Whether New York will miss out on $6 billion in federal funds slated for a portion of the state’s Medicaid program amid the coronavirus pandemic was unclear late Wednesday as lawmakers continued negotiating details of the state’s 2020-21 fiscal year budget.
Gov. Andrew M. Cuomo and Budget Director Robert Mujica have stood firm on a proposed $2.5 billion in cuts to the state’s Medicaid program in the final budget and insisted the federal funding would not be as beneficial as the planned changes.
U.S. Senate Minority Leader Charles E. Schumer, a Democrat, has said $5.2 billion and $1.5 billion in emergency Federal Medical Assistance Percentage (FMAP) aid would go to the state and New York City, respectively, to help alleviate the burden of Medicaid payments during the public health crisis.
However, the funds are contingent on states making no changes to their Medicaid programs. Measures could be taken to postpone some of the changes to ensure New York can access the federal money, as has been suggested by fiscal policy experts.
But state Division of the Budget spokesman Freeman Klopott would not say whether the effective dates for recommendations may be shifted to ensure New York complies with the contingency.
“Many of the Medicaid Redesign Team’s recommendations to reduce spending growth will be included in the budget,” Klopott said. “We will make an evaluation once the budget is adopted of how they conflict with the limitations put in place by the federal legislation.”
Cuomo and Mujica stressed during a weekend news conference at the Capitol that New York is unlikely to receive the full amount cited by federal lawmakers because the amount is based on the United States remaining in a state of emergency for a full year.
“You’re basically saying, ‘take a one shot of these funds, don’t reform the Medicaid system, and spend that money inefficiently on a system that unanimously everyone on there understood was not working properly;’ we were wasting the money,” Mujica said on Sunday.
“So the choice is really, waste the money that way, or do a bill that actually provides funding to New York state. That bill does not even get us a fraction of the amount of money that is needed.” Bill Hammond, director of health policy for the Empire Center, a fiscally conservative think tank based in Albany, concurred with Mujica’s assessment, noting that these payments would be made quarterly.
“This money doesn’t necessarily last a whole year,” he said. “It’s only offered on a quarter-by-quarter basis, so whenever the emergency is called off — and who knows when that will be — the money stops.”
Medicaid restructuring, along with education aid and changes to bail reform, remain the most controversial facets of the state’s annual spending plan.
While legislative leaders reached a “conceptual agreement” on the budget Wednesday morning, language on the health insurance program for the poor had yet to be unveiled and lawmakers continued to debate the final package late in the day.
The state had already been facing a difficult fiscal year, with a $6.1 billion budget gap mostly attributable to Medicaid overspending.
In response, Cuomo’s Medicaid Redesign Team pinpointed $2.5 billion in recurring savings.
Among the panel’s suggestions are nearly $400 million in cuts to hospitals, $715 million in reductions to the state’s long-term care programs, and $71 million in reductions through changes to pharmaceutical practices.
Health care professionals have criticized the recommended changes, particularly during a time when New York is being ravaged by COVID-19, the illness caused by the coronavirus.
James D. Sinkoff, deputy executive officer and CFO of Hudson River Health, called on state lawmakers to reject the recommendation to “carve out” pharmacy from Medicaid managed care to fee-for-service.
“This action has far-reaching consequences that would devastate primary care for 2.3 million of the most vulnerable New Yorkers,” he said. “In the midst of this pandemic, this is the wrong time to destabilize community health centers as it will directly harm our state’s ability to recover today and beyond.”
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