Health Care Reform Act of 2000 (HCRA 2000)
Summary
HCRA 2000 continues the negotiated rate-setting system which began January 1, 1997. The
new expiration date for HCRA is June 30, 2003. Most of the surcharges continue including the
8.18% surcharge and the covered lives assessment. Notable changes include elimination of the
8.18% surcharge on freestanding and hospital outpatient laboratories and a $60 million
reduction in covered lives assessment when fully phased-in.
There are also two new funding sources: a significant portion of the state's tobacco settlement
and a $.55 increase in the tax on cigarettes.
Key Details
1.) Effective January 1, 2000 - June 30, 2003.
2.) Bad Debt / Charity Care
- Funded at $765 million per year by continuing the 8.18% surcharge on hospital bills and
supplementing with tobacco money.
- Eliminates 8.18% surcharge on labs effective 10/1/2000.
- Enhanced accountability for BD/CC funds - hospitals must submit a report specifying the
costs incurred by the hospital and the uncollected amounts from providing services to the
uninsured. The report must include costs incurred by the hospital for the amount of uncollected
deductibles / coinsurance for patients with insurance. An independent certified public
accountant must certify that the reports are accurate.
3.) Covered Lives Assessment
- Continues the covered lives assessment to pay for graduate medical education with the
following reductions:
- No reduction Year 2000
- $20 million decrease in 2001
- $40 million decrease in 2002
- $30 million decrease in 2003 (represents first six months of year)
4.) Family Health Plus
- Extends Medicaid coverage for families with children with gross incomes below 120% of the
federal poverty level in 2000, below 133% of the federal poverty level in 2001 and below 150%
of the federal poverty level in 2002 (will require federal waivers).
- Extends Medicaid coverage for individuals with gross incomes below the federal poverty
level.
- Continues Child Health Plus.
5.) Healthy New York Group (small business subsidy program)
6.) Workforce retraining
- Continues funding for workforce retraining at $30 million in 2000, $40 million in 2002, and
$50 million in 2002.
7.) Quality Task Force
-
The Task Force on Quality Improvement and Information Systems was allowed to expire as
was the quality grant program created as part of HCRA.
Appendix A
Healthy
New York Group
(small
business subsidy program)
HCRA 2000 creates a new standardized health insurance subsidy program for small businesses.
1.) Eligibility
- an employer with fifty or fewer employees;
- has not provided health insurance in the past 12 months;
- at least 30% of the workers make less than $30,000.
2.) Benefits
- inpatient hospital services consisting of daily room and board, general nursing care, special
diets and miscellaneous hospital services and supplies;
- outpatient hospital services consisting of diagnostic and treatment services;
- physician services consisting of diagnostic and treatment services, consultant and referral
services, surgical services (including breast reconstruction surgery after a mastectomy),
anesthesia services, second surgical opinion, and a second opinion for cancer treatment;
- outpatient surgical facility charges related to a covered surgical procedure;
- preadmission testing;
- maternity care;
- adult preventive health services consisting of mammography screening; cervical cytology
screening; periodic physical examinations no more than once every three years; and adult
immunizations;
- equipment, supplies and self-management education for the treatment of diabetes;
- diagnostic x-ray and laboratory services;
- emergency services;
- therapeutic services consisting of radiologic services, chemotherapy and
hemodialysis;
- blood and blood products furnished in connection with surgery or inpatient hospital services;
and
- prescription drugs obtained at a participating pharmacy.
3.) Where is the insurance obtained?
- All HMO's will be mandated to offer this new standardized plan to small business.
4.) Special features
- The benefits will be subject to deductibles and co-pays:
- $500 inpatient hospital
- lesser of 20% or $200 for surgical service
- $75 outpatient surgery
- $50 emergency rooms
- Prescription drugs:
- $10 co-pay for generic
- $20 co-pay for brand name
- $3000 maximum per individual in a calendar year
- Stop-loss coverage:
- the HMO will be responsible for claims under $30,000 and over $100,000. The
state would pay claims between $30,000 and $100,000 from money from the
tobacco settlement and cigarette tax hike.
5.) Employer contribution
- The small business must cover at least 50% of the premium for individuals making less than
$30,000.
6.) A report shall be submitted to the legislature by 01-01-2002 including an examination of
employer participation, an income profile of covered employees and qualifying individuals,
claims experience, and the impact of the program on the uninsured population.
Appendix B
The Numbers
(small business subsidy program)
| REVENUES |
2000 |
2001 |
2002 |
2003
(6 mo. of year) |
| 55 cent
cigarette tax |
394 |
445 |
428 |
207 |
| Tobacco settlement |
276 |
305 |
383 |
360 |
| 8.18% surcharge |
738 |
738 |
738 |
383 |
| Covered lives assessment |
544 |
524 |
504 |
292 |
<
| 8.8% freestanding labs (effective 10-01-2000) |
(9) |
<
(35) |
(35) |
(18) |
| 8.18%
on hospital labs (effective 10-01-2000) |
(5) |
(19) |
(19) |
(10) |
|
Spending
|
2000 |
2001 |
2002 |
2003 |
| Bad
Debt/Charity Care 8.18% surcharge, 1.0% surcharge on hospitals revenue and some
tobacco money |
765 |
765 |
765 |
383 |
|
Graduate Medical Education |
494 |
494 |
494 |
247 |
|
Child Health Plus |
207 |
235 |
324 |
174 |
|
Family Health Plus |
|
* Adults with kids |
7 |
27 |
57 |
43 |
|
* Adults without kids |
0 |
33 |
66 |
44 |
| Small business subsidy |
0 |
<
34 |
77 |
52 |
| Individual subsidy |
0 |
6 |
29 |
21 |
|
Spending |
2000
|
2001 |
2002 |
2003 |
| Continuation
of old HCRA plans (grandfather people already in |
|
* NYSHIP (small
business) |
6 |
5 |
4 |
1 |
|
* Individual plan |
6 |
5 |
4 |
1 |
| Subsidies for direct pay subscribers |
35 |
36 |
39 |
20 |
| Workforce retraining |
30 |
40 |
50 |
30 |
| BD/CC Compliance Audits |
6 |
6 |
6 |
3 |
| Transfer to general fund |
82 |
82 |
82 |
41 |
Please note that this chart does not include all spending programs. Numerous
other general fund programs have been transferred to HCRA money, including
mental health, elderly pharmaceutical drugs, poison control, etc.
