NYAPRS Note: The longstanding dynamic between NYS and Washington’s CMS ultimately impacts not only the access to services in low-income settings, but the ability of state agencies to pursue programmatic and policy reform toward the ultimate well-being of Medicaid recipients with disabilities.
Cuomo’s Quiet Healthcare Funding Challenge
By Dan Goldberg Capital New York March 2, 2015
For more than two years, members of the Cuomo administration have regularly met with officials from the Centers for Medicare and Medicaid Services. The negotiations aren’t exactly secret, but few people who aren’t directly involved in the talks have any idea what’s being discussed or what’s at stake.
Those who do know agree that the talks might be the most important issue on Governor Andrew Cuomo’s Washington agenda.
“We’re looking at a potential fiscal crisis,” said Beverly Grossman, senior policy director with Community Healthcare Association of New York State.
The negotiations are over what is known as the Upper Payment Limit, or U.P.L. That’s a rule that says Medicaid, the insurance program geared toward the poor and paid for with state and federal money, cannot pay a higher amount for any service than Medicare, the insurance program for the elderly, would pay for that same service.
The simplest way to think about the negotiations is that the federal and state governments are arguing over how much Medicaid can pay for certain services—more specifically, how much Medicaid can pay to providers while receiving federal matching funds.
The calculations must be applied to services dating back several years.
The U.P.L. for providers such as hospitals and nursing homes is not a limit on payments to individual providers, but is calculated in the aggregate for each category of Medicaid services and for each provider type, according to the Department of Health and Human Services.
“It’s the biggest problem nobody understands,” said former congressman Bill Owens, who has long been prodding the federal government to resolve the matter.
Late last year, Owens sent a letter to C.M.S. that was signed by several members of the New York delegation urging action. None has been forthcoming.
The state health department and C.M.S. declined to comment.
The calculations may be complex but the consequences of delay are not. Until a deal is reached, the federal government is withholding billions of dollars in Medicaid payments.
The payments are substantial:
- The New York City Health and Hospitals Corporation, the state’s largest Medicaid provider, is waiting on $1.2 billion in payments.
- The Vital Access Provider program, which provides additional state and federal funding through the Medicaid program to assist financially challenged hospitals and other providers, is only being funded by the state. The federal government is withholding its matching portion, more than $500 million, from the program and because it’s a Medicaid program, the hospitals hurt most are the ones who treat the poorest patients.
- Until a U.P.L. payment agreement is reached, Federally Qualified Health Centers won’t be able to access the federal share of the Diagnostic and Treatment Center uncompensated care pool, a pot of money available for treating the uninsured. That means that starting April 1, FQHC’s will face a $54.5 million cut, or 50 percent of what they now receive to treat the uninsured.
“That would be devastating,” Grossman said.
The cuts would come at a time when the state, through its Medicaid waiver program, is trying to empower community health centers to more effectively treat Medicaid patients.
But more is at stake than just the money.
C.M.S. will also not approve several State Plan Amendments to Medicaid until a deal is reached.
These are often routine changes to Medicaid rules that every governor makes. Few are controversial, but they often provide increased funding to providers such as hospitals or nursing homes, or provide greater access to those living with mental or physical disabilities.
There is another danger in delay. With every passing day, the money being talked about grows because there are new claims that will have to be recalculated.
“There are significant consequences of continued delay in that it could undermine the resources that are desperately needed for financially struggling hospitals in rural and urban areas,” said Valerie Grey, executive vice president of policy for Healthcare Association of New York State. “Additionally, it undercuts the funding that is needed across the state of New York.”