Medicaid Redesign Team 2 Launches with Focus on Long-Term Care

The first meeting of the new Medicaid Redesign Team (MRT 2) took place on Feb. 11, 2020 and laid the groundwork for fast-paced deliberations with a presentation on Medicaid spending trends focusing on growth in long-term care (LTC) spending. The MRT 2 was convened as part of the Executive Budget to identify ways to close the $2.5 billion gap in the State's Medicaid budget. The slides from the meeting are available here. In addition to holding the first MRT 2 meeting, the Department of Health (DOH) has, in the past week, appointed an LTC Advisory Group, hosted a public webinar on the MRT process, solicited Medicaid reform ideas from the public, and scheduled public hearings.

The following timetable for the MRT process was announced:

Until 12 p.m. on Feb. 21^st, members of the public may submit Medicaid reform and savings proposals here.
Public comment days will be held in New York City (Feb. 14^th), Rochester (Feb. 18^th), and Albany (Feb. 21^st, 10 a.m. to 1 p.m.).
On March 4^th, the second MRT 2 meeting will be held in New York City. At this meeting, a condensed list of proposals will be reviewed and the framework for evaluating the proposals will be discussed.
The third and final meeting will be held “before mid-March.”

The MRT 2 is co-chaired by Michael Dowling, President and CEO of Northwell Health, and Dennis Rivera, former Chair of SEIU Healthcare. Other members include:

Dr. Steven Corwin, President and CEO, New York Presbyterian
Thomas Quatroche, PhD, President and CEO, Erie County Medical Center
LaRay Brown, CEO, One Brooklyn Health
Mario Cilento, President, New York State AFL-CIO
Christopher Del Vecchio, President and CEO, MVP Health Care
Pat Wang, President and CEO, Healthfirst
Emma DeVito, President and CEO, VillageCare
Wade Norwood, CEO, Common Ground Health
Steven Bellone, County Executive, Suffolk County
T.K. Small, Director of Policy, Concepts of Independence
Donna Colonna, CEO, Services for the UnderServed
Todd Scheuermann, Secretary of Finance, New York State Senate
Blake Washington, Secretary of Ways and Means, New York State Assembly
Paul Francis, Deputy Secretary for Health and Human Services, Governor's Office
Dr. Howard Zucker, Commissioner of Health
Dr. Ann Sullivan, Commissioner, Office of Mental Health
Arlene González-Sánchez, Commissioner, Office of Addiction Services and Supports
Dr. Theodore Kastner, Commissioner, Office for People with Developmental Disabilities
Robert Megna, Senior Vice Chancellor and COO, SUNY

The members of the LTC Advisory Group are:

Hany Abdelaal, DO, President, VNSNY Choice
Emma DeVito, President and CEO, VillageCare
Gedalia Klein, COO, Northern Services Group
Scott LaRue, President and CEO, ArchCare
Bryan O’Malley, Executive Director, CDPAANYS
T.K. Small, Director of Policy, Concepts of Independence
Gregory Turchan, President and COO, Premier Home Health Care Services, Inc.
Sandi Vito, Executive Director, 1199 SEIU Training and Employment Funds
Pat Wang, President and CEO, Healthfirst

The first meeting of the MRT 2 consisted primarily of a presentation by the Medicaid Director, Donna Frescatore, and the Budget Director, Robert Mujica, focused on the MRT process and the data underlying the Medicaid budget gap and current growth trends. Michael Dowling began the meeting by reiterating the MRT’s charge: a package of findings and recommendations must be provided to the Governor by mid-March. The MRT's recommendations are directed to:

Address drivers of greater-than-projected costs and growth in Medicaid;
Improve care management and care delivery for beneficiaries with complex conditions;
Modernize regulations, laws, policies, and programs to achieve efficiency and improve quality;
Ensure a stable and appropriately skilled workforce, especially with respect to meeting the needs of a growing elderly population;
Advance health care reform while restoring fiscal sustainability and ensuring access to benefits;
Strengthen sustainability of safety net providers;
Reassess Global Cap metrics and ensure access to quality care;
Maximize service delivery system efficiencies and align supply with demand; and
Reduce fraud, waste, and abuse.

Donna Frescatore noted that the MRT 2 may consider changes in the components and growth rate of the Medicaid Global Cap. However, changes in the local share of Medicaid and general revenue recommendations (i.e., raising taxes) are outside the scope of the MRT 2.

Robert Mujica described current Medicaid spending trends as unsustainable, projecting gaps ranging from $3 billion in Fiscal Year (FY) 2021 to $3.9 billion in FY 2023. If the State did nothing to address growth, Medicaid spending would grow by about 6.7 percent per year. According to Mujica, tax revenue is not growing at a high enough rate to cover that growth. Mujica also pointed out that from 2013 to 2018, New York’s Medicaid spending grew by 2.2 percent annually, in comparison with a national average state Medicaid growth of 5.3 percent. Mujica noted that LTC represents $12 billion, or 47 percent, of all Medicaid claims in the current year.

He identified the following Medicaid cost drivers:

Health care costs are exceeding the 10-year rolling medical Consumer Price Index (CPI);
Managed Long Term Care (MLTC) spending grew by 301 percent between 2013 and 2019;
Minimum wage costs grew from $44 million to $2 billion in FY 2022, but will stabilize;
Since 2016, the State has assumed $4.5 billion in spending that would have been paid by local social services districts; and
The State's support for distressed hospitals has increased by 160 percent to over $500 million (State share).

Frescatore identified several areas where a “course correction” may be needed:

LTC and Consumer Directed Personal Assistance Services (CDPAS)
Distressed hospitals and other supplemental payments
Prescription drugs
Transportation, especially emergency transportation
Care management including health homes
Program integrity

Drilling down into MLTC spending and enrollment growth, Frescatore argued that at a 13 percent rate, MLTC enrollment is growing faster than demographic changes would suggest. She also noted that MLTC spending is increasing at a rate of roughly $1.2 billion annually. Based on recent trends, CDPAS spending is projected to grow by over 800 percent from 2016 to 2021. She did not indicate how much of CDPAS growth might be driven by substitution of CDPAS utilization for personal care utilization. She also spoke of the State’s interest in expanding enrollment in integrated Medicare and Medicaid managed care plans. Of the 770,000 dual eligibles in New York, only 3 percent are enrolled in integrated plans.

The presentation also covered rising Medicaid spending in pharmacy, transportation, and care management (i.e., health homes). With respect to transportation, there has been a shift in utilization from ambulette to taxi/livery services since 2016.

The presentation suggested that the State's program integrity activities should “go beyond traditional retrospective recovery efforts” and leverage data repositories focusing on managed care, including:

The use of encounter data and acuity scores;
Plan and provider risk profiling; and
Complex value-based payment (VBP) methodologies and program impact.

As noted above, the Department is accepting Medicaid Program cost-saving proposals from the public through 12 p.m. on Feb. 21^st, which can be submitted here. More information on the MRT 2 can be found on the MRT website.