‘Extremely Alarming’ Medicaid Cuts Put Home Care Providers in the Hot Seat

A Medicaid cut of tens of millions of dollars is putting home care providers in one state in the hot seat.

On Jan. 1, the New York State Department of Health announced it was trimming Medicaid payments by 1% for the current fiscal year. While the reduction may seem small, it initially accounts for roughly $124 million — and that’s just the beginning.

Governor Andrew Cuomo and his administration may seek to cut nearly $500 million in each state fiscal year moving forward, according to a public notice published in the New York State Register. Efforts to reduce Medicaid spending come as state policymakers try to reduce a worsening budget crisis projected to blow past $6 billion.

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Already, home care providers in New York are operating on “wafer-thin” financial margins or losses in most cases, according to Roger Noyes, director of communications for the Home Care Association of New York State (HCA-NYS).

Cutting millions in Medicaid dollars would only make their situation more pressing, especially considering home care providers have not had a Medicaid cost-of-living rate adjustment in 10 years.

“In that light, this 1% reduction is extremely alarming,” Noyes told Home Health Care News in an email. “Its timing, just before the release of a new budget proposal in only a few weeks, is a harbinger of just how serious the state’s fiscal outlook is — and what else is yet to come amid a projected $6 billion deficit.”

New York is soon entering its peak budget negotiation period, with the release of an executive budget proposal from Gov. Cuomo expected in mid-January. The State’s fiscal year officially begins April 1 and ends on March 31.

In addition to home care providers, the 1% cut would also affect hospitals, physicians, pharmacists, skilled nursing operators and Medicaid managed care plans, the New York Daily News reported.

Emina Poricanin, partner and home care practice leader at legal firm Hodgson Russ LLP, likewise had a grim outlook on the newly announced cut.

“The 1% cut across the board will have a significant impact on New York state providers in all sectors,” Poricanin told HHCN in an email. “The profit margins for home health care providers in New York are particularly thin as it is. On the heels of threatened cuts in the new fiscal year, it has been particularly distressing for providers to be subjected to such a decrease on very short notice.”

Enrollment for Medicaid in New York increased by 46% from 2008 to 2018, rising from 4.3 million people to about 6.2 million. The population of New York in 2018 was estimated to be about 19.54 million individuals, U.S. Census Bureau statistics show.

Formed in 1978, HCA-NYS advocates on behalf of home-based care organizations on both state and federal levels. HCA-NYS also provides educational programs for its more than 400 members.

Instead of cuts, the state’s Medicaid system needs stable, predictable and sound financing to effectively meet the clinical needs of patients enrolled in state-sponsored health care, Noyes said. To that point, HCA-NYS has been meeting with state officials in recent months urging Medicaid budget reform and relief proposals as an alternative to rate reductions in home care.

“These proposals would address statutory barriers to cost control and efficiency,” he said. “We also recommend alternatives to Medicaid to pay for long-term care in some instances, maximizing federal Medicare coverage where possible, and bolstering support for chronic-care management tools in home care to prevent hospitalizations or other high-cost service use.”

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