§ 2807. Hospital reimbursement provisions; generally. 1. Valid\noperating certificate requirement. No government agency and no\ncorporation organized and operating in accordance with article\nforty-three of the insurance law and no health maintenance organization\norganized and operating in accordance with article forty-four of this\nchapter, shall purchase, pay for or make reimbursement or grants-in-aid\nfor any hospital or health-related service, unless, at the time the\nservice was provided, the hospital possessed a valid operating\ncertificate authorizing such service. No government agency shall\npurchase, pay for or make reimbursement or grants-in-aid for any\nhospital or health-related service that has been determined by the\ncommissioner of health to be unauthorized for payment under the medical\nassistance program pursuant to section twenty-eight hundred three of\nthis article.\n 2. (a) Rate approvals. Payments for hospital service and\nhealth-related service made by government agencies or for services\nprovided prior to January first, nineteen hundred ninety-seven by\norganizations operating in accordance with the provisions of article\nforty-four of this chapter shall be at rates approved by the state\ndirector of the budget in the case of government agencies and approved\nby the commissioner in the case of plans, organized and operating under\nthe provisions of article forty-four of this chapter, under which such\npayments are made by agencies other than government agencies or\ncorporations organized and operating in accordance with article\nforty-three of the insurance law. Payments for hospital service and\nhealth-related service by corporations organized and operating in\naccordance with article forty-three of the insurance law for services\nprovided prior to January first, nineteen hundred ninety-seven shall be\nat rates approved by the commissioner of health.\n (a-1) Notwithstanding any inconsistent provision of law, rates of\npayment by governmental agencies for the operating cost component of\ngeneral hospital out-patient and emergency services, and for the\noperating cost component of treatment or diagnostic center services\nshall not require a certification by the commissioner that they are\nreasonably related to the costs of efficient production of such services\nnor that they are reasonable and adequate to meet the costs which must\nbe incurred by efficiently and economically operated facilities.\n (b) During the period October first, nineteen hundred ninety-four\nthrough September thirtieth, nineteen hundred ninety-five and for each\ntwelve month rate period commencing on October first thereafter, rates\nof payment by governmental agencies for the operating cost component of\ntreatment or diagnostic center services shall be based on operating\ncosts in the base year cost report adjusted by a trend factor determined\nin accordance with rules and regulations promulgated pursuant to\nparagraph (b) of subdivision two of section twenty-eight hundred three\nof this article; provided, however, that prior to such adjustment,\nallowable operating costs shall be established by the commissioner after\ntaking into account the cost of services provided in facilities offering\nsimilar services and regional economic factors, plus the addition of the\ncapital cost per visit. The capital cost per visit shall be based on the\nbase year cost report except that the capital cost per visit may be\nadjusted for major outpatient capital expenditures, incurred subsequent\nto the reporting year, when such expenditures have received the\nrequisite approvals and the facility has provided the commissioner with\na certified statement of expenditures. The base year for the rate period\ncommencing on October first, nineteen hundred ninety-four shall be\nnineteen hundred ninety-two and shall be advanced one year thereafter\nfor each subsequent rate period.\n (c) Notwithstanding any other provision of law to the contrary, for a\ndia
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