health-ins-300x225-9563457Now that the state budget is put to bed for another year—and the public can finally see the details—here is a non-comprehensive rundown of health care-related highlights and lowlights.

Taxes

Governor Cuomo’s proposed surcharge on prescription opioids was repackaged as an “assessment,” trimmed from $125 million to $100 million in revenue and altered to exempt certain uses, such as hospice care and addiction treatment. Despite the name change, it’s still a tax that’s likely to increase costs to New York consumer and taxpayersand it’s still not tied to any significant expansion of funding for rehab.

Under considerable arm-twisting from the governor, Fidelis Care and its would-be buyer, Centene, agreed to quasi-voluntarily pay the state $2 billion over the next four years, to be spent on health-related purposes at the governor’s discretion. (The many troubling features of this transaction are detailed here.)

A related plan that would have skimmed reserve funds from two Medicaid managed care plans—Fidelis and New York City-operated MetroPlus—was altered to exempt MetroPlus. The whole thing becomes moot if Fidelis’ sale to Centene goes through, as planned, before August 1.

A 14 percent tax on for-profit health insurers did not make the final budget, thus heading off a scenario in which plans could well have blamed this year’s premium hikes on the governor.

Extensions

The state’s cap on Medicaid drug spending, initially approved for fiscal years 2018 and 2019, was extended through 2020. Senate Republicans added new reporting requirements for the Health Department, at least partially addressing the program’s lack of transparency.

Among the many other programs routinely extended were $125 million in excess medical malpractice coverage for doctors, which dysfunctionally subsidizes a broken tort system, and a “transition adjustment” in the state’s indigent care pool, which dysfunctionally shifts money to less needy hospitals.

New spending

The budget includes another $525 million in capital funding for health care facilitiesfor a total of $3.8 billion in such commitments since 2014. Lawmakers initially approved $475 million as part of the health and mental hygiene bill, then mysteriously added another $50 million in the revenue bill.

The program is specifically exempt from any requirement for competitive bidding or a request-for-proposals process, and the allowed purposes are broad enough to cover almost any project.

Medicaid hospice payments were increased by 10 percent as of April 1, and Medicaid pharmacy dispensing fees were bumped from $10 to $10.08 per prescription.

The budget calls for increased reimbursements to safety-net hospitals, but offers no detail about where the money should come from or how it should be distributed—and eligibility criteria are loose enough to cover a broad swath of institutions.

Mandate watch

State-regulated health plans must immediately start covering pasteurized donor human milk for newborns when ordered by “a licensed medical practitioner.” Last year’s budget included a similar provision for Medicaid. In neither case, was there a formal study of costs and benefits.

Reforms

The budget enacts some of the reforms proposed by Cuomo’s Regulatory Modernization Initiative, including making it easier for primary care providers to offer mental health and drug-treatment services, and easing restrictions on telemedicine.

It also adds protections for sexual assault victims, including a ban on billing them for the cost of forensic medical exams, and a requirement that the evidence from those exams be preserved for at least 20 years.

In an attempt to boost nursing home quality, the budget orders a 2 percent cut in Medicaid fees for facilities whose federal Nursing Home Compare scores ranked in the bottom fifth the previous year and in the bottom two-fifths for two years in a row.

Cutting-room floor

Many of the governor’s health-related proposals did not make the final budget. Notable among them was his plan to authorize and regulate so-called retail health clinics in stores such as Walmart and CVS, which are an increasingly common and popular option for consumers.

Also killed was an attempt to abolish “spousal refusal,” a rule that enables New Yorkers in need of long-term care to qualify for Medicaid coverage, which is normally intended for the poor, without tapping the income and assets of their spouse. As noted by Politico’s Dan Goldberg, this is the 28th year in a row that governors have unsuccessfully tried to change that policy.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

Two Dozen School Districts Are Returning to the Polls for Budget Revotes

Voters in 24 New York school districts return to the polls on Tuesday for school budget revotes. Last month, voters in 96 percent of school districts outside New York City conducting votes approved their school budgets for the upcoming year. The 683 sc Read More

Even With Federal Cuts, New York’s Health Funding Would Remain High

New York's health-care industry stands to lose billions of dollars in federal funding under the major budget bill being debated in Washington – a rare and jarring turn of events for a sector accustomed to steadily increas Read More

As Albany’s Session Ends, Watch for Rising Health Costs

Every session of the state Legislature brings a fresh crop of proposals that would drive up health-care costs, and 2025 is no exception. Here is a sampling of pending bills that, if Read More

House Budget Would Burst New York’s Essential Plan Bubble

The extraordinary cash bonanza associated with New York's Essential Plan – which has generated billions more than state officials were able to spend – would come to a crashing end under the budget bill advancing in Cong Read More

The House GOP’s Shrinking Budget Plan Could Still Cost New York Billions

The likely impact of federal health-care cutbacks has diminished in recent days as House Republican leaders backed away from some of their bigger-ticket proposals, reducing the estimated savings to $625 billion from previous figures of $715 billion and $8 Read More

Feds Move To Close Medicaid’s ‘MCO Tax’ Loophole, Spelling Trouble for New York

New York's budget has sprung its first major leak just five days after being finalized by Governor Hochul and the Legislature. On Tuesday, federal officials announced a that would Read More

Highlights of Albany’s Bloated and Belated Budget

The state Legislature approved the last of nine budget bills Thursday evening, 38 days after the start of the fiscal year. Here are some highlights of the fiscal impact of final spending plan: Top lines Read More

How Medicaid ‘Expansion’ Changes Could Affect New York

As House Republicans consider cutbacks to federal Medicaid funding, their focus has turned to the so-called expansion population. Although the details of remain undetermined, the s Read More