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New York Dramatically Expands Mandatory Managed Care for Medicaid Beneficiaries

August 18, 2011

This year’s state health budget made fundamental and far-reaching changes to New York’s Medicaid program, with state savings reported at $2.2 billion in year one and $3.3 billion in year two.  This article provides some general background on the budget’s changes to Medicaid, and then focuses on the largest scale change – the expansion in mandatory managed care for Medicaid beneficiaries.

The Budget Process

The Governor succeeded in winning support for fundamental changes to the Medicaid program through the use of the Medicaid Redesign Team (MRT), a carefully chosen group of stakeholders convened by Jason Helgerson, New York’s new Medicaid Director.  MRT membership included the major political players that have controlled the Medicaid program in New York, namely hospitals, insurers and labor unions.  Notably, the MRT included only one consumer seat, occupied by Lara Kassel, the coordinator of Medicaid Matters New York (MMNY). MMNY abstained from voting on the MRT’s final package, which was presented to the full committee with virtually no time for discussion or revision.  Three-way negotiations between Governor Andrew Cuomo, Assembly Speaker Sheldon Silver and Senator Majority Leader Dean Skelos, resulted in some adjustments to the MRT proposals, but the vast majority of what was finally adopted in the health budget reflects the recommendations of the MRT. 

The sheer volume of changes proposed to the Medicaid program made lobbying efforts particularly challenging for consumer advocates.  The consumer advocacy community opposed the rapid expansion of mandatory managed care in the Medicaid program and fought against proposals for co-payment increases, limits on services, and restrictions on eligibility (such as the proposed elimination of spousal refusal).  Advocates also mounted a campaign against drastic reductions in services for enrollees in New York’s drug assistance program, Elderly Pharmaceutical Insurance Coverage (EPIC), and lobbied against elimination of prescriber prevails protections in the Medicaid prescription drugs program. 

The final negotiated budget represents victory for consumers in several areas, but contains many changes to the Medicaid program that will present significant barriers to accessing care. For a summary of the changes made by the Article VII bill, read Fundamental Changes to NYS Medicaid in 2011 State Budget, posted under News on nyhealthaccess.  For further detail on the changes, including cross references to legislation and amended statute, consult the 2011-2012 Health Article VII Summary Chart.

Mandatory Managed Care Expansion – Three Prongs

The 2011 Budget adopted the MRT’s proposal for dramatic expansion of mandatory managed care for the Medicaid recipients, accomplishing this expansion in three ways.  First, services that had remained outside of managed care plans, paid for under traditional fee for service arrangements, will be carved in to the capitated rate and subject to plan approval.  Second, exemptions for special populations not previously subject to mandatory enrollment will be eliminated.  Finally, a new program of mandatory managed long term care will be created for those dually eligible for both Medicaid and Medicare. 

First Prong:  Service Carve-ins

Under current law, managed care plans are responsible for providing most medically necessary health care services to their enrollees, with three notable exceptions. Prescription drugs, personal care and mental health/substance abuse treatment have all been carved out of the managed care package, meaning that enrollees can go to providers outside of the plan for these services and the providers are reimbursed by Medicaid on a fee for service basis. This year’s budget eliminates the carve-outs for prescription drugs effective October 1, 2011 and personal care services effective August 1, 2011.  The state will establish behavioral health organizations to manage mental health and substance abuse treatment. 

Second Prong:  Population Expansions

Most Medicaid beneficiaries in New York have already been required to enroll in a Medicaid managed care plan.  The New York State Department of Health (NYSDOH) reports that 2.9 of the 4.8 million enrolled in Medicaid are now enrolled in Medicaid managed care.  Last year NYSDOH brought virtually all of the state’s Supplemental Security Income (SSI)-related population, as well as New York City residents living with HIV, into the mandatory program. Out of 711,000 SSI recipients in New York State, 305,000 are now in a managed care plan.  Another 100,000 will be enrolled in the next year. 

The 2011 Budget continues the expansion of managed care by gradually narrowing the remaining exemptions and exclusions from mandatory enrollment over the next several years.  Very few groups will remain in the fee for service world after April of 2013, when phase-in is completed.  Key groups that will remain either excluded or exempt include:

  • Certain categories of dual eligibles  (those in “capitated demonstration for long-term care” and those not enrolled in a Medicare Advantage plan)
  • People receiving Medicaid for less than 6 months (Emergency Medicaid and Spend Down)
  • Persons with other cost-effective 3rd party insurance
  • Native Americans
  • Other special populations including infants living with their mother in jail, those eligible under the Cancer Treatment Program, and those receiving limited Medicaid services, such as TB, or hospice or family planning services

All other exemptions and exclusions are eliminated and populations are enrolled in accordance with the phase-in schedule set forth below under Timeline.  The rates that will be paid to the plans for special populations are to be approved by the Office for Mental Health, the Office for People with Developmental Disabilities, the Office on Alcohol and Substances Abuse Services, and the Offices on Children and Families. 

Third Prong:  Managed Long Term Care

The budget authorizes the Health Commissioner to submit the necessary federal waivers and proceed with mandatory enrollment in certified managed long term care plans, or “other program models that meet guidelines specified by the commissioner that support coordination and integration of services.”  Plans currently certified include Medicaid Advantage Plans; partially capitated managed long term care plans, and plans participating in PACE-- the Program of All-Inclusive Care for the Elderly.  For more information on New York’s existing managed long term care program, visit NYHealthAccess and consult the article Managed Long Term Care

The MRT Workgroup on Managed Long Term, which held its first meeting in New York City on July 8, 2011, is to assist in developing the guidelines for alternative program models.  For a list of panel members, materials, and scheduled meetings dates, visit the NYSDOH website at:  Guidelines for alternative models are to be finalized by the Commissioner and posted on the NYSDOH website by November 15, 2011. 

Persons subject to mandatory enrollment in the new program include anyone over age 21 who needs home and community based services (“as specified by the Commissioner”) for more than 120 days.  The program is targeted primarily at duals, since non-duals will be required to enroll in mainstream managed care (see The Second Prong above).  Services likely to be included by the Commissioner as counting toward the 120 days include personal care, home health services, and adult day health care.   

The only groups that will be excluded from enrollment in mandatory managed long term care are those participating in the Assisted Living Program or one of three specified waivers: the Traumatic Brain Injury Waiver, the Nursing Home Transition and Diversion Waiver, and the Office for People with Developmental Disabilities Waiver.  Persons subject to mandatory enrollment will be assigned to a plan if they don’t select one within 30 days of the date on which they are given the choice of plans. Plans are to contract directly with NYSDOH and perform assessments for their members’ care needs every six months. The role of local districts in assessing and providing long term care is significantly reduced.

Budget negotiations did result in one important change to the MRT proposal for managed long term care – plans will be required to offer Consumer Directed Personal Assistance services. Plans are also required to provide “transitional care” to current recipients of long term care services, by continuing existing services until assessments are complete (assessments are to be completed within 30 days of enrollment).

In addition, the health commissioner is required to seek input from representatives of home and community-based long term care services providers, recipients, and the Medicaid managed care advisory review panel, among others, to further evaluate and promote the transition to managed long and other care coordination models, and to develop guidelines for such care coordination models. The final Budget provides that guidelines shall be finalized and posted on the department's website no later than November 15, 2011.

Federal approval of amendments to New York’s 1115 waiver is required before mandatory enrollment in managed long term care can begin, but the target date is April of 2012.  Mandatory enrollment will begin in New York City and NYSDOH has begun discussions with HRA regarding the most effective, efficient way to transition people.  Roll-out options that have been mentioned include enrollment upon reassessment or enrollment by borough. 

Timeline for Implementation of Changes to Mainstream Medicaid Managed Care

NYSDOH has already submitted proposed amendments to its existing managed care waiver in order to authorize the expansions described above.  The proposed schedule for implementation is summarized below.  To view these submissions themselves, visit the NYSDOH website at:


  • Population Expansion – Individuals in the Recipient Restriction Program are enrolled
  • Service Expansion – Personal care services (except Consumer Directed Personal Care) are carved into the capitated benefit package provided by plans


  • Population Expansion – Several new groups will be enrolled as eliminations of existing exemptions for the following groups take effect:
  • Individuals with a relationship with a primary care provider not participating in any managed care plans
  • Individuals living with HIV upstate
  • Individuals without a primary care provider within 30 miles/30 minutes
  • Adults with serious and persistent mental illness (not receiving SSI)
  • Children with serious emotional disturbance (not receiving SSI)
  • Individuals temporarily living outside of their home district
  • Pregnant women whose provider is not participating in any managed care plan
  • Persons receiving mental health family care
  • Individuals who cannot be served due to a language barrier
  • Population Expansion – the following exemption will be time limited to a 6 month duration:
  • Individuals with chronic medical issues whose specialist provider does not participate in any managed care plan


  • Population Expansion – Several new groups will be enrolled as eliminations of the following existing exemptions take effect: 
  • Individuals with characteristics and needs similar to those in the Long Term Home Health Care Program (LTHHCP)
  • Individuals with end stage renal disease
  • Individuals receiving services through the Chronic Illness Demonstration Program
  • Homeless persons
  • Infants born weighing under 1200 grams or disabled and under 6 months of age
  • Individuals enrolled in the LTHHCP (where capacity exists), unless they opt to enroll in the new Managed Long Term Care Program
  • Adolescents admitted to Residential Rehabilitation Services for Youth


  • Service Expansion – Skilled Nursing Facility Services are carved into the capitated benefit package provided by plans
  • Population Expansion – Residents of nursing homes are enrolled


  • Population Expansion – almost all groups remaining outside of managed care will be enrolled as remaining elimination of still more exemptions takes effect:
  • Residents of an institutional care facility for the mentally retarded (ICF/MR) or developmentally disabled (ICF/DD)
  • Individuals with characteristics and needs similar to residents of an ICF/MR
  • Individuals receiving services through the Nursing Home Transition and Diversion Waiver
  • Residents of Long Term Chemical Dependence Programs
  • Children enrolled in the Bridges to Health foster care waiver program
  • Non-institutionalized foster care children
  • Individual receiving services through the Medicaid Home and Community Based Waivers
  • Individuals with characteristics or needs similar to those receiving services through a Medicaid Home and Community-based Services Wavier
  • Individuals receiving services through a Medicaid Model Waver (Care  at Home)
  • Individuals with characteristics or needs similar to those receiving services through a Medicaid Model Waver (Care  at Home)
  • Individuals eligible through the Medicaid Buy-in for the Working Disabled
  • Residents of State-operated psychiatric centers
  • Blind or disabled children living separate and apart from their parents for 30 days or more
  • Institutional foster care children

Consumer Advocates’ Concerns

The list is long.  The Legal Aid Society submitted comments on New York’s waiver proposal which cataloged concerns with the ambitious timeline the state has proposed for the expansion.  Areas of concern include continuity of care during the transition, network capacity, insufficient attention and resources for enrollment outreach and training, and inadequate plan oversight. 

Concerns specific to Managed Long Term Care include the need to produce plan specific data on nursing home utilization (as compared to community long term care coverage) to allow for informed enrollment choices; incentives many Managed Long Term Care plans will have to enroll large numbers of low-hour clients; and, a lack of clarity around consumer rights to appeals and fair hearings.  In all areas of managed care, advocates are concerned that consumers challenged by disabilities, low literacy or language barriers will not receive the help they need with enrollment and service navigation post enrollment.  Legal services offices assisting clients with plan denials note that many plans fail to apply the required medical necessity standard, focusing instead on the contractual language that governs commercial services. 

Medicaid Matters New York (MMNY) has organized a Managed Care Workgroup, which held a day long meeting on July 15 to prioritize advocacy issues and discuss a framework for monitoring plan performance under the expansion.  For more information or to provide input, contact Lara Kassel, Coordinator for MMNY at 518-320-7100.


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