The Empire Plan is a unique health insurance plan designed especially for public employees in New York State. Empire Plan benefits include inpatient and outpatient hospital coverage, medical/surgical coverage, Centers of Excellence for transplants, infertility and cancer, home care services, equipment and supplies, mental health and substance abuse coverage and prescription drug coverage.
GOVERNOR
DEPARTMENT OF CIVIL SERVICE
ALBANY, NEW YORK 12239
www.cs.ny.gov
COMMISSIONER
DANIEL E. WALL
EXECUTIVE
DEPUTY COMISSIONER
NY97-12
PE97-10
PA97-06
TO: Health Benefits Administrators
FROM: Employee Benefits Division
SUBJECT: NY Health Care Reform Act 1996 - Surcharge
DATE: May 14, 1997
Health Care Reform Act - Surcharge
The New York Health Care Reform Act (HC RA) of 1996 took effect on January 1, 1997. This legislation replaces the New York Prospective Hospital Reimbursement Methodology (NYPHRM). As of the effective date, hospital rates were deregulated. Several new surcharges and assessments are being used to cover the costs of bad debt and charity care, Graduate Medical Education and health care initiatives, which were previously funded under NYPHRM.
Empire Plan enrollees will be affected most directly by an 8.18% surcharge which is applied to inpatient and outpatient services provided by general hospitals, services rendered by diagnostic and treatment centers that provide comprehensive primary care services or ambulatory surgical services, and services of free standing clinical laboratories. The surcharge applies to services by these designated providers located in New York State. When laboratory samples are collected or drawn outside of New York State, related laboratory services are exempt from the surcharge.
Participating Provider Services
Under HCRA, the Empire Plan carriers are responsible for paying the 8.18% surcharge when an enrollee uses a participating provider for covered services. The enrollee is responsible only for the amount of the Plan copayment and should not pay the provider any portion of the surcharge.
Non-Participating Provider Services
When an enrollee uses a non-participating provider the enrollee is responsible for paying any applicable surcharge to the provider until the deductible is met. The surcharge amount is a claim expense under the Plan and is applied toward the deductible, out-of-pocket maximum, or non-network benefit maximums. When an enrollee uses a non-participating provider the enrollee is responsible for paying the surcharge on any expenses not reimbursed by the plan. This would include any coinsurance amount, amounts above reasonable and customary, and non-covered services. The enrollee pays any surcharge that is his/her responsibility directly to the provider.
Providers and insurance companies are responsible for forwarding surcharge amounts to the Department of Health.
Enrollees Covered By Medicare
For enrollees covered by Medicare, the surcharge applies only when Medicare benefits for a particular service are exhausted, or if the service is not covered by Medicare.
Interim Method of Handling the Surcharge on Amounts Applied to the Deductible
Until MetraHealth is able to make the necessary changes in its claim payment system, the Plan will be paying the surcharge on covered expenses which are applied to the deductible. MetraHealth expects that its system will be updated by August; at that time enrollees will become responsible for paying the surcharge on amounts applied to the deductibles and MetraHealth will begin treating those surcharge payments as claim expenses.
Additional Information
Information on the HCRA and the related surcharge will be provided in a future issue of the Empire Plan Report which will be mailed directly to enrollees.
Who To Call
Enrollees and providers who have questions about their surcharge liability for Empire Plan expenses covered by MetraHealth, may call MetraHealth at 1-800-942-4640. For information about surcharges on Blue Cross covered expenses, call Blue Cross at 1-800-342-9815.
Questions and Answers:
Q. Will Empire Plan enrollees be responsible for paying any portion of the surcharge on Blue Cross covered expenses?
A. No. Since an enrollee's only out-of-pocket expense for Blue Cross covered services is the copayment for outpatient services, the enrollee pays only the amount of the copayment The Plan is responsible for paying the entire surcharge.
Q. When Empire Plan enrollees use a Participating Provider for covered services does the enrollee have to pay any portion of the surcharge?
A. No. The enrollee should pay no more than the amount of the copay. The Plan is responsible for paying the entire surcharge.
Q. How does an Empire Plan enrollee know what portion of any applicable surcharge (s)he should be paying?
A. When an enrollee receives covered services from a participating provider or receives services which are covered by Blue Cross, the enrollee is not responsible for paying any portion of the surcharge.
When an enrollee uses a non-participating provider, the enrollee will not know what portion of any applicable surcharge (s)he is responsible for until MetraHealth has processed the claim. Therefore, the enrollee should ask the provider to defer collection of any surcharge until after an EOB is received from MetraHealth. Then the enrollee should give the provider a copy of the EOB so that the provider can determine the amount of any surcharge that the provider should collect from the enrollee. A provider may require payment of all charges, including applicable surcharge amounts, at the time services are rendered. In that case, if the enrollee's EOB indicates that the Plan has paid all or part of applicable surcharge amounts, the enrollee should provide a copy of the EOB to the provider in order to obtain a refund of the amount of surcharge paid by the Plan.
Q. Are HMOs subject to the surcharge?
A. Yes. However, the surcharge does not change the amount of any copayment an HMO enrollee is required to pay.