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���������� NYS Medicaid Hearing Roundup
January 30, 2020

���������� Note: Medicaid cuts and potential remedies took center stage in Albany yesterday during the annual health budget hearing that featured testimony by NYS Health Commissioner Howard Zucker and Medicaid Director Donna Frescatore. The following is a digest derived from numerous media accounts.

BACKGROUND

The state has identified a $4 billion deficit in the program, $2.5 billion of which has to be addressed within the next 2 months, by April 1.
Thus far, the state has pointed to 2 primary strategies to cut Medicaid costs:

• tasking a reconfiguration of the Medicaid Redesign Team to identify strategies to address the deficit

• “incentivize” counties to help find Medicaid savings by raising state costs onto them if those savings aren’t realized

Both strategies were under heavy scrutiny yesterday by both legislators, providers and consumer advocates.

MEDICAID REDESIGN TEAM

Composition
Lawmakers were dismayed to learn that Frescatore and Zucker had come to Wednesday’s hearing without details on the redesign team. Neither official could say who would serve on the body, what powers they would be given, or whether they would be able to furnish a list of recommendations to the Legislature ahead of the April 1 deadline.
With budget talks already underway, Cuomo has yet to appoint the panel, except its two co-chairs: a longtime health care union leader and the ���������� City head of a hospital system that is the state’s largest. Senate Finance Chairwoman Liz Krueger (D-Manhattan  argued that it could “be a conflict of interest” for Northwell Health CEO Michael Dowling — one of only two announced members of the redesign effort — to lead the new MRT. She pondered out loud about potential conflicts of interest inherent in having a hospital boss decide winners and losers in Medicaid cuts.
The two health officials said that all Medicaid stakeholders – including local governments and state lawmakers, as well – will be represented on the MRT.

Timetable and Credibility Concerns
State Sen. Gustavo Rivera, a Bronx Democrat and chairman of his chamber’s Health Committee, can make comprehensive changes by the budget’s deadline at the end of March. He called it “completely unrealistic.”
“It’s now January 29 and we don’t have any details. … It is a little bit concerning — scratch that, [a lot] concerning — that you’re coming to a public hearing and telling us that by April 1 we have to accept something that is going to be put together by a magical crew of folks, who we don’t know their power and we have to accept or there will be across-the-board cuts,” he said. “That is not acceptable — I’m saying that to you and to the governor — it’s not acceptable what you’re asking us to do.”
Advocacy groups for Medicaid recipients and the state’s health care industry warned lawmakers Wednesday that Cuomo’s swift deadline doesn’t leave enough time for a serious look at the impact of potential solutions — from tax hikes on private insurance that could raise premiums, to rethinking how the state and counties determine who’s eligible for which Medicaid services, to pushing more costs on counties.
Assembly Health Chairman Richard Gottfried (D-Manhattan) cast the original MRT as “political theater.” He raised concerns that the new redesign effort will only offer proposals “chosen behind closed doors by executive branch staff.” “Was the cake batter already mixed and been in the oven, and we’re now putting the icing on it before the MRT has even been made?” Gottfried asked.

Fears of Medicaid Cuts to Providers
Senate Health Chair Gustavo Rivera…called out a provision in the governor’s budget language that would trigger $2.5 billion in across-the-board cuts if the Legislature doesn’t agree to the team’s savings proposals.
Cuomo’s proposal would allow his administration to resort to $2.5 billion in cuts to planned Medicaid payments to hospitals and other health care providers if the Medicaid Redesign Team fails to find enough savings that protect recipients and local governments.

���������� Legislative Day
Concerns about possible Medicaid cuts will be one of ����������’ top state budget advocacy concerns at our February 25 Annual Albany Legislative Day. For more details, go to .

MEDICAID GLOBAL CAP

Zucker would not say specifically whether the redesign team will be barred from looking at changing the state’s Medicaid global cap.
Sen. Gustavo Rivera (D-Bronx) questioned why it took state health officials nine months — from last April until this week — to publish a report that is supposed to be released on a monthly basis. Medicaid Director Donna Frescatore attributed the delay, in part, to the administration’s efforts to present solutions on how to address the structural imbalance in Medicaid and curb future spending. “That is not an acceptable answer,” Rivera said.
Assemblyman Richard Gottfried (D-Manhattan), meanwhile, questioned whether the department’s failure to release monthly reports may have contributed to the current budget issues in Medicaid. He asked Frescatore to send the data to him and Budget Director Robert Mujica each month.
The Medicaid director said the administration intends to generate the reports “on a monthly basis going forward” and noted that all reports are published online.

COUNTY ROLE IN MANAGING COSTS

Cuomo is proposing to require ���������� counties who raise property taxes above a 2% cap to pay for Medicaid cost increases above 3%.
Cuomo in recent weeks has attributed some blame for rising Medicaid costs to counties.

The State’s Premises
State Medicaid director Donna Frescatore argued before a panel of lawmakers in Albany on Wednesday that local districts have more control over program growth than some might think, going on to say:

• About 47 percent of all Medicaid eligibility cases are decided by local counties, she said.

• While the state and federal government set rules for Medicaid eligibility, ���������� counties play a role in enrolling and checking the assets of older adults and people with disabilities seeking long-term care.

• Some local districts have “found better ways” to identify an applicant’s financial resources when determining who’s eligible for benefits. In other words, local officials are better at weeding out from the program people who don’t truly qualify.

• “Some districts have found, for example, that they can use databases, data sources when somebody’s applying that they review or look at to be able to test to see if there are other resources that are available that would factor into the initial eligibility determination,” she said.

• In addition, counties manage the care plans for roughly 907,000 ����������ers enrolled in Medicaid “fee-for-service” programs, she said.

Under repeated questioning, however, she and state Health Commissioner Howard Zucker were unable to say exactly what kind of actions counties might take to control costs. Several lawmakers scoffed when Frescatore and Zucker didn’t provide a state estimate of the financial impact of Cuomo’s proposed Medicaid reforms on counties. Republican Assemblyman Phil Palmesano said it’s “completely disingenuous” to suggest that counties have control over Medicaid costs.

The Counties Response
Counties responded by pointing out they have little control over Medicaid costs. They determine who qualifies based on rules the state and federal governments set, and have no power to adjust reimbursement rates paid to providers, they said.
NYS Association of Counties executive director Steve Acquario said the state should allow counties to do more Medicaid audits and investigations if officials want counties to amp up scrutiny over Medicaid recipients.
Officials in ���������� City, which accounts for about half of Medicaid costs in the state, said Cuomo’s cost shift plan could, based on recent insurance cost levels, hit the city with a $1.1 billion tab in the coming year. [Cuomo officials later said the city’s $1.1 billion claim was vastly overstated by at least $880 million.]
Last week, Erie County Executive Mark Poloncarz said Medicaid costs would have been about $8 million higher in each of 2017 and 2018 had Cuomo’s new cost-sharing plan been in effect. How much it could be in 2020 is anyone’s guess at this point.

Angry Legislators
Before Health Commissioner Dr. Howard Zucker and Medicaid Director Donna Frescatore departed a legislative hearing room Wednesday, they were told by lawmakers in no uncertain terms that: fiscal books are somehow being cooked; facts are being withheld; painful service cuts are aimed at elderly, poor and disabled ����������ers; and county taxpayers are going to be harmed by cost shifts proposed by Cuomo.
A handful of lawmakers seemed to reject the suggestion that ���������� should rein in Medicaid spending at all, and said the program has only overspent an “arbitrary” spending cap that was enshrined into state law by Cuomo.
“What you’re asking us to do as a Legislature is to trust you. Folks, this don’t build trust. … We don’t trust you,” State Sen. Gustavo Rivera, a Bronx Democrat who chairs the Senate health committee, fumed to the two top Cuomo health advisers.
“It is a little bit concerning — scratch that — a lot concerning that you are coming to a public hearing on Jan. 29 and you’re telling us that by April 1 we have to just accept something that’s going to be put together by a magical crew of folks,” Rivera said. “We don’t know who they are; we don’t know the power they will have; and the time limit is either we accept it or … there’s just an across-the-board cut. That is not acceptable.”
Rivera and other lawmakers criticized the governor for also calling for spending cuts to specific programs that tackle issues from diversity in medicine, to supportive housing, to health workforce issues, to helping ����������ers with cystic fibrosis.
Cuomo’s county cost shifting plan received much attention Wednesday. Assemblyman Richard Gottfried, a Manhattan Democrat and chair of the Assembly health committee, said Cuomo’s comments about county Medicaid costs “implies something wrong is going on” and that counties are just handing out Medicaid enrollments to people “willy nilly.”
Assemblyman Thomas Abinanti, a Westchester County Democrat rebuked what he called the Medicaid deficit’s “self-created crisis” by the Cuomo administration that, he said, is now intent on trying to blame others or shift huge state expenses onto counties.
“I resent that every year when the state has a deficit we look at Medicaid. … Human beings deserve to have a right to affordable quality health care,” said Assemblyman Charles Barron, D-Brooklyn, a frequent Cuomo critic.