New York Gov. Andrew Cuomo unveiled his executive budget proposal for the state in January. Its litany of cost-saving cuts could leave home-based care providers vulnerable, industry stakeholders caution.
Specifically, the proposed budget would mean a 50% reduction in home care workforce recruitment and retention funding, as well as a 1% reduction for Medicaid providers and a retroactive 3.5% rate reduction to managed care plans.
Total federal, state and local Medicaid spending under the state budget proposal is expected to be $82.9 billion in 2022. That includes $48.1 billion in federal spending and $27.6 billion in state spending.
The 50% reduction in workforce funding would claw back more than $22 million in 2022 and 2023.
Budget cuts are hard to avoid for states that are dealing with significant deficits tied to the COVID-19 crisis, among other things. But it is unfortunate that the cuts would affect an industry that is dealing with the virus head on, critics note.
On its end, New York is facing an unprecedented budget deficit of $15 billion. The state is worried the federal government will at least cover $6 billion of that, knowing it will have to make up the rest of the deficit internally.
New York’s cuts to health care funding will only be revisited if the money from the federal government comes in higher than expected. The budget will be finalized on April 1.
“The governor of New York state has not been shy about stating that, unless there is a major federal bailout, New York state will be forced to make significant cuts to, among other [areas], community-based services,” Emina Poricanin, managing attorney of Poricanin Law, told Home Health Care News in an email. “The proposed budget cuts are a reflection of the governor’s fear that he will have to impose cuts in some areas in order to balance the budget.”
The 1% Medicaid cut would be across the board to all providers. The 3.5% cut to managed care plans is also a concern because those plans may pass losses down to the providers.
The home care workforce recruitment and retention funding is usually earmarked to supplement the wages of home care workers. The budget proposal, if finalized, could cut the critical fund in half.
While the state is in dire need of cuts, it doesn’t necessarily excuse the specific cuts related to home- and community-based care, Roger Noyes, the director of communications at the Home Care Association of New York State (HCA-NYS), told HHCN.
“Just because the budget calls for cuts doesn’t mean that these cuts aren’t counterintuitive,” Noyes said. “In fact, they would have a harmful impact at a time when COVID-19 has affected providers, services and the workforce.”
Especially with how tough the staffing environment has been for the home-based care world, even before COVID-19, the cuts to recruitment and retention funding would hit hard.
“At the same time, we understand that there are those types of decisions that need to be made given the budget deficit we’re facing,” Noyes said.
HCA-NYS has been working aggressively to help mitigate any harm that budget cuts could cause in New York. But because the deficit is so dire in its state, the association has turned its eyes to the federal level.
After all, if New York gets more monetary assistance from the government, Gov. Cuomo is less likely to implement cuts on health care providers.
“We’ve been working as aggressively as we can with state officials and with our congressional delegation to send that message to Congress,” Noyes said. “That without the funding at a level that can cover the impact of COVID on state finances, you’re putting a workforce in harm’s way that’s needed at this very moment when we’re in a crisis.”
Additional funding from the government could help the situation in New York and other states in similar scenarios, however.
The House Energy and Commerce Committee proposed some major Medicaid provisions to the $1.9 trillion relief package making its way through Congress. If enacted, the measures would benefit home-based care providers across the country during the public health emergency.
The draft legislation would give a 7.35% rate bump for states to specifically enhance home- and community-based services (HCBS).
It could be worse
There was a pleasant surprise in the House bill, the most recent version of the new spending package. The Biden administration’s plan would give New York around $12 billion instead of $6 billion.
That would roughly mean that New York only needed to make cuts to cover $3 billion in deficits — and not $9 billion. It is far from a done deal, but Noyes called that update “very promising.”
Also, while home-based care could experience damaging cuts, there was always a chance it could be targeted even more.
“Contrary to previous years, there was relatively little in the budget about home care specifically,” Poricanin said. “Therefore, while some reimbursement cuts are probable, providers are also relieved to know that, unlike previous budget years, their industry is not being targeted significantly.”
Also included in Gov. Cuomo’s budget proposal was a plan for the extensive expansion of telehealth.
There’s not a lot of details as to what that means yet, but it could be an encouraging sign for providers, if done the right way, Noyes said.
“The governor has really put telehealth on the map with this budget,” he said. “We’re looking at that closely. But we do have questions as well as some concerns about it. Because we want to make sure that it equitably treats home- and community-based care. There’s also questions about how, as you open up telehealth more, you ensure quality standards and some of the existing jurisdictional boundaries that exist between different settings for care.”