Governor Hochul presented highlights from the state Fiscal Year 2023 Executive Budget which includes an array of healthcare proposals, summarized in brief below. HCA will be analyzing the budget bills that become available later today and will produce a comprehensive memo for the membership in short order.
HCA has received outreach directly from the Governor’s office to arrange a meeting imminently to review the Executive budget and proposals related to home care, specifically. This follows much engagement between the Association and the Executive’s health team via meetings, communications, sharing of data and proposals in advance of the budget release, and more all stressing workforce compensation needs, worker shortage emergency, provider and MLTC needs for funding, and broader steps that need to be taken for long term structural support and capacity of the workforce. Based on our review of the Budget Briefing Book and the Governor’s address today, there seems to be indication of elements of much of the above in this year’s proposed budget.
The Governor proposes to rebuild and growth of the healthcare workforce by 20 percent over the next five years with a program designed to strengthen home care, improve the career pipeline, expand access to healthcare training and education, and recruit health care and direct support professionals to care for people in underserved areas.
The proposal includes:
- $10 billion+ multi-year investment in health care, including, $4 billion+ to support wages and bonuses for Health care workers.
Key components of this multi-year investment include:
- $2 billion to support health care worker wages;
- $1.2 billion to support health care and mental hygiene worker retention bonuses, with up to $3,000 bonuses going to workers earning less than $100,000 who remain in their positions for one year, and pro-rated bonuses for those working fewer hours; the bonuses are proposed to be tailored in varying amounts based on hours worked, and length of time in service.
- $500 million for Cost of Living Adjustments to help raise wages for human services workers;
- $2.4 billion for healthcare capital infrastructure and improved lab capacity; and
- Other investments in workforce and healthcare access and delivery.
- Investment to develop robust statewide diagnostic testing capacity.
- Increasing access to rapid at-home testing for individuals and families.
- Administration of a multi-faceted statewide vaccination and booster program that ensures all New Yorkers, including communities with disparate health challenges, receive equal access.
Medicaid Global Cap
- The Executive Budget proposes to modify this existing metric to incorporate the Centers for Medicare & Medicaid Services (CMS) actuary projection of spending growth which will better accommodate pandemic spending levels identified in this sector.
- Total Federal, State and local Medicaid spending is expected to be $92.0 billion in FY 2023.
- Stats: 7 million+ individuals receive Medicaid-eligible services through 80,000+ providers, 45+ fully and partially capitated managed care plans.
Provider Rate Increases
The Governor proposes Medicaid reimbursement rates increases from “multiyear investments across all programs” through the following actions:
- Across-the-Board (ATB) Rate Restoration and 1 Percent Rate Increase in order to provide flexible funding for providers to respond to market needs and compete in the labor market to attract qualified workers, and to respond to industry requests for payment reform to be operationalized via a structural long-term increase to Medicaid inpatient and outpatient rates.
The budget proposes $3.7 billion for restoration of the 1.5 percent reduction taken in the FY 2021 Budget, and increasing Medicaid rates across the board by an additional 1 percent.
- The budget proposes $2.8 billion in payments directed to “Safety Net” hospitals to support operating needs and address pandemic-related impacts.
- Hospital rebasing is proposed to be delayed by a year due to the irregular cost base resulting from the pandemic.
- The budget proposes to fully restore $77 million in the Mainstream and MLTC quality pools in order to incentivize and reward quality care.
- Proposed is $34.7 million in the MLTC program and HIV Special Needs Plans by increasing plan premiums for certain plans to the middle and high end of the rate range.
Health Care Transformation
- Establishes a new $1.6 billion capital program for the purpose of financing capital improvements for eligible health care facilities and nursing homes and building out ambulatory care infrastructure for financially distressed hospitals. This will bring the total capital investments for healthcare providers to $5.4 billion in total support through FY 2028.
- $750 million will be provided for health care delivery transformation via grants to health care providers for capital projects which build innovative, patient-centered models of care, increase access to care, improve care quality, and ensure health care provider financial sustainability.
- $450 million will be provided for a mix of traditional healthcare capital investments, including opportunity to finance submitted proposals under prior health care capital programs, and includes minimum guaranteed allocations for residential healthcare facilities and nursing homes ($50 million), community-based health care providers ($25 million), and behavioral health centers ($25 million).
- Investment of $200 million will be provided for the modernization of emergency departments of regional significance.
- Investment of $150 million will be provided to build out IT infrastructure and telehealth capabilities across all eligible provider types.
- Investment of $50 million will support implementation of the Green House nursing home initiative – an innovative care model based on the delivery of nursing home level care in real homes, and movement away from the traditional institutional nursing home model in favor of small residential houses where residents both live and receive care.
Public Health and Aging
- Includes $50 million annual increase to support the “Nourish New York” Initiative to Feed New Yorkers and Support Farmers.
- Provides additional Harm Reduction Services funding ($9 million recurring) and Naloxone distribution ($8 million in FY 2023 and $10 million thereafter) under the AIDS Institute by utilizing additional resources from the Opioid Stewardship Fund and the Opioid Settlement Fund, respectively.
- The Executive Budget continues $200 million toward the state’s End the AIDS Epidemic initiative.
- The Executive Budget recommends:
- Investing $6.7 million in FY 2023 ($13.4M in FY 2024) statewide to increase all General Public Health Work (Article 6) county base grants.
- Investing $19 million in FY 2023 ($38 M in FY 2024) statewide to allow LHDs to claim for fringe benefits expenses to assist in the hiring and retention of staff.
- A new $2.9 million investment to help develop, expand on and replicate innovative services to address social isolation to combat social isolation, elder abuse, and support caregivers.
- Continues the Emergency Home Food Delivery (EFD) program New York’s EFD program, which supplies meals to low-income older adults and other COVID-19 vulnerable populations.
- Increases the FY 2023 Human Services COLA payment, investing an additional $6 million into SOFA programming.
- Provides an additional $11 million to the Home Visiting Program to allow it to serve an additional 1,600 families statewide.
Employer Responsibilities
- Invests $12.4 million in the Department of Labor’s (DOL) enforcement of worker protections, including those protections enacted through recent legislation related to elevator safety, airborne diseases, and prevailing wage.
- Legislation submitted with the Executive Budget also bans agreements that limit workers’ ability to move and work freely by eliminating non-compete agreements for workers making below the median wage in New York State and to explicitly ban all “no-poach” agreements under State antitrust law.
- Additional legislation increases criminal penalties for employers who knowingly or intentionally commit wage theft violations to more closely align with penalties for other forms of theft.
Medicaid Expansion
- An expansion in MA eligibility is proposed for low-income New Yorkers age 65 and over and those with disabilities to maintain Medicaid eligibility after they become eligible for Medicare. This coverage expansion will eliminate the resource eligibility test and raise the income level to 138 percent of the Federal poverty level for these populations.
Local Medicaid Costs
- The budget proposes a continuing State Takeover of Local Medicaid Costs. In FY 2023, the State will assume nearly $5.2 billion in costs that would have otherwise been incurred by localities.
Maternal Health
- The budget includes over $20 million in annual investments to expand access to holistic prenatal and postnatal care, and work with the federal government to provide year-long Medicaid postpartum coverage for mothers for up to one year, increasing from 60 days after they give birth.
LGBTQIA+ Health Services.
- Invests $7.0 million (in addition to existing $4.967 million funding) to support the LGBTQIA+ community with direct health services, cultural competency education and training, and organizational capacity building.
Prescription Drug Costs
- Create the New Pharmacy Benefits Bureau to Reduce Prescription Drug Costs. Proposes that this new Bureau will begin licensing Pharmacy Benefit Managers (PBMs), issue comprehensive regulations to ensure transparency and accountability for PBM practices, and hire a new compliance team to investigate PBM business practices and review complaints of misconduct.