Hospital Surcharge Billing: Understanding Insurance Coverage For New Yorkers

The New York State surcharge is a tax on hospital services received, as outlined in the New York Health Care Reform Act (HCRA). The surcharge is required to be collected by hospitals and paid to the New York State Department of Health. The amount of the surcharge depends on how the taxes are paid and where the services are provided. The surcharge is typically covered by insurance companies, however, in some cases, individuals may be responsible for paying the surcharge themselves.

What is the NYS surcharge?

The NYS surcharge is a tax on hospital services received. Under the New York Health Care Reform Act (HCRA), hospitals are required to collect the surcharge and pay it to the New York State Department of Health. The surcharge was introduced in 1996 to fund a set of public healthcare programs. It was designed to help reimburse hospitals for losses incurred by bad debt and charity care. The surcharge applies to members of a self-insured or fully insured health plan.

The initial rate of the NYS surcharge was 8.18% in 1997 and yielded $517 million. The current rate is 9.63%, and yielded $3.6 billion in 2019. The NYS surcharge is one of several taxes imposed by the state of New York on employers and individuals who buy private health insurance coverage. These taxes are paid by consumers and included in their premiums.

The NYS surcharge is not to be confused with other surcharges, such as the Covered Lives Assessment (CLA), which is an annual flat surcharge on all privately insured people in the state. The CLA is included in the individual and family premium and varies by the insured's residence.

Who is responsible for paying the NYS surcharge?

The NYS surcharge is a tax on hospital services received by patients. It is required by the New York State Health Care Reform Act (HCRA) and must be paid to the New York State Department of Health.

The surcharge is typically covered by insurance companies, but this varies by insurance carrier. If your insurance carrier does not pay this tax, you are responsible for paying it.

The surcharge is calculated as a percentage of the total hospital bill. The percentage varies depending on how the taxes are paid and where the services are provided. For example, if the tax is paid directly to the New York Department of Health, the surcharge is 8.18%. If it is paid when the services are rendered, the surcharge is 32.18%.

If you are a self-pay patient, you are responsible for paying the surcharge directly to the hospital when billed.

How is the NYS surcharge calculated?

The NYS surcharge is calculated based on a few factors, including the type of insurance plan, the amount of the hospital bill, and the surcharge percentage rate. Here is a step-by-step guide on how the NYS surcharge is calculated:

• Determine the regular hospital bill amount, excluding any surcharges or additional fees. For example, let's assume a regular hospital bill of $1,500.
• Identify the applicable surcharge percentage rate. In the provided example, the surcharge percentage is 9.63%.
• Calculate the hospital bill with the applicable surcharge by multiplying the regular hospital bill by (1 + surcharge percentage). In this case, the calculation would be $1,500 x 1.0963, which equals $1,644.45.
• To find the amount payable to the service provider, divide the hospital bill with the surcharge by the surcharge percentage. For example, $1,644.45 ÷ 1.0963 = $1,500.
• Finally, calculate the surcharge amount due by subtracting the regular hospital bill from the hospital bill with the surcharge. In this case, the surcharge amount would be $1,644.45 - $1,500 = $144.45.

It's important to note that the surcharge percentage rate can vary, and different scenarios may apply depending on factors such as insurance coverage, co-payments, deductibles, and co-insurance arrangements. Additionally, the calculations may need to be adjusted based on specific guidelines and regulations related to the Health Care Reform Act (HCRA) and the Public Goods Pool (PGP).

What is the difference between the NYS surcharge and the NYS penalty?

I was unable to find information explicitly differentiating between the NYS surcharge and the NYS penalty. However, I found information on surcharges and penalties in New York State that you may find useful.

Surcharges

In New York State, a surcharge is added to the charge for transportation that both begins and ends in New York State and begins in, ends in, or passes through Manhattan, south of and excluding 96th Street (known as the congestion zone). This surcharge applies to transportation in for-hire vehicles that carry people, including rideshare vehicles and pool vehicles. The surcharge amount depends on the type of vehicle used, ranging from $0.75 for each pool trip to $2.75 for each for-hire transportation trip in a vehicle that is not a medallion taxicab or a pool vehicle.

Penalties

New York State also imposes penalties in certain situations, such as for failing to pay the congestion surcharge or for violating credit card surcharge disclosure requirements. For example, if a business fails to clearly post the price of a credit card surcharge, they may be subject to a civil penalty of up to $500 for each violation. Additionally, individuals convicted of criminal offenses in New York are assessed mandatory surcharges and fees, which, if not paid, can result in penalties such as a bench warrant, imprisonment, or a civil judgment.

How does the NYS surcharge affect out-of-state insurance?

The New York Health Care Reform Act (HCRA) of 1996 imposes a surcharge on all out-of-state insurance plans, including insured and self-insured plans, for healthcare services provided to plan participants within New York State. This means that if an individual with out-of-state insurance receives medical treatment in New York, their insurance provider will be subject to the surcharge. The surcharge is used to fund a pool for uncompensated and indigent healthcare costs and to provide grants to teaching hospitals to offset graduate medical education (GME) expenses.

The surcharge rate varies depending on how the taxes are paid and where the services are provided. The patient services tax is imposed on payments for inpatient and outpatient hospital services, diagnostic centres, treatment centres, and certain laboratories. The GME tax is imposed on inpatient hospital services and varies by region. If the taxes are paid directly to the New York Department of Health (NYDH), the rate is lower than if they are paid when services are rendered.

It is important to note that the surcharge is separate from any copays, deductibles, or other charges that an individual may be responsible for under their insurance plan. Additionally, the insurance provider may pass on the cost of the surcharge to the individual, resulting in higher out-of-pocket expenses.

The HCRA surcharge does not apply to all healthcare services received in New York. For example, it does not apply to services provided by independent practice associations (IPAs) or to certain laboratory services. Additionally, there are specific exemptions for certain types of insurance plans, such as accident-only policies and student health insurance plans.

Overall, the NYS surcharge affects out-of-state insurance by increasing the cost of healthcare services provided in New York State and potentially resulting in higher out-of-pocket expenses for individuals with out-of-state insurance.

Frequently asked questions