Albany, NY (February 24, 2011)
Governor Andrew M. Cuomo today accepted a report from the Medicaid Redesign Team which meets the Governor's Medicaid spending target contained in his 2011-2012 budget by introducing a global cap on State Medicaid expenditures of $15.109 billion. The report included 79 recommendations to redesign and restructure the Medicaid program to be more efficient and get better results for patients.
New York spends more than twice the national average on Medicaid on a per capita basis, and spending per enrollee is the second highest in the nation. At the same time, New York ranks 21st out of all states for overall health system quality and ranks last among all states for avoidable hospital use and costs. Unfortunately years of attempts to address the problem have been unsuccessful.
In an unprecedented change from past practice, Governor Cuomo established the Medicaid Redesign Team (MRT) bringing together stakeholders and experts from throughout the state to work cooperatively to reform the system and reduce costs. The approach was designed to move past the dysfunction and rancor of the past and produce real results for all New Yorkers.
"This comprehensive and consensus proposal achieves the dramatic reform this state needs to reduce costs without jeopardizing patient care," Governor Cuomo said. "This approach was not about making cuts but redesigning a program whose costs are unsustainable. I commend the MRT chairs Michael Dowling and Dennis Rivera, New York State Medicaid Director Jason Helgerson, Deputy Secretary for Health and the Director of Healthcare Redesign James Introne and all of the Team members for their dedication to this difficult assignment. I would also like to thank the people who attended any of our statewide public meetings to have their voices heard."
Beginning in January, the MRT held a series of meetings in every region of the state. The meetings were open and transparent, and anyone could offer their ideas for savings either in person or in writing. Meetings were broadcast on the Internet and materials were posted on the MRT's Web page. The MRT received over 4,000 ideas from New Yorkers that were all evaluated and reviewed.
The recommendations submitted today to Governor Cuomo meets the Governor's budget target by introducing a global cap on State Medicaid expenditures of $15.109 billion through a variety of mechanisms, including:
- Proposals that would reform the Medicaid payment and program structure and generate $1.138 billion in total state savings
- Eliminating the permanent law statutory cost drivers which generate $186 million in state savings
- Implementing a two-percent across-the-board rate reduction to generate $345 million in savings
- Prepaying certain Medicaid payments to leverage additional enhanced Federal matching funds made possible under ARRA, which generates a $66 million benefit
- Industry-led cost containment initiatives totaling up to $640 million in savings, representing an unprecedented partnership between the state and its healthcare industry. The Medicaid program will be subject to a contingency reduction if this goal is not met
These proposals will benefit both taxpayers and patients. One million New Yorkers will have access to patient-centered medical homes, and within 3 years, almost the entire Medicaid population will be enrolled in some kind of care management.
Specific recommendations in the report include:
- Enacts a Global Medicaid Budget Cap.
- One Million New Yorkers will now have access to patient-centered medical homes (PCMHs). This proposal catapults New York into a national leadership position.
- Major expansion in use of care management. Within 3 years almost the entire Medicaid population will be enrolled in some kind of care management.
- Introduces new controls in personal care and home health that will both reign in out-of-control spending and preserve access to these vital services.
- Reform Medical Malpractice and lower health care costs.
- Streamlines/eliminates program regulations – direct response to stakeholder feedback – in ways that will lower costs for providers and make the program easier to navigate for consumers.
The Team issued its first report ahead of its March 1st deadline and will continue to generate ideas for further reforms and submit quarterly reports until the end of Fiscal Year 2011-12, when it disbands.
New York's multi-billion dollar Medicaid program is paid for by state, county and federal taxes. In a majority of the state's counties, Medicaid costs alone account for more than half of the entire county tax levy.
Jason Helgerson, New York State Medicaid Director said, "To try and fix the problems with Medicaid the same way it's been done the past would only lead to the same failures. The Governor knew we needed a different approach and that's what the Medicaid Redesign Team is. We brought together experts and stakeholders to work cooperatively to reduce costs and reform the system, and we did it in an open and transparent way."
James Introne, Deputy Secretary for Health and the Director of Healthcare Redesign said, "We met our targets and we did it through consensus. This report is a package of reforms that will bring unprecedented change to Medicaid, and the team will continue to meet to identify additional savings and reform. I want to thank Governor Cuomo for allowing me to serve with this prestigious and professional group."
Stephen J. Acquario, New York State Association of Counties said, "The process used to produce this report was extraordinary. I commend Governor Cuomo for his vision to redesign the Medicaid program in a transparent manner, engaging health care experts and the public. The current health care system is unsustainable and these recommendations are an important first step toward reducing costs for governments and improving patient health care outcomes."
Steve Berger, former Chairman for the Commission on Health Care Facilities in the 21st Century and a board member for the Partnership for New York City said, "This has been an extraordinary, but not perfect process. It is the first time that the state and providers have met together to reshape this program. We don't agree on all the details, but we agreed on a process for making cuts, building major new structures for behavioral health and moving, finally yet carefully, to achieve the benefits of managed care."
Michael Dowling, President and CEO of North Shore LIJ Health system said, "New York has no choice but to reduce Medicaid spending, but it does have a choice of between reform or the continued across the board reductions that are not in the best interests of health care providers or the people they serve. These recommendations represent the better option for everybody."
George Gresham, President of 1199 SEIU United Healthcare Workers East, said, "This process has been a real partnership between the State, industry leaders and our service providers. The results of this effort will help preserve the quality of care for our most vulnerable residents."
Ken Raske, President of the Greater New York Hospital Association said, "The recommendations of the MRT are groundbreaking for Medicaid programs across the United States. The inclusion of a global cap will clearly contain Medicaid expenditures. The process for arriving at these recommendations was thoughtful and required the untiring work of the team members. I thank Governor Cuomo for his foresight and leadership in making this happen."
Daniel Sisto, President of the Hospital Association of New York State said, "I want to commend Governor Cuomo for his leadership and vision in deftly addressing this enormously complex and important issue. The MRT recommendations balance the need to address the state's historic budget deficit with the equally critical need to redesign and sustain the Medicaid program. The Governor's strategy proved to be a unique and effective method of generating the sometimes painful compromises necessary to secure approval of these recommendations. It is clear that these actions are necessary to protect a Medicaid program that would have collapsed upon itself had we not acted, and that is why I support them."
Elizabeth Swain, Chief Executive Officer of Community Health Care Association of New York State said, "I am honored to have participated in the critical work of the Medicaid Redesign Team. Though with challenge I believe New York will benefit greatly from the thoughtful reforms of this process. In particular I am pleased to see the heightened value and importance of Primary Care and Patient Centered Medical Homes."