discharged prior to January first, nineteen hundred ninety-seven provided in accordance with policies written by corporations organized and operating in accordance with article forty-three of the insurance law, or payment by such a corporation on behalf of subscribers of a foreign corporation as described in paragraph (d) of subdivision twelve of this section, which provide for reimbursement on an expense incurred basis; or for patients discharged prior to January first, nineteen hundred ninety-seven provided to subscribers of organizations operating in accordance with the provisions of article forty-four of this chapter, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and shall include: (i) a reimbursable inpatient operating cost component determined in accordance with subdivision five of this section; (ii) capital related inpatient expenses determined in accordance with subdivision eight of this section; (iii) for patients discharged prior to January first, nineteen hundred ninety-seven (A) a bad debt and charity care allowance determined in accordance with subdivision fourteen of this section, (B) a general health care services allowance determined in accordance with subdivision fourteen-b of this section, and (C) a bad debt and charity care allowance for financially distressed hospitals determined in accordance with subdivision fourteen-c of this section; (iv) a projection of reimbursable inpatient operating costs to the rate year by the trend factor determined in accordance with subdivision ten of this section; and (v) adjustments for any modifications to the case payments determined in accordance with paragraph (a), (b), (c) or (d) of subdivision four of this section. * NB Effective until December 31, 2011 * (a) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments made by state governmental agencies; or provided in accordance with policies written by corporations organized and operating in accordance with article forty-three of the insurance law, or payment by such a corporation on behalf of subscribers of a foreign corporation as described in paragraph (d) of subdivision twelve of this section, which provide for reimbursement on an expense incurred basis; or provided to subscribers of organizations operating in accordance with the provisions of article forty-four of this chapter, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and shall include:(i) a reimbursable inpatient operating cost component determined in accordance with subdivision five of this section; (ii) capital related inpatient expenses determined in accordance with subdivision eight of this section; (iii) (A) a bad debt and charity care allowance determined in accordance with subdivision fourteen of this section, (B) a general health care services allowance determined in accordance with subdivision fourteen-b of this section, and (C) a bad debt and charity care allowance for financially distressed hospitals determined in accordance with subdivision fourteen-c of this section; (iv) a projection of reimbursable inpatient operating costs to the rate year by the trend factor determined in accordance with subdivision ten of this section; and (v) adjustments for any modifications to the case payments determined in accordance with paragraph (a), (b), (c) or (d) of subdivision four of this section. * NB Effective December 31, 2011 * (a-1) Payments made by local governmental agencies to general hospitals for reimbursement of inpatient hospital services provided to inmates of local correctional facilities as defined in subdivision sixteen of section two of the correction law shall be at the rates of payment determined pursuant to this section for state governmental agencies, excluding adjustments pursuant to subdivision fourteen-f of this section. * NB Effective until December 31, 2011 * (a-1) Payments made by local governmental agencies to general hospitals for reimbursement of inpatient hospital services provided to inmates of local correctional facilities as defined in subdivision sixteen of section two of the correction law shall be at the rates of payment determined pursuant to this section for state governmental agencies. * NB Effective December 31, 2011 * (a-2) (i) With the exception of those enrollees covered under a payment rate methodology agreement negotiated with a general hospital, payments for inpatient hospital services provided to patients eligible for medical assistance pursuant to title eleven of article five of the social services law made by organizations operating in accordance with the provisions of article forty-four of this chapter or by health maintenance organizations organized and operating in accordance with article forty-three of the insurance law shall be the rates of payment that would be paid for such patients under the medical assistance program, (i) determined pursuant to this section, excluding adjustments pursuant to subdivision fourteen-f of this section, and (ii) excluding medical education costs that are reimbursed directly to the general hospital in accordance with paragraph (a-3) of this subdivision. (ii) Effective July first, two thousand seven, with the exception of those enrollees covered under a payment rate methodology agreement negotiated with a general hospital, payment for inpatient hospital services provided to patients enrolled in the child health insurance program pursuant to title one-A of article twenty-five of this chapter made by organizations operating in accordance with the provisions of article forty-four of this chapter or by health maintenance organizations organized and operating in accordance with article forty-three of the insurance law shall be the rates of payment that would be paid under the medical assistance program determined pursuant to this section, excluding adjustments pursuant to subdivision fourteen-f of this section. * NB Expires December 31, 2011* (a-3) Notwithstanding any inconsistent provision of law: (i) the commissioner shall establish, subject to the approval of the director of the budget, discrete rates of payment for general hospitals for the period July first, nineteen hundred ninety-six through December thirty-first, nineteen hundred ninety-nine and periods on and after January first, two thousand for payments under the medical assistance program pursuant to title eleven of article five of the social services law for persons eligible for medical assistance who are enrolled in health maintenance organizations and for payments under the family health plus program for persons enrolled in approved organizations pursuant to title eleven-D of article five of the social services law based on the components of rates of payment established pursuant to this section for persons eligible for medical assistance who are not enrolled in health maintenance organizations for a general hospital for such rate period that reflect the estimated reimbursable costs of direct medical education expenses and indirect medical education expenses in the determination of: (A) the hospital-specific average reimbursable inpatient operating cost per discharge pursuant to subdivision six of this section, and (B) group category average inpatient reimbursable operating cost per discharge pursuant to subdivision seven of this section, and (C) the operating cost component of rates of payment pursuant to paragraphs (f) and (k) of subdivision four of this section, and (D) the operating cost component of rates of payment in accordance with paragraphs (e), (g) and (i) of subdivision four of this section for general hospitals or distinct units of general hospitals not reimbursed on the basis of case based payments per discharge; and (E) notwithstanding clauses (A) through (D) of this subparagraph, for periods on and after December first, two thousand nine, the operating cost component of rates of payment subject to subdivision thirty-five of this section, and (F) notwithstanding clauses (A) through (D) of this subparagraph, for periods on and after December first, two thousand nine, the operating cost component of rates of payment subject to paragraphs (e-1), (e-2) and (1) of subdivision four of this section for general hospitals or distinct units of general hospitals not reimbursed on the basis of case based payments per discharge; and (ii) such rates of payment may be established by the commissioner on any appropriate payment basis, including a case mix adjusted per discharge basis. * NB Expires December 31, 2011 * (b) For patients discharged prior to January first, nineteen hundred ninety-seven, payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the comprehensive motor vehicle insurance reparations act; or enrolled in a self-insured fund which provides for reimbursement directly to general hospitals on an expense incurred basis, with the exception of those enrollees covered under a payment rate methodology agreement in accordance with the provisions of paragraph (a) of subdivision two of this section; or insured under a commercial insurer licensed to do business in this state and authorized to write accident and health insurance and whose policy provides inpatient hospital coverage on an expense incurred basis; or receiving inpatient hospital services pursuant to an out-of-plan benefits system authorized pursuant to section four thousand four hundred six of this chapter, except where such out-of-plan, inpatient hospital services are offered by an organization organized pursuant to the not-for-profit corporation law or which meets the qualifications of section 501(c) of the internal revenuecode, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and equal to the case payments to general hospitals provided in accordance with paragraph (a) of this subdivision for services provided to subscribers of corporations organized and operating in accordance with article forty-three of the insurance law, adjusted for uncovered services, and increased by thirteen percent or, for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law and the volunteer ambulance workers' benefit law, increased by five percent. Funds received by a general hospital based on the payment differential applied pursuant to this paragraph shall be hospital funds for patient care purposes. Without due cause general hospitals shall not refuse to accept direct payments from a payor who would otherwise be eligible to reimburse hospitals for inpatient services on a case based payment per discharge in accordance with this subdivision. (b-1) (i) For patients discharged on and after January first, nineteen hundred ninety-seven and prior to January first, two thousand and on and after January first, two thousand, payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law, the volunteer ambulance workers' benefit law, and the comprehensive motor vehicle insurance reparations act shall be at the rates of payment determined pursuant to this section for state governmental agencies, excluding adjustments pursuant to subdivision fourteen-f of this section and subdivision thirty-three of this section and excluding such further reductions to such payments as are enacted as part of the state budget for the state fiscal year commencing April first, two thousand ten. (ii) The provisions of paragraph (d) of subdivision eleven of this section shall continue to apply to such payors for payments determined pursuant to this paragraph. (b-2) A payor included in the payor categories specified in paragraph (a) or (b-1) of this subdivision shall not be provided the option of payment to a general hospital for inpatient services based on the lower of hospital charges or the case based payment per discharge determined in accordance with this section for a patient or apportioning the appropriate case based payment per discharge for a patient by excluding payment for a preexisting condition or acquired condition which has to be treated along with the reason for the admission or, except as may affect qualification for payments in accordance with paragraph (b) or (d) of subdivision four of this section, for days within the inlier stay determined to be medically unnecessary. * NB Effective until December 31, 2011 * (b) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the comprehensive motor vehicle insurance reparations act; or enrolled in a self-insured fund which provides for reimbursement directly to general hospitals on an expense incurred basis, with the exception of those enrollees covered under a payment rate methodology agreement in accordance with the provisions of paragraph (a) of subdivision two of this section; or insured under a commercial insurer licensed to do business in this state and authorized to write accident and health insurance and whose policy provides inpatient hospital coverage on an expense incurred basis; or receiving inpatient hospital services pursuant to an out-of-plan benefits system authorized pursuant to section four thousand four hundred six of this chapter, except where such out-of-plan, inpatient hospital services are offered by anorganization organized pursuant to the not-for-profit corporation law or which meets the qualifications of section 501 (c) of the internal revenue code, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and equal to the case payments to general hospitals provided in accordance with paragraph (a) of this subdivision for services provided to subscribers of corporations organized and operating in accordance with article forty-three of the insurance law, adjusted for uncovered services, and increased by thirteen percent or, for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law and the volunteer ambulance workers' benefit law, increased by five percent. Funds received by a general hospital based on the payment differential applied pursuant to this paragraph shall be hospital funds for patient care purposes. Without due cause general hospitals shall not refuse to accept direct payments from a payor who would otherwise be eligible to reimburse hospitals for inpatient services on a case based payment per discharge in accordance with this subdivision. A payor included in the payor categories specified in this paragraph or in paragraph (a) of this subdivision shall not be provided the option of payment to a general hospital for inpatient services based on the lower of hospital charges or the case based payment per discharge determined in accordance with this section for a patient or apportioning the appropriate case based payment per discharge for a patient by excluding payment for a preexisting condition or acquired condition which has to be treated along with the reason for the admission or, except as may affect qualification for payments in accordance with paragraph (b) or (d) of subdivision four of this section, for days within the inlier stay determined to be medically unnecessary. * NB Effective December 31, 2011 * (c) Charge based payments. For patients discharged prior to January first, nineteen hundred ninety-seven, payments to general hospitals for reimbursement of inpatient hospital services provided to those for whom a case based payment per discharge system is not authorized by paragraph (a) or (b) of this subdivision, or who are not covered under the provisions of paragraph (a) of subdivision two of this section, shall be on the basis of the hospital's charges; provided, however, for these patients the definition of a short stay patient pursuant to paragraph (d) of subdivision four of this section shall apply, and reimbursement to hospitals for such patients shall be at payments developed in accordance with paragraph (d) of subdivision four of this section, increased by thirteen percent. The maximum amount to be charged to any charge paying patient for a case shall be one hundred twenty percent of the case based payment per discharge as determined under paragraph (b) of this subdivision for the diagnosis-related group with which the patient is identified. Each general hospital shall establish a charge schedule and inpatient charges from this schedule shall be applied uniformly for all inpatient charge based payments made in accordance with this section. * NB Effective until December 31, 2011 * (c) Charge based payments. Payments to general hospitals for reimbursement of inpatient hospital services provided to those for whom a case based payment per discharge system is not authorized by paragraph (a) or (b) of this subdivision, or who are not covered under the provisions of paragraph (a) of subdivision two of this section, shall be on the basis of the hospital's charges; provided, however, for these patients the definition of a short stay patient pursuant to paragraph (d) of subdivision four of this section shall apply, and reimbursementto hospitals for such patients shall be at payments developed in accordance with paragraph (d) of subdivision four of this section, increased by thirteen percent. The maximum amount to be charged to any charge paying patient for a case shall be one hundred twenty percent of the case based payment per discharge as determined under paragraph (b) of this subdivision for the diagnosis-related group with which the patient is identified. Each general hospital shall establish a charge schedule and inpatient charges from this schedule shall be applied uniformly for all inpatient charge based payments made in accordance with this section. * NB Effective December 31, 2011 (d) The components of rates of payment calculated in accordance with this section related to inpatient operating costs shall be based on general hospital reimbursable inpatient operating costs used in determining payments for services pursuant to section twenty-eight hundred seven-a of this article during the rate period January first, nineteen hundred eighty-seven through December thirty-first, nineteen hundred eighty-seven (or for a distinct unit of a general hospital excluded from case based payments pursuant to paragraph (e) or (g) of subdivision four of this section such distinct unit reimbursable inpatient operating costs), excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) in accordance with paragraph (g) of subdivision eleven of this section and adjusted to reflect the annualized cost impact of rate revisions or adjustments, including the volume adjustment and case mix adjustment for the nineteen hundred eighty-seven rate period, made with respect to such services, which shall be defined as a general hospital's or distinct unit's reimbursable inpatient operating cost base; a projection to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and an increase to reflect special additional inpatient operating costs determined and allocated in accordance with paragraph (e) of this subdivision. (e) General hospital special additional inpatient operating costs shall be determined and allocated among general hospitals in accordance with subparagraphs (i), (iii) and (iv) of this paragraph. For purposes of computing group category average inpatient reimbursable operating costs in accordance with paragraph (a) of subdivision seven of this section and an equivalent cost component for general hospitals that are excluded from the case based payment per diagnosis-related group system in accordance with paragraph (e) or (g) of subdivision four of this section special additional inpatient operating costs shall include an additional increase determined and allocated among general hospitals in accordance with subparagraph (ii) of this paragraph. (i) The total cost increases pursuant to this subparagraph for all general hospitals shall in the aggregate be one hundred thirty million dollars for the nineteen hundred eighty-eight rate period to reflect nineteen hundred eighty-five costs incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five, such cost increases to be projected from nineteen hundred eighty-eight to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals in accordance with the following methodology: Five hundred dollars per bed shall be allocated to costs of each general hospital based on the total number of inpatient beds for which the hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eighthundred five of this article in effect on January first, nineteen hundred eighty-eight. A factor of one quarter of one percent of a general hospital's reimbursable inpatient operating cost base as defined in paragraph (d) of this subdivision, trended through nineteen hundred eighty-eight, shall be allocated to costs of general hospitals for technology advances and a further one quarter of one percent of such costs shall be allocated to costs of general hospitals for increased activities related to quality assurance and patient discharge planning. The balance of one hundred thirty million dollars after deducting the dollar value of the per bed cost enhancement and the dollar value of the percentage cost enhancements shall be allocated to costs of general hospitals based on the ratio of each general hospital's nineteen hundred eighty-five cost incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five in the following discrete areas, summed, to the total sum of such cost over trend of all general hospitals applied to such balance: malpractice insurance costs, infectious and other waste disposal costs, water charges, direct medical education expenses, working capital interest costs of hospitals that qualified for distributions made in accordance with paragraph (b) of subdivision sixteen of section twenty-eight hundred seven-a of this article, costs of distinct psychiatric units excluded from case based payments per diagnosis-related group, and ambulance costs. For purposes of this subparagraph, nineteen hundred eighty-five cost incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five shall be calculated for each such discrete area based on a general hospital's inpatient operating costs for the fiscal year ending in nineteen hundred eighty-five, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), for such discrete area in excess of the hospital's comparable component of reimbursable inpatient operating costs for its fiscal year ending in nineteen hundred eighty-one, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), trended through nineteen hundred eighty-five by the appropriate component of the trend factors and adjusted to reflect approved decreases or increases in inpatient operating costs resulting from all rate adjustments. (ii) The total additional cost increases pursuant to this subparagraph for all general hospitals shall in the aggregate be forty million dollars for the nineteen hundred eighty-eight rate period, such additional cost increases to be projected from nineteen hundred eighty-eight to the rate period by the applicable trend factor, to be allocated among general hospitals in accordance with the following methodology: The additional increase of forty million dollars shall be allocated to costs of general hospitals that are included in group categories established pursuant to paragraph (b) of subdivision seven of this section based on the ratio of the nineteen hundred eighty-eight intermediate group operating costs of each such general hospital, and to costs of general hospitals that are excluded from the case based payment per diagnosis-related group system in accordance with paragraph (e) or (g) of subdivision four of this section based on the ratio of the nineteen hundred eighty-eight intermediate operating costs of each such general hospital, to the total sum of such intermediate group operating costs and intermediate operating costs applied to the forty million dollars. For purposes of this subparagraph, intermediate group operating costs of a general hospital shall be calculated in accordance with rulesand regulations adopted by the council and approved by the commissioner based on the reimbursable inpatient operating cost base determined in accordance with paragraph (d) of this subdivision of such general hospital; adjusted to exclude operating costs related to specialized hospital services for which an alternative reimbursement methodology is adopted pursuant to paragraph (e) or (g) or, if effective, (i) of subdivision four of this section; and trended to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and increased to reflect special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph; and adjusted to exclude a factor for operating costs of patients who required an alternate level of care in accordance with paragraph (h) of subdivision four of this section; and adjusted to exclude the components of the trended reimbursable inpatient operating cost base related to education, physician, ambulance services and organ acquisition costs determined in accordance with subparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven of this section and malpractice insurance costs, and the components of special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph associated with cost increases in such costs. For purposes of this subparagraph, intermediate operating costs of a general hospital excluded from the case based payment per diagnosis-related group system shall be calculated in accordance with rules and regulations adopted by the council and approved by the commissioner based on the reimbursable inpatient operating cost base determined in accordance with paragraph (d) of this subdivision of such general hospital; trended to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and increased to reflect special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph; and adjusted to exclude a factor for operating costs of patients who required an alternate level of care developed consistent with the provisions of paragraph (h) of subdivision four of this section; and adjusted to exclude the components of the trended reimbursable inpatient operating cost base related to education, physician, ambulance services and organ acquisition costs determined consistent with the provisions of subparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven of this section and malpractice insurance costs, and the components of special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph associated with cost increases in such costs. (iii) Cost increases pursuant to this subparagraph shall be made for the nineteen hundred ninety-one rate period to reflect cost increases incurred in excess of the trend factor and not included in the costs used in determining payments in accordance with paragraph (d) of this subdivision and subparagraphs (i) and (ii) of this paragraph. Such costs shall in the aggregate be three hundred twenty-nine million dollars exclusive of costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare). Such costs increases shall be projected from nineteen hundred ninety-one to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals, except those general hospitals whose base year for determining payments for services in such facilities is nineteen hundred eighty-seven, in accordance with the following methodology: (A) Up to two hundred twenty-two million dollars shall be allocated for labor adjustments. If the total of the adjustments is less than twohundred twenty-two million dollars, then the adjustments shall be fully funded. If the total of the adjustments is more than two hundred twenty-two million dollars, then the adjustment specified in accordance with item (II) of this clause shall be funded at the lower of twenty percent of the total amount allocated for labor adjustments or its proportional share of the labor adjustments unless the labor adjustment specified in item (I) of this clause is less than eighty percent of the total amount allocated for labor adjustments in which case the adjustment specified in item (II) of this clause shall be equal to the difference between two hundred twenty-two million dollars and the total amount of the adjustment specified in item (I) of this clause. (I) A portion of the amount allocated for labor adjustments shall be for labor cost increases related to registered nurses' salaries and fringes (twenty percent of salaries) and an add-on for the ripple effect on other health care professionals of at least thirty-five percent. Such adjustment shall cover both inpatient and outpatient cost incurred, based on costs reported in a survey conducted by the department for the period January first, nineteen hundred ninety through June thirtieth, nineteen hundred ninety on forms specified by the commissioner and received by the department no later than November first, nineteen hundred ninety, annualized, in excess of nineteen hundred eighty-five labor costs related to registered nurses' salaries and fringes trended to nineteen hundred ninety and the nineteen hundred eighty-eight statewide nurse salary adjustment trended to nineteen hundred ninety by the appropriate components of the trend factors adjusted to reflect the effect of the annualization of nineteen hundred ninety data and the result trended to nineteen hundred ninety-one and shall be based exclusively on regional experience. Such regional adjustment shall not be less than zero. Each individual hospital within a region shall receive a portion of the regional adjustment equal to its share of the total inpatient and outpatient reimbursable operating costs for the region excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (II) A portion of the amount allocated for labor adjustments shall be for personnel costs other than those related to registered nurses' salaries and fringes and the ripple effect on other health care professionals. Such adjustment shall cover both inpatient and outpatient costs incurred, based on costs reported in a survey conducted by the department for the period January first, nineteen hundred ninety through June thirtieth, nineteen hundred ninety on forms specified by the commissioner and received by the department no later than November first, nineteen hundred ninety, annualized, in excess of nineteen hundred eighty-five personnel costs covered by this adjustment trended to nineteen hundred ninety and the annualized rate adjustments approved in nineteen hundred eighty-nine for personnel costs covered by this adjustment for increased hospital costs to meet additional state requirements that became effective July first, nineteen hundred eighty-nine trended to nineteen hundred ninety by the appropriate components of the trend factors adjusted to reflect the effect of the annualization of nineteen hundred ninety data and the result trended to nineteen hundred ninety-one and shall be based exclusively on regional data. (III) In the event that federal financial participation in payments made for beneficiaries eligible for medical assistance under title XIX of the federal social security act based upon the allocation and adjustment specified in items (I) and (II) of this clause related to outpatient costs as a component of such payments is not approved by thefederal government then such outpatient costs shall not be considered in calculating such adjustment. (B) Health personnel development. Four million five hundred thousand dollars shall be allocated for labor adjustments to be made available for health occupation development and workplace demonstration programs authorized pursuant to section twenty-eight hundred seven-h of this article. The commissioner is directed to make rate adjustments subject to the approval of the director of the budget to cover the cost of such programs, which shall be made available for the duration of such programs. (C) Thirty-three million dollars shall be allocated for technology advances and changes in medical practice. A fixed amount per bed shall be allocated to the costs of each general hospital based on the total number of inpatient beds for which the general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety. (D) Thirty-four million dollars shall be allocated to those general hospitals providing comprehensive health care to the communities they serve as determined by the commissioner pursuant to regulations approved by the council. Comprehensive health care includes providing and/or accommodating patients' health care needs at the appropriate levels and settings of care, and reaches outside of traditional inpatient services to outpatient and other services. Factors to be considered in deciding which general hospitals are providing comprehensive health care and the size of the adjustment shall include but not be limited to: clinic and emergency room volume compared to inpatient volume (measured using total volume and/or volume related to medicaid and medically indigent patients); number and type of clinic services offered; availability of services; whether the general hospital is an AIDS designated center, prenatal care assistance program provider, home health care provider, trauma center, burn center; whether the general hospital offers neonatal intensive care services, dialysis services, birthing center backup agreements, AIDS outpatient programs, specific mental health, drug and alcohol programs including outpatient and emergency services and those designated pursuant to section 9.39 of the mental hygiene law; and whether the general hospital's emergency room is designated as a 911 receiving hospital. In the event that federal financial participation in payments made for beneficiaries eligible for medical assistance under title XIX of the federal social security act based upon the adjustment specified in this clause as a component of such payments is not approved by the federal government because of the inclusion of outpatient services then such outpatient services shall not be considered in calculating such adjustment. If such exclusion results in the allocation for this adjustment not being spent, then any unspent portion shall be reallocated to further fund the adjustments specified in clauses (D) and (E) of this subparagraph in the same proportion as their original funding. (E)(I) Twenty-six million dollars shall be allocated to the costs of general hospitals based on the ratio of each general hospital's nineteen hundred eighty-nine cost incurred in excess of the trend factor between nineteen hundred eighty-five and nineteen hundred eighty-nine in the certain discrete areas, summed, to the total sum of such cost over trend of all general hospitals applied to the total funds under this allocation. Such discrete cost areas shall include but not be limited to: infectious and other waste disposal costs, universal precautions, working capital interest costs, costs for asbestos removal, costs of low osmolality contrast media, malpractice costs, water and sewer charges,ambulance costs and costs related to designation as a trauma center. For purposes of this clause, nineteen hundred eighty-nine cost incurred in excess of the trend factor between nineteen hundred eighty-five and nineteen hundred eighty-nine shall be calculated for each such discrete area based on a general hospital's inpatient operating costs for the fiscal year ending in nineteen hundred eighty-nine, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), for such discrete area in excess of the hospital's comparable component of reimbursable inpatient operating costs for its fiscal year ending in nineteen hundred eighty-five, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), trended through nineteen hundred eighty-nine by the appropriate component of the trend factors and adjusted to reflect approved decreases or increases in inpatient operating costs resulting from all rate adjustments. (II) Any funds allocated under this clause and not distributed pursuant to item (I) of this clause shall be allocated for the following: to reimburse for a portion of the cost increases incurred above the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five for those discrete cost areas specified in the last paragraph of subparagraph (i) of paragraph (e) of this subdivision as added by chapter two of the laws of nineteen hundred eighty-eight and not reimbursed in accordance with such paragraph. Such funds shall be allocated to general hospitals in the same manner as specified in such paragraph. (F) Seven million two hundred thousand dollars shall be allocated to account for the increase in the number of patients admitted through the emergency room and the high costs of treating such patients which has resulted in an increase in severity within diagnosis related groups. Such funds shall be allocated to general hospitals based on the nineteen hundred eighty-nine hospital-specific data on increased admissions through the emergency room since nineteen hundred eighty-one, excluding those admissions related to providing services to beneficiaries of title XVIII of the federal social security act (medicare). (G) Two hundred fifty dollars per bed shall be allocated to the costs of each general hospital having two hundred or less certified acute care beds and classified as a rural hospital for purposes of determining payment for inpatient acute care services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, for recruiting and retaining health care personnel, based on the total number of inpatient acute care beds for which such general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety. (H) One million dollars shall be allocated to assist general hospitals involved in a merger, acquisition, or consolidation in meeting the costs associated with such merger, acquisition, or consolidation on or after January first, nineteen hundred ninety-one. The commissioner shall make rate adjustments for such allocations. (I) Five hundred thousand dollars shall be allocated for a practitioner placement program to assist general hospitals in the placement of physicians and other health care practitioners to practice primary health care and/or dentistry in underserved areas, to serve the medically needy, and including services with affiliated community based providers. The commissioner shall make rate adjustments for such allocations. Notwithstanding any inconsistent provision of thissubdivision, this clause shall not apply in rate periods commencing on or after January first, nineteen hundred ninety-four. (iv) Cost increases pursuant to this subparagraph shall be made for the nineteen hundred ninety-four rate period to reflect cost increases incurred in excess of the trend factor and not included in the costs used in determining payments in accordance with paragraph (d) of this subdivision and subparagraphs (i), (ii) and (iii) of this paragraph. Such costs shall in the aggregate be one hundred seventy-three million dollars exclusive of costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare). Such cost increases shall be projected from nineteen hundred ninety-four to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals in accordance with the following methodology: (A) Forty-six million dollars shall be allocated to the costs of general hospitals for treating tuberculosis patients. Each general hospital shall receive a portion of this total equal to its share of the statewide total of inpatient tuberculosis discharges based on the most recent twelve month period for which data is available. (B) Sixty-three million dollars shall be allocated for labor adjustments in accordance with the following methodology: (I) Fifty-five million dollars shall be for labor cost increases incurred prior to June thirtieth, nineteen hundred ninety-three. Each general hospital shall receive a portion of this total equal to its share of the statewide total of inpatient and outpatient reimbursable operating costs based on nineteen hundred ninety data excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (II) Eight million dollars of the amount to be allocated for labor adjustments pursuant to this clause shall be distributed to general hospitals located in the counties of Ulster, Sullivan, Orange, Dutchess, Putnam, Rockland, Columbia, Delaware and Westchester, to account for prior disproportionate increases in unreimbursed labor costs. Each individual hospital shall receive a portion of the eight million dollars equal to its share of the total inpatient and outpatient reimbursable operating costs based on nineteen hundred ninety data for all hospitals located in the above-referenced counties excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (C) Fifty-five million dollars shall be allocated to the costs of increased activities related to regulatory compliance, universal precautions and infection control related to AIDS, tuberculosis, and other infectious diseases, including the training of employees with regard to infection control, and for infectious and other waste disposal costs. A fixed amount per bed shall be allocated to the costs of each general hospital based on the total number of inpatient beds for which the general hospital is certified pursuant to the operating certificate issued for each general hospital in accordance with section twenty-eight hundred five of this article in effect on August twenty-fourth, nineteen hundred ninety-three. (D) Three million dollars shall be allocated as follows: (I) Two hundred fifty dollars per bed shall be allocated to the costs of each general hospital having two hundred or less certified acute care beds and classified as a rural hospital for purposes of determining payment for inpatient services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, in recognition of the unique costs incurred by thesefacilities in complying with state regulations, based on the total number of inpatient acute care beds for which such general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on August twenty-fourth, nineteen hundred ninety-three. (II) The remainder shall be allocated on a proportional basis to the costs of each general hospital classified as a rural hospital for purposes of determining payment for inpatient services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, in recognition of the unique costs incurred by these facilities to provide hospital services in remote or sparsely populated areas, according to the following methodology: (1) the net income, or the net loss expressed as a negative, as a proportion of the net patient revenue, of each such hospital, based on operating results for the nineteen hundred ninety and nineteen hundred ninety-one rate years, shall be computed and averaged, and expressed as a percentage; (2) each such resulting percentage average shall be multiplied by each such hospital's number of inpatient beds for which such hospital is certified pursuant to the operating certificate issued for such hospital in accordance with section two thousand eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety, and such resulting products for all such hospitals shall be summed, and such sum shall be divided by the total of all such beds for all such hospitals, and the resulting quotient shall be the weighted average rural operating margin expressed as a percentage; and (3) one percentage point shall be subtracted from each such hospital's average net operating margin, and the resulting difference shall be divided by the weighted average rural operating margin; and (4) (a) if the quotient resulting from the computation in subitem three above is less than zero, then the absolute value of such quotient shall be multiplied by each such hospital's number of inpatient beds for which such hospital is certified pursuant to the operating certificate issued for such hospital in accordance with section two thousand eight hundred five of this chapter in effect on June thirtieth, nineteen hundred ninety, such product shall be multiplied by one hundred fifty dollars, and such resulting amount shall be such hospital's adjustment pursuant to this clause; (b) if the quotient resulting from the computation in subitem three above is zero or greater, such hospital's adjustment pursuant to this clause shall be zero; and (c) provided, however, that if the total of all such adjustments so computed exceeds the amount to be allocated in accordance with this item, each such hospital's adjustment shall be proportionately reduced. (E) Three million dollars shall be allocated to assist general hospitals involved in a merger, acquisition, or consolidation in meeting the costs associated with such merger, acquisition, or consolidation on or after January first, nineteen hundred ninety-four. The commissioner shall make rate adjustments for such allocations. (F) (I) One million five hundred thousand dollars shall be allocated for enhanced rates for general hospitals participating within a rural health network as defined in subdivision two of section twenty-nine hundred fifty-one of this chapter. Such rate enhancements shall be established only for inpatient services provided by such hospitals through the written rural health network agreement, where such services have been approved for enhanced rates by the commissioner.Notwithstanding any inconsistent provision of law, such enhanced rates shall be subject to the availability of federal financial participation pursuant to title XIX of the federal social security act in expenditures made for eligible patients, including pooling arrangements and volume adjustments, provided, however that such enhanced rates shall not affect the calculation for any other general hospital of the group price component calculated pursuant to subparagraph (i) of paragraph (a) of subdivision seven of this section. (II) One million five hundred thousand dollars shall be allocated for enhanced rates for general hospitals participating within a central services facility rural health network as defined in subdivision three of section twenty-nine hundred fifty-one of this chapter. Such rate enhancements shall be established only for inpatient services provided by such hospitals through the network operational plan, where such services have been approved for enhanced rates by the commissioner. Notwithstanding any inconsistent provision of law, such enhanced rates shall be subject to the availability of federal financial participation pursuant to title XIX of the federal social security act in expenditures made for eligible patients, including pooling arrangements and volume adjustments, provided, however that such enhanced rates shall not affect the calculation for any other general hospital of the group price component calculated pursuant to subparagraph (i) of paragraph (a) of subdivision seven of this section. (f) The commissioner and the state director of the budget shall consider providing a supplementary increase to general hospital reimbursable inpatient operating costs for purposes of computing rates of payment for annual rate periods beginning on or after January first, nineteen hundred eighty-nine in accordance with this section for reasonable and necessary supplementary cost increases in general hospital operating costs for such rate period or periods based on increased minimum standards and procedures relating to general hospital operating certificates adopted by the council and approved by the commissioner or state initiatives related to recruitment or maintenance of an appropriate level of personnel providing professional services to patients. Any such supplementary increase shall be allocated to costs of general hospitals in accordance with rules and regulations adopted by the council and approved by the commissioner. (g) Hospital discharges for purposes of computing case based payments per discharge pursuant to this section shall be based on the number of patient discharges during the rate period from January first, nineteen hundred eighty-seven through December thirty-first, nineteen hundred eighty-seven excluding discharges of beneficiaries of title XVIII of the federal social security act (medicare) and adjusted as provided in specific provisions of this section, or the number of such patient discharges during a recent twelve month period prior thereto established by regulation for which data are available subsequently reconciled by an adjustment to reflect nineteen hundred eighty-seven discharge data. * (h) Notwithstanding any inconsistent provision of this section, commencing April first, nineteen hundred ninety-five: (i) rates of payment for patients eligible for payments made by state governmental agencies shall be reduced by the commissioner to reflect an exclusion from reimbursable inpatient operating costs commencing April first, nineteen hundred ninety-five of the special additional inpatient operating costs determined and allocated among general hospitals in accordance with clause (C) of subparagraph (iii) and clause (C) of subparagraph (iv) of paragraph (e) of this subdivision and the factor of one quarter of one percent of general hospitals' reimbursable inpatient operating cost base allocated to costs of general hospitals fortechnology advances in accordance with subparagraph (i) of paragraph (e) of this subdivision; and (ii) general hospitals may not request and the commissioner shall not consider any pending or further appeals for an adjustment to rates of payment based on costs associated with technology advances and changes in medical practice and such adjustments to reimbursable inpatient operating costs pursuant to clause (C) of subparagraph (iv) of paragraph (e) of this subdivision. (iii) Notwithstanding the foregoing, or any other provision of this section, the commissioner may establish pass through payments, or other appropriate methodologies, for the period ending December thirty-first, two thousand three for innovative medical device advances for which the federal centers for medicare and medicaid services adopts new codes to the hospital inpatient prospective payment system prior to the federal food and drug administration's approval of such medical device. * NB Effective through March 31, 2011 (i) For the rate period July first, two thousand seven through March thirty-first, two thousand eight and for rates applicable to the state fiscal year commencing April first, two thousand eight, and each state fiscal year thereafter through March thirty-first, two thousand nine, and for the period April first, two thousand nine through November thirtieth, two thousand nine, provided, however, that for the period April first, two thousand nine through November thirtieth, two thousand nine the aggregate rate adjustments calculated pursuant to subparagraph (ii) of this paragraph shall not exceed four million dollars, and contingent upon the availability of federal financial participation: (i) The commissioner shall adjust inpatient medical assistance rates of payment calculated pursuant to this section for public hospitals other than non-state public hospitals located in a city with a population of more than one million persons, that meet the targeted medicaid discharge percentage in accordance with the methodology set forth in subparagraph (ii) of this paragraph. For purposes of this paragraph, "targeted medicaid discharge percentage" shall mean that at least seventeen and one-half percent of a public hospital's total discharges were patients eligible for payments under the medical assistance program pursuant to title eleven of article five of the social services law, including those enrolled in health maintenance organizations, and patients eligible for payments under the family health plus program pursuant to title eleven-D of article five of the social services law, based on data reported in such hospital's institutional cost report submitted for the two thousand four period and filed with the department by November first, two thousand six. Any hospital that meets the filing deadline shall have until June first, two thousand seven to submit revised and corrected data schedules in such institutional cost report which established eligibility for such adjusted rate. (ii) The aggregate amount of rate adjustments calculated pursuant to this paragraph shall not exceed six million dollars for each rate period. Such amount shall be allocated proportionally based on the relative numbers of medicaid discharges among those public hospitals eligible for rate adjustments in accordance with subparagraph (i) of this paragraph based on each such hospital's reported medical assistance data specified in subparagraph (i) of this paragraph. Such amounts shall be included as an add-on to medical assistance inpatient rates of payment, excluding exempt unit rates, and shall not be reconciled to reflect changes in medical assistance utilization between two thousand four and the current rate year.(j) For the rate period July first, two thousand seven through March thirty-first, two thousand eight and for rates applicable to the state fiscal year commencing April first, two thousand eight, and each state fiscal year thereafter through March thirty-first, two thousand nine and for the period April first, two thousand nine through November thirtieth, two thousand nine, provided, however, that for the period April first, two thousand nine through November thirtieth, two thousand nine the aggregate rate adjustments calculated pursuant to subparagraph (ii) of this paragraph shall not exceed twenty-eight million dollars, and contingent upon the availability of federal financial participation: (i) The commissioner shall adjust inpatient medical assistance rates of payment calculated pursuant to this section for voluntary hospitals other than voluntary hospitals located in a city with a population of more than one million persons that meet the targeted medicaid discharge percentage in accordance with the methodology set forth in subparagraph (ii) of this paragraph. For purposes of this paragraph, "targeted Medicaid discharge percentage" shall mean between seventeen and one-half percent and thirty-five percent of a voluntary hospital's total discharges were patients eligible for payments under the medical assistance program pursuant to title eleven of article five of the social services law, including those enrolled in health maintenance organizations, and patients eligible for payments under the family health plus program pursuant to title eleven-D of article five of the social services law, based on data reported in such hospital's institutional cost report submitted for the two thousand four period and filed with the department by November first, two thousand six. Any hospital that meets the filing deadline shall have until June first, two thousand seven to submit revised and corrected data schedules in such institutional cost report which established eligibility for such adjusted rate. (ii) The aggregate amount of rate adjustments calculated pursuant to this paragraph shall not exceed forty-two million dollars for each rate period. Such amount shall be allocated proportionally based on relative numbers of medicaid discharges among those voluntary hospitals eligible for rate adjustments in accordance with subparagraph (i) of this paragraph based on each such hospital's reported medical assistance data specified in subparagraph (i) of this paragraph. Such amounts shall be included as an add-on to medical assistance inpatient rates of payment, excluding exempt unit rates, and shall not be reconciled to reflect changes in medical assistance utilization between two thousand four and the rate year. (k) Subject to the availability of federal financial participation, the commissioner shall adjust inpatient rates of payment for non-public general hospitals located in a city with a population of more than one million persons for the following periods and in the following amounts in order to ensure meaningful access to the hospital's services and reasonable accommodation for all medicaid patients who require language assistance: (i) for the period July first, two thousand seven through December thirty-first, two thousand seven, thirty-eight million dollars shall be allocated proportionally to such hospitals based on fifty percent of each such hospital's reported general clinic medicaid visits and fifty percent on each such hospital's reported medicaid inpatient discharges, as reported in each hospital's two thousand four institutional cost report, as submitted to the department prior to November first, two thousand six, to the total of all such general clinic visits reported by all such hospitals.(ii) for the period April first, two thousand eight through March thirty-first, two thousand nine, and each state fiscal year thereafter through November thirtieth, two thousand nine, thirty-eight million dollars shall be allocated on an annualized basis for such purpose to such hospitals in accordance with the methodology set forth in subparagraph (i) of this paragraph, provided, however, that thirty percent of such funds shall be allocated proportionally, based on the number of foreign languages utilized by one or more percent of the residents in each hospital total service area population, provided, howeve
§ 2807-c. General hospital inpatient reimbursement for annual rate periods beginning on or after January first, nineteen hundred eighty-eight. 1. Payor payments. Payments to general hospitals for inpatient hospital services provided to persons who are not eligible for payments as beneficiaries of title XVIII of the federal social security act (medicare) shall be determined pursuant to this section. Payor payments shall be as follows unless an alternative reimbursement methodology is authorized in accordance with paragraph (e), (f), (g), (h) or (i) of subdivision four of this section. * (a) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments made by state governmental agencies for patients discharged prior to January first, two thousand and on and after January first, two thousand; or for patients discharged prior to January first, nineteen hundred ninety-seven provided in accordance with policies written by corporations organized and operating in accordance with article forty-three of the insurance law, or payment by such a corporation on behalf of subscribers of a foreign corporation as described in paragraph (d) of subdivision twelve of this section, which provide for reimbursement on an expense incurred basis; or for patients discharged prior to January first, nineteen hundred ninety-seven provided to subscribers of organizations operating in accordance with the provisions of article forty-four of this chapter, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and shall include: (i) a reimbursable inpatient operating cost component determined in accordance with subdivision five of this section; (ii) capital related inpatient expenses determined in accordance with subdivision eight of this section; (iii) for patients discharged prior to January first, nineteen hundred ninety-seven (A) a bad debt and charity care allowance determined in accordance with subdivision fourteen of this section, (B) a general health care services allowance determined in accordance with subdivision fourteen-b of this section, and (C) a bad debt and charity care allowance for financially distressed hospitals determined in accordance with subdivision fourteen-c of this section; (iv) a projection of reimbursable inpatient operating costs to the rate year by the trend factor determined in accordance with subdivision ten of this section; and (v) adjustments for any modifications to the case payments determined in accordance with paragraph (a), (b), (c) or (d) of subdivision four of this section. * NB Effective until December 31, 2011 * (a) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments made by state governmental agencies; or provided in accordance with policies written by corporations organized and operating in accordance with article forty-three of the insurance law, or payment by such a corporation on behalf of subscribers of a foreign corporation as described in paragraph (d) of subdivision twelve of this section, which provide for reimbursement on an expense incurred basis; or provided to subscribers of organizations operating in accordance with the provisions of article forty-four of this chapter, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and shall include:(i) a reimbursable inpatient operating cost component determined in accordance with subdivision five of this section; (ii) capital related inpatient expenses determined in accordance with subdivision eight of this section; (iii) (A) a bad debt and charity care allowance determined in accordance with subdivision fourteen of this section, (B) a general health care services allowance determined in accordance with subdivision fourteen-b of this section, and (C) a bad debt and charity care allowance for financially distressed hospitals determined in accordance with subdivision fourteen-c of this section; (iv) a projection of reimbursable inpatient operating costs to the rate year by the trend factor determined in accordance with subdivision ten of this section; and (v) adjustments for any modifications to the case payments determined in accordance with paragraph (a), (b), (c) or (d) of subdivision four of this section. * NB Effective December 31, 2011 * (a-1) Payments made by local governmental agencies to general hospitals for reimbursement of inpatient hospital services provided to inmates of local correctional facilities as defined in subdivision sixteen of section two of the correction law shall be at the rates of payment determined pursuant to this section for state governmental agencies, excluding adjustments pursuant to subdivision fourteen-f of this section. * NB Effective until December 31, 2011 * (a-1) Payments made by local governmental agencies to general hospitals for reimbursement of inpatient hospital services provided to inmates of local correctional facilities as defined in subdivision sixteen of section two of the correction law shall be at the rates of payment determined pursuant to this section for state governmental agencies. * NB Effective December 31, 2011 * (a-2) (i) With the exception of those enrollees covered under a payment rate methodology agreement negotiated with a general hospital, payments for inpatient hospital services provided to patients eligible for medical assistance pursuant to title eleven of article five of the social services law made by organizations operating in accordance with the provisions of article forty-four of this chapter or by health maintenance organizations organized and operating in accordance with article forty-three of the insurance law shall be the rates of payment that would be paid for such patients under the medical assistance program, (i) determined pursuant to this section, excluding adjustments pursuant to subdivision fourteen-f of this section, and (ii) excluding medical education costs that are reimbursed directly to the general hospital in accordance with paragraph (a-3) of this subdivision. (ii) Effective July first, two thousand seven, with the exception of those enrollees covered under a payment rate methodology agreement negotiated with a general hospital, payment for inpatient hospital services provided to patients enrolled in the child health insurance program pursuant to title one-A of article twenty-five of this chapter made by organizations operating in accordance with the provisions of article forty-four of this chapter or by health maintenance organizations organized and operating in accordance with article forty-three of the insurance law shall be the rates of payment that would be paid under the medical assistance program determined pursuant to this section, excluding adjustments pursuant to subdivision fourteen-f of this section. * NB Expires December 31, 2011* (a-3) Notwithstanding any inconsistent provision of law: (i) the commissioner shall establish, subject to the approval of the director of the budget, discrete rates of payment for general hospitals for the period July first, nineteen hundred ninety-six through December thirty-first, nineteen hundred ninety-nine and periods on and after January first, two thousand for payments under the medical assistance program pursuant to title eleven of article five of the social services law for persons eligible for medical assistance who are enrolled in health maintenance organizations and for payments under the family health plus program for persons enrolled in approved organizations pursuant to title eleven-D of article five of the social services law based on the components of rates of payment established pursuant to this section for persons eligible for medical assistance who are not enrolled in health maintenance organizations for a general hospital for such rate period that reflect the estimated reimbursable costs of direct medical education expenses and indirect medical education expenses in the determination of: (A) the hospital-specific average reimbursable inpatient operating cost per discharge pursuant to subdivision six of this section, and (B) group category average inpatient reimbursable operating cost per discharge pursuant to subdivision seven of this section, and (C) the operating cost component of rates of payment pursuant to paragraphs (f) and (k) of subdivision four of this section, and (D) the operating cost component of rates of payment in accordance with paragraphs (e), (g) and (i) of subdivision four of this section for general hospitals or distinct units of general hospitals not reimbursed on the basis of case based payments per discharge; and (E) notwithstanding clauses (A) through (D) of this subparagraph, for periods on and after December first, two thousand nine, the operating cost component of rates of payment subject to subdivision thirty-five of this section, and (F) notwithstanding clauses (A) through (D) of this subparagraph, for periods on and after December first, two thousand nine, the operating cost component of rates of payment subject to paragraphs (e-1), (e-2) and (1) of subdivision four of this section for general hospitals or distinct units of general hospitals not reimbursed on the basis of case based payments per discharge; and (ii) such rates of payment may be established by the commissioner on any appropriate payment basis, including a case mix adjusted per discharge basis. * NB Expires December 31, 2011 * (b) For patients discharged prior to January first, nineteen hundred ninety-seven, payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the comprehensive motor vehicle insurance reparations act; or enrolled in a self-insured fund which provides for reimbursement directly to general hospitals on an expense incurred basis, with the exception of those enrollees covered under a payment rate methodology agreement in accordance with the provisions of paragraph (a) of subdivision two of this section; or insured under a commercial insurer licensed to do business in this state and authorized to write accident and health insurance and whose policy provides inpatient hospital coverage on an expense incurred basis; or receiving inpatient hospital services pursuant to an out-of-plan benefits system authorized pursuant to section four thousand four hundred six of this chapter, except where such out-of-plan, inpatient hospital services are offered by an organization organized pursuant to the not-for-profit corporation law or which meets the qualifications of section 501(c) of the internal revenuecode, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and equal to the case payments to general hospitals provided in accordance with paragraph (a) of this subdivision for services provided to subscribers of corporations organized and operating in accordance with article forty-three of the insurance law, adjusted for uncovered services, and increased by thirteen percent or, for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law and the volunteer ambulance workers' benefit law, increased by five percent. Funds received by a general hospital based on the payment differential applied pursuant to this paragraph shall be hospital funds for patient care purposes. Without due cause general hospitals shall not refuse to accept direct payments from a payor who would otherwise be eligible to reimburse hospitals for inpatient services on a case based payment per discharge in accordance with this subdivision. (b-1) (i) For patients discharged on and after January first, nineteen hundred ninety-seven and prior to January first, two thousand and on and after January first, two thousand, payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law, the volunteer ambulance workers' benefit law, and the comprehensive motor vehicle insurance reparations act shall be at the rates of payment determined pursuant to this section for state governmental agencies, excluding adjustments pursuant to subdivision fourteen-f of this section and subdivision thirty-three of this section and excluding such further reductions to such payments as are enacted as part of the state budget for the state fiscal year commencing April first, two thousand ten. (ii) The provisions of paragraph (d) of subdivision eleven of this section shall continue to apply to such payors for payments determined pursuant to this paragraph. (b-2) A payor included in the payor categories specified in paragraph (a) or (b-1) of this subdivision shall not be provided the option of payment to a general hospital for inpatient services based on the lower of hospital charges or the case based payment per discharge determined in accordance with this section for a patient or apportioning the appropriate case based payment per discharge for a patient by excluding payment for a preexisting condition or acquired condition which has to be treated along with the reason for the admission or, except as may affect qualification for payments in accordance with paragraph (b) or (d) of subdivision four of this section, for days within the inlier stay determined to be medically unnecessary. * NB Effective until December 31, 2011 * (b) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the comprehensive motor vehicle insurance reparations act; or enrolled in a self-insured fund which provides for reimbursement directly to general hospitals on an expense incurred basis, with the exception of those enrollees covered under a payment rate methodology agreement in accordance with the provisions of paragraph (a) of subdivision two of this section; or insured under a commercial insurer licensed to do business in this state and authorized to write accident and health insurance and whose policy provides inpatient hospital coverage on an expense incurred basis; or receiving inpatient hospital services pursuant to an out-of-plan benefits system authorized pursuant to section four thousand four hundred six of this chapter, except where such out-of-plan, inpatient hospital services are offered by anorganization organized pursuant to the not-for-profit corporation law or which meets the qualifications of section 501 (c) of the internal revenue code, shall be case based payments per discharge, for each diagnosis-related group established in accordance with paragraph (a) of subdivision three of this section, and equal to the case payments to general hospitals provided in accordance with paragraph (a) of this subdivision for services provided to subscribers of corporations organized and operating in accordance with article forty-three of the insurance law, adjusted for uncovered services, and increased by thirteen percent or, for payments pursuant to the workers' compensation law, the volunteer firefighters' benefit law and the volunteer ambulance workers' benefit law, increased by five percent. Funds received by a general hospital based on the payment differential applied pursuant to this paragraph shall be hospital funds for patient care purposes. Without due cause general hospitals shall not refuse to accept direct payments from a payor who would otherwise be eligible to reimburse hospitals for inpatient services on a case based payment per discharge in accordance with this subdivision. A payor included in the payor categories specified in this paragraph or in paragraph (a) of this subdivision shall not be provided the option of payment to a general hospital for inpatient services based on the lower of hospital charges or the case based payment per discharge determined in accordance with this section for a patient or apportioning the appropriate case based payment per discharge for a patient by excluding payment for a preexisting condition or acquired condition which has to be treated along with the reason for the admission or, except as may affect qualification for payments in accordance with paragraph (b) or (d) of subdivision four of this section, for days within the inlier stay determined to be medically unnecessary. * NB Effective December 31, 2011 * (c) Charge based payments. For patients discharged prior to January first, nineteen hundred ninety-seven, payments to general hospitals for reimbursement of inpatient hospital services provided to those for whom a case based payment per discharge system is not authorized by paragraph (a) or (b) of this subdivision, or who are not covered under the provisions of paragraph (a) of subdivision two of this section, shall be on the basis of the hospital's charges; provided, however, for these patients the definition of a short stay patient pursuant to paragraph (d) of subdivision four of this section shall apply, and reimbursement to hospitals for such patients shall be at payments developed in accordance with paragraph (d) of subdivision four of this section, increased by thirteen percent. The maximum amount to be charged to any charge paying patient for a case shall be one hundred twenty percent of the case based payment per discharge as determined under paragraph (b) of this subdivision for the diagnosis-related group with which the patient is identified. Each general hospital shall establish a charge schedule and inpatient charges from this schedule shall be applied uniformly for all inpatient charge based payments made in accordance with this section. * NB Effective until December 31, 2011 * (c) Charge based payments. Payments to general hospitals for reimbursement of inpatient hospital services provided to those for whom a case based payment per discharge system is not authorized by paragraph (a) or (b) of this subdivision, or who are not covered under the provisions of paragraph (a) of subdivision two of this section, shall be on the basis of the hospital's charges; provided, however, for these patients the definition of a short stay patient pursuant to paragraph (d) of subdivision four of this section shall apply, and reimbursementto hospitals for such patients shall be at payments developed in accordance with paragraph (d) of subdivision four of this section, increased by thirteen percent. The maximum amount to be charged to any charge paying patient for a case shall be one hundred twenty percent of the case based payment per discharge as determined under paragraph (b) of this subdivision for the diagnosis-related group with which the patient is identified. Each general hospital shall establish a charge schedule and inpatient charges from this schedule shall be applied uniformly for all inpatient charge based payments made in accordance with this section. * NB Effective December 31, 2011 (d) The components of rates of payment calculated in accordance with this section related to inpatient operating costs shall be based on general hospital reimbursable inpatient operating costs used in determining payments for services pursuant to section twenty-eight hundred seven-a of this article during the rate period January first, nineteen hundred eighty-seven through December thirty-first, nineteen hundred eighty-seven (or for a distinct unit of a general hospital excluded from case based payments pursuant to paragraph (e) or (g) of subdivision four of this section such distinct unit reimbursable inpatient operating costs), excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) in accordance with paragraph (g) of subdivision eleven of this section and adjusted to reflect the annualized cost impact of rate revisions or adjustments, including the volume adjustment and case mix adjustment for the nineteen hundred eighty-seven rate period, made with respect to such services, which shall be defined as a general hospital's or distinct unit's reimbursable inpatient operating cost base; a projection to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and an increase to reflect special additional inpatient operating costs determined and allocated in accordance with paragraph (e) of this subdivision. (e) General hospital special additional inpatient operating costs shall be determined and allocated among general hospitals in accordance with subparagraphs (i), (iii) and (iv) of this paragraph. For purposes of computing group category average inpatient reimbursable operating costs in accordance with paragraph (a) of subdivision seven of this section and an equivalent cost component for general hospitals that are excluded from the case based payment per diagnosis-related group system in accordance with paragraph (e) or (g) of subdivision four of this section special additional inpatient operating costs shall include an additional increase determined and allocated among general hospitals in accordance with subparagraph (ii) of this paragraph. (i) The total cost increases pursuant to this subparagraph for all general hospitals shall in the aggregate be one hundred thirty million dollars for the nineteen hundred eighty-eight rate period to reflect nineteen hundred eighty-five costs incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five, such cost increases to be projected from nineteen hundred eighty-eight to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals in accordance with the following methodology: Five hundred dollars per bed shall be allocated to costs of each general hospital based on the total number of inpatient beds for which the hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eighthundred five of this article in effect on January first, nineteen hundred eighty-eight. A factor of one quarter of one percent of a general hospital's reimbursable inpatient operating cost base as defined in paragraph (d) of this subdivision, trended through nineteen hundred eighty-eight, shall be allocated to costs of general hospitals for technology advances and a further one quarter of one percent of such costs shall be allocated to costs of general hospitals for increased activities related to quality assurance and patient discharge planning. The balance of one hundred thirty million dollars after deducting the dollar value of the per bed cost enhancement and the dollar value of the percentage cost enhancements shall be allocated to costs of general hospitals based on the ratio of each general hospital's nineteen hundred eighty-five cost incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five in the following discrete areas, summed, to the total sum of such cost over trend of all general hospitals applied to such balance: malpractice insurance costs, infectious and other waste disposal costs, water charges, direct medical education expenses, working capital interest costs of hospitals that qualified for distributions made in accordance with paragraph (b) of subdivision sixteen of section twenty-eight hundred seven-a of this article, costs of distinct psychiatric units excluded from case based payments per diagnosis-related group, and ambulance costs. For purposes of this subparagraph, nineteen hundred eighty-five cost incurred in excess of the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five shall be calculated for each such discrete area based on a general hospital's inpatient operating costs for the fiscal year ending in nineteen hundred eighty-five, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), for such discrete area in excess of the hospital's comparable component of reimbursable inpatient operating costs for its fiscal year ending in nineteen hundred eighty-one, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), trended through nineteen hundred eighty-five by the appropriate component of the trend factors and adjusted to reflect approved decreases or increases in inpatient operating costs resulting from all rate adjustments. (ii) The total additional cost increases pursuant to this subparagraph for all general hospitals shall in the aggregate be forty million dollars for the nineteen hundred eighty-eight rate period, such additional cost increases to be projected from nineteen hundred eighty-eight to the rate period by the applicable trend factor, to be allocated among general hospitals in accordance with the following methodology: The additional increase of forty million dollars shall be allocated to costs of general hospitals that are included in group categories established pursuant to paragraph (b) of subdivision seven of this section based on the ratio of the nineteen hundred eighty-eight intermediate group operating costs of each such general hospital, and to costs of general hospitals that are excluded from the case based payment per diagnosis-related group system in accordance with paragraph (e) or (g) of subdivision four of this section based on the ratio of the nineteen hundred eighty-eight intermediate operating costs of each such general hospital, to the total sum of such intermediate group operating costs and intermediate operating costs applied to the forty million dollars. For purposes of this subparagraph, intermediate group operating costs of a general hospital shall be calculated in accordance with rulesand regulations adopted by the council and approved by the commissioner based on the reimbursable inpatient operating cost base determined in accordance with paragraph (d) of this subdivision of such general hospital; adjusted to exclude operating costs related to specialized hospital services for which an alternative reimbursement methodology is adopted pursuant to paragraph (e) or (g) or, if effective, (i) of subdivision four of this section; and trended to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and increased to reflect special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph; and adjusted to exclude a factor for operating costs of patients who required an alternate level of care in accordance with paragraph (h) of subdivision four of this section; and adjusted to exclude the components of the trended reimbursable inpatient operating cost base related to education, physician, ambulance services and organ acquisition costs determined in accordance with subparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven of this section and malpractice insurance costs, and the components of special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph associated with cost increases in such costs. For purposes of this subparagraph, intermediate operating costs of a general hospital excluded from the case based payment per diagnosis-related group system shall be calculated in accordance with rules and regulations adopted by the council and approved by the commissioner based on the reimbursable inpatient operating cost base determined in accordance with paragraph (d) of this subdivision of such general hospital; trended to the nineteen hundred eighty-eight rate period by the trend factor determined in accordance with subdivision ten of this section; and increased to reflect special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph; and adjusted to exclude a factor for operating costs of patients who required an alternate level of care developed consistent with the provisions of paragraph (h) of subdivision four of this section; and adjusted to exclude the components of the trended reimbursable inpatient operating cost base related to education, physician, ambulance services and organ acquisition costs determined consistent with the provisions of subparagraphs (i), (iii) and (iv) of paragraph (c) of subdivision seven of this section and malpractice insurance costs, and the components of special additional inpatient operating costs determined and allocated in accordance with subparagraph (i) of this paragraph associated with cost increases in such costs. (iii) Cost increases pursuant to this subparagraph shall be made for the nineteen hundred ninety-one rate period to reflect cost increases incurred in excess of the trend factor and not included in the costs used in determining payments in accordance with paragraph (d) of this subdivision and subparagraphs (i) and (ii) of this paragraph. Such costs shall in the aggregate be three hundred twenty-nine million dollars exclusive of costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare). Such costs increases shall be projected from nineteen hundred ninety-one to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals, except those general hospitals whose base year for determining payments for services in such facilities is nineteen hundred eighty-seven, in accordance with the following methodology: (A) Up to two hundred twenty-two million dollars shall be allocated for labor adjustments. If the total of the adjustments is less than twohundred twenty-two million dollars, then the adjustments shall be fully funded. If the total of the adjustments is more than two hundred twenty-two million dollars, then the adjustment specified in accordance with item (II) of this clause shall be funded at the lower of twenty percent of the total amount allocated for labor adjustments or its proportional share of the labor adjustments unless the labor adjustment specified in item (I) of this clause is less than eighty percent of the total amount allocated for labor adjustments in which case the adjustment specified in item (II) of this clause shall be equal to the difference between two hundred twenty-two million dollars and the total amount of the adjustment specified in item (I) of this clause. (I) A portion of the amount allocated for labor adjustments shall be for labor cost increases related to registered nurses' salaries and fringes (twenty percent of salaries) and an add-on for the ripple effect on other health care professionals of at least thirty-five percent. Such adjustment shall cover both inpatient and outpatient cost incurred, based on costs reported in a survey conducted by the department for the period January first, nineteen hundred ninety through June thirtieth, nineteen hundred ninety on forms specified by the commissioner and received by the department no later than November first, nineteen hundred ninety, annualized, in excess of nineteen hundred eighty-five labor costs related to registered nurses' salaries and fringes trended to nineteen hundred ninety and the nineteen hundred eighty-eight statewide nurse salary adjustment trended to nineteen hundred ninety by the appropriate components of the trend factors adjusted to reflect the effect of the annualization of nineteen hundred ninety data and the result trended to nineteen hundred ninety-one and shall be based exclusively on regional experience. Such regional adjustment shall not be less than zero. Each individual hospital within a region shall receive a portion of the regional adjustment equal to its share of the total inpatient and outpatient reimbursable operating costs for the region excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (II) A portion of the amount allocated for labor adjustments shall be for personnel costs other than those related to registered nurses' salaries and fringes and the ripple effect on other health care professionals. Such adjustment shall cover both inpatient and outpatient costs incurred, based on costs reported in a survey conducted by the department for the period January first, nineteen hundred ninety through June thirtieth, nineteen hundred ninety on forms specified by the commissioner and received by the department no later than November first, nineteen hundred ninety, annualized, in excess of nineteen hundred eighty-five personnel costs covered by this adjustment trended to nineteen hundred ninety and the annualized rate adjustments approved in nineteen hundred eighty-nine for personnel costs covered by this adjustment for increased hospital costs to meet additional state requirements that became effective July first, nineteen hundred eighty-nine trended to nineteen hundred ninety by the appropriate components of the trend factors adjusted to reflect the effect of the annualization of nineteen hundred ninety data and the result trended to nineteen hundred ninety-one and shall be based exclusively on regional data. (III) In the event that federal financial participation in payments made for beneficiaries eligible for medical assistance under title XIX of the federal social security act based upon the allocation and adjustment specified in items (I) and (II) of this clause related to outpatient costs as a component of such payments is not approved by thefederal government then such outpatient costs shall not be considered in calculating such adjustment. (B) Health personnel development. Four million five hundred thousand dollars shall be allocated for labor adjustments to be made available for health occupation development and workplace demonstration programs authorized pursuant to section twenty-eight hundred seven-h of this article. The commissioner is directed to make rate adjustments subject to the approval of the director of the budget to cover the cost of such programs, which shall be made available for the duration of such programs. (C) Thirty-three million dollars shall be allocated for technology advances and changes in medical practice. A fixed amount per bed shall be allocated to the costs of each general hospital based on the total number of inpatient beds for which the general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety. (D) Thirty-four million dollars shall be allocated to those general hospitals providing comprehensive health care to the communities they serve as determined by the commissioner pursuant to regulations approved by the council. Comprehensive health care includes providing and/or accommodating patients' health care needs at the appropriate levels and settings of care, and reaches outside of traditional inpatient services to outpatient and other services. Factors to be considered in deciding which general hospitals are providing comprehensive health care and the size of the adjustment shall include but not be limited to: clinic and emergency room volume compared to inpatient volume (measured using total volume and/or volume related to medicaid and medically indigent patients); number and type of clinic services offered; availability of services; whether the general hospital is an AIDS designated center, prenatal care assistance program provider, home health care provider, trauma center, burn center; whether the general hospital offers neonatal intensive care services, dialysis services, birthing center backup agreements, AIDS outpatient programs, specific mental health, drug and alcohol programs including outpatient and emergency services and those designated pursuant to section 9.39 of the mental hygiene law; and whether the general hospital's emergency room is designated as a 911 receiving hospital. In the event that federal financial participation in payments made for beneficiaries eligible for medical assistance under title XIX of the federal social security act based upon the adjustment specified in this clause as a component of such payments is not approved by the federal government because of the inclusion of outpatient services then such outpatient services shall not be considered in calculating such adjustment. If such exclusion results in the allocation for this adjustment not being spent, then any unspent portion shall be reallocated to further fund the adjustments specified in clauses (D) and (E) of this subparagraph in the same proportion as their original funding. (E)(I) Twenty-six million dollars shall be allocated to the costs of general hospitals based on the ratio of each general hospital's nineteen hundred eighty-nine cost incurred in excess of the trend factor between nineteen hundred eighty-five and nineteen hundred eighty-nine in the certain discrete areas, summed, to the total sum of such cost over trend of all general hospitals applied to the total funds under this allocation. Such discrete cost areas shall include but not be limited to: infectious and other waste disposal costs, universal precautions, working capital interest costs, costs for asbestos removal, costs of low osmolality contrast media, malpractice costs, water and sewer charges,ambulance costs and costs related to designation as a trauma center. For purposes of this clause, nineteen hundred eighty-nine cost incurred in excess of the trend factor between nineteen hundred eighty-five and nineteen hundred eighty-nine shall be calculated for each such discrete area based on a general hospital's inpatient operating costs for the fiscal year ending in nineteen hundred eighty-nine, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), for such discrete area in excess of the hospital's comparable component of reimbursable inpatient operating costs for its fiscal year ending in nineteen hundred eighty-five, after excluding inpatient operating costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare), trended through nineteen hundred eighty-nine by the appropriate component of the trend factors and adjusted to reflect approved decreases or increases in inpatient operating costs resulting from all rate adjustments. (II) Any funds allocated under this clause and not distributed pursuant to item (I) of this clause shall be allocated for the following: to reimburse for a portion of the cost increases incurred above the trend factor between nineteen hundred eighty-one and nineteen hundred eighty-five for those discrete cost areas specified in the last paragraph of subparagraph (i) of paragraph (e) of this subdivision as added by chapter two of the laws of nineteen hundred eighty-eight and not reimbursed in accordance with such paragraph. Such funds shall be allocated to general hospitals in the same manner as specified in such paragraph. (F) Seven million two hundred thousand dollars shall be allocated to account for the increase in the number of patients admitted through the emergency room and the high costs of treating such patients which has resulted in an increase in severity within diagnosis related groups. Such funds shall be allocated to general hospitals based on the nineteen hundred eighty-nine hospital-specific data on increased admissions through the emergency room since nineteen hundred eighty-one, excluding those admissions related to providing services to beneficiaries of title XVIII of the federal social security act (medicare). (G) Two hundred fifty dollars per bed shall be allocated to the costs of each general hospital having two hundred or less certified acute care beds and classified as a rural hospital for purposes of determining payment for inpatient acute care services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, for recruiting and retaining health care personnel, based on the total number of inpatient acute care beds for which such general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety. (H) One million dollars shall be allocated to assist general hospitals involved in a merger, acquisition, or consolidation in meeting the costs associated with such merger, acquisition, or consolidation on or after January first, nineteen hundred ninety-one. The commissioner shall make rate adjustments for such allocations. (I) Five hundred thousand dollars shall be allocated for a practitioner placement program to assist general hospitals in the placement of physicians and other health care practitioners to practice primary health care and/or dentistry in underserved areas, to serve the medically needy, and including services with affiliated community based providers. The commissioner shall make rate adjustments for such allocations. Notwithstanding any inconsistent provision of thissubdivision, this clause shall not apply in rate periods commencing on or after January first, nineteen hundred ninety-four. (iv) Cost increases pursuant to this subparagraph shall be made for the nineteen hundred ninety-four rate period to reflect cost increases incurred in excess of the trend factor and not included in the costs used in determining payments in accordance with paragraph (d) of this subdivision and subparagraphs (i), (ii) and (iii) of this paragraph. Such costs shall in the aggregate be one hundred seventy-three million dollars exclusive of costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare). Such cost increases shall be projected from nineteen hundred ninety-four to subsequent annual rate periods by the applicable trend factor, and shall be allocated among general hospitals in accordance with the following methodology: (A) Forty-six million dollars shall be allocated to the costs of general hospitals for treating tuberculosis patients. Each general hospital shall receive a portion of this total equal to its share of the statewide total of inpatient tuberculosis discharges based on the most recent twelve month period for which data is available. (B) Sixty-three million dollars shall be allocated for labor adjustments in accordance with the following methodology: (I) Fifty-five million dollars shall be for labor cost increases incurred prior to June thirtieth, nineteen hundred ninety-three. Each general hospital shall receive a portion of this total equal to its share of the statewide total of inpatient and outpatient reimbursable operating costs based on nineteen hundred ninety data excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (II) Eight million dollars of the amount to be allocated for labor adjustments pursuant to this clause shall be distributed to general hospitals located in the counties of Ulster, Sullivan, Orange, Dutchess, Putnam, Rockland, Columbia, Delaware and Westchester, to account for prior disproportionate increases in unreimbursed labor costs. Each individual hospital shall receive a portion of the eight million dollars equal to its share of the total inpatient and outpatient reimbursable operating costs based on nineteen hundred ninety data for all hospitals located in the above-referenced counties excluding costs related to services provided to beneficiaries of title XVIII of the federal social security act (medicare) and excluding direct medical education costs. (C) Fifty-five million dollars shall be allocated to the costs of increased activities related to regulatory compliance, universal precautions and infection control related to AIDS, tuberculosis, and other infectious diseases, including the training of employees with regard to infection control, and for infectious and other waste disposal costs. A fixed amount per bed shall be allocated to the costs of each general hospital based on the total number of inpatient beds for which the general hospital is certified pursuant to the operating certificate issued for each general hospital in accordance with section twenty-eight hundred five of this article in effect on August twenty-fourth, nineteen hundred ninety-three. (D) Three million dollars shall be allocated as follows: (I) Two hundred fifty dollars per bed shall be allocated to the costs of each general hospital having two hundred or less certified acute care beds and classified as a rural hospital for purposes of determining payment for inpatient services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, in recognition of the unique costs incurred by thesefacilities in complying with state regulations, based on the total number of inpatient acute care beds for which such general hospital is certified pursuant to the operating certificate issued for such general hospital in accordance with section twenty-eight hundred five of this article in effect on August twenty-fourth, nineteen hundred ninety-three. (II) The remainder shall be allocated on a proportional basis to the costs of each general hospital classified as a rural hospital for purposes of determining payment for inpatient services provided to beneficiaries of title XVIII of the federal social security act (medicare) or under state regulations, in recognition of the unique costs incurred by these facilities to provide hospital services in remote or sparsely populated areas, according to the following methodology: (1) the net income, or the net loss expressed as a negative, as a proportion of the net patient revenue, of each such hospital, based on operating results for the nineteen hundred ninety and nineteen hundred ninety-one rate years, shall be computed and averaged, and expressed as a percentage; (2) each such resulting percentage average shall be multiplied by each such hospital's number of inpatient beds for which such hospital is certified pursuant to the operating certificate issued for such hospital in accordance with section two thousand eight hundred five of this article in effect on June thirtieth, nineteen hundred ninety, and such resulting products for all such hospitals shall be summed, and such sum shall be divided by the total of all such beds for all such hospitals, and the resulting quotient shall be the weighted average rural operating margin expressed as a percentage; and (3) one percentage point shall be subtracted from each such hospital's average net operating margin, and the resulting difference shall be divided by the weighted average rural operating margin; and (4) (a) if the quotient resulting from the computation in subitem three above is less than zero, then the absolute value of such quotient shall be multiplied by each such hospital's number of inpatient beds for which such hospital is certified pursuant to the operating certificate issued for such hospital in accordance with section two thousand eight hundred five of this chapter in effect on June thirtieth, nineteen hundred ninety, such product shall be multiplied by one hundred fifty dollars, and such resulting amount shall be such hospital's adjustment pursuant to this clause; (b) if the quotient resulting from the computation in subitem three above is zero or greater, such hospital's adjustment pursuant to this clause shall be zero; and (c) provided, however, that if the total of all such adjustments so computed exceeds the amount to be allocated in accordance with this item, each such hospital's adjustment shall be proportionately reduced. (E) Three million dollars shall be allocated to assist general hospitals involved in a merger, acquisition, or consolidation in meeting the costs associated with such merger, acquisition, or consolidation on or after January first, nineteen hundred ninety-four. The commissioner shall make rate adjustments for such allocations. (F) (I) One million five hundred thousand dollars shall be allocated for enhanced rates for general hospitals participating within a rural health network as defined in subdivision two of section twenty-nine hundred fifty-one of this chapter. Such rate enhancements shall be established only for inpatient services provided by such hospitals through the written rural health network agreement, where such services have been approved for enhanced rates by the commissioner.Notwithstanding any inconsistent provision of law, such enhanced rates shall be subject to the availability of federal financial participation pursuant to title XIX of the federal social security act in expenditures made for eligible patients, including pooling arrangements and volume adjustments, provided, however that such enhanced rates shall not affect the calculation for any other general hospital of the group price component calculated pursuant to subparagraph (i) of paragraph (a) of subdivision seven of this section. (II) One million five hundred thousand dollars shall be allocated for enhanced rates for general hospitals participating within a central services facility rural health network as defined in subdivision three of section twenty-nine hundred fifty-one of this chapter. Such rate enhancements shall be established only for inpatient services provided by such hospitals through the network operational plan, where such services have been approved for enhanced rates by the commissioner. Notwithstanding any inconsistent provision of law, such enhanced rates shall be subject to the availability of federal financial participation pursuant to title XIX of the federal social security act in expenditures made for eligible patients, including pooling arrangements and volume adjustments, provided, however that such enhanced rates shall not affect the calculation for any other general hospital of the group price component calculated pursuant to subparagraph (i) of paragraph (a) of subdivision seven of this section. (f) The commissioner and the state director of the budget shall consider providing a supplementary increase to general hospital reimbursable inpatient operating costs for purposes of computing rates of payment for annual rate periods beginning on or after January first, nineteen hundred eighty-nine in accordance with this section for reasonable and necessary supplementary cost increases in general hospital operating costs for such rate period or periods based on increased minimum standards and procedures relating to general hospital operating certificates adopted by the council and approved by the commissioner or state initiatives related to recruitment or maintenance of an appropriate level of personnel providing professional services to patients. Any such supplementary increase shall be allocated to costs of general hospitals in accordance with rules and regulations adopted by the council and approved by the commissioner. (g) Hospital discharges for purposes of computing case based payments per discharge pursuant to this section shall be based on the number of patient discharges during the rate period from January first, nineteen hundred eighty-seven through December thirty-first, nineteen hundred eighty-seven excluding discharges of beneficiaries of title XVIII of the federal social security act (medicare) and adjusted as provided in specific provisions of this section, or the number of such patient discharges during a recent twelve month period prior thereto established by regulation for which data are available subsequently reconciled by an adjustment to reflect nineteen hundred eighty-seven discharge data. * (h) Notwithstanding any inconsistent provision of this section, commencing April first, nineteen hundred ninety-five: (i) rates of payment for patients eligible for payments made by state governmental agencies shall be reduced by the commissioner to reflect an exclusion from reimbursable inpatient operating costs commencing April first, nineteen hundred ninety-five of the special additional inpatient operating costs determined and allocated among general hospitals in accordance with clause (C) of subparagraph (iii) and clause (C) of subparagraph (iv) of paragraph (e) of this subdivision and the factor of one quarter of one percent of general hospitals' reimbursable inpatient operating cost base allocated to costs of general hospitals fortechnology advances in accordance with subparagraph (i) of paragraph (e) of this subdivision; and (ii) general hospitals may not request and the commissioner shall not consider any pending or further appeals for an adjustment to rates of payment based on costs associated with technology advances and changes in medical practice and such adjustments to reimbursable inpatient operating costs pursuant to clause (C) of subparagraph (iv) of paragraph (e) of this subdivision. (iii) Notwithstanding the foregoing, or any other provision of this section, the commissioner may establish pass through payments, or other appropriate methodologies, for the period ending December thirty-first, two thousand three for innovative medical device advances for which the federal centers for medicare and medicaid services adopts new codes to the hospital inpatient prospective payment system prior to the federal food and drug administration's approval of such medical device. * NB Effective through March 31, 2011 (i) For the rate period July first, two thousand seven through March thirty-first, two thousand eight and for rates applicable to the state fiscal year commencing April first, two thousand eight, and each state fiscal year thereafter through March thirty-first, two thousand nine, and for the period April first, two thousand nine through November thirtieth, two thousand nine, provided, however, that for the period April first, two thousand nine through November thirtieth, two thousand nine the aggregate rate adjustments calculated pursuant to subparagraph (ii) of this paragraph shall not exceed four million dollars, and contingent upon the availability of federal financial participation: (i) The commissioner shall adjust inpatient medical assistance rates of payment calculated pursuant to this section for public hospitals other than non-state public hospitals located in a city with a population of more than one million persons, that meet the targeted medicaid discharge percentage in accordance with the methodology set forth in subparagraph (ii) of this paragraph. For purposes of this paragraph, "targeted medicaid discharge percentage" shall mean that at least seventeen and one-half percent of a public hospital's total discharges were patients eligible for payments under the medical assistance program pursuant to title eleven of article five of the social services law, including those enrolled in health maintenance organizations, and patients eligible for payments under the family health plus program pursuant to title eleven-D of article five of the social services law, based on data reported in such hospital's institutional cost report submitted for the two thousand four period and filed with the department by November first, two thousand six. Any hospital that meets the filing deadline shall have until June first, two thousand seven to submit revised and corrected data schedules in such institutional cost report which established eligibility for such adjusted rate. (ii) The aggregate amount of rate adjustments calculated pursuant to this paragraph shall not exceed six million dollars for each rate period. Such amount shall be allocated proportionally based on the relative numbers of medicaid discharges among those public hospitals eligible for rate adjustments in accordance with subparagraph (i) of this paragraph based on each such hospital's reported medical assistance data specified in subparagraph (i) of this paragraph. Such amounts shall be included as an add-on to medical assistance inpatient rates of payment, excluding exempt unit rates, and shall not be reconciled to reflect changes in medical assistance utilization between two thousand four and the current rate year.(j) For the rate period July first, two thousand seven through March thirty-first, two thousand eight and for rates applicable to the state fiscal year commencing April first, two thousand eight, and each state fiscal year thereafter through March thirty-first, two thousand nine and for the period April first, two thousand nine through November thirtieth, two thousand nine, provided, however, that for the period April first, two thousand nine through November thirtieth, two thousand nine the aggregate rate adjustments calculated pursuant to subparagraph (ii) of this paragraph shall not exceed twenty-eight million dollars, and contingent upon the availability of federal financial participation: (i) The commissioner shall adjust inpatient medical assistance rates of payment calculated pursuant to this section for voluntary hospitals other than voluntary hospitals located in a city with a population of more than one million persons that meet the targeted medicaid discharge percentage in accordance with the methodology set forth in subparagraph (ii) of this paragraph. For purposes of this paragraph, "targeted Medicaid discharge percentage" shall mean between seventeen and one-half percent and thirty-five percent of a voluntary hospital's total discharges were patients eligible for payments under the medical assistance program pursuant to title eleven of article five of the social services law, including those enrolled in health maintenance organizations, and patients eligible for payments under the family health plus program pursuant to title eleven-D of article five of the social services law, based on data reported in such hospital's institutional cost report submitted for the two thousand four period and filed with the department by November first, two thousand six. Any hospital that meets the filing deadline shall have until June first, two thousand seven to submit revised and corrected data schedules in such institutional cost report which established eligibility for such adjusted rate. (ii) The aggregate amount of rate adjustments calculated pursuant to this paragraph shall not exceed forty-two million dollars for each rate period. Such amount shall be allocated proportionally based on relative numbers of medicaid discharges among those voluntary hospitals eligible for rate adjustments in accordance with subparagraph (i) of this paragraph based on each such hospital's reported medical assistance data specified in subparagraph (i) of this paragraph. Such amounts shall be included as an add-on to medical assistance inpatient rates of payment, excluding exempt unit rates, and shall not be reconciled to reflect changes in medical assistance utilization between two thousand four and the rate year. (k) Subject to the availability of federal financial participation, the commissioner shall adjust inpatient rates of payment for non-public general hospitals located in a city with a population of more than one million persons for the following periods and in the following amounts in order to ensure meaningful access to the hospital's services and reasonable accommodation for all medicaid patients who require language assistance: (i) for the period July first, two thousand seven through December thirty-first, two thousand seven, thirty-eight million dollars shall be allocated proportionally to such hospitals based on fifty percent of each such hospital's reported general clinic medicaid visits and fifty percent on each such hospital's reported medicaid inpatient discharges, as reported in each hospital's two thousand four institutional cost report, as submitted to the department prior to November first, two thousand six, to the total of all such general clinic visits reported by all such hospitals.(ii) for the period April first, two thousand eight through March thirty-first, two thousand nine, and each state fiscal year thereafter through November thirtieth, two thousand nine, thirty-eight million dollars shall be allocated on an annualized basis for such purpose to such hospitals in accordance with the methodology set forth in subparagraph (i) of this paragraph, provided, however, that thirty percent of such funds shall be allocated proportionally, based on the number of foreign languages utilized by one or more percent of the residents in each hospital total service area population, provided, howeve
