New York Governor Eliot Spitzer's proposed budget, which he released on Jan. 22, contains cuts to nursing homes and home health care providers totaling approximately $300 million. While roughly 33% less than the total savings sought from long term care (LTC) providers in last year's initial budget proposal, the proposed LTC reductions represent a significant concern to providers when layered on top of several cost-savings actions that were set in motion last year. Also, unlike last year's budget plan, this year's proposal includes $82 million in cuts to home health care providers, much of which will fall hardest on home health providers in the New York metropolitan area.

Nursing Homes: The budget would implement provisions totaling $202 million in nursing home cuts, including a 25% reduction in the 2008 Medicaid inflation update, or "trend factor," for nursing homes (State share savings, $16 million; impact on providers, including matching Federal dollars, $32 million), as well as a reconfiguration of nursing home rebasing funding that would eliminate rebasing amounts for calendar year 2007 and would reduce slightly the amounts to be allocated between Jan. 1, 2008, and Mar. 31, 2009 (State share savings, $85 million; impact on providers, $170 million). The proposed budget also reflects State savings resulting from the implementation of the Berger Commission recommendations for LTC restructuring (State share savings, $10 million).

Home Health: The budget's proposed home health cuts include a 25% reduction in the trend factor for home health agencies and personal care providers (State share savings, $10 million; provider impact, including matching Federal dollars, $20 million); lowering the cap on administrative and general costs for certain Certified Home Health Agencies (CHHAs) and Long Term Home Health Care Programs (LTHHCPs) to 20%, as well as lowering by 10 percentage points the current ceiling on CHHA rates and establishing 2005 as the base year for calculating CHHA rates (combined State share savings, 25 million; provider impact, including matching Federal dollars, $50 million); and establishment of a three-year Personal Care Demonstration Project in NYC to test the effectiveness of a new entity to oversee utilization of personal care services (State share savings, $6 million; provider impact, including matching Federal dollars, $12 million). 

Other Long Term Care Provisions: The proposed budget would also limit premium increases for managed long term care programs to 50% of the otherwise applicable premium increase; subject Adult Day Health Care (ADHC) programs to a 25% trend factor reduction; establish a demonstration program, using non-Medicaid funds, to test the delivery of blended medical and social-model adult day health care services for persons whose clinical profile falls between that of typical medical or social ADHC program registrants; and create a new Home Care Technical Advisory Council to advise the NYS Department of Health on developing an updated home health reimbursement system.

Continuing Care Leadership Coalition: CCLC is deeply concerned about the cumulative effect of this budget's LTC provisions, the payment reductions set in motion by last year's budget agreement, and the Federal government's failure to approve funding for LTC reimbursement reform, and has been working actively to document and mobilize public support for maintaining a strong investment in LTC services. CCLC is also working to quantify the effect of these actions on its members in order to communicate effectively with legislators about the need to restore essential funding for the LTC community.