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Devastating Cuts in NYS Medicaid Program Proposed

25 Feb, 2011

Yesterday, February 24, 2011, the governor’s Medicaid Redesign Team approved a package of 79 cost-cutting Medicaid recommendations -- nearly half of which were hurriedly presented that day for the first time.  The team , which had solicited ideas for cost-cutting and reform in public hearings around the state over the last month, was slated to spend three days reviewing a package of 39 reforms that had been selected by the State Department of Health.   The Team's selections were then to be sent on to Gov. Cuomo.

But the State health department expanded the number of reforms to 79 late Wednesday February 23rd.  The next day, which was the first of three days scheduled for review and discussion, state staff urged the team to take a vote before the day was even over.

 Advocates for Medicaid  consumers, including Lara Kassel, co-ordinator of Medicaid Matters NY, a statewide coalition, and the lone advocate appointed to the Redesign Team, denounced the hurried process.  Despite the fact that the package was to be reviewed over the 3 days, allowing time" to delve into the details, become familiar with the impact, probe the authors for details, and have discussions within the advocacy community about how to respond, a vote was taken to approve the package." (Statement of Medicaid Matters NY)

The next step is for Gov. Cuomo to amend his budget proposal to incorporate these proposed cuts.  This will likely happen in the next few days.    Then the usual budget wars begin, except this time, the powerful trade groups that represent health care providers  -- and labor unions --have been disarmed by agreeing to these cuts as members of the Redesign Team.

The official list of proposals is posted here.  The references to proposal numbers and page numbers are to this document.

Read the governor’s press release about the recommendations.

Click here for Selfhelp Community Services' summary of the proposals. 

Click here for an initial reaction to the proposals by the Center for Indepencence of the Disabled - NY (CIDNY). 

See more reaction on the Housing Works Blog and in the Albany Times-Union (Feb. 25, 2011)

Here is a short list of the proposals (again, not approved).     



 §         Apply the 60 month look back period for transfer of assets to non-institutional long-term care applicants with spousal impoverishment protections.  DOH claims, “Any income placed in a pooled trust that is used appropriately for allowable services will not be affected. The proposal does not violate the ACA Maintenance of Effort requirement  because it does not affect the eligibility determination. If someone has made a transfer, it would affect the services they can receive not their eligibility for Medicaid.”  We dispute this and believe this change cannot be effective until 2014 because of the maintenance of effort requirement in the health reform law.  


 o        Disregard IRA’s and 401(k) for Medicaid-Buy-in for Working People with Disabilities (but they are already exempt if in payout status.)

 o        Aged, disabled would no longer have to recertify every year, if they have fixed incomes -- for Medicaid and Medicare Savings Programs.. DOH can automatically calculate eligibility by COLA increases.  

  o      Increase efforts to simplify, automate enrollment and increase retention of insurance - eg. ask for waiver for 2-year enollment, maximize online verification of eligibility,

 2.         HOME CARE --

 §         "Improve management and utilization for split-shift & other hi-intensitypersonal care (home attendant) cases - pilot program will be developed as part of transition to Managed Long Term Care -- clearly they are intending to limit use of 24-hour split-shift care.  

 §         Level I - Limit Housekeeping to 8 hours/week (reduced from current 12 hours)  

 §         Replace all assessment instruments in all home care programs with a Uniform Assessment Tool, which must be piloted   

 §         Incorporate personal care (home attendant) into the Medicaid managed care benefit package (joining a Medicaid managed care plan would be mandatory for almost all people but dual-eligibles and people with a spend-down) 

§         Transition most personal care, CHHA and other home care recipients to Managed Long Term Care programs, making enrollment mandatory (now it is voluntary).  See articles about concerns about these growing programs reprinted from the Elder Law Attorney, along with links to lists of these programs statewide at http://wnylc.com/health/entry/114/      

 §         Create incentives to join Managed Long term care: 

MLTC programs will be permitted to include (not mandated) Consumer-Directed ( CDPAP) services -- would do this through state regulation, not a state plan amendment…  (# 1427)  

 Housing income disregard for MLTC enrollees - State would seek 1115 federal waiver to allow nursing home eligible individuals to receive a disregard of a portion of housing expenses if they join a Managed Long Term Care Plan (this would waive requirement that same allowance be given to all “medically needy” Medicaid recipients. (#1032)

  • Lots of other cuts in CHHA reimbursement that will impact our CHHA.  
3.              Expand Medicaid Managed Care enrollment for Non-dual eligibles -- While Medicaid managed care is
mandatory in most parts of the state, there are many categories of people currently  EXEMPT or EXCLUDED.  (For current rules see this article).  Most of these exemptions will be eliminated over a three-year rollout.   Virtually the only people still excluded are people with a Medicaid spend-down and dual eligibles.
  • Examples of categories that are currently EXCLUDED, but will no longer be are below.   The notation (YEAR x) indicates what year exclusion is lifted in the 3-year roll-out.   (EXEMPT categories not listed here) .  Managed care will become mandatory for people who:
     * are in institutional foster care (Year 3) 

    * live in a nursing home, or are in a long-term home health care program,  or residential treatment facility for children (Year 2) (LTHHCP have option of joining MLTC plan)

    * are a blind or disabled child and live away from their parents, and residents of state-operated psychiatric facilities (Year 3);
    * are in Medicaid’s Restricted Recipient program (Exclusion lifted Year 1);
    * are an infant who weighs less than or equal to 1200 grams at birth and other infants meeting the SSI-related categories. (Year 2);        

FOR COMPLETE LISTS of exemptions and exclusions that will be removed see  Proposal 1458 in  this document. p. 210.

  • Managed care will also be expanded to include services currently carved out -- prescription drugs, personal care, nursing home.              

  • Dual Eligibles -- Though still exempt, the proposal calls for development of more managed care for dual eligibles -- in addition to the push to put all home care services into Managed Long Term Care.                                          


§         ENTERAL FORMULA - limit coverage for nutritional supplements to those who can only ingest food by tube feeding, those with rare metabolic disorders, those with low Body Mass Index, and children with developmental conditions.. Will eliminate those who just oral nutrition formulas "for convenience" 

§         BEHAVIORAL HEALTH CLINICS - utilization controls - would set thresholds for number of visits per year for OASAS, OMH, and OPWDD .  If number of visits exceeds 1st number (lower threshold), claims paid at 25% discount.  Visits exceeding higher threshold paid at 50% discount

§         ORTHOPEDIC SHOES & ORTHOTICS - Coverage limited to growth and development problems in children, diabetics (Medicare coverage) and when a shoe is attached to a lower limb orthotic brace.  Would cut usage in half. 

§         ELIMINATE BED-HOLD WHILE ADULT  ( >21)  NURSING HOME RESIDENTS ON MEDICAID are temporarily hospitalized or away from the nursing home for other reasons.   Nursing homes could regain the ability to receive reserved bed payments if they enroll 50% of their eligible residents in a Medicare Managed Care Program.  (DOH says federal law makes it optional for states to pay for bed-hold, and that in 2010 state law reduced the bed hold rate to 95% from 100% of the regular per diem rate and limited the number of bed hold days.)

§         Physical Therapy, Occupational Therapy, and Speech Therapy/Pathology, -- Establish Utilization Limits of 20 per YEAR for except for Developmentally Disabled and children 

§         COMPRESSION STOCKINGS - limit to Medicare criteria (treatment of open wounds only) and during pregnancy. No longer cover  poor circulation, varicose veins and discomfort except In pregnancy.  Would reduce by 75%.

§         MEDICAID LIMITS PAYMENT OF  MEDICARE PART B COINSURANCE  -- Medicaid will no longer pay the Medicare Part B coinsurance for services not otherwise covered by Medicaid. (it does now?) Medicaid will limit reimbursement to clinics so that their total Medicare/ Medicaid payment does not exceed the amount that Medicaid would have paid the clinic for a Medicaid-only patient. (They did not adopt wholesale elimination of all Medicaid payment for Part B coinsurance. NOTE: This may not be legal for QMBs).

§         INCREASE copays for Medicaid, Family Health Plus --  and charge copays for additional services -- physician, nurse practitioner, eye glasses, dental, audiology, and rehabilitative services.  Increase Copay annual cap from $200 to $300. 

§         Reduce dental   rates reduced  to match managed care rates on high volume procedures   - may diminish number of dentists willing to accept Medicaid

§         Eliminate Part D Wraparound and other Prescription Drug Cuts  Medicaid will no longer cover the few drugs it now covers if not on the Part D plan's formulary  -- Atypical antipsychotics, Antidepressants, Antiretrovirals used in the treatment of HIV/AIDS, Anti-rejection drugs used in the treatment of tissue and organ transplants, and Medicaid won't cover most of these without "prior approval".     For drugs not on an expanded Preferred Drug List, the physician must request approval, and the law will no longer have a "provider prevails" policy, which currently requires approval of the drug if the physician goes to the trouble of requesting the approval.    


  • Expand the Medicaid definition of "estate" to include assets that normally bypass probate (e.g., assets that pass directly to a survivor, heir or assignee through joint tenancy rights of survivorship, life estates, or living trust).  The proposal would (1) as required by federal law, prohibit a Medicaid estate recovery at a time when the recipient has a surviving spouse, minor child, or blind or disabled child of any age; and (2) allow the Medicaid program to waive an estate recovery in undue hardship situations.

  •  Give statewide responsibility for making Medicaid recoveries from recipients, in personal injury actions and in legally responsible relative refusal cases - already in state law since 2008.  

  •  Cap non-economic damages for medical malpractice awards and  establish a Neurologically Impaired Infant Medical Indemnity Fund. 

  • Encourage new options for private Long Term Care insurance




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