CNY HFMA

Turning Stone Resort and CasinoVerona, NY

March 12, 2015

Allan S. FillerSenior Director of Policy Development

Iroquois Healthcare Alliance

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Election Results• Republicans gained clear, but

thin (32 Seats), majority in State Senate

• Governor Cuomo wins re-election, but enters the next four years with less political clout than when the campaign began.

• Assembly still strongly Democratic (106 Members) but will be affected by the sudden change in the Speakership

Photo Credit: Chang W. Lee/The New York Times

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Governor CuomoCommissioner Zucker

Attorney General SchneidermanSpeaker Heastie

NYC Mayor de Blasio

ALL ARE DEMOCRATS FROM NYC

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Having a Little Legal Trouble

………Stay Tuned?

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Wildcards

Opportunities/Challenges /Unknowns

• NYS Surplus= $525M operating and $5.8B in one-time insurance settlements

• OPWDD audit liability of $1.26B with additional audit periods possible (NYS Appealing)

• Medicaid Global Cap Pressures - 6.2M Medicaid enrollees (Approximately 33% of the State)

Complex Health Policy Environment

• $10B Medicaid 1115 Waiver (DSRIP)

• Medicaid Redesign Team (MRT) and the Medicaid Global Cap

• Mandatory Medicaid Managed Care (MLTC,FIDA, HARPs, DISCOs)

• New York State of Health (Health Exchange)

• SHIN-NY• UPL Dispute with CMS

• $100M State Health Innovation Plan (SHIP)

• Population Health Improvement Contractors (PHIPs)

• All-Payer Claims Database• Value-Based Payment• Staffing Ratio Legislation

NYS Hospitals and Health Care Systems by the Numbers

• NYS Hospital Margins are the 2ndd Worst in the Nation ( Congratulations Rhode Island!)

• ¾ of Hospitals have Fair or Poor Financial Strength

• Infrastructure 9th Oldest in the Nation• Nursing Home Margins Also among the Worst

in the Nation

Source: HANYS

2015-2016 Proposed Executive Budget

2015-2016 Proposed Executive Budget

• $1.9B in capital related grants to promote health care transformation– $700M for capital non-operational in support of health care transformation

in Brooklyn– $400M for debt retirement, capital and non–capital non operational projects

that facilitate health care transformation for essential community providers (defined as hospitals or health care systems that in the discretion of the commissioner offer services within a defined and isolated geographic region

– $300M to support health care transformation by creating and integrated health care delivery system in Oneida County

– (30 Day Amendment) $500M for economic development projects to enhance the economic benefits of health care facility transformation

* These funds are in addition to the $1.2B in capital funding in the 2014-2015 enacted state budget primarily related to DSRIP-Performing Provider Systems Projects

2015-2016 Proposed Executive Budget

• Vital Access Provider (VAP)Program (All Funds)*– Current VAP Funding in 2015-2016: $372M – Transformational Operational Support: $500M– Funding for Single Public PPSs: $80M

• Vital Access Provider (VAP) Program Sub-allocation- (All Funds)*

• $10M for rural and essential community providers (defined, isolated geographic region). Eligible providers are hospitals, nursing homes, D&TCs, ambulatory surgery centers and clinics.

• $7.5M for CAHs ($2.5M Increase from 2014-2015) and requires an examination of permanent Medicaid rate methodology changes.

*Assumes resolution of UPL issues and full financial participation

2015-2016 Proposed Executive Budget

• $12M annualized ($9M in 2015-2016) for federally defined Sole Community Hospitals (SCHs)

• Inpatient and/or Outpatient rate adjustment, methodology/mechanism to be determined.

• Other Hospital Investments*:– $91M for the establishment of a hospital quality pool– $51M from the elimination of the Potentially Preventable

Negative Occurrence rate cut (PPNO)– $19.2M from the elimination of the elective C-Section rate cut– $15M reduction in the across the board inpatient obstetric

services tax

2015-2016 Proposed Executive Budget

• Other Budget Provisions of Interest:– Extends the DSH/Indigent Care Funding Methodology until

December 31, 2018. The transition adjustment (the maximum percentage loss a hospital can experience in a year would increase by 2.5% per year to 10% in 2016; 12.5% in 2017; and 15% in 2018

– Authorization of a private equity pilot program, limited to 5 demonstrations (non-publicly traded)

– Consolidation of 41 public health programs into 5 targeted pools with each pool cut by 15% - The Public Health Workforce Pool includes the Rural Health Development (Network and Care Access) and Health Workforce Retraining Initiative

2015-2016 Proposed Executive Budget

• Requires 340B Providers to bill Managed Care Organizations (MCOs) at Acquisition Cost (as opposed to Charges) - reduces payments to 340B providers by approximately $22M.

• Effectively eliminates MA co-payment for dually eligible individuals for physician services in Medicare Part B and for physicians, hospitals and others for Medicare Part C- reduces MA spending by approximately $90M.

• Statutorily authorizes MCOs and DOH to utilize value-based payments.

Budget Requests

• IHA, in collaboration with others associations is advocating for increased funding and changes to the Doctors Across New York (DANY) Program to further help address the physician shortage upstate.

Governor Cuomo’s Proposed 30-Day Budget Amendments

"Notwithstanding any inconsistent provision of law, in order to complement and enhance the fiscal management and programmatic integrity of the Medicaid program, funds from this appropriation may not be spent unless the director of the budget has notified the commissioner of health by March 31, 2015 that the legislature has enacted a chapter or chapters of law that contains part B (sections 1-7, 11-14, 25-34 and 37), part D (sections 1, 2, 4-12, 14-15, 17, 20-24 and 29), part E and part F in a form identical to legislation submitted by the governor pursuant to article VII of the New York constitution as legislative bill numbers S. 2007-A/A. 3007-A.“

• Governor Cuomo strongly pushing for his ethics packages, and teacher evaluation system among other items including Medicaid investments and cuts

• Possible but unknown effects of the Governor's amendments are : a late budget, a constitutional court case, a government shutdown etc.

Delivery System Reform Incentive Payment Program (DSRIP)

$8 Billion Medicaid 1115 Waiver

DSRIP

$6.4 billion

Interim Access Assurance Fund

(IAAF)$500 million

Health Homes

$190 million

Long-Term Care

$245 million

Behavioral Health

$646 million

State Health Improvement Plan (SHIP)

State Health Improvement Plan (SHIP)

Population Health Improvement Contractors (PHIPS)

PHIPS

• The Population Health Improvement Program (PHIP) will promote the Triple Aim of better care, better population health and lower health care costs.

• PHIP contractors each will work in one of several regions that together will serve the entire state.

• PHIP contractors will convene stakeholders and establish neutral forums to support strategic planning for identifying, sharing, disseminating and helping to implement best practices and local strategies to promote population health and reduce health care disparities in their respective regions.

• In particular, the PHIP will help support and advance ongoing activities related to the New York State Prevention Agenda 2013-2017 and the State Health Innovation Plan and incorporate strategies to reduce health and health care disparities.

• In December RFP applicants were awarded an average of $2.4M to serve as the PHIP contractor in 10 regions of the state. (Finger Lakes HSA was previously designated as the PHIP for the Finger Lakes Region)

• Capital District: Healthy Capital District Initiative $2,440,000

• Central New York: Health Advancement Collaborative of Central New York, Inc. $2,439,993

• Long Island: Nassau-Suffolk Hospital Council, Inc. $2,400,000

• Mid-Hudson: Taconic Health Information Network and Community Inc. $2,434,685• Mohawk Valley: The Mary Imogene Bassett

Hospital $2,438,819• New York City: Fund for Public Health in

New York Inc. $5,000,000• North Country: Adirondack Health

Institute Inc. $2,440,000• Southern Tier: STHL, Inc. $2,070,848• Tug Hill Seaway: Fort Drum Regional Health

Planning $2,438,616• Western New York: P2 Collaborative of

Western New York, Inc. $2,440,000

PHIPS

• DOH and the PHIPs are finalizing contracts and are locating office space and staffing up.

• PHIPs underwent DOH orientation at the end of January

• PHIPS will be reaching out to their stakeholder communities over the next several months and DOH will be monitoring these efforts

• PHIPs will also have individual websites where they will provide further information on their individual PHIP and their work plans.