Relates to waiving recoupment of medical assistance payments for the capital costs of diagnostic and treatment centers primarily engaged in providing services to the developmentally disabled

Summary of provisions

Section 1 of this bill provides that the Commissioner of Health may waive recoupment of Medicaid payments for capital costs for the period September 2009 to December 31, 2012 for a Diagnostic and Treatment Center (D&TC) licensed under Article 28 of the Public Health Law that provides, as its principal mission, services to individuals with developmental disabilities,

Section 2 provides that the bill takes effect immediately and is deemed to be in full force and effect on and after September 1, 2009.

Justification

Article 28 Diagnostic and Treatment Centers (DTCs), with a primary mission to serve individuals with developmental disabilities, were established to provide healthcare for individuals with disabilities who other health care providers could not or would not serve. These DTCs were established by not-for-profit providers and family members who could not find healthcare services for individuals with developmental disabilities. The reimbursement fox these DTCs was cost based until the rates were frozen in 1994. From 1994 until September 2009, these clinics did not receive any increase, trend or COLA to their reimbursement rate even though health care costs rose by double digits annually. Overall, these DTC reimbursement rates were inadequate to cover costs and led to deficits which averaged 20§ of operating costs. Then in September 2009, New York State began implementation of the APG reimbursement system.

In the transition to APGs there was no recognition of the fifteen years of unreimbursed costs. There was a recognition that in moving forward, New York State wanted to invest in more primary and preventive care in order to save money on acute and emergency care and provide better health outcomes. DTCs, with a primary mission to serve individuals with developmental disabilities, struggled to position themselves in the evolving healthcare landscape to meet the needs of their local communities and New York State.

In February 2013, as these DTCs continued to lose about 20% on operations, the Department of Health (DOH) began to recoup 15% of Medicaid payments. This 15% recoupment of clinics' Medicaid payment was based on the retroactive recalculation of capital payments back to September 1, 2009. The capital reimbursement that DTCs were receiving up to this point had been calculated by DOH based on the DTCs 1992 cost report. When DOH implemented APGS they continued the capital reimbursement and then three and a half years later decided to retroactively recalculate these capital payments. As a result, these DTC, which serve extremely vulnerable New Yorkers and have been

experiencing 20% losses, were suddenly and without warning losing an additional 15% of their Medicaid payments.

For some clinics, the total capital recoupment amount represents a significant portion of their total operating funds. One clinic, in Upstate New York, would have a $700,000 recoupment on a $2 million annual budget. Recoupments of this magnitude will close these DTCs that serve patients who will otherwise have no or extremely limited access to healthcare.

This legislation will mitigate the impact of the capital recalculation by allowing the Commissioner of Health to fully or partially waive or modify retroactive recoupments from the 2009-2012 period when necessary in order to keep DTCs open and able to provide healthcare services to the most vulnerable New Yorkers.

Prior legislative history

None.

Fiscal implications

To be determined.

Effective date

Immediately and deemed to be in full force and effect on and after September 1, 2009.