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May 2009

New York: Providers, Foundations and the New York Department of Health Targeting High-Cost Medicaid Patients

A recent report from the Medicaid Institute at the United Hospital Fund, Rethinking Service Delivery for High-Cost Medicaid Patients, outlines a multi-year effort by foundations, researchers, and providers in New York to study high-cost Medicaid patients and then plan and implement interventions to address their health care needs.  Initial analysis at one facility— Bellevue Hospital Center in New York City—showed that interventions led to a dramatic 67 percent reduction in emergency room visits and a 45 percent reduction in inpatient admissions.  As a result, the New York Department of Health has authorized funding for regional demonstrations to implement similar models across the state of New York.

The initial analysis of Medicaid claims data found that—when long-term care patients and their spending is taken out—the most costly 1 percent of Medicaid beneficiaries consumed 20 percent of the remainder of the New York Medicaid budget.  The top 10 percent utilized 57 percent of calculated spending.  Two-thirds to three-fourths of these patients had a chronic disease (defined as a physical chronic condition, not including mental illness or substance abuse).  In addition, approximately two-thirds suffered from mental illness, two-thirds had a substance abuse condition and about half had both simultaneously.  New York health care providers worked with researchers to identify high cost patients—and those at risk of generating high costs—in order to conduct in-depth surveys to learn more about their socioeconomic circumstances.  The patients were found to be highly disadvantaged and facing a range of issues including homelessness, unemployment (only 5 to 10 percent had full- or part-time employment), limited transportation options, and lack of community and social supports. 

Two hospitals—Bellevue and Montefiore Medical Center—received funding from the United Hospital Fund and the New York Community Trust to implement care models to meet the needs of the high-cost patients they identified.  Both models relied on coordination of care between providers, particularly between physicians, mental health care providers and social workers, and tracking of high-risk patients.

At the conclusion of the foundation-funded pilot (which ran from 2005-2008), the New York Department of Health announced in January 2009 that they will fund a demonstration program targeted at reducing costs among high-cost Medicaid patients.  Bellevue’s parent organization, New York Health and Hospitals Corporation, was one of the recipients.  The state will offer more than $8 million per year to competitively selected providers to participate in a statewide collaborative with regional grantees that will provide targeted, coordinated, and interdisciplinary services to high-cost Medicaid recipients.  In years two and three of the initiative, providers will have the opportunity to receive additional performance-based incentives.