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Cuomo Makes Push To Keep Medicaid Savings

By Jon Campbell, Gannet News Service ��January 22, 2014

ALBANY –��Gov. Andrew Cuomo’s budget plan could near the $140 billion mark if the federal government approves ����������’s request to keep a share of its Medicaid savings.

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Cuomo’s administration on Tuesday increased its pressure on the U.S. Department of Health and Human Services, using his annual budget presentation to make the case for federal approval of what’s known as a Medicaid 1115 waiver.

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The waiver, which the state first applied for in August 2012, would allow ���������� to re-invest $10 billion of the $17.1 billion it is expected to save the federal government over a five-year period through a series of reforms to its Medicaid program.

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But Cuomo’s current $137.2 billion budget proposal doesn’t rely on the funds to stay afloat, financially speaking. Instead, the federal money would be added to the spending plan, with an additional $2.7 billion coming this year if the state’s waiver request is approved as is, according to the Cuomo administration.

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“To transform failing hospitals, expand primary care and get the right mix of community-based services, the federal government needs to approve the $10 billion Medicaid waiver we submitted 18 months ago,” state Health Commissioner Nirav Shah said Tuesday at Cuomo’s budget address.

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The money from the Medicaid waiver, if approved, could only be spent on specific programs laid out in the state’s application, which includes plans to expand primary care in the state and provide assistance to hospitals that provide assistance to low-income populations.

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Cuomo’s budget would implement a framework for distributing the money from the waiver, but the framework would only be useful if the waiver is granted.

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Shah said several of the state’s financially struggling hospitals — including several in Brooklyn and St. Francis Hospital and Health Center in the town of Poughkeepsie — could face closure if the waiver isn’t approved.

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Saint Francis Hospital CEO Art Nizza on Wednesday said approval of the waiver “would benefit hospitals around the state,” but said he “can’t speculate about the specific impact” on St. Francis since the hospital is going through bankruptcy.

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Robert Megna, the state budget director, said Cuomo’s tax initiatives and other priorities wouldn’t be affected if the waiver is rejected. But the state would have to take steps to cut health-care costs to make up for the loss of the waiver, since it would face pressure to step in and bail out the financially troubled hospitals.

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“It would difficult for us to deal with our current hospital situation without the waiver,” Megna told reporters Tuesday. “That’s not something currently anticipated in our financial plan.”

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A spokesperson for the U.S. Department of Health and Human Services declined comment Wednesday, saying the department does not comment on pending waivers.

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Shah and other Cuomo administration officials criticized the federal government for the time it has taken to decide on the waiver, pointing to states like California and Texas that received approval in less than a year.

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The state, however, has had been at odds with the federal government over Medicaid before. The federal reimbursement rate for the care of the severely developmentally disabled was re-negotiated in ���������� last year after a federal audit found the state had been charging too much prior to Cuomo taking office, including $700 million in overpayments in 2009 alone. The audit was spurred by a report in Gannett Co. Inc.’s Poughkeepsie Journal.

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“While you could make a case that ���������� is being treated unfairly in the Medicaid world, one of the reasons the federal government is not so quick to grant the waiver is that the state was accused of essentially bilking billions of dollars over the years from Medicaid payments they didn’t deserve,” said Lawrence Levy, executive dean of Hofstra University’s National Center for Suburban Studies.

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Larry Schwartz, Cuomo’s secretary, said the state can’t wait any longer for a federal decision.

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“It’s immediate. We need it now. These hospitals are on the verge of closing,” Schwartz said.

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