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State Budget: Initial Summary

Governor presents his 2013-14 Executive Budget proposal

Today Gov. Cuomo presented his $135 billion spending and revenue plan, closing an estimated $1.35 billion gap in the 2013-14 state budget and allowing for 2% growth in spending without any increased taxes. The plan includes investments in affordable and supportive housing; 4% growth in Medicaid spending; and 2% across the board Medicaid provider cut. The proposal also includes nursing home wage standards; CON reform; MLTC quality and oversight provisions; and worker’s compensation and unemployment insurance reform.

The Executive Budget continues the Medicaid spending cap enacted in 2011-12 and recommends funding consistent with its provisions. The Budget would achieve $125.3 million in savings from public health and aging programs through program reforms, enterprise-wide efficiency measures, and general cost-control efforts.

Following is an initial summary of some key provisions in the governor’s proposal that would impact LeadingAge New York members. LeadingAge NY staff will be thoroughly reviewing the budget bills over the coming days and will provide a more complete analysis of these proposals to members in the coming week.

All the budget documents can be reviewed at the following link: http://publications.budget.ny.gov/eBudget1314/1314_budgetLegislation.html

Sandy Relief

The Budget includes appropriations of $21 billion for disaster-related recovery, rebuilding and mitigation. An estimated $30 billion of Federal aid will flow through these appropriations or be directly administered by the Federal government, local governments and other entities. Initiatives include:

Restore Healthcare Facilities: Improvements will be made at hospitals, nursing homes and clinics to ensure these critical facilities are more resilient to future storms.

A Statewide Volunteer Network: Establishment of a network if individuals, non-profit organizations and corporations will help the state meet critical needs in disaster relief efforts by matching volunteers with opportunities to assist.

Establishment of Vulnerable Population Databases: First responders, outreach workers, and healthcare and human services personnel will have access to information to help find and serve those who may need assistance.

Medicaid Global Cap and Administration
• Extends the Medicaid spending cap through March 31, 2015, extends the 2% across the board cut and permanently eliminates trend factors.
• Consolidates into DOH all state Medicaid administrative functions (e.g., rate setting, negotiation of managed care contracts, claims processing) across various agencies (including OPWDD and OMH)

Health Planning Reform

Certificate of Need: “Streamlines” the Certificate of Need process for the establishment and construction of health care services and facilities and “rationalizes” standards in considering prospective facility operators.

Corporate Financing:  establishes a pilot program to allow a business corporation in Kings County and another one elsewhere allowing increased capital investment in health care facilities.

Housing

• Transfers the Mitchell-Lama affordable housing asset portfolio from ESD to Homes and Community Renewal (HCR) to preserve over 8,600 units of affordable rental housing.

• Create a new House NY program to invest $1 billion over five years to preserve and create 14,300 affordable housing units statewide.

• Supportive housing funding is increased from $75 million to $95 million

• Transfer the Homeless Housing Assistance Program from the Office of Temporary and Disability Assistance (OTDA) to HCR to streamline project completion

Adult Care/ Assisted Living

Supportive Housing Units: Development of 1,000 supported housing units for residents of nursing homes (including 400 by the end of 2014), 4,000 supported housing beds for individuals in adult homes (including 1,400 by the end of 2014), and 3,400 beds for the homes housing program in NYC (including 634 by the end of 2014).

ALP Expansion: The ALP is expanded by up to 4,500 beds.  Eligible applicants are transitional adult homes (80 beds or more in which 25% or more of the population are individuals with serious mental illness) located in a city with a population of over one million people.  The process need not be competitive.  Further, real capital reimbursement would be available for ALPs that are transitional adult homes transitioning to ALP, and the commissioner would be able to cap construction costs.

LHCSA Repeal: It is recommended that the law which permanently continues the statutory requirement that establishes limited licensed home care service agencies in adult homes or enriched housing programs as providers of personal care and limited medical services be repealed.

Temporary Operator: Includes provisions for a temporary operator to be assigned in an ACF under certain circumstances.  Temporary operator provisions were proposed last year as well.

FIDA: Adds language to enable the FIDA demonstration program to be enacted.

Re-appropriations: Past years funds that were not distributed were reappropraited, we are examining this closely as we had been advocating to ensure
that such funds that we got reappropriated last year were paid out.  In addition, last year’s EQUAL was reappropriated in full.

Nursing Homes

Wage Standards: Would mandate that managed care contracts with nursing homes would include a provision requiring nursing homes to pay “standard rates of compensation” to nurses, aides, therapists, orderlies, attendants and any other occupations determined by commissioner of health.  These standard rates would be determined annually by the commissioner of labor and cover pay and benefits.  Managed care plans would be required to pay rates “sufficient to ensure the retention of a qualified workforce” at the nursing home.

Financially  Disadvantaged Nursing Homes: This funding will be redirected  to nursing homes through the vital access provider payments.

Reimbursement:

• Authorizes DOH to repurpose up to $16 million of 2013 nursing home IGT funding to distribute to public homes subject to retroactive reductions to their 2006 IGT funding amounts.

• Extends audit authority for 2002 cost reports from 2014 to 2018.

• Eliminates the need to reconcile $305 million in rebasing transition payments attributable to 2007 and 2008.

• Specifies that capital reimbursement for nursing homes on and after 1/1/2014 would be determined by regulations developed by DOH in consultation with nursing the home sector.

• Specifies that DOH shall develop a reimbursement methodology for specialty units to be effective by April 1, 2014.

Managed Long Term Care

Wage Standards: Would mandate that managed care contracts with nursing homes would include a provision requiring nursing homes to pay “standard rates of compensation” to nurses, aides, therapists, orderlies, attendants, orderlies and any other occupations determined by commissioner of health.  These standard rates would be determined annually by the commissioner of labor and cover pay and benefits.  Managed care plans would be required to pay rates “sufficient to ensure the retention of a qualified workforce” at the nursing home.

Mandatory MLTC Expansion: Mandatory managed care enrollment would be expanded to include additional individuals covered under the Office of Mental Health, the Office for People with Developmental Disabilities, the Office of Children and Family Services, and the Office of Alcohol and Substance Abuse Services on a full capitation basis, including special needs managed care plans and HIV special needs plans, and pending the development of special program features and reimbursement rates.

Reform measures: Creates an MLTC quality incentive pool and an Ombudsman Program.

MLTC Plan Development: Eliminates the cap on the maximum number of MLTC care plans that can be authorized.

Miscellaneous provisions
• Restructure health care program funding by consolidating 89 separate health awareness and prevention programs administered by DOH into six competitive pools to achieve targeted health outcome goals 2013-14 value: $40.0 million

• Local Assistance Programs: at the request of the DOH, the executive has lumped all the local assistance program funding (EQUAL, EnABLe) into one pool and reduced funding by $70 million

• Authorize the State to undertake up to $100 million of Pay for Success initiatives (also known as “Social Impact Bonds”) over the next five years to invest in programs in the areas of health, education, juvenile justice, and public safety.

Minimum Wage Increase: As called for in the Governor's State of the State address, the Executive Budget increases the minimum wage from $7.25 to $8.75 an hour, bringing it more in line with the cost of living. The change would take effect July 1, 2013.

Major Reform of Workers’ Compensation System: The Executive Budget includes a sweeping reform of the state's complex and inefficient Worker's Comp system that will provide $900 million in savings to employers, local governments, and school districts without affecting the rights of workers. The reform plan will allow the State Insurance Fund to release reserves no longer needed to fund future liabilities, which will be used to fund job-creating capital projects and help reduce the state's debt.

Unemployment Insurance Reform: The Executive Budget proposes substantial reforms that will decrease costs to employers and modernize the Unemployment Insurance system. For UI claimants, reforms will increase both minimum and maximum weekly benefit rates. For employers, reforms will lower total costs, with a savings of $400 million over ten years.

Again, we are currently reviewing all the budget documents and will provide you with a more thorough analysis on all of these, as well as other items not listed, next week.