Medicaid Faces More Reform To Cut $1B-Per-Week Tab
By Cara Matthews Gannett News Service February 10, 2012
Medicaid costs a whopping a $54 billion a year in New York — more than $1 billion a week to provide health-care insurance to the poor and disabled.
But as New York nears the end of its first year under a revamped Medicaid program, it has so far kept its contribution to health-care services for the poor and disabled under its self-imposed cap, state health officials said Wednesday.
“The good news is that through the end of December, we’re $95 million under the spending cap, but every month things change and we remain very vigilant in watching how spending changes from month to month, to make sure we’re living within that cap,” Jason Helgerson, the state’s Medicaid director, said after testifying at a budget hearing on health and Medicaid.
At 36 percent of the state budget, the most of any program, Medicaid remains a challenge for Gov. Andrew Cuomo’s administration to control. The program grew 2.1 percent between April and December of 2011, adding 104,000 enrollees for a total of 4.99 million — the most in state history.
Cuomo’s 2012-13 budget plan proposes a 4 percent hike for Medicaid, as was agreed to last year. The state Health Department cap would increase to $15.9 billion for its share of Medicaid, and Medicaid spending for other state agencies would grow from $5.8 billion to $5.9 billion.
The program costs are split between the state, federal and local governments. The federal government pays about 50 percent; the local governments pay about 15 percent and the state pays the rest.
Hospitals have reduced admissions rates and helped keep people in primary care when appropriate, Dr. Nirav Shah, state health commissioner, said after the hearing. The changes have “bent the cost curve” and produced new, high-quality care for patients, he said.
“Everyone’s seen the pressure,” he said. “The reality is that they’ve managed it. They’ve met the challenge even though we had a real growth in the Medicaid program.”
Cuomo is proposing help to local governments who say their budgets are being crippled by Medicaid costs. In Chemung County, 78 percent of the money raised through property taxes go to fund Medicaid. In Rockland County, the Medicaid tab is more expensive than all the property taxes the county brings in each year.
Cuomo is recommending a phased-in state takeover of local governments’ Medicaid administration expenses. In the 2012-13 fiscal year, which starts April 1, the state would cap local spending on administration at 2011 calendar-year levels. The initiative would be implemented over the next five or six years, Helgerson said.
The governor also wants the state to assume the cost of the growth in Medicaid over a three-year period. Currently, the counties’ share of Medicaid is capped at 3 percent growth each year.
Beginning Jan. 1, 2013, the state would cover 1 percent of growth, followed by 2 percent in 2014 and all 3 percent of it in 2015. In fiscal year 2015-16, the proposal would save local governments $370 million, according to the Citizens Budget Commission.
The proposed budget would add 120 full-time employees to do this, and over time, the state would employ 1,200 people for this purpose, Helgerson said.
In a report this week on the 2012-13 budget proposal, state Comptroller Thomas DiNapoli said there is a risk of not being able to continue to find such savings in Medicaid and remain in compliance with current federal rules.
“Furthermore, details are also lacking about how Medicaid spending growth would be limited to approximately 4 percent annually, especially after commissioner authorization to implement unilateral cost saving actions expires,” the report said.
The commissioner’s authority to find savings independently would end after the 2012-13 fiscal year.
Elizabeth Lynam, deputy research director of the Citizens Budget Commission said the global cap has been managed effectively this year. “There isn’t a cause for concern right now that they’re going to go over,” she said.
Capping county costs would put more of a financial burden on the state, which would provide more incentive for cost-containment going forward, she said.
She said DiNapoli’s comments focus on the transparency of what’s happening under the cap and how providers have been able to make adjustments.
“I think we do need to know at the end of the day what happens in the provider community and how it was done, how it affected individual consumers,” Lynam said.
Not everyone is happy with the Medicaid changes.
“The aftermath of the MRT (Medicaid Redesign Team) proposals affecting home care has been rather chaotic and has invited a lot of destabilization for the home care sector,” Joanne Cunningham, president of the Home Care Association of New York State, told lawmakers Wednesday.
Home-care providers are having a tough time transitioning patients into mandatory managed care, as opposed to traditional fee for service insurance model.
Cunningham said the home-care sector needs “legislative safeguards” to make sure the transition “can preserve patient access, can protect the rights of patients and consumers, and also offer community-based providers — that have been in your communities a long, long time — some predictability, a pathway, and some stability.”
The 2011-12 state budget incorporated 78 recommendations of the Medicaid Redesign Team, which was set up by Cuomo. The governor’s proposed budget this year includes 25 recommendations from phase two of the team’s work.
In order to fully implement all of the recommendations, the state likely will pursue a waiver from the federal government, Helgerson said. That would give the state more flexibility in administering the program, he said. The Medicaid Redesign Team’s phase one initiatives will save the federal government $18.3 billion over five years, which puts New York in a position to ask for a portion of that money to reinvested here, Helgerson said. The amount of the request has not been determined, but the Health Department wants to move forward with the waiver request this calendar year, he said.”We think there’s a case to be made to be able to reinvest some of that savings back into the health-care delivery system, back into the program here in New York and that as a result of that, we can achieve even greater savings and greater improvements in quality in the long run,” he said.The New York Association of Psychiatric Rehabilitation Services backs the administration’s reshaping of the health- and mental-health systems to improve coordination of care and focus on alternatives to hospital and emergency-room care.
But, that will only be successful “if the state dramatically expands the amount and array of community wellness, prevention and support systems,” Harvey Rosenthal, executive director of the group, told lawmakers.