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October 2011 St@teside

New York Achieves Substantial Savings through Medicaid Reforms

The New York state Medicaid program recently announced that it is on track to achieve $2.2 billion in savings in the current fiscal year as a result of the implementation of proposals made by the state’s Medicaid Redesign Team (MRT). Seventy eight MRT proposals will result in $1.26 billion in savings in the 2011-12 fiscal year. Of the proposals that are completed and currently in progress, $596.35 million in savings have already been achieved. With the implementation of other cost-cutting strategies also recommended by the Medicaid Redesign Team, the total savings target will be achieved in the current fiscal year.  

Click here to learn more about New York’s current Medicaid reform process.

New York generated cost-saving ideas by soliciting public input through regional forums, developing a website to solicit ideas, utilizing a transparent stakeholder process, and engaging a high-level board of community and political leaders. The cost-saving mechanisms employed by New York include a litany of measures (outlined here), including increased care management, pharmacy rate reform, managed care rate changes, and rate reform for home- and community-based services.

Phase 2 of the MRT focuses on pursuing comprehensive reform. The MRT will develop a multi-year quality improvement/care management plan.  Additionally, the MRT has been subdivided into work groups, which will engage a broader set of stakeholders, and focus on complex issues that were not addressed in Phase 1.  Work group recommendations will submitted to Governor Cuomo by December 2011. The work groups are:  Managed Long Term Care Implementation and Waiver Redesign, Behavioral Health Reform, Program Streamlining and State/Local Responsibilities, Health Care System Redesign – Brooklyn, Payment Reform/Quality Measurement, Basic Benefit Review, Health Disparities, Affordable Housing, Medical Malpractice, and Workforce Flexibility/Change of Scope of Practice.

New York is utilizing several strategies to keep their reforms on track. First, they have established a Global Medicaid Cap, a two-year state share actual dollar cap, and a four-year state share spending cap linked to growth in CPI-Medical.  The cap is a challenge to the health care industry to control costs.  “Super powers” have been given to the State Commissioner of Health to ensure that the cap is not exceeded.   Monthly reports on the Global Cap are made available to the industry, legislature and public.  Second, they are utilizing sophisticated data mining tools that enable them to identify problem spending and track progress. Third, they have refined their state plan amendment with process with CMS, and they are currently convening weekly meetings to speed approval of proposed reforms. Fourth, they are using a transparent process, posting progress on a dedicated website.