Bureau of Public Hospital Reimbursement & Health Care Revenue

Implemented as part of the FY 2021 Enacted Budget, this Bureau is responsible for the calculation, development, packaging, and implementation of supplemental reimbursements to hospitals. These distributions are utilized both in Medicaid fee-for-service (FFS) and managed care.

The Health Care Reform Act (HCRA) was established in law effective January 1, 1997. Under HCRA, most non-Medicare payors are required to make surcharge payments for subsidization of indigent care and health care initiatives. In addition, certain payors are required to contribute to a Professional Education Pool, largely to fund graduate medical education expenses. Collectively, these funds are known as the New York State Public Goods Pool.

The surcharges apply to affected payments for patient services rendered on or after January 1, 1997, by NYS licensed general hospitals, comprehensive primary care clinics, ambulatory surgery centers, and freestanding clinical laboratories. Subsequent legislation eliminated the surcharge on all services provided by freestanding clinical laboratories and referred laboratory services provided by hospitals and/or comprehensive clinics on or after October 1, 2000.

For an affected third-party payor that elects to pay the surcharges directly to NYS, the standard surcharge rates on paid non-Medicaid and Medicaid claims varies over certain periods.

Covered lives assessments (CLA) are based on the HCRA region in which the member resides and the member's enrollment status (family or individual). Surcharges and covered lives remittances are required monthly, accompanied by the Certification Form, Report of Patient Services Payments and Surcharge Obligations, and Report of Covered Lives Assessments (Payor Reports).

The HCRA Statute also provides that an allocation of pooled funds be used to audit affected payor and provider compliance with the surcharge and assessment requirements set forth in sections 2807-c, 2807-j, 2807-s, and 2807-t of the NYS Public Health Law (PHL).

In accordance with the provisions of Article 28 of the PHL, the Office of Pool Administration oversees the Public Goods Pool established under HCRA, the Health Facility Cash Receipts Assessment Program (HFCAP) established pursuant to Section 2807-d of the PHL, and the Bad Debt and Charity Care Independent Accountant's Report on Applying Agreed-Upon Procedures pursuant to Section 2807-k of the PHL.

Additional information on HCRA can be found through the following links:

The HFCAP requires NYS designated providers to pay an assessment on cash operating receipts on a monthly basis pursuant to Chapter 1 of the Laws of 2002 as amended by various subsequent period Chapter Laws. The assessment includes:

  • Article 28 Residential Health Care Facilities;
  • Article 28 General Hospitals;
  • Article 36 Long Term Home Health Care Programs;
  • Article 36 Certified Home Health Agencies; and
  • Personal Care Providers that possess a Title XIX (i.e., Medicaid) contract with a Local Social Services District for the delivery of personal care services pursuant to Section 367-i of the Social Services Law.

Additional information on HFCAP can be found through the following links:

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Waiver of Broad-Based Authority

Federal Medicaid statute and regulations afford states flexibility to tailor health care-related taxes within certain parameters to meet their provider community needs and align with broader state tax policies and priorities for their Medicaid programs. The Centers of Medicare and Medicaid Services (CMS) is authorized to waive the requirements that health care-related taxes be broad-based and/or uniform when applicable conditions are met.

The Enacted State Fiscal Year (SFY) 2025 Budget authorized the Department of Health to submit a waiver of the broad-based and uniformity provisions of Section 1903(w)(3)(B) and (C) of the Social Security Act to CMS that imposes a provider tax on Managed Care Organizations (MCOs). The Office of Health Insurance Programs (OHIP) received approval from CMS for its MCO provider tax and waiver of the broad-based and uniformity requirements, effective January 1, 2025.

OHIP will provide additional guidance to MCOs regarding the implementation of the tax, which will not apply to the Programs of All-Inclusive Care for the Elderly (PACE), Medicare, Self-insured, and Federal Employees Health Benefits lines of business.

Additional Resources

New York MCO Tax Waiver Approval and Companion Letter (PDF)
Social Security Act 1903
CMCS Informational Bulletin- Health Care-Related Taxes and Hold Harmless Arrangements Involving the Redistribution of Medicaid Payments (PDF)