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February 28, 2008

Governor Spitzer's Proposed 2008-2009 Budget

Governor Spitzer's 2008-2009 proposed budget, facing a large deficit, includes initiatives to reduce projected costs in the Medicaid program, redirect program resources, and expand access to health insurance coverage. Technically, the Legislature is required to act on the proposals by April 1, although that date has frequently been missed as the branches of government quarrel over issues and funding.

Initiatives of the proposed budget include:

  • continuing the focus on implementation of the Berger Commission recommendations for rightsizing the hospital and nursing home systems
  • extending provisions of the Health Care Reform Act providing financing through surcharges and assessments for various health care initiatives to 2011
  • limiting cost-of-living increases in Medicaid rates by reducing the increase by 35% for hospitals, nursing homes, and home care services
  • rebasing the hospital inpatient reimbursement rates over a four-year period to reflect 2005 costs
  • revising the methodology for distribution of a pool of funds for hospital care for the uninsured
  • modifying the physician graduate medical education pool distribution methodology and enhancing support for training in primary care settings
  • eliminating 2007 increases in nursing home reimbursement that have not received federal approval
  • modifying the home care reimbursement methodology for certified home health agencies to foster Medicaid savings
  • phasing-in reimbursement to clinics based on the intensity of services provided rather than on a per-visit basis
  • focusing on care coordination for certain high cost cases and patients with co-occurring disorders
  • increasing physician fees over a multi-year period
  • reducing payments for prescription drugs, expanding the preferred drug program and establishing a program for specialty drugs
  • expanding access to health insurance coverage through implementing a Family Health Plus buy-in program and expanding Child Health Plus
  • revising outpatient reimbursement in the OMH & OMRDD systems, redesigning the delivery of OASAS chemical abuse detoxification ser-vices, and continuing COLA rate increases for an additional three years for providers licensed by these agencies
  • revising the system for patient transportation authorization, including contracting with a transportation access manager, and developing lower cost transportation alternatives in high-volume areas.

If you require further information regarding the information presented in this Legal Alert and its impact on your organization, please contact any of the members of the Practice Area.

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