Summary of Governor’s 2014-15 Executive Budget Proposal

The Governor presented his $142.1 billion Executive Budget Proposal for fiscal years 2014-15 on Tuesday, January 21, 2014, a growth of $1.3 billion or 0.9 percent.

As far as the mental hygiene agencies, which includes the Office of Mental Health (OMH), the Office for People with Developmental Disabilities (OWPDD), Office of Alcoholism and Substance Abuse Services (OASAS), as well as the Developmental Disabilities Planning Council (DDPC), Justice Center for the Protection of People with Special Needs, the Executive Budget proposes $7.4 billion in funding, an increase of $62.4 million or 0.9 percent. In particular, the Governor proposes a $52.2 million (or 1.6 percent) increase in funding for OMH. Here is the breakdown:

Category

2013-14
($ in millions)

2014-15
($ in millions)

Change

Dollar
(in millions)

Percent

DD

3,446.5

3,457.7

11.2

0.3

OMH

3,263.9

3,316.1

52.2

1.6

OASAS

579.4

579.4

0.0

0.0

Justice Center

38.0

41.7

3.7

9.7

CQCAPD

4.7

0.0

(4.7)

(100.0)

DDPC

4.2

4.2

0.0

0.0

Total

7,336.7

7,399.1

62.4

0.9

 

Spending on the State’s Medicaid program would rise by approximately 4.6 percent to $58.2 billion (all funds, including state and federal) with State spending increase by $604 million or 3.8 percent.

Regarding the OMH Regional Centers of Excellence (RCE) Plan and the closure of beds, the Executive Budget provides $25 million to expand community services aimed at reducing inpatient hospital stays and local government costs. The enhanced community services would include: “additional crisis and respite beds, home and community-based services waiver slots, supported housing, mental health urgent care walk-in centers, mobile engagement teams, first episode psychosis teams, peer-operated recovery centers, family resource centers, evidence-based family support services, suicide prevention services, community forensic and diversion services, telepsychiatry, transportation services, family concierge services and greater integration of physical and behavioral health services.” The enhanced community services would be supported “by an investment, on average, of $110,000 for every inpatient bed that is closed.” In 2014-15, the Budget calls for OMH to begin the process of creating regional centers of excellence as part of a restructuring that will close 400 inpatient beds and leave the State with the ability to serve 3,000 on an inpatient basis.  

A note of clarification regarding the OMH RCE Plan: In December, the Governor announced that Greater Binghamton Health Center, St. Lawrence Psychiatric Center and Elmira Psychiatric Center would remain open under the RCE Plan and an accompanying press release stated, “No further implementation of the Regional Centers of Excellence plan will take place until OMH, in consultation with the community and mental health advocates, evaluate the effectiveness of the expanded community services on the need for inpatient beds.” This statement is not meant to be interpreted as delaying the entire OMH RCE plan and is only applicable to the Greater Binghamton Health Center, St. Lawrence Psychiatric Center and Elmira Psychiatric Center.

Regarding funding to support residential units, the Executive Budget appropriates a total of $40 million for persons with mental illness moving from adult homes and nursing homes, which will support the development of the following: 

  • 200 new supported housing units for residents of nursing homes (a total of 600 by the end of 2015)
  • 500 supported housing beds for individuals in adult homes (a total of 1,750 by the end of 2015)
  • 300 new beds for the homeless housing program in New York City (a total of 3,200 by the end of 2015)

The Department of Health’s 2014-15 Executive Budget also increases Medicaid Redesign Team (MRT) supported housing funds by $14 million in 2014-15 and an additional $60 million in 2015-16.

Some of the other specific policy proposals included in the Governor’s proposed budget are outlined in greater detail in the following pages.  

1. NYSPA/MSSNY Veterans’ Mental Health – Primary Care Training Initiative Grant – Executive Budget re-appropriates the $330,000 grant provided to NYSPA ($165,000) and MSSNY ($165,000) for the Veterans’ Mental Health Primary Care Training Initiative through the 2014-15 fiscal years.

2. Physician’s Excess Medical Malpractice Program – Governor’s budget extends the Physician’s Excess Medical Liability Program through June 30, 2015 and does not propose any changes to eligibility for the program. The Executive budget recommends an appropriation of $127.4 million for the program. 

3. Prescriber Prevails/Pharmacy Proposals

  • Prescriber prevails would be eliminated in Medicaid managed care programs for drugs that have Federal Drug Administration (FDA)-A rated generic equivalents. Specifically, the provision in the Social Services Law authorizing prescriber prevails for atypical antipsychotics and antidepressants in Medicaid Managed Care would be amended to state that prescriber prevails shall not apply “to any brandname drug for which a multi-source therapeutically and generically equivalent drug, as determined by the federal food and drug administration, is available.”
  • Prescriber prevails wouldbe eliminated in Medicaid fee-for-service for drugs that have Federal Drug Administration (FDA)-A rated generic equivalents. Specifically, the provision in the Public Health Law providing for prescriber prevails when a drug is prescribed that is not on the preferred drug list would be amended to state that prescriber’s determination shall be final, “except that, with respect to any brand name drug  for  which  a multi-source  therapeutically and generically equivalent drug, as determined by the federal food and drug  administration,  is  available,  the program  will  consider the additional information and the justification presented to determine whether the use of such brand name drug  that  is not on the preferred drug list is warranted.”
  • Require verification of FDA and/or Compendia supported uses in order for reimbursement for certain drugs where there is evidence of prescribing for a non-medically indicated, or “off-label,” use.
  • Authorizes the Commissioner of Health to require the manufacturers of brand name drugs utilized in the Medicaid fee-for-service pharmacy program that are eligible for reimbursement to provide a minimum level supplemental rebate to the State. The manufacturer’s drugs may be subject to prior authorization if a minimum supplemental rebate is not provided.

4. Nurse Practitioners Scope of Practice

  • Governor’s budget includes the Nurse Practitioners Modernization Act, which has the following components:
  • Nurse practitioners in practice for more than 3,600 hours would not have to maintain a written practice agreement with a physician of the same specialty. Instead, nurse practitioners with more than 3,600 hours of practice would be required to maintain “collaborative relationships” with one or more physicians who are qualified to collaborate in the specialty involved or a hospital. The nurse practitioner would have to document the collaborative relationships “in a manner required by the Department.”
  • If a written practice agreement with a collaborating physician is terminated a result of the physician moving, retiring, no longer needing the services of the nurse practitioner or no longer being qualified to practice or due to no fault of the nurse practitioner, the nurse practitioner would be authorized to enter into a written practice agreement and collaborative relationship with a nurse practitioner who has been in practice for more than 3,600 hours of practice. The collaboration with another nurse practitioner would be permitted for six months and can be extended for additional six months upon showing of good cause. Where permitted, a collaborating nurse practitioner could not enter into a practice agreements with more than four nurse practitioners who are not located at the same physical premises.

5. Corporate Practice

  • The Governor’s budget includes the recommendations of the Public Health and Health Planning Council, including authorizing the establishment of limited service clinics (i.e. retail clinics) we well as recommendations regarding urgent care, office-based surgery, and office-based anesthesia. Limited services clinics would be permitted under the Public Health Law, as diagnostic or treatment centers, which would be operated within the space of a retail business operation, such as a pharmacy, store open to the general public or shopping mall. For profit corporations would be permitted to operate limited services clinics. The Commissioner of Health would be required to promulgate regulations addressing the operational and physical plant standards for limited services clinics as well as the “designating or limiting the treatments and services that may be provided.” Under the recommendation approved by the Public Health and Health Planning Council, limited services clinics would be prohibited from providing surgical services, dental services, physical rehabilitation services, mental health services, substance abuse services, or birth center services.

6. Out of Network Insurance Reforms

The Governor’s Executive Budget includes out-of-network health insurance reforms aimed at protecting consumers from “surprise” bills from non-participating providers. The reforms the Governor proposes include:

  • o Requiring insurers to disclose information in writing regarding out-of-network coverage, including a clear description of the methodology used to determine reimbursement for out-of-network health care services, a description of the amount the insurer will reimburse using a methodology based on the usual and customary costs as well as examples of anticipated out-of-pocket costs for frequently billed out-of-network health care services.
  • o Ensuring policyholders have the ability to go out-of-network if an insurer does not have a health care provider in-network with the appropriate training and experience to meet the particular health care needs of the insured. The Superintendent of the Department of Financial Services would review the network of health care providers at the time of the initial approval of health policy or contract and at least every three years thereafter.
  • o Requiring a group health insurance policy to make available coverage for out of network health care services that covers 70 percent of the usual and customary costs if requested by the policyholder. 
  • o Establishes a dispute resolution process to resolve bills for emergency care and other surprise bills for hospital care provided by non-participating physicians and providers. The insurer would have to offer a “reasonable payment” to the physician who could then file a dispute over the payment to the “independent dispute resolution entity” who would then have to decide between the insurer’s payment and the non-participating physician’s fee. In determining what is a reasonable fee, the independent resolution entity would have to consider: (a) fees paid by other health care plans in which the physician is not participating for the same services, (b) fees paid by the health care plan to reimburse similarly qualified physicians, who are non-participating providers, for the same services in the same geographic region, (c) level of training, education and experience of the physician, (d) the circumstances and complexity of the case, and (e) the usual and customary cost of the service.

7. Cost of Living Adjustment (COLA)

  • The Executive Budget defers the human services cost of living adjustment for designated programs under the auspices of the Office of Mental Health, the Office for People with Developmental Disabilities, Office of Alcoholism and Substance Abuse Services, Department of Health, Office for the Aging and the Office of Children and Family Services, which will save the state $64 million in the 2015 fiscal year.

8. Funds for New York’s Health Exchange, New York State of Health – Federal funding for the operations of the New York’s exchange, New York State of Health, will cease on January 1, 2015. As such, the Governor’s executive budget “provides $54.3 million in 2014-15, growing to $148.3 million in State funding, between the Department of Health and the Department of Financial Services budgets, to sustain its continued operations.” 

9. Medicaid – In addition, the Executive Budget extends the State Medicaid Global Spending cap for another a year through March 31, 2016, while also ending the 2 percent across-the-board cut on April 1, 2014. Still, the budget continues to provide the Commissioner with the authority to develop “alternative methods of cost containment.”

In addition, 2014-15 Executive Budget proposes to allocate $3 million for implementation of the Managed Care Ombudsman Program, which would provide independent assistance to individuals new to Medicaid Managed Care.

There is language in the budget authorizing the Department of Health to “… reinvest funds allocated for behavioral health services, which are general fund savings  directly related  to  savings  realized  through  the  transition  of populations covered by this section from  the  applicable  Medicaid  fee-for-service system to a managed care model, for the purpose of increasing investment in  community  based  behavioral  health services, including residential services certified by the  office  of  alcoholism  and  substance  abuse services.” The budget also authorizes the Commissioner of Health to distribute $5 million dollars to establish coordination between health homes and the criminal justice system.

The Executive Budget provides for $120 million (federal and State) in Medicaid investments for behavioral health transformation initiatives, as outlined by the State’s Medicaid Director, Jason Helgerson, recently:

Appropriation

Description

$20,000,000

Funding to facilitate the transition of behavioral health services for adults and children into managed care

$15,000,000

Integration of behavioral and physical health and implementation of collaborative care model

$40,000,000

Targeted Vital Access Provider (VAP) program to preserve critical access to behavioral health inpatient and other services in certain geographic areas

$5,000,000

OASAS Residential Restructuring: Establish a Medicaid service for clinical care provided in OASAS Residential settings

$10,000,000

Health Home Plus for AOT:  Health Home Plus reimbursement for individuals receiving care management under a court order for Assisted Outpatient Treatment (AOT)

$30,000,000

1915(i)-like Services under HARPS:  Funding for new 1915(i)-like services under the Health and Recovery Plans (HARPs) based on a functional assessment including rehabilitation, peer supports, habilitation, respite, non-medical transportation, family support and training, employment supports, education, and supports for self-directed care

$120,000,000

Total

 

In other health-care related budget initiatives, the Governor and Commissioner of Health, Nirav Shah, M.D., called on the U.S. Department of Health and Human Services to approve the State’s $10 billion Medicaid Waiver request, which the State wants to use along with complimentary investments to:

  • Establish Regional Health Improvement Collaboratives (RHICs) – The Governor’s budget provides for $7 million in 2014-15 to establish and support eleven regional health improvement collaboratives, which will function “as neutral conveners of key health care stakeholders to identify regional health care challenges and implement recommended solutions.”
  • Improve Health Information Technology -- The Executive Budget appropriates up to $65 million in 2014-15 to support the State Health Information Network of New York (SHIN-NY) as well as establish a statewide electronic medical record system and All Payer Claims Database (APCD).

10. Basic Health Insurance Program – The Governor’s executive budget authorizes the Commissioner of Health to establish a basic health insurance program “if it is in the financial interest of the state.” The basic health insurance program, an option provided to States under the Affordable Care Act, would be available to New York residents who are under the age of 65 and have an income between 133 percent and 200 percent of the federal poverty level. Reports indicate that New York and states that establish basic health programs can receive 95 percent of the money the federal government would have spent subsidizing these individuals with tax credits if they purchased coverage through the State’s exchange. The Urban Institute estimates that 468,000 New Yorkers would be eligible for the program.

11. Professional Licensure (Outstanding Tax-Liabilities) – Mandate for professional and business licenses electronic tax clearance upon application or renewal. Specifically, the Executive Budget proposes a new program designed to aid in enforcing and collecting past-due tax liabilities by preventing applicants from receiving or renewing professional or business licenses if they owe certain past-due tax liabilities.