Cuomo panel recommends Medicaid cuts

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A panel New York Gov. Andrew Cuomo appointed has recommended cutting Medicaid spending on state hospitals by nearly $400 million.

Medicaid Redesign Team II projects about $1.6 billion in savings overall in the proposals it released Thursday to Cuomo and the state legislature. Cuomo formed the panel at the start of the year, before the COVID-19 crisis escalated.

New York Gov. Andrew Cuomo formed the Medicaid Redesign Team before the COVID-`19 outbreak.

The move would cut spending in the New York City Health + Hospitals system, which has been in triage mode since the virus escalation, by $186 million for fiscal 2021, which begins for the state on April 1. The city must pass its budget by July 1.

Mayor Bill de Blasio has urged the federal government to replenish the city’s critical medical supplies and personal protective equipment. Citywide as of Thursday, there were 3,954 positive cases of COVID-19 and 26 fatalities.

Any Medicaid changes by state lawmakers come amid a caveat: provisions in federal rescue packages could limit how states pass Medicaid-related costs onto cities and towns.

"It's de minimis from my point of view," the governor told reporters in Albany.

The state faces a $6.1 billion shortfall tied largely to a $4 billion increase in Medicaid costs. The city receives about $2 billion from the state annually in Medicaid reimbursement. State and city officials are still calculating virus-related costs.

According to state budget Director Robert Mujica, the virus pandemic makes the commission's work more relevant.

“The task was to right-size the program," Mujica said. "We are now in a different time."

Headline items include recalculating the indigent care pool, enrollment caps in managed long-term care plans, and greater transparency to pharmacy benefits.

Indigent-care adjustments could save $156 million, the report said, and "additional savings" outside core hospital operations could pare $56 million. The latter category includes eliminating certain hospital supplemental payment program funding pools, reducing hospital inpatient capital rate add-on and capital reconciliation payments, and requiring the beneficiary of an insurance policy contribute 50% of the coverage cost, among other favors.

The report also called for a structural review of how the state manages the $75 billion Medicaid program, "to ensure that the state has the necessary infrastructure and appropriate organizational structure to most effectively manage the program." This review, the panel said, would include the respective roles of the state and its counties, information technology infrastructure and data analysis capacity.

“The MRT’s recommendations focus on many of the right areas, particularly long term care and targeting the funds for supplemental payments and special programs," said Andrew Rein, president of the watchdog Citizens Budget Commission. "However, the proposals fail to meet the $2.5 billion savings target, leaving the state financial plan $851 million short."

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Healthcare industry State of New York Andrew Cuomo New York City Health + Hospitals