Provides for funding of early intervention services

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 seventeen shall be one hundred fifteen million dollars. Paragraph (h) provides that the one hundred fifteen million dollars specified in paragraph (g) shall be allocated among the municipalities and the State based on the share of each municipality and the State 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 2807-s of the public health law by adding a new paragraph (d) that provides that funds shall be added to the funds collected by the commissioner for distribution in accordance with section 2807-o, in the amount of one hundred fifteen million dollars for the period January 1, 2017 through December 31, 2017.

Section four amends subdivision 1 of section 2557 of the public health law, subdivision 1 as amended by section 4 of part C of chapter 1 of the laws of 2002, to delete the reference to a plan of insurance so that benefits under this title shall be considered secondary only to any state government benefit program under which an eligible child may have coverage, and to delete the provision that nothing in this section shall increase or enhance coverages provided for within an insurance contract subject to the provisions of this title.

Section five amends section 2557 of the public health law by adding a new subdivision 4 to require the commissioner to collect data, by municipality, on the early intervention program for purposes of improving the efficiency, cost effectiveness and quality of the program. Data to be collected shall include the number of children enrolled in the program, the number of state-approved agencies and organizations providing early intervention services by service specialty and the number of state-approved independent providers of early intervention services by service specialty, the number of state-approved evaluators, the number of children covered by the medical assistance program, the number of claims submitted to the medical assistance program by municipality, the percentage claims denied by medical assistance and the reasons for the denials. The commissioner shall report for the period July 1, 2017 to December 31, 2017 and for each calendar year thereafter, to the Governor and the Legislature by March 1 of each year the information and analysis required by this section.

Section six amends subdivision 2 of section 2557 of the public health law, as amended by section 9-a of part A of chapter 56 of the laws of 2012, to provide that the department shall reimburse the approved costs paid by a municipality other than those reimbursable by the medical assistance program, eliminating the exclusion of costs reimbursable by third party payors.

Section seven amends the section heading of section 2559 of the public health law, as added by chapter 428 of the laws of 1992, to eliminate the reference to third party insurance.

Section eight amends subdivision 3 of section 2559 of the public health law, as added by chapter 428 of the laws of 1992, paragraphs (a), (c) and (d) as amended by section 11 of part A of chapter 56 of the laws of 2012 and paragraph b as further amended by section 104 of Part A of chapter 62 of the laws of 2011, to provide that providers shall first seek payment from the medical assistance program rather than third party payors including governmental agencies, 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 eight also deletes paragraphs (b) requiring 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) requiring that payments made for early intervention services under an insurance policy or health benefit plan provided as part of an IFSF shall not be applied against any maximum lifetime or annual limits specified in the policy or health benefit plan. In addition, section eight 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 nine provides the effective date.

Justification

The early intervention program was established under the Public Health Law and the federal Individuals with Disabilities Education Act (IDEA) to enhance the development of infants and toddlers from birth to age three who have a significant developmental delay or disability, as well as enhance the capacity of families to meet their children's special needs. The program seeks to identify and evaluate as early as possible those infants and toddlers whose healthy development is compromised and to provide for appropriate therapeutic and supportive services. With early intervention, we can reduce the number of children with disabilities or reduce the severity of their disabling conditions.

All early intervention (EI) services must be provided to eligible children at no cost to their families. The EI program is financed through a combination of state and county funds, Medicaid and commercial insurance. Although Public Health Law and IDEA mandate that public and private commercial insurance be maximized in financing El services, reimbursement from third party payors, 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, which 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, overshadowing 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 EI services for the entire State was $40 million. Since a substantial portion of municipal budgets must be spent on EI services, municipalities 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 inadequate, this bill provides a different approach to funding. The bill would set up a statewide pool from which municipalities and the State would be allocated funds to pay RI costs. For the first year, an amount of $115M would be paid into the pool. This amount is based on the approximate percentage commercial insurers pay of total EI program costs (utilizing data from the 2012-13 program year) increased by the estimated amount paid by commercial insurers related to mandated coverage for autism spectrum disorder.

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 case where the insured is not eligible for medical assistance) to seek reimbursement of El 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 and the State will provide vital relief to the State and the municipalities across the state that have been struggling to finance the EI program and thereby improve their ability to more effectively administer EI services to children who need those services.

Prior legislative history

A.6517-A, 2013 and 2014 referred to health. A.812, 2011 and 2012 reported referred to ways and means.

A.4058-A, 2009 reported referred to ways and means and 2010 held for consideration in ways and means. A.6814-A, 2007 reported referred to ways and means and 2008 amended and recommitted to ways and means.

Fiscal implications

This bill will have no fiscal impact to the State and will in fact generate revenue to the State. The State currently bears approximately 97% of the total EI program costs, with commercial insurers paying 3%. The bill contemplates that commercial insurers will pay into a fund 15% of the program costs with the State and municipalities sharing such funded amount.

Effective date

This act shall take effect on the thirtieth day after it shall become a law; provided, however the amendments to section 2807-s of the public health law made by sections two and three of this act shall not affect the expiration of such section and shall be deemed to expire therewith.