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Vorys Health Care Advisors

New York State’s Budget Relies on Federal Medicaid Money –Expecting an Answer from CMS Soon

Posted in Affordable Care Act, Health Care, Health Care Reform, Medicaid

In 2012, New York Governor Andrew Cuomo submitted to the federal Centers for Medicare & Medicaid Services (CMS) an amendment to New York’s existing Partnership Plan 1115 waiver that sought to “redesign” the state’s Medicaid program.  The amendment proposed to reinvest $10 billion of the $17 billion in savings the state anticipated it would achieve by implementing Medicaid Redesign Team (MRT) recommendations.  CMS has been carefully reviewing the waiver amendment in combination with several other pieces of New York’s Medicaid program that are also before CMS for consideration.

Earlier this week, Governor Cuomo released the New York State budget, which calls for the state to, among other things, spend $1.2 billion to restructure hospitals, long-term care, and other health care services, and to invest an additional $75 million in health information technology.  These projects would be financed, in part, by the $10 billion wrapped up in the waiver amendment.  In his budget presentation, the Governor called on CMS to approve the waiver amendment in order to free up this funding that, along with a 2% cap on state spending growth, will help balance the budget.

Some of the health care related provisions in the budget include the following:

  • Continues the downsizing of institutional programs for individuals with intellectual and developmental disabilities (IDD) by 300 individuals.
  • Encourages more integrated employment opportunities to reduce costs through reforming day service programs for individuals with IDD by transitioning them from full day-day service to Pathways to Employment opportunities.
  • Supports the integration of physical health and behavioral health services within a managed care environment through Behavioral Health Organizations and Health and Recovery Plans.
  • Makes additional funding available for affordable housing.
  • Facilitates the transition of foster care children into managed care.
  • Provides $54.3 million in 2014-15, growing to $148.3 million in state funding between the Department of Health and Department of Financial Service budgets, to sustain the continued operations of the New York Health Benefit Exchange, which will end January 1, 2015.
  • Requires counties to make good faith efforts to link uninsured women with health insurance coverage for prenatal care reimbursement through the General Public Health Works Program.

The Governor’s budget relies on funding still not approved by the federal government in addition to the modest increase in state spending. The health care initiatives are ambitious.  Yesterday’s Democrat and Chronicle from Rochester NY reports a conversation that Senator Schumer had with Secretary Sebelius on the floor of the House of Representatives following the President’s State of the Union Address, in which the Secretary indicated that a decision about the waiver, and the associated $10 billion dollars in funding,  would be made within 30 days. This budget will be one to watch.