Provides for funding of early intervention services

Summary of specific provisions

Section one amends the public health law by adding a new section 2807-o that provides definitions for terms used in this section of law. Section one also provides that the commissioner shall make grants to municipalities for the delivery of early inter- vention services. Such grants shall be deemed reimbursements from third party payors to the municipalities and shall be a share of grants equal to the municipality's proportionate share of the total approved state- wide dollars not reimbursable by the medical assistance program, paid by municipalities to providers of early intervention services (excluding providers of transportation based upon the last complete state fiscal year for which such data available.

Section two amends subdivision 6 of section 2807-s of the public health law by adding two new paragraphs (g) and (h). Paragraph (g) provides that a further gross statewide amount for two thousand eleven shall be one hundred million dollars. Paragraph (h) provides that the one hundred million dollars specified in paragraph (g) shall be allocated to the municipalities based on each municipality's share of early intervention program expenditures not reimbursable by the medical assistance program for the latest twelve month period for which such data is available.

Section three amends subdivision 7 of section 2607-s of the public health law by adding a new paragraph (d) that provides that the commis- sioner shall collect funds, to be distributed in accordance with section 2807-o, in the amount of one hundred million dollars for the period January first, two thousand eleven through December thirty-first, two thousand eleven. Section four amends subdivision 1 and paragraphs (j) and (k) of subdivision 4 of section 2557 of the public health law. Subdivision 1 provides that benefits under this title shall be consid- ered secondary to any state government benefit program under which an eligible child may have coverage. Paragraph (j) requires the number of children that are covered by the medical assistance program, rather than those who have third party reimbursement, and paragraph (k) requires the number of claims submitted to the medical assistance program, rather than third party payors, and the percentage of claims denied by the medical assistance program, rather than third party payors.

Section five amends subdivision 2 of section 2557 of the public health law to provide that the department shall reimburse the approved costs paid by a municipality other than those reimbursable by the medical

assistance program (not third party payors) in an amount of 50% of the amount expended.

Section six provides that the section .heading of section 2559 of the public health law is amended to read "Medical assistance program payments."

Section seven amends subdivision 3 of section 2559 of the public health law to provide that providers shall first seek payment from the medical assistance program, not third party payors including governmental agen- cies, prior to claiming payment from a municipality for services rendered, though not when the insured is not eligible for medical assistance pursuant to the social services law. Section seven deletes paragraphs (b) (requires the commissioner to promulgate regulations providing public reimbursement for deductibles and copayments imposed under an insurance policy or health benefit plan to the extent that such deductibles and copayments are applicable to early intervention services) and (c) (payments made for early intervention services under an insurance policy or health benefit plan provided as part of an IFSP shall not be applied against any maximum lifetime or annual limits spec- ified in the policy or health benefits plan). In addition, section seven provides that a municipality shall be subrogated to the extent of its expenditures for early intervention services furnished to eligible persons to the rights such person may have from the medical assistance program (rather than from third party reimbursement). Except as provided in this article, no third party payor other than the medical assistance program shall be required to reimburse for early intervention services.

Section eight provides the effective date.

Justification

The early intervention' program was established under Public Health Law and the federal Individuals with Disabilities Educa- tion Act (IDEA) to enhance the development of infants and toddlers from birth to age three who have a significant developmental delay or disa- bility as well as enhance the capacity of families to meet their special needs. The program seeks to identify and evaluate as early as possible those infants and toddlers whose healthy development is compromised and provide for appropriate therapeutic and supportive-services.

With early intervention, we can reduce the number of children with disa- bilities or reduce the severity of their disabling conditions.

All early intervention (El) services must be provided to eligible chil- dren at no cost to their families. The EI program is financed through a combination of state and county funds, Medicaid and commercial insur- ance. Yet although Public Health Law and IDEA Mandate that public and private commercial insurance be maximized in financing El services, reimbursement from third party payers, other than Medicaid, has been minimal, leaving the cost of this entitlement to be paid by state and municipal tax dollars.

In 2005; an aggregate 893',000 claims were submitted to commercial insurers; 70% of the claims were denied. Further, according to a survey by the New York-State Association of County Health Officials, for the period July 2003 to June 2004, $75.5 million in claims for EI services were filed with commercial insurers, of which $10.6 million, or 14%, was paid. Counties, who are required by the state to finance and administer the EI program, are entitled to be reimbursed by the state for 50% of their unreimbursed costs for EI services (36% for administration costs). Counties have billed private insurers approximately $100 million, over- shadowing the aggregate costs billed to Medicaid. The partial funding by the state, combined with the low rate of recoupment from third party insurers, has required municipalities to bear an estimated 43% of the costs of providing EI services.

To require municipalities to bear such a significant portion of the costs of the program where the number of children served as well as the level of services provided continues to increase imposes a significant strain on local budgets. In New York City alone, for the last six months of 2005, an estimated $213.1 million was incurred for EI services, of which $800,000 was paid by commercial insurance. Whereas in 1993 to 1994, the first year the EI program became effective, the costs of RI services for the entire state was $40 million. Since a substantial portion of municipal budgets must be spent on EI services, munici- palities must face a shrinking balance of available funds, forcing them to decrease or eliminate altogether other needed services.

Recognizing that the Current structure of financing EI costs is inade- quate, this bill provides a different approach to funding. The bill would set up a statewide pool from which municipalities would be allo- cated funds to pay RI costs. By allowing for the direct allocation of funds to municipalities from the statewide pool, we will eliminate the unwieldy and inefficient step of requiring municipalities (in the cases where the insured is not eligible for medical assistance) to seek reimbursement of EI costs first from third party insurers and then, only upon denial or other disposition of the claim, from the state. In cases where the insured is eligible for medical assistance, municipalities will remain obligated to seek reimbursement first from the medical assistance program.

Making funds readily available and streamlining the process by which the funds are distributed to municipalities will provide vital relief to the municipalities across the state that have been struggling to finance the EI program and thereby improve their ability to more effectively admin- ister EI services to children who need those services.

Prior legislative history

A.6814-A, 2007 and 2008 recommitted to ways and means.

Fiscal implications

Approximately $50 million to the state.

Effective date

This act shall take effect January 1, 2011; provided, however, that the amendments to section 2607-s of the public health law

made by sections two and three of this act shall not affect the expira- tion of such section and shall be deemed to expire therewith.