So What Would You Do With 10 Billion Dollars?

Would you buy a yacht and sail the high seas or perhaps relocate to a tropical island? Well, the Empire State has slightly different plans. As you know, the Medicaid Redesign Team (MRT) initiatives were established to introduce fiscal discipline into New York’s Medicaid Program – the largest Medicaid program in the nation. It has been quite successful. Significant federal savings have already been realized during the first phase of these initiatives, and substantial savings are expected to accrue as a result of the implementation of the entire action plan. Out of the 18.3 billion dollars in anticipated savings, New York wants to reinvest 10 billion into its healthcare infrastructure and to drive key MRT reforms. The state also hopes to use this money to prepare the provider community for national health care reform.

What is an 1115 waiver? Here’s the scoop.

According to the NYS DOH, a waiver is an agreement between the State and the Federal government which allows the State greater flexibility to administer the program and/or invest savings to implement innovations that improve care, increase efficiency, and reduce costs. Generally, 1115 waivers are approved for a five-year period. Waivers must be “budget neutral,” meaning that during the course of the project, federal spending will not be more than federal spending without the waiver.

Why is this important?

Governor Cuomo’s MRT action plan is the most sweeping Medicaid reform plan in state history, and potentially, the nation. The state needs money to fund all of its desired projects, but cannot just change the contract it has with the feds. It must seek permission from the federal government (CMS) to amend the existing 1115 waiver. It hopes to be granted authorization to reinvest 10 billion dollars, as have other states in the union.

How does the state propose to spend this money? Here’s how.

There are thirteen proposed reinvestment categories; key elements are highlighted below. Ironically, despite the strong emphasis on home & community health models, the waiver plan does not include any major provisions for investment in home care.

Primary Care Expansion: Capital funding will be provided for health care providers to modernize and expand facilities. Special focus will be given to expanding access to high quality primary care and to the conversion of existing hospital capacity into new ambulatory settings.

Health Home Development: Development & operational funding will be provided for Health Homes. Health Homes are creative new partnerships to align care management with prioritized housing for New York’s sickest, most vulnerable and most costly patients.

New Care Models: The state wants to break away from traditional approaches and invest in the launching of new innovative care delivery models, such as ACO’s, hospital/nursing home partnerships that better manage transitions in care, and telehealth initiatives.

Public Hospital Innovation: Funding will be provided for a new demonstration program for “pre-emergency” Medicaid services to the uninsured. The state hopes to reduce the costly emergency Medicaid service costs by establishing a primary care benefit. Funding will also be allocated to track results and savings of this project.

Medicaid Supportive Housing Expansion: NY wants to invest in the expansion of supportive housing for high needs / high cost Medicaid qualifying recipients. The state hopes that this will reduce chronic homelessness and avoidable institutionalized care.

Managed Long Term Care: Funding will be provided to modernize nursing homes as they prepare to fully integrate care management, as well as expand access to other long term care settings/programs.

Capital Stabilization for Safety Net Hospitals: Funding will be allocated for New York’s most vulnerable not-for-profit safety net Hospitals. These facilities are highly in debt and antiquated. The state wants to invest in their financial health, as well as provide monetary assistance for the transition from an inpatient setting to both an inpatient/outpatient care center.

Hospital Transition: The state wants to direct funding to assist hospitals in the future health care delivery transformation, including patient centered outcomes, a formal network of services which emphasize prevention, wellness, primary care and outpatient services, global budgeting and reduction in hospital/emergency room utilization.

Workforce Training: The state wants to invest in training its health workforce and in the creation of a health workforce data repository to track and analyze data. The state also wants to expand the DANY program (Doctors Across New York) and the PCSC program (Primary Care Service Corps), a program that targets non physician clinicians in medically underserved communities.

Other proposed reinvestment categories include an expansion of the safety net provider program, regional health planning and an MRT and waiver evaluation program. If you are interested in learning more details please refer to the DOH website.