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ALBANY — Recommended cuts and changes to the state’s Medicaid program are being met with resistance as hospitals grapple with surging numbers of coronavirus cases and the state takes drastic measures to flatten the curve of those being hospitalized for COVID-19, the respiratory illness caused by the virus.
The state’s second iteration of the Medicaid Redesign Team, tasked by Gov. Andrew M. Cuomo with finding $2.5 billion in Medicaid savings, approved a slew of recommendations to help cut New York's rapid growth in Medicaid costs.
Among the panel's suggestions that now go to Cuomo and the state Legislature are nearly $400 million in cuts to hospitals, $715 million in reductions to the state’s long-term care programs, and $71 million in reductions through changes to pharmaceutical practices.
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“We appreciate the amount of time and service that the members of the Medicaid Redesign Team devoted in developing (the) recommendations, particularly in the face of the significant public health crisis confronting health care providers, health plans, employers, consumers and the state,” said Eric Linzer, president and CEO of the New York Health Plan Association. “Given the significant impact that the coronavirus disease is having on all New Yorkers, this is the worst possible time to be adding to the cost of coverage and we are concerned that several of the provisions in (the) recommendations will increase health care costs for employers, consumers and union benefit funds without improving the quality of care.”
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Linzer said carving out the pharmacy benefit from Medicaid, as recommended by the redesign team, would actually increase costs to the Medicaid program. He lamented that the funding cuts fall “disproportionately on health plans” with more than $1.1 billion in reductions directed at health plans. It includes the $851 million in cuts for the 2020-21 fiscal year, Linzer said.
“By further slashing health plan rates, imposing new administrative costs on private coverage, and carving out the pharmacy benefit, these provisions will increase costs for employers and consumers and make it more difficult to protect the long-term viability of the Medicaid program and the millions of New Yorkers who rely on our member Medicaid plans,” he said.
Bryan O’Malley, executive director of Consumer Directed Personal Assistance Association of New York State, said any cuts to consumer directed assistance would be detrimental, particularly when seniors and the people with disabilities should stay home amid the pandemic.
“As we face a tremendous healthcare worker shortage, we need family members and community members stepping up to provide care to elderly and disabled when and where they can. Personal assistants are putting themselves in harm’s way to provide critical services, and they deserve the same wages for their labor,” he said in a statement. “This program will be an essential support in our healthcare fabric during and coming out of this pandemic. You don't cut spending from the fire department when the whole town is burning, and we should not cut Medicaid as our healthcare system is on the verge of collapse.”
The redesign team’s recommendations don’t meet the $2.5 billion in cuts either, coming up short by nearly $1 billion with the expectation the state will reduce costs by $850 million this year. State Comptroller Thomas DiNapoli has estimated that due to the pandemic revenues will be up to $7 billion below the $87.9 billion projected in the governor's Executive Budget.
The state had already been looking toward a difficult budget year, facing a roughly $6 billion budget gap mostly attributable to Medicaid overspending.
Citizens Budget Commission President Andrew S. Rein commended the team for focusing on the right areas, particularly long-term care and targeting the funds for supplemental payments and special programs. But, he pointed out that the recommendations lack improvements to transparency, don’t tackle the Global Cap’s accounting and design, and don’t meet the $2.5 billion target.
“The MRT’s own proposals only total $1.6 billion in savings,” Rein said. “Absent non-Medicaid savings being developed to offset the lower-than-expected Medicaid savings, this leaves a deficit in the state’s financial plan, notwithstanding the yet unknown impact of the current pandemic and associated economic upheaval.”