NY State Budget Cuts City Public Health Funding by $59M
The budget lowered the state’s reimbursement for health services provided by the city to a minimum of 20%, compared with 36% for all other municipalities statewide.
De Blasio said the funding is used for newborn home visits; clinics that treat STDs, HIV and tuberculosis; and public health response services that have been used for Legionnaires’ disease, West Nile and Zika. It is also used to combat opioid addiction and test updated vaccines for diseases such as measles and hepatitis A.
“The Health Department will not be able to compensate for the loss of funding with federal dollars—federal funding is earmarked for certain activities and not guaranteed,” she said in statement to Crain’s. “We urge the state to fully restore the funding next year, so that we can limit the loss in public health gains we have been able to realize on behalf of all New Yorkers.”
The state Legislature and Gov. Andrew Cuomo’s agreement on a budget over the weekend had far-reaching effects, with the final agreement altering funding for hospitals, pharmacists, direct-care workers and ambulance companies by tens of millions of dollars.
In addition to receiving a $550 million increase to Medicaid, hospitals also avoided a budget proposal that would have lowered payments to facilities with high rates of avoidable admissions. A pool set aside for safety-net hospitals, which treat high numbers of Medicaid and uninsured patients, increased by $32 million, to $82 million. The final agreement also excluded an Assembly proposal, opposed by hospitals, that would have allowed patients or insurers to appeal out-of-network emergency room charges to an independent dispute-resolution entity. Currently only physician charges can be appealed.
“I am exceedingly pleased with this outcome,” Kenneth Raske, president and CEO of the Greater New York Hospital Association, wrote to members.
The association said the one “fly in the ointment” was a $24.5 million cut to five academic medical centers.
Independent pharmacists cheered the budget’s ban of “spread pricing,” in which pharmacy benefit managers keep the difference between what they charge Medicaid managed-care plans and what they reimburse pharmacies. The budget requires insurers to pay no more than ingredient costs, the dispensing fees paid to pharmacies and an administrative fee for providing pharmacy benefit management services. The Department of Health “may establish a maximum administrative fee,” according to the budget.
“This new law is an exciting and important first step in bringing high prescription drug costs down by shedding new light on the business practices of PBMs,” said Elizabeth Lasky, executive director of the Pharmacists Society of the State of New York.
Eric Linzer, president of the state Health Plan Association, said the initiative includes “an extremely aggressive timeline” of about three months in which Medicaid plans must rework their contracts with PBMs. “Our preference would have been for additional time around implementation,” he said.
Workers who support individuals with mental health conditions, substance-use disorders or developmental disabilities will receive a 2% pay increase Jan. 1 and an additional 2% raise April 1, 2020. The raises will cost the state $80 million. That falls short of the $140 million that social services agencies had requested to cover a broader 2.9% cost-of-living adjustment, which would have helped nonprofits manage rising rents, health benefits and utility costs.
The budget did not include a proposal by the governor to save $17.5 million by limiting Medicaid payments for ambulances and psychologists. The state would have paid no more than what Medicaid would reimburse for services even if the patient was dually eligible for Medicaid and Medicare. Medicaid typically pays patients’ Medicare Part B deductibles.
By Jonathan Lamantia [Crains]