Cuomo administration disputes NYC’s math on $1.1 billion Medicaid hit

New York state’s top health officials faced off with state legislators Wednesday, backing the governor’s plan to shift more Medicaid costs to local governments.

The state’s plan has met fierce opposition from Mayor Bill de Blasio’s administration, which has estimated the proposal could cost the city as much as $1.1 billion.

A state budget spokesman told Crain’s the state estimates the city would pay only $221 million in the case that it overruns a 2% property tax cap.

The spokesman for the state’s budget office said the city is calculating its potentially higher share of costs incorrectly and is inflating how much Medicaid spending will rise. The state pegs the growth rate at 3%.

The state and city, he said, had once worked together to hold down spending and the governor’s plan would “revive that partnership as we return spending growth in the Medicaid program to 3% or less.”

Gov. Andrew Cuomo this month accused local governments of suffering from a “blank check syndrome” that led them to let Medicaid spending go unchecked, helping create a $6.1 billion state budget imbalance for fiscal 2021, which begins April 1.

Dr. Howard Zucker, the state health commissioner, and state Medicaid Director Donna Frescatore had little to share with legislators about how they plan to lower the Medicaid budget by $2.5 billion and who will serve on a proposed Medicaid redesign team.

New York City and counties around the state have said their role in the Medicaid program is limited to determining whether people signing up meet financial eligibility requirements. They say the state, with the federal government, sets the eligibility standards and the benefits package.

Frescatore told legislators that local governments could help manage spending by ensuring Medicaid enrollees aren’t hiding assets that make them ineligible for the health program, which is for the poor and the disabled.

“We share in the administration of the Medicaid program,” she said.

The state froze counties’ level of Medicaid spending in 2013, but Cuomo proposed the counties be responsible for paying for any growth in Medicaid costs above 3%. For New York City, where Medicaid costs grew about 7% in the 2019 fiscal year, the city would be on the hook for about $646 million, according to city officials.

If New York City were to raise property taxes above the state-mandated 2% cap, the city would be responsible for the full 7% increase, costing $1.1 billion, according to the city’s estimate.

The city has been working to save the state money—generating $180 million in savings, including $90 million in state spending, in the past three years by identifying people who shouldn’t have been eligible for Medicaid—Steven Banks, commissioner of the city Human Resources Administration, said Wednesday during a call with reporters.

About half of city residents signing up for Medicaid do so through the HRA, with the other half using the New York State of Health marketplace.

Frescatore made the case that local governments play a bigger role. She said the city and counties manage the care plans of 900,000 Medicaid beneficiaries who are enrolled in fee-for-service Medicaid—which means the state, not a Medicaid insurer, pays their claims. That population represents about $1.3 billion in monthly costs, she said.

First Deputy Mayor Dean Fuleihan called that argument misleading and noted that the greatest cost driver has been the managed long-term care program, in which private insurers approve oversee care.

Fuleihan said the consequences to the city would be devastating if it had to absorb an extra billion dollars in costs.

“This is an incredibly large amount of money that is being shifted to us on a program that’s completely run by the state,” he said.

https://www.modernhealthcare.com/medicaid/cuomo-administration-disputes-nycs-math-11-billion-medicaid-hit