The Situation Report | April 22, 2024
The Governor and both houses of the Legislature reached agreement on this year’s State Budget on Saturday, nearly three weeks past the deadline. Governor Hochul has signed off on several parts of policy in the $237 billion state budget. As HCA reported extensively, there were many priority issues with tremendous potential impact on the home healthcare and managed care sectors outstanding through the end of the negotiation period.
The following preliminary overview provides a high-level sense of where those priority issues landed; HCA will continue to analyze and interpret the legislative language, providing a more detailed summary to the membership this week. Please also stay tuned for information from us on how you can engage with HCA and your representatives to advocate in the wake of this landmark state budget agreement.
OVERALL:
- For the second year in a row, despite considerable advocacy from across the healthcare industry, the final budget seems to fall short in the delivery of much-needed support for all sectors during a period when crises in care delivery are plaguing the entire system due to shortages in workforce, financing and capacity.
- On top of the general underinvestment in healthcare, despite including a major funding proposal for CHHAs in the Assembly one-house budget, the final State budget ignores the alarming needs of home healthcare providers, failing to include this vital financial support, and implementing massive reductions in care delivery to New Yorkers in every region of the state. This was also done, once again, as the Governor and the Legislature agreed to provide rate increases to hospitals, nursing homes and assisted living providers—making a glaring decision to leave the home health sector without this direly-needed support.
- HCA was successful in leading the effort to omit in the final budget a highly concerning proposal made by Governor Hochul that would have allowed hospitals to provide care in the home without an Article 36 or 40 license, and without a licensed partner. In our advocacy to the Legislature and Executive, HCA presented the extensive and outstanding hospital-home care collaborative models being operated across the state providing acute and critical care, primary and preventive care, emergency room diversion, pre- and post-surgical programs, and other services, demonstrating that the Governor’s proposal was both unnecessary and a flagrant violation of state licensure requirements.
- Perhaps the most striking outcome from this year’s State Budget as it relates to the home healthcare field is what was decided related to the Consumer Directed Personal Assistance Program (CDPAP). In pursuit of over $200 million in savings, Governor Hochul initially proposed to eliminate Wage Parity for CDPAP workers. During the negotiations, this proposal morphed into adding a proposed change to one sole fiscal intermediary (FI) for the entire state. HCA and partners across the home healthcare and consumer sector fought against these proposals until the last moment, and, as we understand, it was one of the final issues to be settled. Unfortunately, the final agreement stipulates that one statewide FI will operate and subcontract with Independent Living Centers (ILC) and one additional FI per rate setting region—of which there are 4. That additional FI must have been operating since January 1, 2012 and meet other eligibility requirements. While this is not one entity, it is still a massive reduction in FIs that will cause very significant upheaval in the home healthcare sector and in the ability to keep patients in their homes statewide. Additionally, managed care plans and local departments of social services (LDSS) will be required to contract with that one statewide FI only.
- The final budget seems to not include other proposed CDPAP changes, including the elimination of designative representatives; limits on number of hours that personal assistants can work; and a bar on Licensed Home Care Services Agencies) LHCSAs or managed care plans from operating an FI.
- The final budget contains a provision that allows the Department of Health (DOH) to seek federal approval to implement a tax on managed care organizations. The tax is estimated to amount to $350 million in revenue in fiscal year 2025 and be used to support healthcare quality programs, reimbursement of the general fund for Medicaid, capital expenses in healthcare, and more.
- A number of the proposals by the Governor and the Legislature related specifically to Managed Long Term Care (MLTC) plans were of great concern to HCA. We are pleased to see that the final budget does not include some particularly problematic items, such as the competitive procurement process for MLTCs, the proposal to prohibit plans that owned or were affiliated with LHCSAs or FIs to maintain those relationships. However, the final budget does eliminate the 1% rate increase enacted in 2022, as well as the MLTC Quality Pool. It also imposes penalties on plans for non-compliance with electronic visit verification (EVV) requirements.
HCA will be following the developments around implementation of these proposals very closely, and advocating for the membership’s best interest every step of the way. Please stay tuned for our comprehensive memo.
Reactions
The overwhelming consensus from the health care community was one of disappointment.
Sen. Gustavo Rivera, chair of the Senate Health Committee, said: “I’m dismayed that the Executive was unwilling to do more to ensure the long-term financial stability of healthcare providers and institutions that serve our most vulnerable. While we rightfully increased Medicaid rates for our hospitals, nursing homes, and assisted living facilities, we needed more for health services across the board. Many of the providers in our community, including community health centers, home care providers, and hospices, are still facing financial challenges that we must take action to address.”
“As a State, we should be pushing to ensure older and differently abled New Yorkers have the choice to stay in their communities and receive the care they need from their loved ones,” he added.
He also called the consolidation of the Consumer Directed Personal Assistance Program (CDPAP) under a single fiscal intermediary (FI) a “concerning measure” with “serious implications for the population it serves.”
HCA President Al Cardillo expressed his opposition to the proposal, “The CDPAP proposals that have been advanced, including the single statewide fiscal intermediary, defy the realities of patient need and patient care not only in the CDPAP program, but the crisis in access and care across the entire health care system. The Executive proposals have been prepared without regard for their exacerbation of these crises – hospital emergency room overburden, months-long delays in scheduling inpatient hospital procedures, individuals in need of in-home care unable to secure a home health aide or a nurse, individuals with severe disability needs struggling to keep their care intact and remain outside of long-term care facilities. These proposals are devoid of any planning for or appreciation of their human and health system impact.” His words were read on the Assembly floor last week.
Association on Aging in New York Executive Director Becky Preve called this year’s budget “a massive failure for aging” in her statement.
What’s ahead
HCA is continuing to pull together all available information, and to further connect with budget negotiators, state officials, and multi-association colleagues, to further assess the budget outcome and to plan immediate strategies for confronting and changing the seriously adverse actions and omissions in this budget as described above.
The legislature is is expected to adjourn June 6, leaving lawmakers, advocates and stakeholders fewer than six weeks to engage on key legislative matters.
HCA will also be working to meet with lawmakers to advance critical post-budget priorities for our sector, and be reaching out to member organizations to engage with lawmakers, as well.
For questions or concerns about HCA’s end-of-session priorities, or how to engage with lawmakers, please contact Alex Fitz.