Governor Cuomo Releases Proposed Executive Budget

Home » News » Public Policy Observer » Governor Cuomo Releases Proposed Executive Budget

 Governor Cuomo Releases Proposed Executive Budget

 
“Building on Success” was the theme of Governor Andrew Cuomo’s proposed budget presentation for the FY 2014-2015, which begins on April 1, 2014 and runs through March 31, 2015.  The $137.1 billion Executive budget “Holds State spending growth to 2 percent for the fourth consecutive year” according to the Governor’s press release.  Not surprising, the budget focuses on major themes from his State of the State address; namely tax cuts, economic development and investments in education.  
 
In the area of tax cuts, according to the Executive Budget Briefing Book, “The Executive Budget proposes a multi-year tax reduction plan for individuals and businesses, which has been sized to absorb the surplus that would otherwise occur, using current projections. Property tax relief will consist of a residential property tax freeze credit, a residential real property tax credit, and a renter’s credit. Business tax relief will be composed of an elimination of the tax rate on net income for Upstate manufacturers, a 20 percent real property tax credit for manufacturers, and corporate tax reform. The estate tax filing threshold will be increased, and the top rate decreased, over four years.”  Both the Governor’s State of the State address and his budget presentations focused heavily on this portion of his plan for the coming year.
In a clear nod to newly elected Mayor de Blasio’s call for universal pre-K, the Governor’s budget address highlighted education initiatives.  These include an increase in state aid to education of almost four percent; a new a statewide universal pre-K program funded through State general funds in the amount of $1.5 billion over a five-year period; and a new bond initiative to provide technology upgrades to schools throughout the state.  There is no mention of giving New York City the authority to raise City personal income taxes on the wealthy in order to fund universal pre-K.  
 
In a public appeal, the Governor noted that unless the federal government approves the state’s Medicaid waiver soon, New York State will not have the resources to save failing health care facilities in Brooklyn.
Some health care budget items include: 
Medicaid
Medicaid Global Spending Cap and 2% Across the Board Cut.  Not surprising, the budget includes language to continue the Medicaid global spending cap (through March 2016). As had been promised, and will be certainly appreciated by health care providers, the two percent across the board Medicaid cut to reimbursement has been eliminated in the budget. The proposed budget stops the 2 percent across-the-board cut to Medicaid, as well as payment cuts that were achieved through other approaches such as higher gross receipt taxes. 
 
Prescriber Prevails.  In what will clearly put the Administration at odds with many HIV, disability, aging and other advocacy and consumer oriented groups, the Executive Budget eliminates prescriber prevails in both Medicaid fee-for-service and managed care for those drugs where a multi-source therapeutically and generically equivalent drug, as determined by the FDA, is available.
 
Spousal Refusal.  The Governor, once again, proposes to eliminate New York’s spousal refusal program.  While most advocates will strongly oppose this change, this is mandated by Federal law, and New York may be one of the only states left with this policy.
 
Reinvestment in Health Care System
 
Health Care Savings.  In another effort to encourage the health care industry to reduce costs and find efficiencies, the Executive Budget proposes to pass Medicaid savings on to providers and plans should total Medicaid spending become lower than the budgeted amount for the year.  Under this proposal 50% of the savings would be shared with all Medicaid providers, and 50% would be shared with safety net providers.
 
The Executive Budget would make available a capital pool of $1.2 billion in grants over five years that would be available to health care providers under the proposed Medicaid Redesign Team Medicaid waiver that is pending approval in Washington, D.C.
 
The budget would appropriate $65 million annually over three years to connect Regional Health Information Organizations across the State to the State Health Information Network, known as the “SHIN-NY.” This would be funded through a combination of Federal Medicaid funding and new revenue from the covered lives tax due to increased insurance enrollment through the New York State health insurance exchange.
 
Home Care
 
Recruitment and Retention Monies - In addition, the budget proposes to modify the way in which Recruitment, Training and Retention (RTR) amounts are included in home care rates. The bill proposes to eliminate the RTR rate increases for various home health and community based service providers, and instead shift existing RTR funding to providers’ base rates. Along with this change, DOH is also proposing to eliminate the associated attestation requirements for RTR for such providers. 
 
Wage Parity.  The Budget will allow the commissioner of health to adjust Medicaid payments CHHAs and LTHHCPs in order to enable them to comply with the living wage requirements adopted in 2012 under the home care worker Wage Parity Law.  This will take effect in March 2014.
 
 
 
 
 
Managed Care
 
Managed Care Payment Rates.  The Budget requires plans to pay the Medicaid FFS rate for behavioral health services provided by article 28, 31 and 32 providers through December 31, 2016 in New York City and through June 30, 2017 in the remainder of the state. The Budget also requires plans to pay the nursing home fee-for-service rate, unless a negotiated rate has been agreed to between residential health care facilities and the managed care plan.   
 
Out of network consumer protections - The Budget includes provisions to protect consumers from out-of-network medical bills by establishing a process to resolve billing disputes that holds consumers harmless, expanding network adequacy protections and improving disclosure of out-of-network reimbursement methods.
 
Affordable Care Act Provisions
 
Creation of Basic Health Program.   Many health care advocates were disappointed two years ago when the Governor had not authorized the creation of a basic health plan for those individuals earning between 133-200% of the federal poverty level, which is allowed under the ACA.  This budget proposal corrects for that and authorizes the commissioner of health to establish a Basic Health Program if it is in the financial interest of the State. The Budget sets forth various rules around eligibility, enrollment, and cost sharing in the program. 
 
Eligibility Requirements.  There are some changes to the state’s enrollment and eligibility laws to make it conform with requirements under the Affordable Care Act, such as eliminating the Child Health Plus waiting period. 
 
The budget would also appropriate $54.3 million to fund operations of the NYS run Health Benefit Exchange. 
 
HIV Budget Items
 
There is a small $1.2 million cut to the AIDS Drug Assistance Program (ADAP), which is characterized as savings achieved from the Affordable Care Act.  This seems highly probable, considering that some ADAP beneficiaries are inevitably going to be eligible for either the expansion in Medicaid eligibility or exchanges,  and represents a very tiny portion of the total ADAP budget.  
 
Total funding of the AIDS Institute increased slightly from $99 million in FY 2013 to $101 million in FY 2013. The budget of the AIDS Institute is broken down in the budget into four buckets:  
 
Bucket 1 includes Regional and Targeted HIV, STD and Hep C Services $27,749,300 in FY 2013 to $29,009,000 in FY 2014.  The ‘ensuring organization viability’ language is included in the budget.  
Bucket 2 includes Services of HIV, AIDS, STD, and Hep C Health Care Programs.  Funding increased from $29,248,300 in FY 2013 to $30,673,000 in FY 2014.   Funding for health care support services (including NY NY III) and Hep C Programs are included in this bucket.   Hep C programs used to have a separate budget line, and was funded at $1,068,000 last year.  It’s budget line has been removed.  It is unclear if “bucket” 1 or 2 includes last year’s funding allocation.  
Bucket 3 includes HIV, AIDS, STD and Hep C Prevention Programs. Funding allocation of this bucket has slightly increased to $31,858,000 this year from $31,087,500 last year.
Bucket 4 includes Clinical Education Programs.  Funding allocation of this bucket has slightly increased from $2,598,000 last year to $3,196,000 this year.
 
In a disappointment to the HIV community, despite significant advocacy efforts and the support of the NYS Department of Health AIDS Institute, the Governor’s budget did not include language or necessary initial funding to develop a statewide plan to end the HIV epidemic.  
 
HIV advocates were also hoping that the budget would include language to ensure that individuals receiving HRA/HASA housing benefits pay no more than 30 percent of their income (such as SSDI) towards rent.  Previous opposition to this initiative was the result of objections from the previous Mayor Michael Bloomberg, but newly elected Mayor Bill de Blasio has continued to publicly support such legislation.  
 
Next Steps
 
Over the next few weeks the NYS legislature will cull over his budget documents. Joint Senate and Assembly budget hearings have already been announced and will occur over the next few weeks.  A deal on the budget must be finalized by March 31st.  The Governor has already pledged the fourth on-time budget in a row.