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Changes to Health Programs in the 2005-2006 New York State Budget (see also new Health Laws for 2005 sponsored by Senator Hannon)
Summary
The 2005 budget contains important Medicaid reforms designed to contain Medicaid costs and improve the quality of care available to Medicaid, FHP, and CHP recipients. Expanded Medicaid Disease Management Programs help to improve care and reduce costs by providing ongoing care and education for patients with chronic illnesses. A new Preferred Drug Program keeps Medicaid prescription coverage affordable by allowing the state to negotiate for better drug prices, and to identify preferred medications on a scientific, results-oriented basis. A Transitional Care Unit Demonstration Program will experiment with using available hospital capacity to provide sub-acute services for recovering patients who are too ill to return home, but too well to require more intensive services. A Selective Contracting Program will create centers of medical expertise, reducing overcapacity for certain services, and improving care by ensuring that facilities providing selected services are the most experienced available. A Pay for Performance program is designed to encourage the development of new ways to measure quality and improve patient safety and care. Changes are made to the Family Health Plus program to ensure that the program remains affordable for the state and New York's families. Finally, the state continues successful 2004 reforms that empower New Yorkers to plan for long term care expenses through tax incentives and the innovative New York State Partnership Plan
**Section 1**
Family Health Plus
Since its inception, the Family Health Plus program has been tremendously popular, and has created a vital link to quality, affordable health coverage for New Yorkers who have too much income to qualify for traditional Medicaid, but for whom private health insurance is either unavailable or prohibitively expensive. The 2005 budget makes the following changes:
Co-Payments
Prescription co-payments are increased from $1 to $3 per generic prescription
Prescription co-payments are increased from $3 to $6 for brand prescriptions
Dental co-payments are set at $25 per visit, with a $25 annual cap
Clinic and physician service co-payments are set at $5 per visit
Vision services provide for:
1 eye exam every 24 months
1 pair of glasses or contact lenses where medically necessary
1 pair of occupational glasses where medically necessary
There is no longer an annual co-payment cap under Family Health Plus, but people under 21, pregnant women, and certain other enrollees may be exempt from co-payments.
Waiting Period
Eligibility for Family Health Plus is restricted to applicants who are nine months without coverage, but exceptions apply for loss of employment, death of a related coverage bearer, change of employment or residence, employer discontinuation of health insurance, expiration of COBRA coverage period, discontinuation of coverage because of long-term disability, and diminution in wage or hours with which employer coverage can be purchased.
Exclusions
Federal, state, county, municipal, or school district employees who are eligible for health care coverage from their employers are ineligible for Family Health Plus.
**Section 2**
Disease Management Program
The Legislature has expanded the number of Disease Management programs beyond six. Funding for the programs was increased to $7.5 million, from January 1, 2006 until December 31, 2006. The programs will enhance the quality and cost-effectiveness of care rendered to individuals with chronic health problems whose care and treatment result in high Medicaid expenditures.
Ÿ The programs will promote adherence to evidence-based guidelines, improvement of patient and provider communication and provide information on provider and beneficiary utilization of services.
Ÿ The State Department of Health shall provide disease management programs which are geographically and ethnically diverse and representative of both urban and rural communities and monitor the quality and cost effectiveness of the demonstration programs.
**Section 3**
Preferred Drug Program [Part C; Sections 10-14; page 115]
The spiraling cost of prescription drugs presents a unique fiscal challenge to the state. Total state, local, and federal spending on prescription drugs in the state reached an estimated $3.7 billion last year, a 19 percent increase over the previous year. The legislature recognizes that prescription medication has crucial benefits for millions of New Yorkers, and this year enacted a Preferred Drug Program, whereby the state can maximize its bargaining power to obtain prescription drugs at fair and sustainable prices, while carefully ensuring that the goal of cost control never impairs the ability of physicians and patients to use the best available pharmaceutical therapies. Major features of the new Preferred Drug Program are outlined below:
PDP Program Outline
The Preferred Drug Program establishes a preferred drug list, an expert-assessed categorization of medications preferred for reimbursement by the Medicaid and EPIC programs.
The preferred drug list is evaluated by a seventeen-member pharmacy and therapeutics committee, which advises the commissioner of health on pharmaceutical preferences on the basis of clinical effectiveness, safety, patient outcomes, and the effect of preferred listings on special populations like the elderly and children.
Access Protections
Drugs not on the preferred drug list may be reimbursed through a prior authorization process. The program contains provisions to ensure that a prescribing physician, using her reasonable professional judgment, may always make the final determination as to whether a non-preferred drug is necessary
The following drugs do not require prior authorization: atypical anti-psychotics, anti-depressants, anti-retrovirals used in treatment of HIV/AIDS, and anti-rejection drugs used for organ and tissue donation.
Where prior authorization is not assessed within 24-hours, or cannot be assessed in an emergency, a 72-hour supply of the prescription is provided to guarantee urgent access.
Clinical Drug Review Program
In addition to controlling prescription drug costs to Medicaid and EPIC, the budget contains provisions for a clinical drug review program designed to protect the public health by evaluating and monitoring prescription protocols for drugs that are prone to abuse, overuse, or illegal diversion.
**Section 4**
Early Intervention Program
Although the early intervention program was the subject of considerable debate, a chapter amendment to the 2005-2006 budget, agreed to by the legislature and executive, repealed budget changes to the program. The early intervention program is therefore unchanged.
**Section 5**
Childhood Obesity Prevention Program
The 2005-2006 budget reflects efforts to improve the health of New York's children by enacting programs to reduce childhood obesity. The budget includes a $1.5M appropriation to support the expansion of the Childhood Obesity Prevention Program to include school-based activities and physical activity programs.
The Legislature has appropriated $1.5 million to support expansion of the Childhood Obesity Prevention Program to include school-based childhood obesity prevention and physical activity programs.
According to the Centers for Disease Control and Prevention (CDC), the percentage of young people who are overweight has more than tripled since 1980. Among children and teens aged 6-19 years, 16 percent (over 9 million young people) are considered overweight. In New York, 28% of high school students are overweight or at risk of becoming overweight and 33% of low-income children between two and five years of age in New York State are overweight or at risk for overweight. According to the CDC, New York’s obesity-attributable Medicaid expenditures is $3.5 billion. The State’s funding is a highly symbolic step in acknowledging the importance of reducing the incidence and prevalence of childhood obesity
Overweight and obese individuals are at increased risk for many diseases and health conditions, including: hypertension, high cholesterol, type 2 diabetes, coronary heart disease, stroke, gallbladder disease, osteoarthritis, sleep apnea and respiratory problems, some cancers (endometrial, breast, and colon).
The programs will be designed to prevent and reduce the incidence and prevalence of obesity in children and adolescents, especially among populations with high rates of diabetes, heart disease, cancer, osteoarthritis, and asthma. The programs will use recommendations developed by the CDC, Department of Health and Human Services, and Department of Agriculture to develop and implement guidelines for nutrition education and physical activity as part of a obesity prevention projects. The programs will also focus on the importance of choosing a balanced and healthy diet.
Program Components
Ÿ Media and health promotion campaigns that target children, adolescents and their parents emphasizing consumption of low-calorie and nutritious foods and increasing physical activity.
Ÿ School-based nutrition and physical activity programs which will promote a healthy school environment - including physical and aesthetic surrounding, a school culture designed to prevent and reduce the incidence and prevalence of obesity, parent/community involvement including an integrated school, parent, and community approach for enhancing the well-being of students and linkages to physical education courses which utilize the school health index of the National Center for Chronic Disease Prevention and Health Promotion and other recognized school health assessment.
Ÿ The community-based program will encourage communities, families, and child care providers to provide safe and adequate space for physical activity and encourage a healthy diet.
Ÿ Obesity prevention strategies in government food aid, health, education and recreation programs. Coordination of State Education Department, Department of Agriculture and Markets, Office of Parks - Historic and Preservation, Office of Temporary Disability, Office of Children and Family Services.
Ÿ Sponsor periodic conferences to bring together experts in nutrition to examine societal-based solutions to childhood obesity and issue guidelines and recommendations for New York State policy and programs.
Ÿ Training programs for medical and other health professionals to teach practical skills in nutrition and exercise education to children, parents and caregivers.
Ÿ Screening programs that are coordinated with health care providers, (i.e. day care centers and schools, etc) using age and gender appropriate body mass index (BMI) and confidential notification of parents and children of BMI status. Recommendations will be given to parents regarding resources available to assist in improving nutritional and physical activity.
Program Evaluation
The Department of Health shall periodically collect and analyze information from schools, health and nutrition programs and other sources to determine the prevalence of childhood obesity and the efficacy of such programs.
**Section 6**
Transitional Care Unit Demonstration Programs [Part B; Section 87; pages 90-91]
The 2005 budget includes provisions for transitional care demonstration programs, an effort to ensure a smooth and available continuum of care for hospital patients who require sub-acute care.
Description
The commissioner of health is authorized to approve up to 5 general hospitals to operate as transitional care units, on a demonstration basis. "Transitional care" shall mean subacute care services provided to patients of a general hospital who no longer require acute care general hospital inpatient services, but who continue to need specialized medical, nursing, and other hospital ancillary services and are not yet appropriate for discharge. Transitional care shall be limited in duration and designed to resolve a patient's sub-acute care medical problems and result in a timely and appropriate discharge of the patient to a home or other appropriate setting.
Program Applications
Applications shall be filed on forms created by the commissioner. The commissioner must act upon applications in a manner consistent with section 2802 of the PHL and may not waive review and recommendation by SHRPC. Priority shall be given to the applicants with a memorandum of understanding or other cooperative agreement with one or more skilled nursing facility within their service area. Consideration shall also be given to the geographic distribution of applicants throughout the state.
**Section 7**
Selective Contracting [S. 4271; Part E; Section 21; pages 148-150]
The 2005 budget reflects the legislature's sense that the public health is best served when certain specialized medical services are provided through designated regional centers. It is hoped that concentrating specialized procedures will both (1) improve efficiency by reducing regional equipment redundancies and (2) improve medical outcomes by ensuring that specialized procedures are performed at sites with the expertise, experience, and patient volume to provide patients with the most experienced care available.
Site Selection
The commissioner of health, subject to the approval of the director of the budget may contract with up to five hospital to provide up to five specialty services for inpatients eligible for medical assistance for needy persons. Selected program sites are to be geographically distributed, chosen through an RFP process or through direct negotiation with hospitals. The Department of Health will establish a payment methodology to be used in lieu of rates of payment otherwise applicable pursuant to section 2807-c of the public health law. Hospitals will be selected on the basis of their ability to assure patient access, the hospitals' established service volume for the selected service, and the consistency of quality outcomes in the selected service.
Inpatient services not selected will receive reimbursement pursuant to section 2807-c of the public health law, without regard to the new selective contracting statute. Nonparticipating hospitals within a geographically defined site shall not accept patients for selected services without prior DOH approval, except in emergencies. Payment rates are contingent upon federal approval, which DOH shall seek. DOH is further instructed to make a report to the governor and the legislature concerning the implementation of the program.
Service Selection
Services shall be selected based on whether they may be provided more efficiently and economically at a selective contracting site, particularly where there is a scientifically-established correlation between volume and improved patient outcomes. The existence of other DOH initiatives, such as academic centers for excellence, may play a role in site and service selection.
**Section 8**
Pay for Performance [Part B; Section 71; pages 76-78]
The 2005 health budget recognizes the importance of measuring outcomes and efficiency. The budget contains a pay for performance program, designated to have a workgroup of providers and payers develop metrics with which to measure provider performance and to promote patient safety and quality, effective care. The recommendations and metrics devised by the workgroup may be tested in up to five demonstration projects, and results of the demonstration projects are to be reported to the governor and the legislature.
Workgroup Makeup
The workgroup shall include, but is not limited to, representation by:
statewide and regional health care provider associations
health care plan associations and conferences
hospital representatives
consumers
labor and self-insured employers
Demonstration Projects
The pay for performance program authorizes up to five demonstration projects, selected through a competitive bid or RFP, which encompasses one or more of the following:
use of the workgroup metrics to measure and reward physician, clinic, and hospital performance.
involvement of multiple payers, including government programs, multiple providers, and multiple communities voluntarily agreeing to employ the workgroup metrics to reward physician, clinic, and hospital performance for quality improvement.
use of information technology to share patient information among providers to improve coordination of patient care.
targeted improvement in care coordination through the participation of multiple stakeholders.
collection, analysis, and public reporting on the risk-adjusted measures, incentives, and processes used, as well as on the outcome of those procedures and processes.
programs to enhance patient self-management through adherence to treatment plans.
For each demonstration project, not more than half of those enrolled, or half of annual reimbursement, shall come from recipients of Medicaid, FHP, or CHP. No demonstration project shall limit the scope or terms of coverage or limit the grounds or procedural rights for appealing a denial of reimbursement for a health care service for any consumer, enrollee, or recipient. Participation in the program shall be voluntary. Finally, the commissioner is directed to make a report on the pay for performance demonstration projects to the governor and legislature on or before March 31, 2006.
**Section 9**
Commission on Health Care Facilities in the Twenty-First Century
The health care system must have the capacity to provide quality care in multiple settings within regions throughout the State. Excessive capacity must be minimized in order to promote a stable and efficient health care system, thereby attaining a maximum return from the State's investment in health care. The commission established by Park K of Chapter 63 of the Laws of 2005 is designed to undertake a rational, independent review of health care capacity and resources, and make recommendations therefor.
The Commission will consist of 18 statewide members. The 18 statewide members must be appointed within 45 days from April 13, 2005. The Governor shall 12 members, one of whom shall be designated as chair. The majority leaders of both the Senate and the Assembly shall each appoint 2 members of the 18 statewide members, and the minority leaders of both the Senate and the Assembly shall each appoint 2 members of the 18 statewide members.
Regional Representation
The act also establishes 6 regions throughout the state, each of which will have six regional members - of the whom the Governor, the Temporary President of the Senate and the Speaker of the Assembly will each appoint two. Regional members shall vote and be counted for quorum purposes for the statewide commission only when the commission is acting on recommendations relating solely to the regional members' respective region. Regional members shall not participate in matters not specifically related the members' region.
The 6 regions are as follows:
1. Long Island, consisting of Nassau and Suffolk counties;
2. New York City;
3. Hudson valley, consisting of Delaware, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster, Westchester counties;
4. Northern, consisting of Albany, Clinton, Columbia, Essex, Franklin, Fulton, Greene, Hamilton, Montgomery, Otsego, Rensselaer, Saratoga, Schenectady, Schoharie, Warren, Washington counties;
5. Central, consisting of Broome, Cayuga, Chemung, Chenango, Cortland, Herkimer, Jefferson, Lewis, Livingston, Madison, Monroe, Oneida, Onondaga, Ontario, Oswego, Schuyler, Seneca, St. Lawrence, Steuben, Tioga, Tompkins, Wayne, Yates counties; and
6. Western, consisting of Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans, Wyoming counties.
Regulations Governing the Commission
All 18 commission members and all 36 regional members will be subject to the same conflict of interest provisions that apply to members of the State Hospital Review and Planning Council.
The commission will begin to act 45 days after April 13, 2005, the date the act became law. A simple majority of the members authorized to participate in a particular action will suffice for purposes of establishing a quorum and for approval of any matter.
The Commissioner of Health shall appoint one or more liaisons between the department and the commission. The Director of the Dormitory Authority, as well as all state agencies, public authorities and public benefit corporations shall provide such assistance as may be reasonably requested by the chair of the commission.
The commission shall recommend changes to the health care system of general hospitals and nursing homes in New York State in light of, but not limited to, the following factors:
the need for capacity;
the existing capacity in each region;
the economic impact of right sizing on the state and/or the region, including the capacity of the system to provide employment or training to health care providers affected;
the Financial status of general hospitals and nursing homes, including capital debt and revenues;
the availability of alternative sources of funding with regard to capital debt and a plan for retiring such debt;
the availability of other health care services in the affected areas;
the potential for converting facilities to uses other than for health care;
the extent to which the facility serves the health care needs for the region;
the extent to which the actions recommended by the commission would result in greater stability and efficiency in the delivery of needed health care services for a community
The Commissioner of Health and the Director of the Dormitory Authority shall submit information relevant to make recommendations based on the above-listed factors. Additionally, the Commissioner of Health shall submit to the commission information from (i) operating certificate files, (ii) institutional cost reports, (iii) facility occupancy reports, (iv) annual reports of the certificate of need program, and (v) the statewide planning and research cooperative system. Such additional information shall not be subject to disclosure pursuant to the freedom of information law.
Deliberations may be conducted in person or by means of conference telephone, conference video or similar communications. Meetings of the commission will be subject to the open meetings law. The commission shall collaborate with regional advisory committees, solicit input from, foster discussions among, and conduct formal public hearing with statewide and regional stakeholders, who shall include, but not be limited to, community-based organizations, health care providers, labor unions, payers, businesses and consumers. The commission must formally solicit recommendations from health care experts, county health departments, community-based organizations, state and regional health care industry associations, labor unions and other interested parties.
The commission shall establish regional advisory committees, the maximum membership of which shall be determined by the commission. The members of the regional advisory committees shall be appointed in equal numbers by the Governor, the Temporary President of the Senate and the Speaker of the Assembly, and not later than 90 days after April 13, 2005.
"Each regional advisory committee shall develop recommendations for reconfiguring its region's general hospital and nursing home bed supply to align bed supply with regional and local needs."
Regional advisory committees shall solicit input from, foster discussions among, and conduct formal public hearing with stakeholders from within their region. Stakeholders shall include, but not be limited to, community-based organizations, health care providers, labor unions, payers, businesses and consumers. Each regional advisory committee shall transmit recommendations in a written report on November 15, 2006 to the commission. Such recommendations shall include: (i) recommended dates by which such actions should occur; (ii) necessary investments, if any, including any necessary workforce, training, or other investments to ensure that remaining facilities are able to adequately provide services; and (iii) the regional advisory committee's justification for its recommendations.
Report of the Commission
The report containing the Commission's Recommendations:
shall be transmitted to the Governor and the Legislature on or before December 1, 2006;
must be region specific, and shall not reference more than one region for a specific action;
must estimate efficiencies that may be derived from recommended reconfiguration;
shall include:
recommended dates by which such actions should occur;
necessary investments, if any, including any necessary workforce, training, or other investments to ensure that remaining facilities are able to adequately provide services;
commissions response to recommendations of regional advisory committees; and
the commission's justification for its recommendations.
The commission's report may include:
recommended changes on a streamlined regulatory process to address the provision of needed community health services;
recommended changes to general hospital and nursing home reimbursement systems; and
a summary of solicited information.
Implementation of Recommendations
If the Governor transmits the commission's report with his or her written approval to the legislature by December 5, 2006, and a majority of the legislature does not reject the recommendations in their entirety by December 31, 2006, then notwithstanding provisions of the Public Health Law, the Commissioner of Health shall take all actions necessary to implement, in a reasonable, cost-efficient manner, the recommendations of the commission, including, but not limited to: (i) coordination with local government, management and labor representatives of affected facilities, and other parties as the commissioner deems appropriate; (ii) the rescission of operating certificates; and (iii) expediting consideration of such applications for consolidation, conversion or restructuring of existing health care facilities, consistent with commission recommendations. The Commissioner shall take all steps necessary to protect patient safety and preserve patient medical records.
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