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Empire Justice Center’s Comments on Proposals on the Medicaid Redesign Website

February 16, 2011


Empire Justice Center SUPPORTS the following three proposals as summarized on the Redesign Team's website:

1.  Reduce payment & revise Indigent Care methodology consistent with Federal reform.

Federal health reform legislation includes provisions which will progressively reduce federal disproportional share hospital (DSH) funding to states by $1.5 billion nationally beginning in federal fiscal year (FFY) 13-14. States which continue to allocate indigent care DSH payments using methodologies which are not based on uninsured uncompensated care and/or Medicaid losses will experience the greatest reductions in federal DSH spending.

We urge New York to shift the portion of indigent care pool resources allocated based on uninsured coverage from 10% to 100% in order to come into full compliance with federal requirements. Under this uninsured units methodology, uncompensated care need is computed for each hospital by first multiplying their reported uninsured units for each category of service by the applicable hospital-specific Medicaid rate for that service to derive the “cost” of the uninsured care for each service provided by the hospital. The sum of these costs for each hospital, offset by any uninsured revenue collections, constitutes the hospital’s uncompensated care need which is then used to determine their percentage share of available indigent care pool resources.  Use of this methodology would allow us to track the uninsured need by hospital and make a much stronger case for preserving our DSH dollars than current formulas allow.  It would also strengthen the incentive for New York hospitals to make uninsured patients aware of their financial assistance programs, and to actually enroll patients in these programs proactively. 

2.  Implement a community based pay for performance (P4P) payment system reform that provides financial incentives to providers to reduce unnecessary hospital admits and readmits thereby lowering cost and improving quality.

New York has average performances in key quality indicators but ranks 50th nationally on avoidable hospital use and appears to be dealing with a systemic quality issue stretching across payers and health care delivery sectors.  New York is also above the national average in Medicaid spending in all service categories except for physicians.  

There are five types of health care encounters or events that are potentially preventable (more commonly referred to as Potentially Preventable Events (PPEs)) and lead to unnecessary services.  Of these five, three are concerned with inpatient events.  New York currently uses one, Potentially Preventable Re-admissions (PPRs) and is on track to implement a second, Potentially Preventable Conditions (PPCs).  A third PPE, Potentially Preventable Admissions (PPAs) completes the inpatient field and is described in greater detail below.

PPAs are facility admissions that may have resulted from the lack of adequate access to care or ambulatory care coordination.  PPAs are ambulatory sensitive conditions (e.g., asthma) for which adequate patient monitoring and follow-up (e.g., medication management) can often avoid the need for admission.  The occurrence of high rates of PPAs represents a failure of the ambulatory care provided to the patient.  The PPAs are more comprehensive than the U.S. DHHS Agency for Healthcare Research and Quality (AHRQ) list of ambulatory care sensitive conditions as initially defined in the 1980s.  They are more comprehensive in large part because of advances in our understanding of the role coordinated care can play in avoiding admissions together with the understanding that the preventability of these admissions should be adjusted for the overall burden of illness of the individual patient. 

We encourage further focus on identifying excess PPAs by comparing risk adjusted rates of PPAs across providers to allow a wider range of conditions to be identified as a PPA.  PPA based initiatives are readily suited for scaling should health care entities, such as Accountable Care Organizations (ACOs), with the full responsibility for coordination and preventive services become more commonplace.   We encourage models that would allow for community responses to PPA incentives for improved performance.

3.  Allow administrative renewals for consumers enrolled in Medicare Savings Programs.

New York has made tremendous strides toward maximizing access to the Medicare Savings Program through various data matches and accepting applications for low-income subsidy to be used for MSP.  To ensure that enrollees remain on MSP, we recommend implementing administrative renewal.  If most individuals on MSP are on fixed incomes, administrative renewal can save State dollars and reduce churning.  Instead of mailing the current renewal form annually, the State would generate/mail a letter requesting a reply only if there has been a change in income, residence, or household size.  This letter would be generated annually at the time of cost of living increases.


The Empire Justice Center strongly OPPOSES the following three proposals as summarized on the Medicaid Redesign Team's website:

1.  Eliminate State funding for Medicare Part D education and outreach. 

This proposal maintains that there is no longer a need for targeted education and outreach regarding Medicare Part D on a state level.  While the program is now well-known, it is not well-understood.  Consumers remain confused by the complex program.  Varying levels of benefits and eligibility for assistance have resulted in complex rules for enrollment and billing, some of which are driven by state processes, while others are a result of federal policy.. 

New York has made great strides over the last few years to maximize the participation of New Yorkers with Medicare in programs that help them better access the care they need while saving consumers and the state significant amounts of money. For example, the state has pursued an initiative to screen members of the Elderly Pharmaceutical Insurance Program (EPIC) for the federally funded Extra Help program that provides almost full, federally-funded Part D drug coverage to eligible low-income beneficiaries, effectively off-loading drug costs that had been borne by the state-financed EPIC program onto the federal Part D program.
Through the Managed Care Consumer Assistance Program (MCCAP), funded by the State Office for the Aging, organizations that work with low-income Medicare beneficiaries, including the Empire Justice Center, the  Medicare Rights Center, the Community Service Society, Legal Aid, State Wide Senior Action, Self-Help, and the New York Legal Assistance Group, have maximized enrollment in Part D coverage and “Extra-Help” to save EPIC and the Medicaid programs money while ensuring that New Yorkers have access to the care they need. We estimate that together we saved New York over $5.5 million last year by ensuring that Medicare and Medicare Part D plans paid for care that New York’s Medicaid and EPIC programs would have paid for with state funds.
We are unclear whether this proposal to eliminate funding of Part D education and outreach applies to MCCAP. First, the MCCAP agencies do much more than Part D education and outreach: they help to enroll eligible New Yorkers in Extra Help and help consumers appeal denials of drug coverage by Part D plans. This assistance is needed now more than ever, as Part D plans continue to erroneously deny prescription drug coverage; in 2009 the independent reviewer overturned 65 percent of the plan decisions it considered.  Further, the minimal savings generated by eliminating Part D education and outreach would result in savings for the State Office for the Aging, and not for the Medicaid program. Finally, if the proposal does refer to MCCAP, it would be “penny wise and pound foolish” as it would save only $1 million but result in the state losing over $5.5 million in savings generated by the program.

2.  Eliminate Personal Care Services

Two proposals recommend either elimination of level 1 personal care services for all Medicaid recipients or elimination of the entire personal care benefit for recipients not qualifying for nursing home level care.  Significant short term savings are associated with these proposals.  However, these proposals will not result in savings long term and as such are short sighted indeed.  Personal care services allow Medicaid recipients to maintain their health and independence and avoid more costly medical care in the future.  Rather than eliminate this critical benefit, New York should explore means of standardizing need assessments and new options for community based care that can draw down additional federal resources, such as the Community First Choice Option and the State Balancing Incentive Payments Program.

3.  Eliminate funding included in Medicaid and FHPlus premiums for direct marketing of Medicaid recipients and facilitated enrollment activities for Managed Care in all counties.

As of October, 2010 the penetration rate of eligible Medicaid recipients enrolled in managed care was 84% statewide (77% upstate and 88% NYC).  By March 2011, the State will only have 7 non mandatory counties where enrollment in managed care remains an option.  Recipients in mandatory counties must enroll or be auto-assigned into a managed care plan (MCP), which greatly reduces the need for marketing. 

While these facts lend some support to a proposal to reduce funding for plan marketing, facilitated enrollers play a very different role with the plans.  New York’s facilitated enrollment (FE) program provides application assistance for government-sponsored health insurance programs to adults and families throughout New York State. Facilitators are located in community based sites frequented by the target population and are available at days and times convenient for families including evening and weekend hours.  Facilitators are culturally and linguistically representative of the population being served.  The total number of complete applications submitted by Health Plan Facilitated Enrollers in the past year was 325,283.  Many local districts currently heavily rely on the services of facilitated enrollers (FE) for applications.  In some counties approximately 90% of applications are submitted by FEs.  Given the breadth and scope of our FE program,

If New York were to eliminate funding for facilitated enrollment at this juncture, we would risk destabilizing the Medicaid program’s application and eligibility procedures statewide.