(a) Effective for periods on and after January 1, 2013, payments pursuant to subdivision 5-d of section 2807-k of the Public Health Law shall be made in accordance with the provisions of this section.

1. (1) Funds reserved in the Financial Assistance Compliance Pool (FACP) pursuant to section 2807-k(5-d)(b)(iv) of the Public Health Law for the calendar years 2014 through 2022 shall be distributed to hospitals which demonstrate substantial compliance, as determined by the commissioner, with the provisions of section 2807-k(9-a) of the Public Health Law (the financial assistance law or FAL).
2. (2) Hospitals which are determined to be in substantial FAL compliance by the end of each calendar year shall receive the following year’s FACP funds as soon as practical in such year, in accordance with subdivision (b) of this section.

(b) For the purposes of distributions in accordance with this section, each hospital’s relative uncompensated care need amount shall be determined in accordance with the following:

1. (1) All uninsured inpatient units of service as reported in exhibit 32 of the institutional cost report from the cost reporting year two years prior to the distribution year, but excluding hospital-based residential health care facility (“RHCF”) and hospice units of service, shall be multiplied by the average applicable Medicaid inpatient rate in effect for January 1st of the distribution year.
2. (2) All uninsured outpatient units of service as reported in exhibit 33 of the institutional cost report from the cost reporting year two years prior to the distribution year, but excluding referred ambulatory and home health services, shall be multiplied by the average applicable Medicaid outpatient rate in effect for January 1st of the distribution year.
3. (3) The inpatient amounts determined pursuant to paragraph (1) of this subdivision for each hospital shall be summed and adjusted by a statewide inpatient cost adjustment factor equivalent to the aggregate sum of the inpatient uninsured units multiplied by the step-down cost per unit for each applicable inpatient service, excluding hospital-based RHCF and hospice services, for all hospitals statewide, divided by the aggregate sum of the amounts determined pursuant to paragraph (1) of this subdivision for all hospitals statewide.
4. (4) The outpatient amounts determined pursuant to paragraph (2) of this subdivision for each hospital shall be summed and adjusted by a statewide outpatient cost adjustment factor equivalent to the aggregate sum of the outpatient uninsured units multiplied by the step-down cost per unit for each applicable outpatient service, excluding referred ambulatory and home health services, for all hospitals statewide, divided by the aggregate sum of the amounts determined pursuant to paragraph (2) of this subdivision for all hospitals statewide.
5. (5) The adjusted inpatient and outpatient amounts determined pursuant to paragraphs (1) through (4) of this subdivision for each hospital shall be summed and reduced by the sum of all of the cash payments collected from such uninsured patients as reported in the institutional cost report from the cost reporting year two years prior to the distribution year to determine each hospital’s net adjusted uncompensated care need.

6. (6) The uncompensated care nominal need for each hospital shall be calculated as the net adjusted uncompensated care need multiplied by the sum of: The Medicaid inpatient utilization rate shall be calculated based on discharge data reported in exhibit 32 of the institutional cost report from the cost reporting year two years prior to the distribution year and shall include fee-for-service and managed care discharges for acute and exempt services.

   1. (i) 0.40; and
   2. (ii) the Medicaid inpatient utilization rate multiplied by 0.60.

(c) For the 2013 calendar year, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than two and a half percent less than the average distributions such hospitals received pursuant to section 2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.
2. (2) $994,900,000 shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than two and a half percent less than the average distributions such hospitals received pursuant to sections 2807-k and 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to section 2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to section 2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.
3. (3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(d) For the 2014 calendar year, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than five percent less than the average distributions such hospitals received pursuant to section 2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.
2. (2) $994,900,000 shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than five percent less than the average distributions such hospitals received pursuant to section 2807-k and 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to section 2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to section 2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.
3. (3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(e) For the 2015 calendar year, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than seven and a half percent less than the average distributions such hospitals received pursuant to section 2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.
2. (2) $994,900,000 shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than seven and a half percent less than the average distributions such hospitals received pursuant to sections 2807-k and 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to section 2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to section 2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.
3. (3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(f) For the 2016 calendar year, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (DSH) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 10 percent less than the average distributions such hospitals received pursuant to section 2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.
2. (2) $994,900,000 shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 10 percent less than the average distributions such hospitals received pursuant to section 2807-k and section 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to section 2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to section 2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.
3. (3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(g) For the 2017 calendar year, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (DSH) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 12½ percent less than the average distributions such hospitals received pursuant to section 2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.
2. (2) $994,900,000 shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 12½ percent less than the average distributions such hospitals received pursuant to section 2807-k and section 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to section 2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to section 2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.
3. (3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(h) For the 2018 calendar year, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (DSH) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 15 percent less than the average distributions such hospitals received pursuant to section 2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.
2. (2) $994,900,000 shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 15 percent less than the average distributions such hospitals received pursuant to section 2807-k and section 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to section 2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to section 2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.
3. (3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(i) For the 2019 calendar year, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (DSH) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 17½ percent less than the average distributions such hospitals received pursuant to section 2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.
2. (2) $994,900,000 shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than 17½ percent less than the average distributions such hospitals received pursuant to section 2807-k and § 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to section 2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to section 2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.
3. (3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be sufficient, as determined by the commissioner, to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(j) For the 2020 through 2022 calendar years, payments shall be made as follows:

1. (1) $139,400,000 shall be distributed as Medicaid disproportionate share hospital (DSH) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals.
2. (2) The $969,900,000 shall be shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, excluding any reductions made pursuant to section 2807-k(17) of the Public Health Law.

3. (3) Payments made pursuant to paragraph (2) of this subdivision shall be further adjusted such that such payments made to hospitals shall be subject to an aggregate reduction of $150,000,000, provided that eligible general hospitals, other than major public general hospitals, that qualify as enhanced safety net hospitals under section 2807-c(34) of the Public Health Law for state fiscal year 2019-2020 shall not be subject to such reduction. The methodology to allocate the reduction shall take into account the payor mix of each voluntary hospital, including the percentage of inpatient days paid by Medicaid. Such methodology will calculate the total public payor mix of each facility and calculate an average public payor mix. For the purposes of this subparagraph, public payor mix means the percentage of total reported Medicaid and Medicare inpatient days, as reported in Exhibit 32 of the Institutional Cost Report (ICR) for the reporting period two years prior to the distribution year, where Medicaid and Medicare were the primary payors, out of total reported inpatient days which includes all inpatient services but excludes alternate level of care days.

   Hospitals exceeding the calculated average of public payor mix will be exempt from reductions pursuant to this subparagraph. Hospitals that fall below the calculated average of public payor mix will be subject to a proportionate reduction pursuant to this subparagraph.

4. (4) Payments made pursuant to paragraph (2) shall be further adjusted such that $64,600,000 shall be distributed to eligible general hospitals, other than major public general hospitals, that qualify as Enhanced Safety Net Hospitals under section 2807-c(34) of the Public Health Law as of April 1, 2020, and that experience a reduction in indigent care pool payments pursuant to this subdivision when compared to their 2019 ICP payments. Such additional payments shall be calculated to equal the proportional reduction experienced by the facility out of the total decrease experienced by all qualifying Enhanced Safety Net Hospitals multiplied by the $64,600,000.