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March 11, 2014

NYS Department of Health Medicaid Benefit Review Process

In 2011, Governor Cuomo established the Medicaid Redesign Team (MRT) by Executive Order. The MRT's charge was to come up with ideas to reform the Medicaid system and to reduce costs. One of those ideas was to establish a process to review (clinically and financially) both the benefits that Medicaid currently covers and any new technologies or treatments for which Medicaid coverage is sought.

While coverage of broad benefit categories (such as dental and durable medical equipment) is a matter for the Legislature, many items or services within those broad categories are generally not mandated by statute or regulation, and the administrative agency has some coverage decision leeway.

New York Medicaid is working with the Oregon Health and Science University on this project. The University has established a Medicaid Evidence Based Decision Project for the stated purpose of providing State Medicaid agencies (roughly a dozen nationwide) with "the tools and resources they need to make evidence-based decisions." For example, the University has performed studies on Elective Cesarean Sections, Bone Growth Stimulators and Vagus Nerve Stimulation for Depression and for Epilepsy, among others. A New York Medicaid administrator has stated that University reports and recommendations are received by Medicaid but that New York Medicaid decides which items or services will be subject to review.

Regarding benefits that Medicaid currently covers, the Department of Health (DOH) has announced that it does not plan to give comprehensive reviews to items or services with low programmatic costs (considering both price and utilization); situations of clear and known benefit; and mere code clarifications or updates. In addition, pharmaceutical decisions will remain within the purview of the Pharmacy and Therapeutics Committee.

For both existing and new services, those of "uncertain value (e.g., high cost with lower cost alternative; high risk; questionable efficacy)" (this, per the DOH website) will be subjected to an evidentiary review called the Dossier Process. The Dossier Process (including forms and instructions) is set forth on the DOH website at The Dossier requires the comprehensive submission of materials such as service rationale, references, studies and quality appraisal checklists, and other supporting documents as necessary, such as FDA approval letters and IRB protocols.

DOH states that the review is primarily a clinical one but that, this being Medicaid, financial considerations come in as well. What are the anticipated costs (including fee for service and managed care premium costs) of the service or item? Will there be offsetting costs through elimination or diminution of other, alternative, service modalities? Obviously, benefit decisions that will result in higher cost outlays will receive scrutiny at higher levels within the DOH and the Governor's Division of the Budget.

DOH has not established a formal administrative process to review negative coverage decisions (there is no administrative hearing process, for example). While informal appeals to DOH and/or Governor's Office officials can be effective, legal challenge of a negative decision through an Article 78 Proceeding may be necessary. A typical claim in such a Proceeding would be that: DOH got the science wrong; or that DOH's decision improperly discriminated against certain disease states; or that DOH failed to follow its own stated review protocols; or that DOH allowed financial considerations to overwhelm the science. Any such proceeding would need to be brought within four months of DOH's negative decision.

We have had conversations about this topic with high level staff within DOH's Office of Health Insurance Programs and its Division of Legal Affairs. DOH states that it does not see this process as an opportunity to do a "slash and burn" through the Medicaid benefit package. Officials are also aware that decisions based primarily on the dollars and not on the science are inherently suspect and will receive heightened scrutiny from the courts. However, all must bear in mind that this project is part of a major initiative of the Governor and, while it is doubtful that DOH has received a "quota" of cuts and denials, it will be expected to work the process.

When faced with an existing service that is under review or a new service for which Medicaid coverage is being sought, it will be important to complete the dossier process to the best of your ability. A court will rarely jump in if there is an established administrative process set up by the State agency that is not followed by the applicant. DOH states that it will answer questions about the dossier process and has provided a phone number: 518-473-2160.

Should you need assistance with the dossier process or a discussion regarding any Medicaid coverage issue, contact Gregor Macmillan at (518) 429-4234 or, Melissa M. Zambri, Chair of the Health Care & Human Services Practice Area at (518) 429-4229 or, or any member of our firm's Health Care & Human Services Practice Area.


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