On June 23, 2006, New York Gover-nor George E. Pataki, Assembly Speaker Sheldon Silver, and Sen-ate Majority Leader Joseph Bruno reached an agreement on the State fiscal year 2006–07 budget, which would effectively end an impasse that could have resulted in hundreds of millions of dollars in Medic-aid cuts to hospitals, nursing homes, and Medicaid beneficiaries. As Skyline News went to press, it was expected that the bud-get would be passed by the close of the leg-islative session on June 23.
The budget agreement, which was nego-tiated with substantial input from GNYHA and its Healthcare Education Project part-ner, 1199 SEIU United Healthcare Workers East, restores nearly all of the Medicaid funding the Governor proposed cutting in his budget in January and provides new investments for emergency care and nurs-ing home quality improvement activities.
This agreement will remove the cloud of uncertainty that has hung over the health care community since the Governor vetoed the Legislature’s funding restorations in April and then, after the Legislature over-rode the vetoes, declared that he would ignore the overrides and implement the cuts from his original proposal. It also paves the way for GNYHA and its members to withdraw a lawsuit they brought in State Supreme Court that called upon the Court to stop the Governor from imposing his proposed budget cuts. It will also negate the need for bills that the Legislature passed (and that the Governor vetoed) to rovide new funding for hospitals for quality improvement and for nursing homes for energy assistance.
The agreement will also render unnecessary another bill passed by the Legislature that requires the Governor to withdraw the amendments to the State’s Medicaid plan, which was submitted to the Federal government for approval, that would have allowed the State to cut Medicaid rates for hospitals and nursing homes. Working with GNYHA, U.S. Senators Charles E. Schumer and Hillary Rodham Clinton sent a letter to the Bush Administration urging them to take no action on the State plan amendments submitted by the Governor until the State budget impasse was resolved.
GNYHA is extremely grateful to Speaker Silver, Senator Bruno, Senators Schumer and Clinton, and all of the region’s elected representatives for helping to make this final budget agreement a reality.
Hospitals: Gone are the Governor’s original proposed Medicaid cuts to hospitals, including elimination of the trend factor, the volume adjustment cut, the inpatient detox cut, the graduate medical education cut, and the cut for outpatient mental health services. The only reduction for hospitals is a 0.25 percentage point reduction in the 2006 Medicaid trend factor, for a reduction in payments to hospitals of $16 million (down from a potential $160 million cut from eliminating the trend factor altogeth-er). In addition, the final agreement would increase the $95 Medicaid reimbursement rate cap for emergency department visits to $125 on January 1, 2007, $140 on January 1,2008, and $150 on January 1, 2009. The $40 triage fee for non-complicated emergency visits for Medicaid managed care enrollees would be eliminated.
Nursing homes: The final agreement does not contain any of the Medicaid nursing home cuts the Governor proposed in January for the 2006–07 State fiscal year, includ-ing the elimination of the trend factor, the so-called Medicaid-only case mix cut, or the elimination of the add-ons for large nursing homes and hospital-based nursing homes.
The only reduction for nursing homes in the final agreement in this fiscal year would be a 0.25 percentage point reduction in the 2006 trend factor, for a reduction in pay-ments to nursing homes of $14 million (down from a potential cut of $140 million from eliminating the trend factor altogeth-er). In addition, nursing home reimburse-ment rates would be updated by changing the base year on which costs are calculated to 2002. This so-called rebasing would begin on January 1, 2007, and would be fully phased in in 2009. Nursing homes that would be disadvantaged by the change in the base year would be “held harmless” and would receive a trend factor increase. The only other savings proposal that would affect nursing homes is the change in the adult day care reimbursement methodology to reimburse programs at cost rather than a percentage of the inpatient nursing home rate. This change would take effect not this fiscal year, but on April 1, 2007. The increased funding in the Legislature’s bud-get for nursing home quality improvement activities would go forward.¦