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State Making Across-the-Board Cut to Medicaid Payments

As previously communicated to members, the Department of Health (DOH) has announced that Medicaid payments are being reduced across the board (ATB) by 1 percent for dates of service Jan. 1, 2020 through March 31, 2020 and each State Fiscal Year (SFY) thereafter. LeadingAge NY, together with a broad coalition of provider and practitioner groups, has asked Governor Cuomo to repeal this damaging reduction.

The 1 percent ATB reduction will be taken against Medicaid fee-for-service (FFS) payments made to nursing homes, adult day health care programs, home care agencies, personal care providers, and Assisted Living Programs. As noted below, hospice services are not subject to the cut. Published Medicaid FFS rates for affected providers are not being revised; rather, the 1 percent reduction will be taken against Medicaid checks and/or Electronic Funds Transfers for dates of service on or after Jan. 1, 2020.

Payments to Managed Long Term Care (MLTC) plans will also be reduced through a 1 percent reduction to premium rates, effective Jan. 1, 2020. DOH has advised LeadingAge NY that while MLTC plans are having their premiums reduced by 1 percent, the nursing home benchmark rates are not being revised, and plans will not be permitted to pass this 1 percent reduction onto nursing homes for in-network or out-of-network services.

Among the Medicaid payments that will be exempted from the ATB reduction are:

  • Supplemental Medical Insurance (Part A and Part B) payments;
  • Medicare Part D payments;
  • Court orders and judgments;
  • Hospice services;
  • Intergovernmental Transfer payments made to county and New York City Health and Hospitals Corporation nursing homes; and
  • Services provided to inmates of local correctional facilities.

A complete list of affected providers/payments and exemptions is available on the eMedNY website. The authority on which the State is relying to make this cut was included in the final SFY 2019-20 budget (Chapter 53 of the Laws of 2019) and allows DOH and the Division of the Budget (DOB) “…to make across-the-board reductions to the department of health state funds medicaid spending by $190,200,000 for each of the state fiscal years 2019-2020 and 2020-2021.”

The reduction comes in the wake of a looming State budget deficit estimated at $6.1 billion and a projected $4 billion breach of the Medicaid global spending cap in the current SFY, which ends March 31, 2020. The FY 2020 Savings Plan being developed by DOB will also reportedly include a permanent adjustment to the timing of health care payments and may include other cost containment measures in addition to this ATB reduction. The State intends to unveil other elements of this savings plan as part of the release of the Governor’s SFY 2020-21 Executive Budget Proposal on Jan. 14th, which is expected to have additional Medicaid cost containment proposals for the upcoming year.

DOH has asked affected Medicaid providers and plans to submit any questions on the 1 percent ATB reduction to health.sm.ATB-reduction@health.ny.gov. Your email should include the provider name and Medicaid number so that questions may be reviewed by the relevant program area. Please copy LeadingAge NY on your questions as well. We will keep members updated on this payment reduction.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866