Albany, NY (April 14, 2014)
Governor Andrew M. Cuomo today announced that New York has finalized terms and conditions with the federal government for a groundbreaking waiver that will allow the state to reinvest $8 billion in federal savings generated by Medicaid Redesign Team (MRT) reforms. The MRT waiver amendment will transform the state's health care system, bend the Medicaid cost curve, and ensure access to quality care for all Medicaid members.
“We will finally be able use the billions in savings we generated by reforming the state's Medicaid system to protect and improve health care services for millions of New Yorkers,” said Governor Cuomo. “In 2011, New York did what people said couldn’t be done: we overhauled our Medicaid system to save taxpayers billions while delivering better health care. This waiver amendment allows us to invest these savings in keeping Brooklyn’s hospitals open, providing new community based primary care clinics in neighborhoods that need them and preserving health care services across our state.”
New York City Mayor Bill de Blasio said, “Today’s announcement is a major milestone that will help break the vicious cycle of heedless hospital closures across our city. With this funding, we can pivot from reacting to crises to proactively transforming our healthcare system for the long-term. Our administration is proud to have worked alongside Governor Cuomo to ensure New York received what it deserved. Thanks to the Governor’s leadership, and the collaboration of Senator Schumer and Secretary Sebelius, we can reinvest in our community hospitals—particularly those threatened in Brooklyn--and deepen our commitment to neighborhood healthcare. The City stands ready to work with our State partners to ensure we invest these resources wisely and make the most of this historic opportunity.”
The Medicaid 1115 waiver amendment will enable New York to fully implement the MRT action plan, facilitate innovation, lower health care costs over the long term, and save scores of essential safety net providers from financial ruin. The waiver allows the state to reinvest over a five-year period $8 billion of the $17.1 billion in federal savings generated by MRT reforms.
The waiver amendment dollars will address critical issues throughout the state and allow for comprehensive reform through a Delivery System Reform Incentive Payment (DSRIP) program. The DSRIP program will promote community-level collaborations and focus on system reform, specifically a goal to achieve a 25 percent reduction in avoidable hospital use over five years. Safety net providers will be required to collaborate to implement innovative projects focusing on system transformation, clinical improvement and population health improvement. Single providers will be ineligible to apply. All DSRIP funds will be based on performance linked to achievement of project milestones.
The $8 billion reinvestment will be allocated in the following ways:
- $500 Million for the Interim Access Assurance Fund – temporary, time limited funding to ensure current trusted and viable Medicaid safety net providers can fully participate in the DSRIP transformation without disruption
- $6.42 Billion for Delivery System Reform Incentive Payments(DSRIP) – including DSRIP Planning Grants, DSRIP Provider Incentive Payments, and DSRIP Administrative costs
- $1.08 Billion for other Medicaid Redesign purposes – this funding will support Health Home development, and investments in long term care, workforce and enhanced behavioral health services
In addition, the special terms and conditions also commit the state to comprehensive payment reform and continuing New York’s effort to effectively manage its Medicaid program within the confines of the Medicaid Global Spending Cap.
Governor Cuomo has aggressively advocated for waiver amendment approval over the past 18 months and repeatedly made the case to HHS Secretary Kathleen Sebelius on the state’s need for MRT savings reinvestment to transform the health care delivery system. Today’s announcement will pave the way to continue the efforts of the MRT in advancing reform and transformation in New York’s health care delivery system.
Public comment on the MRT waiver amendment will be solicited through the MRT website, webinars and public hearings to take place over the next several weeks. Additional information, including the waiver special terms and conditions, list of eligible safety net providers, descriptions of eligible projects, and other overview documents are available at: http://www.health.ny.gov/health_care/medicaid/redesign/.
About the Medicaid Redesign Team:
Established by Governor Cuomo in January 2011, the MRT brought together stakeholders and experts from throughout the state to work cooperatively to both reform New York State's health care system and reduce costs. In January and February 2011, the MRT held a series of public meetings across the State, which provided New Yorkers valuable opportunities to share their ideas and comments. Meetings were also broadcast on the Internet and informational materials were posted on the MRT web page. In all, the MRT received more than 4,000 ideas from citizens and stakeholders.
The MRT worked in two phases. Phase 1 provided a blueprint for lowering Medicaid spending in State fiscal year 2011-12 by $2.3 billion. Phase 1 was completed in February 2011 when the MRT submitted an initial report in line with the Governor's Medicaid spending target contained in his 2011-2012 budget. The report included 79 recommendations to redesign and restructure the Medicaid program by bringing efficiencies and by generating better health outcomes for patients. The Legislature, as part of the budget process, approved 78 of the 79 recommendations it considered; these initiatives are now being implemented.
In Phase 2, to address additional issues and to monitor the implementation of key recommendations enacted in Phase 1, the MRT divided into 10 work groups. As part of their work, the groups provided 175 additional stakeholders the opportunity to participate in the MRT process. A number of public hearings were held across the state. Following these sessions, MRT recommendations were compiled and included in a final report. The report is available at http://www.health.ny.gov/health_care/medicaid/redesign/docs/mrtfinalreport.