30-Day Amendments Delivered to the Legislature
On Feb. 15th, Governor Cuomo submitted his 30-day amendments to the 2019-20 Executive Budget. The amendments address the $2.3 billion budget gap that the Governor and State Comptroller announced earlier this month. Within the amendments, three actions are advanced in the Medicaid program to generate an additional $550 million in General Fund savings and to close the shortfall.
The first action would reduce Indigent Care Pool distributions to inpatient hospitals by $275.5 million in total. The remaining two actions would affect LeadingAge NY members and are:
- An across-the-board cut to payments to all Medicaid providers (except for mental hygiene services) to save the State $190.2 million. This equates to an approximate 0.8 percent reduction and would result in a total impact of $380.4 million on providers if taken as a Medicaid cut. This proposal would affect nursing home, adult day health care, home care, assisted living program (ALP), hospital, and clinic services. The cut would be in effect for a two-year period for services provided April 1, 2019 through March 31, 2021.
- Elimination of the 1.5 percent increase in operating rates for nursing homes (and a corresponding 2 percent increase in hospital operating rates), which was to be effective Nov. 1, 2018. These dollars are to come from the Health Care Transformation Fund, which was funded with proceeds from the sale of Fidelis to Centene, and are intended to help facilities offset labor costs. We understand the State savings is estimated at $222 million, suggesting a total impact on nursing homes and hospitals of $444 million. We are seeking verification as to the time period(s) affected and other details. This budget measure is not to be confused with the Statewide Health Care Facility Transformation Program, the capital grants program under which $203 million in awards was recently announced.
Fiscal Intermediaries
Beyond the proposed cuts to Medicaid, there are amendments relating to fiscal intermediary (FI) contracting (HMH Article VII, Part G) which clarify that all independent living centers, including those that have not previously operated as fiscal intermediaries, can seek authorization from the Department of Health (DOH) to operate as FIs outside of the DOH procurement process.
Opioid Excise Tax
The Governor includes a new proposal that is similar to the Opioid Stewardship Fund enacted last year, but recently declared unconstitutional, that required every opioid manufacturer or distributor who sells or distributes opioids in New York to contribute to the $100 million fund in an amount equal to their “ratable share.” The proposal would impose an excise tax on the first sale of an opioid in New York, to be charged and paid by the wholesaler, manufacturer, or outsourcing facility (“registrant”) in the amount of .025 cents per morphine milligram if the acquisition cost is less than .50 cents, or 1.5 cents if the wholesale cost is .50 or more. However, this proposal would allow the added costs to be passed on to purchasers.
We are concerned, as we were with last year’s proposal, that the language does not expressly exempt hospice from the provisions. We are working to determine whether this proposal could affect members that operate their own pharmacies as well as payment sources (e.g., Medicare) that include the costs of pharmaceuticals if these costs are passed on by manufacturers or distributors. We are continuing to review this proposal and will let members know if any additional advocacy is required.
Telehealth
Regarding telehealth services for dually enrolled Medicaid and Medicare individuals, the new budget language adds authority to the Commissioner to promulgate regulations governing the Medicaid coverage and reimbursement rates for dually enrolled individuals.
Medicaid Redesign Team
Following the release of the 30-day amendments, it was announced that the Governor will call upon DOH to reconvene the Medicaid Redesign Team (MRT) to conduct a comprehensive evaluation of the Medicaid program and offer recommendations to further improve access to high quality and cost-effective medical services and stabilize the long-term fiscal condition of the Medicaid Global Cap. The MRT will be comprised of health care industry leaders and stakeholders from across the state and will convene this year to conduct its evaluation and report recommendations to the Governor. Topics for review will include but not be limited to addressing the needs of vulnerable populations, responding to the current federal landscape, evaluating options to enhance affordable health insurance coverage and access, sustaining the future of our long term care system, and stabilizing fiscally distressed health care providers.
LeadingAge NY staff is working to get a better understanding of these proposed changes and cuts and will be providing new advocacy messaging for members in this week’s Legislative Bulletin. We strongly encourage members to seek meetings with their legislators in the coming weeks to ensure they understand the impact that these cuts will have on the services they provide.