NYS Reform Activities in Full Swing
As a result of health reforms included in the budget for State fiscal year (SFY) 2007-08 and the desire of the Spitzer Administration to evaluate further reforms for inclusion in next year's State budget, GNYHA has been working throughout the summer with State agencies and other interested parties to prepare for the implementation of new reimbursement systems and to shape reforms to be included in Governor Spitzer's budget for SFY 2008-09.
This Special Insert to Skyline News provides a summary of NYS reform activities and GNYHA's related work.
Summary of NYS Reform Activities
Medicaid DRG Re-weighting: The SFY 2007-08 budget law requires the NYS Department of Health (DOH) to "re-weight" the inpatient diagnostic-related groups (DRGs) used by the State's Medicaid program beginning January 1, 2008. Specifically, the service intensity weights for inpatient DRGs will be based on 2004 cost and length-of-stay data. (The current DRG weighting is based on 1992 data.) These changes to the DRG system will be budget-neutral to the Medicaid program but could have tremendous re-distributional impacts among services and hospitals. GNYHA is working intensively with DOH and the Healthcare Association of New York State (HANYS) on this initiative.
Hospital Indigent Care Pool: The SFY 2007-08 budget law also required the Commissioner of Health to establish a Technical Advisory Committee (TAC) to study and make recommendations on ways to reform the State's funding pool for hospital bad debt and charity care (BDCC). The TAC, chaired by DOH Commissioner Richard F. Daines, M.D., consists of the Chairs of the Senate and Assembly Health Committees, representatives of hospitals, consumer advocacy organizations, and others. The TAC is charged with issuing recommendations to the Commissioner of Health to assist in preparing the report that he will submit to the Legislature, by law, by December 15, 2007. The TAC held its first meeting in June and will meet again in the fall.
On July 31, GNYHA and HANYS testified jointly at a public hearing of the TAC in New York City. A summary of GNYHA's testimony appears on the reverse side of this Special Insert, and GNYHA's full testimony can be found at www.gnyha.org.
A second hearing will be held on August 13 in Syracuse.
Graduate Medical Education: In June, DOH Commissioner Daines charged the New York State Council on Graduate Medical Education (COGME) to report to him by the end of the summer with recommendations for reforming New York's GME system. GNYHA has been asked to provide expert consultants to two of five workgroups COGME has created to respond to the Commissioner's request, including workgroups that will study GME financing ("Transparency and Accountability") and the quality of New York's GME programs. Other workgroups are looking at physician supply, cultural competence, and biomedical research. COGME plans to issue a report with recommendations to Dr. Daines by September to assist in developing proposals for the Governor's budget for next year.
Medical Malpractice: At the time that he announced that the State Department of Insurance had approved a 14% increase in medical malpractice insurance premiums effective July 1, 2007, NYS Insurance Superintendent Eric Dinallo announced that Governor Spitzer has asked him to convene a task force comprising physician and hospital associations, insurers, consumers, health plans, trial lawyers, and members of the Legislature to begin looking at ways to reform New York's medical malpractice system. The task force, which is expected to begin its deliberations in early fall, has been asked to submit recommendations to the Governor by the end of the year. GNYHA will be intensively engaged throughout this process.
Language Assistance: GNYHA is also working with DOH and immigrant advocates to develop a practical approach to distributing the portion of the NYC voluntary hospital pool restoration fund—enacted as part of the SFY 2007-08 budget to partially offset hospital funding cuts—that is required to be allocated based on the number of non-English-speaking residents in each hospital's service area. This year, funding is allocated based on Medicaid inpatient and outpatient discharges. Next year, up to 30% of the funding will be allocated based on language assistance measures.
Behavioral Health: GNYHA is involved in a number of initiatives spearheaded by DOH and the Offices of Mental Health (OMH) and Alcohol and Substance Abuse Services (OASAS) that affect behavioral health providers. Specifically, GNYHA is a member of the State's Task Force on the Continuum of Care for Alcoholism and Substance Abuse Services, charged with recommending ways to redesign the treatment delivery system to improve quality and patient outcomes and to improve utilization of Medicaid resources. Inpatient detox services are a major focus of the task force, which is expected to recommend reforms in time for inclusion in next year's State budget. GNYHA is also participating in the Task Force on Co-Occurring Disorders, which is meeting throughout the summer to develop short-term recommendations to reduce fragmentation between OMH and OASAS delivery systems for individuals with co-occurring mental health and substance abuse disorders. In addition, GNYHA is a member of OMH's Inpatient Survey Advisory Group, which is charged with looking at ways to decrease burdens associated with the OMH survey process and improving coordination with DOH, The Joint Commission, and other agencies with oversight of inpatient mental health programs. Finally, GNYHA has closely monitored public hearings during the month of July on OMH's proposed "Statewide Comprehensive Plan for Mental Health Services."
Ambulatory Care Reimbursement and Access Issues: The Spitzer administration views ambulatory care reform as an integral part of changing the health care delivery system and increasing access to care. GNYHA expects to be a part of discussions throughout the remainder of the summer and into the fall on various ways to invest in ambulatory care services.
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GNYHA Testifies at Public Hearing on NYS Hospital Indigent Care Pool
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On July 31, GNYHA, together with the Healthcare Association of New York State (HANYS), testified at a public hearing on the NYS Hospital Indigent Care Pool, also known as the bad debt and charity care (BDCC) pool.
The hearing was called by NYS Department of Health (DOH) Commissioner Richard Daines, M.D., Assembly Health Committee Chairman Richard Gottfried, and Senate Health Committee Chairman Kemp Hannon, pursuant to 2007-08 State budget legislation calling for a review and recommendations regarding changes to the BDCC pool. Several members of a Technical Advisory Committee (TAC), which was established to provide counsel on these issues, as well as DOH and Assembly Health Committee staff attended the hearing in addition to Dr. Daines, Chairman Gottfried, and Chairman Hannon. The TAC members in attendance included Richard Langfelder, Chief Financial Officer of Lutheran Medical Center; Phyllis Lantos, Chief Financial Officer of NewYork-Presbyterian Hospital; Robert Shapiro, Chief Financial Officer of North Shore-Long Island Jewish Health System; Mark Scherzer, Esq., of New Yorkers for Accessible Health Coverage; and Trilby DeJung, Esq., of the Empire Justice Center.
GNYHA's testimony reviewed the context for evaluation of the BDCC pool, which includes the availability of about $850 million each year for hospital bad debts and charity care, $268 million of which will be funded by a tax on inpatient revenues this year; total hospital uncompensated care need of $1.6 billion; and $2 billion in hospital losses from Medicaid. GNYHA's position is that the pool should be available for uncompensated care provided in accordance with hospital financial assistance policies, which are in turn governed by Public Health Law section 2807-k(9-a), passed just last year, including financial assistance provided to insured patients who are unable to afford cost-sharing amounts or require medically necessary services that are not covered by their health plans. GNYHA offered its opinion that proposals to model a system of BDCC payments for uninsured units of service encounter difficulties because the underlying data used to make pool distributions are based upon accounting systems and principles rather than insurance principles. GNYHA noted that recent proposals by the Internal Revenue Service and U.S. Senate Finance Committee rely similarly upon accounting data to determine hospitals' provision of charity care. Nevertheless, GNYHA offered suggestions for improving the quality, transparency, and consistency of the data that hospitals report and observed that the current system actually works relatively well in targeting BDCC dollars to hospitals serving the greatest proportions of patients in need of financial assistance. GNYHA's testimony also described how uncompensated services and costs are tracked across different portions of the cost report and how they capture hospital uncompensated care that would not be captured by a "units of service" approach, as well as the difficulty hospitals often have in persuading patients to complete financial assistance applications. This difficulty often leads to classification of uncompensated care to indigent patients in the "bad debt" category of BDCC; GNYHA requested assistance from DOH in identifying acceptable ways to categorize such services as charity care.
The hearing panel was interested in knowing why pool payments should not be tied to units of service, as well as whether public dollars should be spent on coinsurance and deductible amounts. As noted above, GNYHA voiced its strong opinion that the pool should be available for all uncompensated care costs resulting from application of a hospital's financial assistance policy. In addition, the panel was interested in knowing whether new reporting requirements attached to last year's Financial Assistance Law would provide useful information.
GNYHA has been working closely with a task force of its member hospitals, HANYS, and patient accounting vendors to explore and evaluate ways to respond to DOH's strongly expressed interest in moving to a unit-of-service-based distribution model. GNYHA and HANYS will follow up jointly with DOH to suggest an effort to ensure that current pool reporting requirements elicit consistent information from hospitals around the State, and will continue to work with DOH and others on ways to improve transparency and accountability in pool payments.
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