Health care budget roundup

by Bill Hammond |  | NY Torch

Now 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.


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.


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.


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.