SYRACUSE, N.Y. – Spending on an increasingly popular New York Medicaid program that lets the elderly and disabled hire people, including their own relatives, to care for them at home soared 85 percent between 2017 and 2018.
The Consumer Directed Personal Assistance Program – CDPAP for short – is intended to keep people out of high-cost nursing homes and other institutions.
But a 2018 federal audit criticized New York for not keeping an eye on the program. “New York’s lack of effective monitoring of the CDPAP leaves the program vulnerable to misuse of federal funds and could potentially place beneficiaries at harm,” the audit said.
CDPAP spending rose from $1.3 billion in 2017 to $2.4 billion in 2018. The state projects CDPAP spending will hit $2.8 billion by 2021. That’s just one reason New York’s $73 billion Medicaid program is one of the costliest in the nation, second only to California.
- Medicaid pays the bill for two of every three New York nursing home residents and for more than half of all births in the state.
- New York covers dental, vision, eyeglasses, physical therapy and some other medical services not covered by some other states’ Medicaid programs.
- The state pays out more than $1 billion in Medicaid money a year to hospitals to cover the cost of charity care for uninsured patients, even though some of the hospitals don’t need it.
- Thirty three percent of New Yorkers, or one in three, are covered by Medicaid. New Mexico is the only state with a higher percentage – 35 percent — of residents enrolled in Medicaid. Medicaid enrollment in New York rose from 4.7 million to 6.2 million people after the state expanded eligibility under the federal Affordable Care Act.
New York’s Medicaid program has been in the spotlight lately because its runaway costs have contributed to a $6.1 billion state budget deficit. Gov. Andrew Cuomo has ordered his recently appointed Medicaid Redesign Team to find $2.5 billion in Medicaid savings by mid-March.
Medicaid is a nationwide health plan for the poor, disabled and elderly. It is jointly paid for in New York by federal, state and local governments. It is New York’s single largest expense, accounting for about $1 of every $3 in state spending.
Cuomo put the brakes on Medicaid spending growth when he took office in 2011. Cuomo imposed a “global cap” on Medicaid spending tied to the medical inflation rate and took other steps that curbed spending. But the state lost control of Medicaid spending again in 2016. From 2016 to 2019, the state’s Medicaid cost per enrollee soared 25 percent, according to the state Citizens Budget Commission.
Why are New York’s Medicaid costs so high?
It’s a combination of high enrollment, generous benefits, an aging population, overspending, mismanagement and fraud, according to Bill Hammond of the Empire Center, a nonprofit Albany think tank.
New York spent $3,236 per capita on Medicaid in 2016, more than any other state and nearly 80 percent higher than the national average, federal data shows.
Medicaid spending in New York on care for the elderly and disabled soared more than 300 percent between 2013 and 2019.
Much of that was fueled by increased use of CDPAP.
The Cuomo administration tried to reduce funding for the program last year, but was blocked in state Supreme Court after disability advocates sued.
Even before CDPAP surged in popularity, New York’s Medicaid program was spending more than any state on personal care provided at home to the elderly and disabled by aides from home care agencies. This type of care includes services like cooking, housekeeping and help with bathing.
New York spent $5.5 billion on personal care services in 2016, the most recent year for which national data are available. Among the 33 other states with Medicaid programs that also cover this service, New York spent six times more than average, according to a report by the Empire Center.
New York, which has 6 percent of the U.S. population, accounted for 40 percent of all Medicaid personal care spending nationwide in 2016, the Empire report shows.
“You see people pouring in and applying for personal care in unprecedented numbers,” Hammond said. “To see it grow so quickly raises a red flag.”
State Comptroller Thomas P. DiNapoli recently said his auditors have uncovered billions of dollars in “waste, fraud and abuse” in other Medicaid programs over the last four years. His auditors recently identified $790 million in unnecessary Medicaid payments and uncollected prescription drug rebates.
New York has been widely criticized for the way it doles out more than $1 billion of Medicaid money every year to hospitals that care for large numbers of poor and uninsured patients.
Several studies have found hundreds of millions of the Medicaid dollars in this pot of money, known as the “indigent care pool,” are going to profitable hospitals instead of the ones who need it the most.
A 2018 study by the Community Service Society of New York found the state shifted $138 million in Medicaid indigent care money from 54 New York hospitals and distributed it as windfalls to 93 other hospitals. Hospitals that got the windfalls provided about half as much financial help to patients than the hospitals that lost funding.
Hammond said the state uses a flawed formula to determine which hospitals get money from the indigent care pool.
An Empire Center review of 2016 indigent care pool payments found four hospitals got grants even though they didn’t lose any money treating uninsured patients. One of them was the world-famous Memorial Sloan Kettering Cancer Center in New York City which got almost $12 million.
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