JOINT LEGISLATIVE HEARING In the Matter of the 2025-2026 EXECUTIVE BUDGET ON HEALTH

When I see someone come in and they start to open their pages I just want to go oh, no, no, no, this isn't going to work.

So I try to tell everybody in the beginning, bullet-point your most important highlights. Again, we all have the written testimony, and it is online on both the Senate and Assembly budget hearing websites, and all 19.5 million New Yorkers get to read it and even follow up with you.

Okay. So with that, I think those are the general rules of the road. So now I'm going to officially open the hearing.

So good morning. I'm Senator Liz Krueger, chair of the New York Senate Finance Committee and cochair of today's budget hearing.

Today is the seventh of 14 hearings conducted by the joint fiscal committees of the Legislature regarding the Governor's proposed budget for the state fiscal year '25-'26. These hearings are conducted pursuant to the New York State Constitution and Legislative Law.

Today the Senate Finance Committee and Assembly Ways and Means Committee will hear testimony concerning the Governor's proposed budget for the following agencies: Department of Health, Department of Financial Services.

Following each testimony there will be some time for questions from the chairs of the relevant committees, and then also other legislators will have time to ask as well.

I'm now going to introduce members from the Senate, and Assemblymember Gary Pretlow, chair of Ways and Means, will introduce members of the Assembly.

And then we will also make sure that Senator Tom O'Mara, ranking member of Finance, introduces his members and Senator Ra -- Senator? -- Assemblymember Ra introduces his members from the minority in the Assembly.

And I'm just pulling up my list. Of course we have Gustavo Rivera, the chair of the Health Committee. We have Senator Brouk, Senator Fernandez, Senator Ryan, Senator Webb, Senator Hoylman-Sigal.

I'm going to turn it over to Gary for the Assembly.

CHAIRMAN PRETLOW:Thank you, Senator.

With us we have our chairperson of the Health Committee, Amy Paulin, and chair of the Insurance Committee, David Weprin. We also have with us Assemblymember Bores, Assemblyman Epstein, Assemblywoman Forrest, Assemblyman Hevesi, Assemblywoman Lunsford, Assemblyman McDonald, Assemblyman Otis, and Assemblywoman Solages.

CHAIRWOMAN KRUEGER:And then Senator O'Mara, for your members.

SENATOR O'MARA:Yes, thank you.

We're joined on the minority side with our ranking member of the Health Committee, Pat Gallivan, and Senators Jack Martins and Joe Griffo.

CHAIRWOMAN KRUEGER:Great.

Assemblymember Ra?

ASSEMBLYMAN RA:Good morning.

We are joined right now by our ranker on Health, Assemblyman Josh Jensen, as well as Assemblymembers Norber, Slater and Gandolfo.

CHAIRWOMAN KRUEGER:Okay, great.

So now we're going to start with our first panel, for people who have the list, and that is New York State Department of Health, James McDonald, commissioner; New York State Department of Health, Amir Bassiri, Medicaid director; and New York State Department of Financial Services, Adrienne Harris, superintendent.

And I think we probably should go in that order, if that's okay with you all. You each get 10 minutes. Thank you.

DOH COMMISSIONER McDONALD: Well, good morning, Chairpersons Krueger, Pretlow, Rivera and Paulin. It is good to be with you here today to talk about the Governor's budget for next year.

And I want to make sure people know Amir Bassiri, who's joining me today, is our Medicaid director, to help me out with any Medicaid-specific questions I may not know.

One of the things we did in 2024 was update the mission of the New York State Department of Health. Our mission is to protect and promote the health and well-being for all, built on a foundation of health equity. And that mission hasn't changed. I think it's more important today than it ever was.

Before I get into the budget, I do want to acknowledge we're going through a federal transition. It's creating a little bit of impact for our budget and just in general, and we're in Day 22 of the transition so far.

And the budget that we're going to talk about was predicated on the federal government fulfilling its obligation to New Yorkers, maintaining its existing agreements with the New York State Department of Health. We do expect the federal government to honor these commitments that it made to the people of New York.

I do want to provide a little bit of context about the budget. We're at a $252 billion state budget. It's an increase of 13 billion from last year. The entire Department of Health budget that's proposed in front of you today is 113.6 billion.

So the Department of Health is 45 percent of the entire state budget. We're an increase of a little over 8 billion from last year. Medicaid's a little over $93 billion, up from $86 billion last year. And the essential plan accounts for 13.2 billion. And that leaves 7 billion for the department to do everything else it does. That's all of our public health work, everything we do for WIC, everything we do for Early Intervention, Wadsworth and really so much more.

And just as a note of context again, so in total roughly 65 percent of the Department of Health's budget comes from federal funds, and it's primarily from Medicaid, the Essential Plan, federal grants, WIC, all that tied together. And I do think it's important to note that Medicaid does so much more than provide direct patient care. The 1115 amendment we did was a good example: How it's going to improve population health, expand and enhance our healthcare workforce, and help safety-net hospitals.

Medicaid currently insures 7 million New Yorkers, down from a peak of 8 million during the public health emergency.

The Essential Plan covers 1.6 million New Yorkers, an increase of 400,000, mostly because of changes we made last year that allowed more people to be eligible for the Essential Plan.

This budget does build off last year's Safety Net Transformation Program by investing $1 billion for capital expenditures, an additional 300 million -- that's 600 with the federal match -- in operating support for the MCO Assessment and for the approved Safety Net Transformation projects.

Other investments from the MCO Assessment include up to 305 million -- 610 with the federal match -- for hospitals; up to 200 million, so 400 million with the federal match, for nursing homes and long-term care; and up to 50 million -- 100 million with the federal match -- for physician fees to help physician fees come up to 90 percent of Medicare from 80 percent.

There's an additional 10 million -- 20 million with the match -- for Federally Qualified Health Centers.

I do want to talk about a little bit about workplace. The department has a comprehensive approach to supporting the healthcare workforce. This includes our $694 million investment under the 1115 waiver. It also includes 48 million in that space for loan repayment. And we partner with you in several workforce initiatives. One's the Area Health Education Centers. We also partner on our Diversity in Medicine initiative. We also have 22.5 million in our Increasing Training Capacity of Statewide institutions. We also have roughly $20 million in our Healthcare Education and Life Skills Program.

One of the things that we keep hearing, though, as we go through our various healthcare facilities is how much they're concerned about scope of practice in their workforce. So there are a couple of proposals I'll just mention really quickly.

One is joining the other 49 states so a medical assistant can give a vaccine. Thank you to Chair Paulin for meeting with us and for your interest on this.

Another is, you know, nursing homes have asked us, could a certified medication aide give a medicine in a nursing home, like 38 states make this possible. I think those are really good things we should do.

There's other proposals here regarding emergency medical services. One is for New York to have EMS be an essential service, so when someone calls 911 there's an ambulance there no matter where they are in the state.

And the other proposal this year in EMS is really to get strategic plans for all of our county EMS agencies. There's $5 million in the budget so each one of our EMS services can do that.

I just want to talk a little bit about the investment this year in nutrition. So access to healthy food -- I think we all know healthy food is really, really important. This year we have an additional 23.3 million for our Hunger Prevention and Nutrition Program, which brings our total investment to 57 million. That's a -- we have another $5 million boost to our Nourish New York program, bringing our total investment to $55 million.

There's an increase of 9.5 million to our WIC program. So that's going to bring our total state investment to 26.3 million, and we add that to our 578 that we get from the federal government. We haven't had waiting lists for WIC in 30 years, and hoping we're not going to have them this year as well.

Additionally, there's a proposal for universal free breakfast and lunch for kids in school that would save kids up to $1600 per child, helping expand eligibility to an additional 300,000 students.

I was intrigued by the Governor's Unplug and Play proposal, a nice investment in playgrounds and parks, encouraging our kids to get outside and off those cellphones. And it's great to see there's a proposal so that kids aren't using cellphones in school. It's $138.5 million for the schools to implement the program they need.

There's also a $5 million investment this year to help kids swim, so for swimming lessons. It's hopefully something we can do to get kids exercising and, just as importantly, prevent accidental drowning.

The department does a lot with overdose work. You know, we're making some progress as a state. If you look at the most recent available data, August of '24 to August of '23, there's a 24 percent decline.

There's two proposals in this budget to make buprenorphine more available, one for paramedics, the other for anyone in a healthcare facility, aligning with the federal law.

I want to shift now and just talk about there's an investment in reproductive health, an additional $20 million to build on previous support so providers can do medication abortions.

And I do want to just talk a little bit about maternal health. We have a pretty comprehensive program towards maternal health. It's a very important issue to me.

In addition, we have $4.5 million annually to work collaboratively to improve clinical quality of care within our regional perinatal centers.

Additionally, we leverage funds from Medicaid, including our $50 million two-year investment to support specific birthing hospitals' initiatives so they can implement strategies like reducing maternal mortality and reducing severe maternal morbidity.

Contracts have been awarded to nine hospitals, and projects include implementing strategies to reduce unnecessary C-sections, fetal heart rate monitoring training for providers and nursing staff, and expanding doula programs and services and reducing disparities in maternal health through racial equity, implicit bias, and trauma-informed-care trainings for staff.

The budget also includes a continued annual funding of $5 million to promote women's health, $4 million to address maternal mortality, and $33 million to address maternal and infant mortality.

Other maternal health initiatives outlined in this budget include paying a birthing person on public assistance a hundred dollars per month during pregnancy and $1200 when their baby is born, to assist with expenses.

In closing, we're at a unique time in our nation's history, and this budget is predicated on the federal government honoring our agreements. I'm hoping we can work together to help all New Yorkers achieve health. And we define health as an optimal state of physical, mental and social well-being.

And thank you. I look forward to your questions today.

CHAIRWOMAN KRUEGER:Thank you (mic off; inaudible).

DFS SUPERINTENDENT HARRIS:Good morning, Chairs Krueger, Pretlow, Bailey, Weprin, Rivera, and Paulin, ranking members O'Mara, Ra, Helming, Blankenbush, Gallivan and Jensen, and all distinguished members of the New York State Assembly and Senate.

My name is Adrienne Harris, and I am the superintendent of the Department of Financial Services. Thank you for inviting me to today's hearing.

Today DFS is widely considered one of the premier financial regulators in the world, a role we take seriously. The department's mission dictates our responsibility to protect consumers and markets while also helping to grow a robust and thriving marketplace where companies want to do business.

But when I joined the department more than three years ago, it was underfunded and without adequate investment in human capital, technology or risk management procedures. Thanks to the support of the Governor and the Legislature, we are rebuilding DFS.

Today I will highlight three areas as a testament to our transformation: Our positive impact on New Yorkers, how we have cemented DFS as a preeminent global regulator, and all we have done to create a modern, operationally resilient organization.

Central to transforming DFS is our expanded focus on kitchen-table issues that directly impact the lives of New Yorkers. During my tenure we have returned $645 million to New Yorkers, setting record highs for restitution each year. In 2024 alone, we returned more than $228 million to consumers.

We have increased access to affordable banking services, allowing state-chartered institutions to offer "Bank On" accounts and approving seven new banking development districts across the state. We saved New Yorkers $22 million in check-cashing fees by creating a fairer fee methodology, and have proposed regulations to expand the community recidivist renovate reinvestment act to non-bank mortgage lenders and to eliminate exploitative overdraft fees.

We have protected consumers from discrimination in insurance products, setting clear guardrails around the use of AI and underwriting and prohibited insurers from discriminating against affordable housing providers in their coverage and rate decisions.

Further, we prohibited life insurers from offering inferior products to low-income households and consumers of color.

We are taking steps to address the cost of prescription drugs through our regulation of pharmacy benefit managers. Since DFS was given the authority to regulate PBMs in 2022, we have hired more than 25 experts to our PBM team, completed the licensure of all PBMs operating in the state, and adopted market conduct regulations.

And we are tackling the health equity gap by eliminating cost-sharing for insulin and ensuring New Yorkers have timely access to mental health and substance use treatments.

We also have proposed a regulation requiring health insurers to collect voluntarily disclosed demographic data from policyholders. This information can be used to develop data-driven policy solutions to combat discrimination and address systemic health inequities.

Beyond creating and promulgating policies to empower and protect New Yorkers, we continue to strengthen DFS's role as a global regulator. Since August 2021, DFS has adopted or amended 54 regulations, issued 98 pieces of regulatory guidance, and closed 117 enforcement actions resulting in more than $418 million in penalties.

But we do not churn out new rules or guidance for the sake of it. We prioritize data-driven decision making and strive for flawless execution. In turn, other states and jurisdictions have followed our lead. Our nation-leading cybersecurity regulations have been adopted by over half of states and both national associations for banking and insurance commissioners have published model laws based on it.

In 2023 we amended the regulation to keep pace with the evolving cybersecurity landscape, and to better protect financial institutions and consumers from cyber threats.

DFS also has been a pioneer in the regulation of cryptocurrency, yet when I came to DFS we had a lot of work to do to operationalize our regulatory framework. Today we have one of the most sophisticated virtual currency teams in the world, with more than 60 experts.

This team prevented FTX, Voyager and Celsius from operating in New York. They protected New Yorkers when algorithmic stablecoins crashed, and secured $2.1 billion in digital assets for consumers in New York and around the world from Gemini Trust Company.

Regulators around the world call us every day wanting our counsel as they seek to build similar cryptocurrency frameworks. And as Congress continues to contemplate legislation for a federal framework, legislators on both sides of the aisle regularly seek the department's expertise.

Third, I want to highlight DFS's leadership in climate. Since the formation of the climate division during my tenure, the department has issued guidance to the insurance, banking and mortgage industries, setting detailed expectations on managing the financial and operational risks from climate change.

Because climate change disproportionately impacts low- and moderate-income communities, our banking and mortgage guidance makes clear that entities cannot meet climate objectives at the expense of their fair lending obligations.

DFS's leadership has required a new foundation of operational excellence and resilience. Thanks to support from the Governor and Legislature, we were able to get DFS fully funded for the first time in its history in fiscal year 2023, allowing us to better deliver on our mission for New Yorkers.

Since January 2022, we have hired or promoted more than 1,000 individuals, 548 new staff and 481 promotions. We created the first ever data governance and pharmacy benefit teams, hired the department's first ever chief technology and chief risk officers, created an executive role to lead operations and onboarded 179 financial services examiners, the first hired since 2018.

But our work can't stop there. The entities regulated by DFS are sophisticated and rapidly changing, creating more risk and uncertainty for markets and consumers. The department's mandates and responsibilities have expanded over the past 12 years, while our current FTE target is significantly lower than when DFS was created.

While we have made incredible progress to reduce the staffing deficit built over a decade, the department remains underresourced. To effectively execute our mission, DFS continues to require significant workforce investments.

In addition to our staffing efforts, the department has also embarked on a complete technology overhaul. The realtime data analysis needed to be a forward-looking regulator is not possible with outdated technologies and incompatible systems. A significant component of our modernization is DFS Connect, a single portal that will transform all facets of how DFS engages with stakeholders.

But I believe the most important and tangible outcome of our renewed operational vigor is the department's ability to respond in a crisis.

In March 2023 banks across the country unexpectedly began to fail, including Signature Bank in New York. Teams from across the agency worked tirelessly together to protect consumers and businesses during the bank's closure and in the aftermath. Moreover, our teams' work during that time was critical to safeguarding the global financial system.

Having weathered that crisis, I know the DFS team can make progress towards solving some of the state's most intrenched issues, including the current state of the livery insurance market. The companies operating in the space, including the largest carrier, have generally set inadequate rates, creating multiple insolvencies and leading to instability across the market.

Shockingly, company management, regulators and policymakers have known about this and allowed it to go on for decades. I've met with drivers, base operators, and other stakeholders in the industry who are entitled to a stable and well-functioning market, but those individuals have not been well-served by their insurance providers for years.

Last year DFS published the first reports of examination of the largest livery insurers in nearly 40 years, giving policymakers the data they need to develop solutions. Thank you to the Governor and to the Legislature for already removing a provision in the Insurance Law that permitted livery insurers to reduce rates without DFS's prior approval.

The Governor's 2026 Executive Budget includes three additional proposals to help stabilize the market. I look forward to discussing these and other policy initiatives included in the budget, including proposals to address overdraft fees, establish oversight for buy now, pay later, and require PBMs to publicly disclose details about their rebate agreements.

Before I close I want to express my deep gratitude to the DFS team for all they do to advance the DFS mission, and to you and your colleagues for your consistent collaboration.

I look forward to your questions during today's hearing.

CHAIRWOMAN KRUEGER:(Inaudible.)

DOH COMMISSIONER McDONALD: Again, Amir is just here to help if there's some technical issue on Medicaid that I don't know. So thank you.

CHAIRWOMAN KRUEGER:Okay. Our first questioner will be Senator Samra Brouk.

SENATOR BROUK:Honored. So nice to see you all. I have to say thank you, Commissioner, not just for your testimony but also for your visits to Rochester.

I wanted to start with kind of bringing back something that I brought up last time we were at this budget hearing, which was the fact that we had just passed a day in Rochester at our local hospital with the highest capacity on record. The sad part is I'm here to report that we are blowing past those records and sit here today with over 120 percent capacity at some of our local hospitals.

And as I think about specifically in the Rochester area, I think we have very acute challenges that are sometimes not faced in other parts of the state, including the fact that we have the fewest hospital beds per capita of any community in New York State. In addition to the fact that we have one of the most rapidly aging populations compared to other parts of the state.

So we are obviously grateful that the Governor has included no cuts to Medicaid. That's a good starting point. But we're very concerned that what's in the Executive Budget is not going to suffice to solve the very real crisis that we're in. We're in a position now where if you go to a hospital, it is not guaranteed that you may get that care because we are unable to discharge enough patients to open up those beds.

So my question to you is, you know, given the federal climate, given where we are now, what is the plan for sustainable funding to actually make sure our healthcare system can stay afloat and serve the patients that it needs to?

DOH COMMISSIONER McDONALD: I agree with you on Rochester. I think it's -- I've been out there several times now, but one of the things we've recently got is some data.

One of the things we're looking at is called the complex discharge problem. And we're seeing people are stuck in hospitals longer in that area than in other parts of the state. So I think there is something different about the Rochester area.

When you look at the investments that we're doing from the Managed Care Organization Assessment, they're not across the board rate increases. They're meant to be funds we can put into particular places so we can actually help the state in different parts at the same time. For example, there isn't an across-the-board rate increase for nursing homes. But if you look at the Rochester area in particular, one of the things you see is a lot of people who are stuck in the hospitals need to get to a nursing home.

So one of the things that might make more sense is if we have to increase nursing home rates, we don't have to do it the same everywhere in the state. Rochester has a workforce problem, and Rochester has a nursing home problem. So we can deploy those resources in different parts of the state in different ways to help Rochester out.

The other thing I want to just get back to is we have got workforce problems here. And one of the things I heard from Rochester in particular was they want certified medication aides in the nursing homes, they want a nurse licensure compact. And I think they're right. I think those are good things.

The one thing I want to caveat about the MCO Assessment is you asked if it was sustainable. I don't know if it's sustainable. There's a regulation that was enacted through CMS, and if they want to take that away from us, we expect them to change the regulation, not just take it away from us.

SENATOR BROUK:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

CHAIRMAN PRETLOW:Assemblywoman Paulin for 10 minutes.

ASSEMBLYWOMAN PAULIN:Thank you so much. Thank you for coming today and for being willing to answer our questions.

First, I was very pleased to see in your testimony that there's been nine hospitals that have a contract to help reduce C-sections and address maternal mortality and morbidity. Where are those -- when were those contracts awarded? I hadn't heard about it before.

How much are they per hospital? Are they geographically diverse? And, you know, in other words, were they selected? Because C-section rates don't seem to have geographic boundaries. And what is the monitoring process for following the results from those contracts?

DOH COMMISSIONER McDONALD: So to answer your question, there's multiple investments to reduce C-sections this year. I did mention the one.

Another one I think you might be more interested in is what the Perinatal Quality Collaborative is doing. That is working with 70 birthing hospitals that will address 80 percent of births in New York.

ASSEMBLYWOMAN PAULIN:So what about the nine -- rather than --

DOH COMMISSIONER McDONALD: I'm getting there.

ASSEMBLYWOMAN PAULIN:Oh, okay. Yes.

DOH COMMISSIONER McDONALD: So they are geographically located in different parts of the country. And I don't know off the top of my head how much money they have. I can get it to you.

But really the reason why I bring up the Perinatal Quality Collaborative is the project they're working on this year started in October. And what they're really looking at is how to safely reduce C-section rates.

And what they're challenging, getting everybody to look at it, is some of the reasons people get C-sections -- at least the most common reason is labor dystocia, or failure to progress.

And what they're really challenging is how medicine operates in that area, and really getting to the point of like maybe we need to think differently, acknowledge that the literature shows people labor differently, and not having people go into a C-section as soon as possible.

So part of why I'm excited about the Perinatal Quality Collaboratives, they come up with bundles of quality perinatal projects, they work collaboratively with hospitals and regional perinatal centers. This is the type of thing that I think will be a significant change.

Because if you look at our data over the last 20 years, it's not really changing the world right now. And I'm particularly concerned about the people who get the first-time C-section. And I think there's a lot of work that we can do in this space.

So those are just two examples of two investments. But if you're asking how contracts are awarded for those buying contracts, it's a competitive process. They're geographically located throughout the state, but I don't remember where all nine are off the top of my head.

ASSEMBLYWOMAN PAULIN:Could I get a copy of the contract?

DOH COMMISSIONER McDONALD: Of course. If it's available to release the contract, I'll give it to you.

ASSEMBLYWOMAN PAULIN:Thank you.

Next, two not related topics, but a related theme. On Early Intervention and on the monies to the hospitals, in both cases the State Plan Amendments were not filed -- I think Early Intervention was the end of December. I guess I'm asking if the State Plan Amendment was filed for the hospitals at all.

And -- so the money didn't go out the door for the -- a percentage of increase for Early Intervention, nor did the money go out the door for the hospitals. And that's very concerning, because that's what we adopted in the budget.

So I wondered -- your comments on both, and if the State Plan Amendment was even filed for the hospitals.

DOH COMMISSIONER McDONALD: So the State Plan Amendment for Early Intervention, the 5 percent increase, 4 percent modifier, was submitted December 31st, 2024. And not for want of trying to get it out -- the team worked really hard to get that done.

We were ready in April, but we had to find savings first. The way the budget was enacted last year, we had to find the savings. We tried really hard to find the savings required in the budget. At some point they just realized we couldn't find the savings, that it was so important we submitted it.

Are you talking about the 7.5 percent increase for hospitals that we did? Because that was submitted and approved.

ASSEMBLYWOMAN PAULIN:Amir is shaking his head.

MEDICAID DIRECTOR BASSIRI:Thank you for the question, Assemblywoman. I think you're referring to the one-time, one add from last year's budget for the hospitals.

There is a State Plan Amendment going in. It's intended to be a lump-sum payment before the end of the year, to account for that funding. Unclear on when that will be approved by CMS, but we are planning.

ASSEMBLYWOMAN PAULIN:There are rumors out there that only one month of that money was going to be allocated to the hospitals. Is that the case, or is it going to be retroactive to the full amount?

MEDICAID DIRECTOR BASSIRI:So it's not necessarily retroactive.

The concept is the upper payment limit, meaning, you know, we can pay up to the amount Medicare would have paid for the services. So that difference, which is the amount that was on the scorecard, will be paid lump sum for the entirety of the year. But it's paid in a lump-sum basis if it were to be approved.

ASSEMBLYWOMAN PAULIN:Are there concerns -- I have a more detailed question on the federal piece, so maybe I'll save that.

But obviously there are concerns at the federal level about approving anything at this point. So -- you don't have to comment. I'm going to move on so I -- because I only have five minutes left.

CDPAP. You know, we've seen the commercials, we've seen -- you know, our office has spoken to PPL. There seems -- and advocates, and there seems to be a delay. Or we worry that not all of the current recipients of that assistance are even filing. We understand that there's a 15-page document that each have to fill out per worker. So if somebody has three workers, it's 45 pages of stuff.

And so we have concerns, you know, I think collectively whether this is really going to happen by April 1st.

So I guess the question is, is there a Plan B? You know, what happens -- you know, we have a short window till April 1st. You know, is there any thinking about doing a phase-in or extending that deadline? I realize that it would have a budgetary impact. But here we are.

DOH COMMISSIONER McDONALD: So the way PPL organized the phase-in is it is like a stairway going up. We just looked at data last night; they're actually ahead of the schedule they proposed to us. So we're heading in the right direction.

You can register by phone, online. They have over 150 physical locations across the state. But to answer your question, the deadline's April 1st. That's in the law, and that's what we're planning on doing and that's what we expect we will do.

There's been a lot of noise about CDPAP. I think people have heard it. I think one of the challenges is the misinformation, and people being told purposely not to sign up isn't helpful. But I can tell you right now -- I looked at data again this morning -- their call center doesn't have wait times for phone calls. They've had over 90,000 calls so far. They're answering people's calls. The average call time is about 18 minutes, because it takes time to get the answers you need to fill it out.

So right now it's ahead of schedule and working as designed.

ASSEMBLYWOMAN PAULIN:Thank you. That's not what we're hearing out there in the world, but I appreciate your position at this point, and we now understand where you are.

Next question. We understand that the Master Plan for Aging is close to being finalized. When will we see the report? Why aren't the preliminary recommendations reflected in the budget as far as we can tell?

DOH COMMISSIONER McDONALD: So the Master Plan for Aging is on schedule. The State Office for the Aging -- Greg Olsen, John Cochran -- have been extremely valuable partners. There's been over 400 public meetings on this.

So it is on schedule. It's scheduled to be released in early 2025, so around springtime. So really about six, seven weeks from now is what I'm expecting.

The reason why there's nothing for the Master Plan for Aging in the budget is because it's not designed to do that. It's meant to be a master plan for aging. People can then see it and then people can respond to it. And then we can decide collectively, together, hey, what do you want to fund?

And it's going to be a while. It's not meant to be a one-time-fix-all solution. It's a pretty comprehensive product. I've seen it. So I think, you know, it's going to be one of those things -- I'm looking forward to hearing what everybody has to suggest on how we do this and how we fund it.

ASSEMBLYWOMAN PAULIN:Thank you.

Now on to the federal government. You know, we talked about the State Plan Amendments. And you can comment now, if you like, about your expectation about them being approved and if there's been conversations to that effect.

What is the -- I guess the Executive Budget recommends finding support for 6,217 FTEs. How many are funded by the federal government if we see massive cuts? And within Medicaid, how many employees are at the Office of Health Insurance Programs? How many of the 6,217 are paid by the Health Research -- the HRI, or are those FTEs on top of the 6,217? If so, how many are -- how many employees are working at DOH?

So it's a long question, you know, but I think we're all concerned about what we're going to see with the feds.

DOH COMMISSIONER McDONALD: I'm very concerned about what we're going to see in the federal government too.

I think, you know, as far as Health Research Incorporated goes, the vast majority are funded by the federal government. I think almost all of them are. And there's roughly 1300 employees who work for HRI. They're funded on all these different various grants that I have. Public Health Infrastructure Grants is an example of a big one.

So -- but those grants are safe at the moment. Just so you know, my leadership team and I meet daily to deal with the federal transition, because the threat is significant.

Do you want to talk about how many people are funded through Medicaid?

ASSEMBLYWOMAN PAULIN:Just -- are they on top of the 6,000, roughly, in --

DOH COMMISSIONER McDONALD: Yes. The 1300 people I have from HRI are wonderful people, I love them dearly -- they've been with me forever, I love them. But they're on top of everybody else I have working for the state. And they're all funded by grants. And they're all people who I -- I take care of their needs just as well as everyone else's. They're very important to me.

MEDICAID DIRECTOR BASSIRI:Yeah, and all of the staff members at the Office of Health Insurance Programs are covered under Medicaid. They're fully protected. No changes that are happening at the federal level will impact their status.

ASSEMBLYWOMAN PAULIN:So I've gotten through five questions, and I have 17. So I'm going to ask for my second three minutes.

CHAIRMAN PRETLOW:You'll get it at the end.

CHAIRWOMAN KRUEGER:I'm sorry, thank you.

Senator Brad Hoylman-Sigal.

SENATOR HOYLMAN-SIGAL:Thank you.

Good to see you, Superintendent and Commissioner.

I wanted to ask you, Commissioner, about the recent executive orders on gender-affirming care. As you know, on January 28th President Trump signed an executive order stating that the federal government would not fund, sponsor, promote, assist or support gender-affirming care. And agencies providing federal research or education grants to medical institutions were ordered to ensure that those institutions were not carrying out any gender-related procedures.

Now, we know that these policies save lives. The statistics are that LGBTQ young people are four times more likely to attempt suicide than their peers. We know that since states across this country passed anti-transgender legislation, there's been an increase of 72 percent of suicide attempts among young transgender people.

We need New York State to stand up to these directives. What is the Health Department doing or saying to protect the well-being of young transgender people?

Hospitals, to my knowledge, have not been given any direction. And we know that several hospitals have preemptively made the decision to pause gender-affirming care and appointments in connection with that. That seems to be outrageous and dangerous and demands a very swift response, which as far as I know the State of New York has not delivered to our citizens.

DOH COMMISSIONER McDONALD: Yeah, so I think the executive order was mean-spirited and wrong, and it contradicts sound medicine and science. So I just want to be blunt about that.

We are actually sending out guidance to hospitals. It's probably going out today or tomorrow. What we really --

SENATOR HOYLMAN-SIGAL:Why didn't it go out sooner, Commissioner?

DOH COMMISSIONER McDONALD: Because I think -- let me just finish.

SENATOR HOYLMAN-SIGAL:I mean, there seems to be a rollover mentality from the State of New York when it comes to federal directives. This has to stop.

DOH COMMISSIONER McDONALD: Well, the Attorney General did file suit and get a temporary restraining order with other attorneys general --

SENATOR HOYLMAN-SIGAL:What did the Governor say?

DOH COMMISSIONER McDONALD: The Governor supports everything the Attorney General and I'm doing here. And part of why we're trying to be really thoughtful about what we say is it's really important to give guidance to hospitals, make sure healthcare workers understand they have an obligation to provide continuity of care, that they simply can't abandon patients.

And regardless of a federal executive order, they still have an obligation not to discriminate against their patients and to provide the necessary care.

It may seem like it took a long time to get that wording done, but we really needed to do our research and make sure our guidance to hospitals was accurate, right, and compatible with federal law and state law.

SENATOR HOYLMAN-SIGAL:When do we expect that letter to hospitals? Because hospital administrators are calling me, a State Senator in Manhattan, asking me what they should do.

DOH COMMISSIONER McDONALD: We're sending a "Dear Administrator" letter to all the hospitals. It will either go out today or tomorrow. I looked at the draft last night. I just -- I'm not sure -- it didn't go out last night.

SENATOR HOYLMAN-SIGAL:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Assembly.

CHAIRMAN PRETLOW:Assemblyman Jensen, five minutes.

ASSEMBLYMAN JENSEN:Thank you, Chairman Pretlow.

Dr. McDonald, New York has consistently over the past few budgets provided capital funding for healthcare providers via the Statewide Health Care Facility Transformation Program. And there's been several awards made recently on the Safety Net Transformation Program.

About the older capital program, Statewide IV and V, what is the value of the remaining uncommitted funds?

DOH COMMISSIONER McDONALD: So for Statewide IV, there's $250 million in capital, and that's going to be announced in the next couple of weeks.

For Statewide V, there's $450 million, and that will be announced later on this year.

Just to keep it honest about everything, there's also Safety Net Transformation funds -- I don't have an exact dollar amount, but those are coming out this year.

Just so you hear it from me, we had $4 billion worth of ask. We tried our best to meet everyone's needs. We saw a lot of really good ideas.

ASSEMBLYMAN JENSEN:I appreciate you jumping ahead, because my next question was going to be about the amount in the safety net.

What is DOH doing to ensure that with the billions of amount requested, with the outstanding funds and funds that will still allocated in the soon-to-be-enacted budget, what is DOH going to do to ensure that there is equity across needs and regional balance to ensure that, you know, Western New York, Finger Lakes, North Country, Southern Tier, New York, Long Island are all an getting equitable amount of funding for their needs?

Especially in light of my Senate colleague's leading question about, you know, the needs we have in Rochester.

DOH COMMISSIONER McDONALD: Yeah, so we do -- I do look at geographic distribution in isolation. And it is different across the state. Like my friends in the North Country, they have real different issues than the folks in downstate. So we do look at that issue. It's important that we do that.

But when you look at Safety Net Transformation, those are partnership arrangements. And one of the things that we're seeing is a lot of creative and novel partnerships that far exceeded what we expected. So I'm kind of excited about it.

That's why I'm excited about the $1 billion-plus in this year's budget, because I think we see this is the type of -- where healthcare is going. Hospitals do better when they're connected to other hospitals and other partners, whether they're outpatient or hospitals. They do better when they've got the shared brain power, shared governance, shared leadership. So I'm excited about how we're going with Health Safety Net Transformation.

ASSEMBLYMAN JENSEN:Thank you.

Could you explain the logic of why the budget proposal does not look to restore the cuts in capital reimbursement for nursing homes that have been enacted previously, around 15 percent in aggregate?

And without restoration of these cuts, how are nursing homes going to make facility improvements to ensure resident and staff safety, meet debt service obligations, for the projects that are approved and completed, especially the absence of adequate reimbursement rates?

DOH COMMISSIONER McDONALD: Yeah, so there is -- a lot of the MCO tax money we have is going to be going towards nursing homes. At least that's what we're planning on doing with that. And that's where we're targeting our investments, so we can offset some of that.

I'm not contesting the 15 percent number, but I don't know that that number includes the 7.5 percent increase we did two years ago and the 1 percent increase last year. And then we did a 4 percent -- it was kind of a per-diem increase last year of 285 million. So we did -- we're doing a lot of these increases here. But I agree.

One of the things nursing homes are struggling with, though, is workforce. We need to find a way to help them lower their costs of labor.

ASSEMBLYMAN JENSEN:Well, and I think certainly, you know, we've seen increases in the state previous budgets on reimbursement rates, lump-sum payments. But I think what I've heard from facilities not just in my own community but across the state is that the capital cuts, while they need to invest in their workforce and quality of care, the capital projects and those capital dollars were critically important to ensure that they create home-like environments, especially as acuity levels increase.

We talked about the need to ensure the continuum of care, from hospital discharge to appropriate levels of care, meets the needs of everyone who needs it. So I think the capital funding is a critical component of that.

Moving on, the 2025 fiscal year included 350 million in state-share Medicaid investments for hospitals and nursing homes -- a $200 million state share for hospitals, 150 for the nursing homes. The understanding is the 150 million for nursing home rates has been distributed. Has the state's share of the hospital funding been released? And if not, why not?

MEDICAID DIRECTOR BASSIRI:I can take that.

DOH COMMISSIONER McDONALD: Go ahead.

MEDICAID DIRECTOR BASSIRI:That is what Assemblymember Paulin had asked about as well.

And so we are in the process of doing that. The State Plan Amendment is effective on March 1st, and that's how the state share would be released at that time.

ASSEMBLYMAN JENSEN:Okay. And then just one quick question, because I have 13 seconds.

Would DOH be supportive of adding dentistry to the Doctors Across New York program or creating a new Dentists Across New York program?

DOH COMMISSIONER McDONALD: Can I look into that? Because I haven't thought about that before. It's an interesting idea.

ASSEMBLYMAN JENSEN:All right. Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Senator Fernandez.

SENATOR FERNANDEZ:Good morning. Thank you so much.

As you know, I'm the chair of Substance Use Disorder for the State Senate, and I have some questions related to that. When people think of --

CHAIRWOMAN KRUEGER:Can you speak a little louder towards the mic? Sorry.

SENATOR FERNANDEZ:When people think of substance use, it's thought that OASAS has a majority of the work and control, but I know that DOH oversees the Office of Drug User Health as well as other units.

Can you tell me what DOH is doing as it relates to substance use disorder and what in this year's budget supports it?

DOH COMMISSIONER McDONALD: So a couple of examples that we have in our budget is getting New York State to align with the federal law of three days of buprenorphine to be handed to somebody in a hospital.

Another example is three days of buprenorphine to help someone who saw a paramedic to actually get it in the field.

We do have an office of drug user health. We also have what's called a PORT, post-opioid response treatment. We also have the Overdose to Action Grant, which really helps us. We also have the State Unintentional Drug Overdose Reporting System data.

We have a lot of this mixed in with federal and state funds. We do get some money from the Opiate Settlement Fund as well.

SENATOR FERNANDEZ:A question on buprenorphine.

Last year the Governor signed a bill -- my bill -- that allows up to a 72-hour supply of medication for detox treatment and maintenance, to match federal regulations. How does the Governor's proposal differ from what was signed last year?

DOH COMMISSIONER McDONALD: Last year's law was actually narrower than the federal legislation.

This year's proposal completely aligns with the federal legislation, because last year it only applied to a healthcare facility that didn't have a pharmacy. Since most hospitals have pharmacies, they weren't eligible. This year we're just trying to bring that together so more hospitals can participate in that.

SENATOR FERNANDEZ:Okay. All right.

Well, jumping back to the Office of Drug User Health, the Office of Drug User Health is currently running several drug-checking services in the city and across the state. What has been the impact of these programs?

DOH COMMISSIONER McDONALD: So what's great about the programs is people come in thinking they have one thing, but they find out they have another. The big mismatch is sometimes they think they have fentanyl -- which, you know, it's the illegal fentanyl -- but they actually have something different.

And sometimes people think they have cocaine, but they have fentanyl. And sometimes they're surprised there's xylazine in this as well. And, you know, this is the whole point, is when you get your illicit drug from a dealer, the dealer doesn't always know what they're giving you.

So we've done literally thousands of drug checkings, and we do it in realtime with people when they're right there in front of us, and give them the results.

SENATOR FERNANDEZ:So this is a really helpful tool.

DOH COMMISSIONER McDONALD: It's a really helpful program, yeah.

SENATOR FERNANDEZ:Would you suggest that we expand it and allow more facilities to be able to check the drug supplies?

DOH COMMISSIONER McDONALD: Well, it's a great idea. We'll see what's possible.

SENATOR FERNANDEZ:Thank you. I have a bill on that too. Thank you.

DOH COMMISSIONER McDONALD: Thank you.

CHAIRMAN PRETLOW:Change of scenery.

Assemblyman Weprin.

ASSEMBLYMAN WEPRIN:Thank you, Mr. Chairman.

I'm going to ask most of my questions for Department of Financial Services Superintendent Harris, although I do have one or two questions in my 10 minutes for Health Commissioner McDonald.

For Superintendent Harris. One is I want to start by saying I think it's terrific that our offices have such a good relationship and meet on a regular basis, and I think that has been productive. This is my -- as you know, my third year as Insurance chair, and I appreciate the ongoing dialogue, you know, on various issues, prior to crises as well as during crises.

We understand that the livery insurance market is at a critical juncture right now. Can you take us through your approach to this crisis and how the proposals in the Governor's budget will help to address the situation?

DFS SUPERINTENDENT HARRIS:Absolutely. Thank you so much, Chair Weprin. And I as well enjoy the collaborative relationship, and thank you for your partnership.

As I noted in my testimony, the livery insurance market in New York State is made up of about three insurers that insure about 90 percent of the market. And when we're talking about livery, of course we're talking about yellow cabs, Ubers, Lyfts, black cars. Over the decades those companies have been underpricing their insurance policies below actuarially sound levels in an effort to capture market share, and in doing so have made themselves insolvent. They also delayed paying claims when they come due to drivers and passengers and healthcare providers.

So these companies have been insolvent now for decades. As I noted, we just published the first reports of examination of these companies since 1987. We are required by law to examine these companies and publish reports, and we've just done so for the first time in decades.

But what we've realized in our examination of the companies and engaging with drivers and brokers and insurance companies is that the market itself is not stable as a result of this underpricing.

And so what the Governor has put forward are proposals that will bring additional competition into the market that would allow DFS to set rates in the market like we do in other lines of insurance, so that it brings more insurance companies to the market to give those companies some flex-rating abilities -- just like we do on the private passenger side, because they don't have underwriting experience in the space -- and to allow for group policies as well.

ASSEMBLYMAN WEPRIN:Great. We've heard concerns from the livery industry -- sorry -- that TED Part BB would allow for higher group policy insurance in New York City that may have an unintended but devastating effect on the New York City for-hire vehicle sector.

Their concern is that a big player that meets the operational and financial obligations required to form a group policy will create a group policy and not allow cross-dispatching.

Currently drivers carry their own for-hire insurance, as you know, and can receive dispatches from any for-hire base or ride-sharing platform. They worry that group policies will eliminate their ability to rely on cross-dispatching, and most of the supply of drivers will be under the control of large ride-sharing platforms.

Can you share your thoughts on this concern?

DFS SUPERINTENDENT HARRIS:Absolutely. Thank you, Chair. I think it's a really important consideration. As I said, we've been engaged with drivers, dispatchers, brokers and others and heard some of these same concerns.

I think these are concerns that can be addressed in drafting, either as part of the legislation or in regulation that DFS may write as a result of this legislation.

So I think we're able to work through these concerns in a constructive way to make sure they're properly addressed.

ASSEMBLYMAN WEPRIN:Okay, I appreciate that.

In your testimony -- and I know this has been a problem in the past with staffing -- you alluded to the fact that despite the progress you have made on the hiring front, DFS still remains underresourced. Can you please elaborate on what you need to be able to operate at the agency effectively? And what's your current employee count now?

DFS SUPERINTENDENT HARRIS:We're just under 1400.

ASSEMBLYMAN WEPRIN:How much?

DFS SUPERINTENDENT HARRIS:Just under 1400.

ASSEMBLYMAN WEPRIN:Fourteen hundred.

DFS SUPERINTENDENT HARRIS:Mm-hmm.

So there's a number of things. As I noted in my testimony, we have a lower FTE cap today than we did when the agency was created 12 years ago, but we have more and more mandates put upon us every year -- which we're grateful to take on. For instance, the pharmacy benefit manager regulation, the regulation of cryptocurrency, climate oversight and other things. And so we need that staff to grow accordingly.

As I noted, I'm grateful to the Governor and the Legislature for fully funding the agency for the first time in its history a few years ago. I was challenged at the time to hit that FTE cap and told we weren't going to hit it, but there's nothing I love more than being told I can't do something, because we are about to hit that cap probably in the middle of this year.

The Governor has put forward some additional staff for us in the budget, which is incredible, and we're very grateful to that. And we look forward to, you know, hopefully hitting that cap as well, as we staff up. But as you know as well, the federal regulators have been cutting back on their staffs. Just over the weekend the CFPB, the Consumer Financial Protection Bureau, was shuttered. We partner with them quite a bit. And although we don't rely on them for staff or funds, without their partnership on the federal level, that's work that's going to fall to DFS.

Similarly, the FDIC, with whom we co-examine banks, just rescinded offers to 200 examiners. So that means there will be fewer examiners going in with us when we examine our banking institution, and that's slack that we at DFS are going to need to take up to make sure our institutions are functioning well and consumers are protected.

ASSEMBLYMAN WEPRIN:Well, I appreciate that. And I will do everything in my power to help you with those staffing concerns.

My final question for you, Superintendent, is about PBMs. And in the Governor's proposal, they're required to produce a report showing the dollar amount of rebates, fees, price protection payments, and any other payments received from drug manufacturers through a rebate contract, and the portion passed on to payers or retained by the PBM.

Can you tell us how this provision will benefit consumers in New York State? And will this lead to lower drug prices for New Yorkers, which is something that we are all concerned about.

DFS SUPERINTENDENT HARRIS:Absolutely. As you know, sir, prescription drug costs are one of the largest contributors to rising healthcare costs, not just in New York but around the country.

And that's why we're so grateful to have the authority to regulate PBMs, as we do now. And we've adopted our market conduct regulation just at the end of last year.

What the Governor's proposal does is, as you noted, require PBMs to publish their rebate agreements and additional details so that employers, consumers, can compare plans and make better choices about what's going to suit their needs, because they'll have that transparency and ability to compare the PBMs' rebate plans, the formularies, and that will make the PBMs compete and hopefully bring down costs.

ASSEMBLYMAN WEPRIN:I appreciate that.

And then I have one or two questions for Commissioner McDonald.

Commissioner, I share Chair Paulin's concern about the CDPAPs and the April 1st deadline, which I think is an unrealistic deadline, from everything I've heard from my constituents and other people's.

Over 280,000 people rely on CDPAPs. And as of January 31st, the department reported that only 22,000 consumers had completed or started the enrollment process with PPL. Given the staggering numbers of caregivers and care recipients and the work that remains to be done, you know, what is the plan once they do not reach the deadline of April 1st?

DOH COMMISSIONER McDONALD: Yeah, so right now they're ahead of schedule, as I said earlier. They're planning on hitting April 1st, and we're holding them to it. We expect the managed care plans to help.

One of the things that would help, though, is -- and this is a shared responsibility anyway. The current fiscal intermediaries have not super been helpful at this point. But I think if they would just encourage people to transition, it would help.

But there's multiple ways to transition, either by phone, online, the 150 different locations. PPL is going to be reaching out to people already. So they're doing a lot to get people on board. But it's an April 1st deadline set in the law.

MEDICAID DIRECTOR BASSIRI:And if I could just add, you know, we have been trying to be -- and put out information related to the transition. As you've probably seen, the commissioner's public service announcement, our releases. We've put out tremendous amounts of guidance.

And I strongly urge any of you to please let us know if your constituents are informing you about things that are happening that are concerning to you, because there's a large misinformation campaign that we've been working against, and we could use, you know, your help in reaching your constituency.

ASSEMBLYMAN WEPRIN:Okay. And on that, my district is a very diverse district in Queens, many different languages spoken. There still is a problem with PPL, from what I've heard, with language translation. I have Bangladeshi, Pakistani, Indian --

MEDICAID DIRECTOR BASSIRI:There are no issues with language translation. They have translation in all languages. I can assure you of that.

ASSEMBLYMAN WEPRIN:Yeah, if you could follow up on that, because I've been told it's not sufficient. So I agree with you it should be done.

CHAIRWOMAN KRUEGER:Thank you.

ASSEMBLYMAN WEPRIN:Thank you, Mr. Chairman. My 10 minutes is up.

CHAIRWOMAN KRUEGER:Senator Gallivan, five-minute ranker.

SENATOR GALLIVAN:Thank you, Madam Chair.

Good morning to the panel. My first question is for Director Bassiri.

So it appears that overall medical spending is projected to reach approximately $124 billion in the upcoming fiscal year, which is up from 89 billion just back in the 2022 fiscal year. How are you dealing with this? Like what specific reforms are being proposed to manage the growth and ensure the program's sustainability?

MEDICAID DIRECTOR BASSIRI:Thank you for the question, Senator.

I think part of the increase is the things that we're counting as part of the total budget spending, so Essential Plan and other things. But how we're managing spending growth, as you've seen in last year's budget and the focus on our growth in managed long-term care spending system, which is outpacing all other aspects of the Medicaid budget and crowding out other areas of spending.

In essence, you know, back when you're referring to, a few years ago at 86, our managed long-term care program was maybe half to 75 percent of our mainstream managed-care program, the program that covers 5 million- plus New Yorkers.

They are now equivalent, if not managed long-term care is exceeding our mainstream program. So that is the primary area of growth that we've been trying to manage, and hoping we will manage and curb the cost trend that we're seeing in the Medicaid program.

SENATOR GALLIVAN:So what steps are you taking as far as managing the growth to make sure you're verifying the eligibility with these additional people coming on?

MEDICAID DIRECTOR BASSIRI:Yeah. We are certainly verifying the eligibility based on the income levels and other circumstances of households. It's a pretty prescriptive process that we follow.

However, with things like the statewide fiscal intermediary that we're implementing and the 600-plus fiscal intermediaries that are doing more than providing fiscal intermediary services, that is what we're really trying to manage and curb the cost trend, because that's where the growth in the program spending is occurring.

SENATOR GALLIVAN:Thanks. And I know that the response merits some follow-up on CDPAP, but I'm going to defer to my colleagues because I know many of them have concerns about their particular program.

Commissioner, back in 2018, I believe it was, the New York State Drug Take-Back Act was passed by the Legislature, and that obviously has to do with the prescription drugs that are out there, the ones that are unused. We don't want them -- we're dealing with the opioid crisis, of course. We don't want them in the wrong hands.

But I don't think that the program has been fully implemented. If I remember correctly, the state engaged two different operators to implement the program statewide. Am I correct in -- am I correct in thinking that the program's not fully implemented? And if that's the case, why not and what are you doing about it?

DOH COMMISSIONER McDONALD: Yeah, so my understanding is the program is fully implemented. But I'll double-check and get back to you on that. Because if there's -- if you're seeing something that's a challenge, then we obviously need to find out. But I thought it was fully implemented.

SENATOR GALLIVAN:What's reported to me is that one operator has fully implemented but the other has not. And so if we could follow up separately, I'd appreciate that.

DOH COMMISSIONER McDONALD: Yeah, sure.

SENATOR GALLIVAN:Commissioner, again, Safety Net Hospital Transformation Program. This budget appropriates about a billion dollars to support capital improvements to safety-net hospitals and their partners. What specific capital improvements do you envision?

DOH COMMISSIONER McDONALD: So what you would see is hospitals partnering with someone else to say, like, Do you need a new emergency department?

Like one of the ones we just funded was St. Barnabas in the Bronx. Their emergency department was really small, really outdated, and really, really just not functional for just the patients. They're building a new emergency department with that. That's one example.

For other places, what they might be doing is fixing a parking garage, which might be a challenge. For other places, it's going to be something like fixing the mechanical, electrical and plumbing of their place.

That may sound a little bit mundane, but if you have a hospital without sound mechanical, electrical and plumbing, like some of our hospitals do, you have sewage backing up in your hospital, and that's not good for anybody.

But we're really looking for projects that improve access to care, quality of care, improve outcomes in the community, try to eliminate health disparities, and overall just population health.

So there's a number of ways hospitals do this. Some people might need an ambulatory surgical center. Most of medicine is now outpatient, so a lot of this money is probably going to go towards ambulatory projects, and it's going to be geographically distributed across the entire state to meet everyone's needs. It's a lot of money. It's a big investment.

SENATOR GALLIVAN:All right, thank you. Across the entire state is key. I know we've talked about it. It's good to remember the needs of the small rural community are just as important as a population of millions.

DOH COMMISSIONER McDONALD: That's right.

SENATOR GALLIVAN:Thank you. Thank you, Chair.

CHAIRWOMAN KRUEGER:Assembly.

CHAIRMAN PRETLOW:Thank you. (Mic off; inaudible.)

ASSEMBLYWOMAN FORREST:Good morning, all.

Commissioner McDonald, you testified today that last year's failed proposal, the nursing compact, is a solution to Rochester's healthcare staffing problems. Does DOH assume that there are not enough nurses in New York State?

DOH COMMISSIONER McDONALD: Yes, there's not enough nurses in New York State.

ASSEMBLYWOMAN FORREST:Okay. So according to NYSED, New York State Education Department, new RN licenses increased 49 percent from April 2018 to January 2025. That's 224,416 new issues. At the same time, RN employment in New York has remained relatively flat at 4 percent, from the same 2018 to '23.

Licensure isn't the problem. What does DOH think is the real problem?

DOH COMMISSIONER McDONALD: So we don't have enough nurses is true.

The big issue that I think's going on in New York State is half of the nurses who have a license aren't involved in direct patient care. And I think that is really the critical issue here. So trying to get nurses to come back into direct patient care is something we need to work on.

Now, I can tell you what we're doing this year.

ASSEMBLYWOMAN FORREST:But I have -- but I want to keep on following this direct "get to the bedside," because that's interesting. I have a similar idea of the problem.

You know, as a committed bedside nurse I think that when we look at RNs' working conditions, it's terrible. If you want a better solution -- or I don't think a compact is the solution at all. But a better solution is better pay, better working conditions, and better benefits. And that's how you keep your nurses from going out of state but staying in the state.

So in the line of better conditions at the job, NYSNA reports that half of ICU units are in violation of the minimum one-to-two ratio required by law.

So my last question. How much funding does the Governor give the Department of Health for oversight and enforcement of the new hospital staffing law?

DOH COMMISSIONER McDONALD: So we have been enforcing the staffing law this year, and we actually have prosecuted quite a few complaints. You'll start to see fines come out this year. Because just the way the law is constructed, people have a chance to rectify that.

I don't know the exact amount, but if you look at enforcement actions of the Department of Health not just for hospitals, but for nursing homes, we've enforced -- we've had more enforcement actions this year than any year previous --

ASSEMBLYWOMAN FORREST:I have submitted --

DOH COMMISSIONER McDONALD: -- for hospitals and nursing homes.

ASSEMBLYWOMAN FORREST:-- multiple times, myself, when the unit is not in compliance to the Safe Staffing Law. Very -- if none of those complaints from my fellow nurses were investigated. Because we just don't have -- there is no reinforcement, there is no enforcement.

DOH COMMISSIONER McDONALD: So we've done more enforcement this year than we've ever done before, not just for hospitals but nursing homes. Record fines in the last two years for both too.

ASSEMBLYWOMAN FORREST:Thank you, Commissioner.

DOH COMMISSIONER McDONALD: Thank you.

CHAIRWOMAN KRUEGER:Senator Tom O'Mara.

SENATOR O'MARA:Thank you.

I just want to recognize that we've been joined by our ranking member on Insurance, Senator Pam Helming. We've also been joined by Senators George Borrello, Dan Stec, Steve Rhoads, and Jake Ashby.

CHAIRWOMAN KRUEGER:Thank you.

And we have been joined by Senator Jackson, Senator Liu and Senator Gonzalez. And people are wandering in and out to other committee meetings.

Next, to Senator Helming, five minutes, ranker.

SENATOR HELMING:Thank you, Senator Krueger.

Superintendent Harris, I wanted to thank you for your testimony and also thank you for your accessibility. Your office has been incredibly helpful as we've navigated our way through a couple of natural disasters.

I appreciate the opportunity to talk to you last week about primarily what's on the minds of my constituents: Affordability, especially as it relates to car insurance and the skyrocketing costs. I'm not going to ask you a question on it because I feel like we've discussed it. But again, anything you could put out publicly or anything you could point to in the budget that specifically addresses combating the fraud that is occurring.

And also, again, something that is important after the natural disasters is just something that you could put out to the public to ensure that there's a healthy, competitive market for homeowner's insurance. People are really concerned after the hailstorms, the flooding, the California fires, and so much more.

But again, I have so many questions for the commissioner of health. But again, I want to say thank you to you, and I'll be in touch too to see what we can get in writing that I can could put out to my constituents.

DFS SUPERINTENDENT HARRIS:Perfect, thank you.

SENATOR HELMING:Thank you.

Dr. McDonald, I'd like to start with a question on rural suicide prevention. Both houses last year unanimously passed a bill that the Governor vetoed, with many other bills, citing cost. It was a voluntary commission that was gong to be formed. What specifically is in the budget to address rural suicide prevention?

DOH COMMISSIONER McDONALD: There's not a specific budget line that says "rural suicide prevention." That's not in there.

But the way we're looking at all of these issues is I do work with the Office of Mental Health quite a bit, but if you look at how we're putting together the 1115 amendment, we have these Social Care Networks. What we're trying to do is improve people's individual social determinants of health --

SENATOR HELMING:I read the report that went out by the Department of Health a couple of years ago. I've read reports since then. We are seeing an increase in rural suicide. We need to specifically address that. We need to evaluate and understand access to services, et cetera.

So I want to move on. I represent several towns in Monroe County and several rural counties. And when you talk about Rochester and the Rochester healthcare system, we should be talking about the Greater Rochester healthcare system, because those two big health systems run everything out in my rural communities. And I feel like we have to scratch and fight to get funding to roll out from those big centers into our rural communities.

You mentioned the unique challenges with workforce problems and the nursing homes. What specifically is in the budget to address these issues in the Greater Rochester area?

DOH COMMISSIONER McDONALD: So the budget has a lot in there for workforce. And one of the things I didn't mention was training we're doing to help people pay for their training with the health program. But if there's nothing that's --

SENATOR HELMING:Dr. McDonald, I'm sorry, but I only have three minutes. So if you could get back to me with specifically what's in there.

Last year New York State invested almost $650 million for training initiatives in our area. I'm very curious, how's that going? Because I continue to hear about the struggles with workforce. I continue to hear about people being held up in emergency rooms or on floors in the hospital where we need to move them out to the nursing homes.

But something's broken, and it's not working.

DOH COMMISSIONER McDONALD: Well, it's a workforce problem. We just don't have enough workforce. I mean, we don't have enough doctors, nurses, medical assistants. We don't.

SENATOR HELMING:I know that. I'm asking you, what are we doing? And how effective has all the money been that we brought you to do it?

DOH COMMISSIONER McDONALD: I'm happy to send that to you. We're doing a lot in workforce. I'm happy to send that to you.

SENATOR HELMING:Okay, I appreciate that.

Moving on, I'd like to align my comments. I continue to get numerous calls from individuals concerned about the CDPAP program, numerous calls. I have -- one of the issues I think in our rural communities is access to healthcare, being able to see providers when you need to. We have a shortage of providers.

And one of the things that struck me as odd is the -- in the budget there's something about medical malpractice. And I read that and I think as a doctor, would that entice me to come to New York? Or would that be another thing that goes in the checkmark of the box that's not a reason to come to New York State?

Why do we put proposals in the budget that are going to potentially discourage people from coming here?

DOH COMMISSIONER McDONALD: I think we need to look at long-term sustainable solutions. The highest malpractice rates in the United States are in Long Island, followed by New York City. Using taxpayer money to subsidize isn't the best solution.

We've done a lot of stakeholder engagement. Of those things I've seen that might make sense, I think New York needs to look long and hard at what other states have done --

SENATOR HELMING:Thank you. I'm sorry, I have eight seconds left and I have to get this in.

So our public health, county health departments are on the forefront of fighting the drug addiction services, and they need County Law 677 to be amended so that they have access to realtime data on what's happening in their communities.

CHAIRMAN PRETLOW:Assemblywoman Solages for three minutes.

ASSEMBLYWOMAN SOLAGES:I want to go back to talking about nursing homes.

So despite considerable need, last year's budget cut to the VAPAP program targeting nursing homes was 25 million. The program is designed to provide nursing homes in severe financial distress the opportunity to apply for short-term financial relief dollars to maintain operators and vital services and solutions.

The question is, can the Department of Health tell us exactly what is happening with that program? And what can be done to make this process {inaudible}. And then I have another question as well.

DOH COMMISSIONER McDONALD: So we do use -- there's $25 million just for nursing homes for VAPAP, and we do use that. And we did save quite a few nursing homes last year. We didn't save all of them; three did close.

The VAPAP is designed for one-time use, and it implies you have a transformation plan. Of the three that closed, that wasn't what was applicable to them. And it's not meant for emergency funding to run your payroll.

So that's -- what's in the budget this year was in the budget last year. What we're looking for is long-term sustainable investment in nursing homes, and there's a pretty significant commitment this year with the MCO assessment. And that's where we're trying to do things.

But we really need to look at how do we help the workforce. Nursing homes, all of them across the state tell me they have struggled hiring staff. One of the things we just released was our Temporary Agency Staffing Report. It's stunning how many hospitals and nursing homes are still employing temporary agency staffing nurses, which still speaks to the shortage. And the majority of those nurses live within 10 miles of where they're working. They're not really traveling. And we're paying a fortune for that.

So these are things that we need to work together on to find solutions.

ASSEMBLYWOMAN SOLAGES:I hope that we can strengthen our nursing homes. On Long Island we're having a severe issue, and we need emergency help for a lot of them.

Another question I have, in 2022 New York State enacted a law to reimburse kidney donors up to $14,000 in related donation expenses. And we want to encourage donation, organ donation. But the Department of Health has yet to implement the law, and now the Governor's proposing a tax credit up to 10k.

Given that this previous law exists, how can we implement it or execute the last proposal before we implement the new one?

DOH COMMISSIONER McDONALD: Yes, and we're working hard to implement the Living Donor Support Act. The law was chaptered in March of '23. It was supposed to be effective April of '23. I didn't get -- the budget wasn't approved that year until May of '23. It was impossible. We needed to hire staff, we need to train staff, we need to write regulations, we need to do an information technology build.

We're going to implement it this year, because I think organ donation is really important.

One of the big things we struggle with in New York State, by the way, is for whatever reason, we are like almost the bottom in the country in registering to be an organ donor. And as much as the Living Donor Support Act is important, and something that's really important to me, we do need more people to, quite frankly, register to donate, to be an organ donor. Because you don't need them after you're gone.

ASSEMBLYWOMAN SOLAGES:Thank you so much.

DOH COMMISSIONER McDONALD: Thank you.

CHAIRWOMAN KRUEGER:Senator Webb.

SENATOR WEBB:Good morning, everyone.

So as the chair of Women's Issues in the Senate, my first question is for you, Commissioner McDonald, with regards to maternal mortality rates and also morbidity rates.

So I know you mentioned in your testimony that there's a plan to establish nine sites, and I know Assemblywoman Paulin raised this point. I'd really like to home in on implementation because there seems to be a consistent challenge with implementing a lot of these measures in realtime.

And especially given the very alarming rates of maternal mortality here in New York, where we have some of the highest rates in the country, that also disproportionately impacts women of color.

I would like for you to expand on that a little bit more.

DOH COMMISSIONER McDONALD: So there are a lot of investments, not just the perinatal centers. But one of the programs I didn't really talk about was our Perinatal Infant Community Collaborative, where we funded 30 community-based organizations -- it's $13 million a year -- to not just address the perinatal mortality, but the infant mortality, because so much of that's connected.

Now, we do have the Maternal/Child Home Visiting Program as well. We have the Nurse Family Partnership, which has, you know, got a nice $3 million investment with a nice federal match to that as well. We have, you know, something small, like the Safe Motherhood Initiative. We do have, you know, other savings we do as well here.

But we get a lot of money from the federal government on this stuff as well, and I think it's a really comprehensive program.

I don't think there's a quick solution, though. There's not one big issue. The issues that I most worry about is when people pass away after having babies, sometimes it's right around the perinatal experience. But we look at someone who might have passed away up to a year later, and we divide that into pregnancy-related versus pregnancy-associated deaths, because you really want to make sure that no one's dying from pregnancy, whether it was a direct cause from what happened in an operating room or in a birthing room, or whether it was a circumstance that happened in life.

Part of why I bring that up is the initiative to give someone $100 a month of public assistance while they're pregnant and 1200 a month when they're having a baby, that may not seem like a really big initiative, but that is significant.

And one of the other investments that have this kind of smallest -- we're doing more to do lactation consulting as well. Like we're trying to do as much as we can. The data will take a long time to mature because it does take a long time to go through the data and figure this out. But we're doing the interventions and then trusting the data will be there when we're done.

SENATOR WEBB:And I only have a little bit of time left. I do want to continue on this theme of challenges with implementation.

So I too have a lot of concerns around the CDPAP program changes. I represent a very rural community myself, and I have a lot of constituents who are very reliant on this program, and it has created a lot of issues with not only consumers but also providers of care.

And so I know we have limited time, but I would like to have a much larger conversation on not only how we're implementing these changes and the impacts, but also challenges with communications with the Department of Health in getting consistent, clear communication on how these programs are being implemented and the challenges that constituents are having.

CHAIRWOMAN KRUEGER:I'm sorry, I have to stop you, Senator.

SENATOR WEBB:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Assembly.

CHAIRMAN PRETLOW:Thank you.

We've been joined by Assemblymembers Anderson, Gonzalez-Rojas, Kelles and Reyes.

The next questioner, for five minutes, is Assemblyman Gandolfo, ranker on Insurance.

ASSEMBLYMAN GANDOLFO:Thank you.

My first question is for you, Commissioner. Thanks for joining us here today.

The Governor's proposed budget language would authorize DOH to penalize health plans for contract and performance standard noncompliance, with penalties ranging from $250 to $25,000 per violation, dependent on the severity and at the sole discretion of the commissioner.

Under the Medicaid managed program, DOH and individual health plans enter into a model contract defining the obligations of the parties to provide benefits to Medicaid enrollees.

Does the department already have this authority to levy penalties through the model contract?

MEDICAID DIRECTOR BASSIRI:Thank you for the question.

Yes, the department has authority to impose penalties under the model contract today. However, it takes a very long time. It goes through the administrative hearing process that is outlined in Public Health Law.

And the language that is being proposed in this year's Executive Budget allows us to more swiftly impose penalties for trivial and standard contract noncompliance.

ASSEMBLYMAN GANDOLFO:Now, is there any way for -- is there a process for health plans to dispute the penalty being levied? Is there any kind of appeal?

MEDICAID DIRECTOR BASSIRI:There are too many processes for health plans to dispute penalties.

ASSEMBLYMAN GANDOLFO:Well, under this language would there be a process if the commissioner levied a --

MEDICAID DIRECTOR BASSIRI:Yes, there would be an abbreviated process, and the penalties that would be imposed would be much more objective and black and white with respect to the requirements that are already in the contract.

ASSEMBLYMAN GANDOLFO:Okay. All right, thank you.

And moving on to the funding for the Medicaid Quality Incentive funding pools, the Executive Budget utilizes a portion of the proceeds from the MCO tax established in last year's budget to provide 50 million state share for the mainstream Medicaid Quality Incentive program. The QI program has been vital in enhancing the quality of care for individuals in Medicaid, supporting a broad range of initiatives.

Does the $50 million fully fund the program?

MEDICAID DIRECTOR BASSIRI:It fully funds the amount that is remaining in the program.

It has changed over time, so I don't actually recall what the full amount was. But every amount that is currently funded through the global cap would be funded through this initiative. We're not reducing it any further.

ASSEMBLYMAN GANDOLFO:Okay, thank you.

And earlier I think, Commissioner, you said that PPL was ahead of schedule. Does that mean all 600,000 consumers and caregivers would be fully transitioned by April 1st?

DOH COMMISSIONER McDONALD: So my understanding, the answer is yes, that our plan is that PPL will meet on time. That's exactly what we're saying.

Our understanding is there's roughly 240,000 members right now, and then the workers are who else you're talking about. But right now you can sign up on the phone, you can sign up online, there's 150-plus physical locations. And if you don't call them, they will call you.

ASSEMBLYMAN GANDOLFO:Okay, so you would expect all 600,000 to be transitioned by --

DOH COMMISSIONER McDONALD: Well, as many as -- as who want to. I mean, I have to create space for -- I guess there might be some people who don't want to transition. I guess if that's possible, then they don't have to. But if they want to, that's what our plan is.

MEDICAID DIRECTOR BASSIRI:And just to add to what the commissioner said, I mean, we're tracking these numbers on a daily basis, if not an hourly basis. They are already up from the numbers that were referenced earlier. We are on track. There's no reason to believe we will not continue to be on track going to April 1st.

And unequivocally, there is no change in eligibility. People who are receiving the service will receive the service regardless on April 1st. That is not changing here.

ASSEMBLYMAN GANDOLFO:Have any payments been made to subregional partners for administration costs?

MEDICAID DIRECTOR BASSIRI:No.

ASSEMBLYMAN GANDOLFO:So not at this point? Okay.

And that's all I have. Thank you all for answering the questions.

And, Superintendent, also thank you. I have to compliment your staff. We've talked about some issues there. I didn't get the outcome I wanted, but I appreciated their candor and willingness to discuss the issues and try to figure something out.

So thank you.

CHAIRWOMAN KRUEGER:Thank you.

Senator Griffo.

SENATOR GRIFFO:Thank you.

A two-part question for Dr. McDonald.

First, Doctor, this winter we've seen a high incidence and a high volume of diverting patients from emergency departments across upstate New York. Despite the workforce shortage, what can or will the Department of Health do to assist these hospitals and medical facilities to resolve this problem, which is not only an inconvenience but potentially dangerous?

Secondly, the Upstate University Hospital is a very important part of the upstate medical system across that region, and it faces significant challenges both in operational and capital needs. This year in the budget we've seen $450 million for modernization and rehabilitation for Downstate as well as 100 million for operating funds for Downstate Medical Center.

What are you willing to do to address the Upstate problem -- because they're only receiving 200 million in capital -- and to advocate for parity?

DOH COMMISSIONER McDONALD: Yeah, so, you know, Downstate's a very important hospital, it's an academic health center. Upstate is as well. They're both very important.

As far as advocating for parity, this comes out of SUNY's ask for the budget, but I'm highly invested in both of them. I worry about Upstate Medical Center because as much as Downstate's critical as an academic health center, there's other hospitals in that area, 14 other hospitals in that Kings County area. But Downstate's really critical. We need them.

When you look at Upstate, we need Upstate Medical Center in New York State. And part of why I say that, they're a quaternary medical center, they're a premier academic health center. But the thing about Upstate is there's a lot of people across the whole central part of New York who rely on Upstate Medical Center.

So there's $200 million for them. Now, they're eligible for the Safety Net Transformation Program --

SENATOR GRIFFO:We got all that, and I understand and I appreciate that. But what will you do to rectify and seek parity in that budget, then?

DOH COMMISSIONER McDONALD: Well, I think I'm doing it now by being very blunt about how much I love Upstate Medical Center.

SENATOR GRIFFO:I think the money would be more important. Your love is appreciated.

DOH COMMISSIONER McDONALD: Well, you know, I don't have a checkbook, my friend, I really don't. And part of what I'm getting at is what I can do is what I can do.

What I can say about the Safety Net Transformation Program, they put in a very good proposal. I can't speak to whether it will be approved or not here. But this is a great tool for them to use. And Upstate is smart; they know how to do these things. But SUNY could do a little bit -- maybe SUNY could do a little more to advocate for them too, by the way. Because I'm really a big fan. I could use some help for them.

SENATOR GRIFFO:And how about the emergency room diversions that we talked about? Despite the shortages, what can the department or should it do to help these hospitals?

DOH COMMISSIONER McDONALD: You know, it's a workforce issue to some degree. But some of the issues are how do you get patients to the right setting of care.

One of the things you see when you look at workforce, when you look at ED utilization, 70 percent of the people who are going to EDs really could have been handled at an urgent care or a primary care.

One of the things that I'd like about some of the proposals we're seeing, not naming any, is when they partner with an urgent care to get people to not go to their emergency department, to go to a different setting of care.

One of the reasons why I love St. Barnabas' program, they really did a nice partnership to move complex mental health patients to Cityblock. So there's partnerships we can do --

CHAIRWOMAN KRUEGER:All the rest of that answer to follow up with him afterwards.

SENATOR GRIFFO:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Assembly.

CHAIRMAN PRETLOW:Thank you.

Assemblywoman Lunsford.

ASSEMBLYWOMAN LUNSFORD:Hello, Commissioner. My first two questions are going to be about lead pipes; I'm going to ask them together.

The first is there's some confusion in our local governments about whether water rate revenue can be used to help pay for private property lead-line replacement. I'd like to know if the department has a position on that.

And also, given the EPA's lead and copper line improvement rule that was just issued, what can we expect between now and 2037 when we're expected to replace all of our lead pipes -- what can we expect from the department in terms of support for our local municipalities?

DOH COMMISSIONER McDONALD: So regarding your first question about whether you can use water rates to replace lead service lines, I don't specifically know the answer to that question.

Let me have Dr. Ginsburg get back to you on that, because I'd rather give you the right answer.

The second question, can you repeat it for me again? I lost some of the audio.

ASSEMBLYWOMAN LUNSFORD:Sure.

The lead and copper rule improvements requires replacement of our lead pipes by 2037. What can we expect in supports for our local municipalities to achieve that?

DOH COMMISSIONER McDONALD: Yeah, it helps that we got the inventory online. I think that's really important.

We have $129 million this year from the Bipartisan Infrastructure Law. We have money from the Drinking Water Revolving Fund. We have money from the Clean Water Infrastructure Act. We're replacing as many as possible.

It's about $5,000 to $10,000 to replace a lead service line. Are we going to have them all done by 2037? I don't know. Can't commit to that for sure because we have a lot of lead pipes. This is one of the things about being in a Northeastern state -- lead got here before we did, it almost seems.

ASSEMBLYWOMAN LUNSFORD:Thank you.

Our over-65 population is quickly approaching the largest demographic in our state. Can any of our 1115 waiver money be used to support prevention and social determinants of health supports for this population?

DOH COMMISSIONER McDONALD: Oh, absolutely. In fact, that's a really good example of how we're going to use that. Because when we build the Social Care Networks -- there's nine of them that are already built and functioning -- what we're trying to do is target high-risk individuals to improve their individual social determinants of health and help prevent problems.

The nice thing about the Social Care Networks is they can customize. And, you know, what's interesting about it, the Social Care Network for the North Country isn't going to do the same thing as what's going on in downstate, because there are different needs for people. Transportation's a big problem for some people upstate. For downstate, it's not as big a deal.

And this is one of the things about the 1115 waiver with the Social Care Network -- it's $3.4 billion I have for that. And part of it, just to make sure it's clear, this is a demonstration project that CMS approved. We expect to show a substantial return on investment. It expires March 31, 2027. So we have a really big investment in this. And I certainly hope CMS keeps their word on that agreement.

ASSEMBLYWOMAN LUNSFORD:Excellent.

The EI Hub rollout's been a little rocky. I'm hearing from providers that not only are they taking months to get paid, but even just the service authorizations are taking a long time, which is further exacerbating our waitlists. Can you give me an update on how that's going?

DOH COMMISSIONER McDONALD: So the EI Hub was five databases into one database. Right now -- the rollout was challenging for a lot of people. We got involved really quickly with the technical fix and helped out the vendor with that because in the beginning, the first two weeks, the technical aspects of its performance was terrible.

I'll get back to you on the rest.

ASSEMBLYWOMAN LUNSFORD:Thank you.

CHAIRWOMAN KRUEGER:Next is Senator John Liu. I'll just give him my chair.

SENATOR LIU:Thank you, Madam Chair.

And good morning to our commissioners. Thank you very much.

Commissioner McDonald, a very quick question for you. For 14 years we've been waiting for this claims data on health insurance. Do you know where that is?

DOH COMMISSIONER McDONALD: Yeah, the all-payer claims database is -- it's making progress. And I won't give you an exact date, but I'm hoping it comes together at the end of this year.

I know what you're talking about. I'm moving it along. I inherited a lot --

SENATOR LIU:End of this year, 2025? Or end of the year --

DOH COMMISSIONER McDONALD: I'm hoping for 2025.

But I inherited a lot when I got to the department. I'm aware of the problem. I'm trying my best to fix this.

SENATOR LIU:Fourteen years. It's not all you, but we need you to do this.

DOH COMMISSIONER McDONALD: I had a lot -- I had a lot to fix, my friend. I'll do the best I can.

SENATOR LIU:Thank you very much. Apparently everybody has a lot to fix.

And apparently Superintendent Harris has fixed a lot already. I appreciate your testimony. Congratulations. A three-year recap; looking to see what you've done this past year in 2024.

I think your testimony, as usual, highlights the tremendous successes that you and DFS have had, but of course along the way there have been some failures. I'm not going to belabor the failures on the commuter van insurance industry, but that for-hire vehicle industry and the insurance failures in that industry are very much alarming.

And, you know, I mean, I'm astounded that you testify that one of the insurers in the for-hire vehicle industry has been insolvent since 1979. And yet DFS continues, for nearly half a century, to allow this company to operate while DFS shuttered the only commuter van in the insurance company that was available, thus imperiling the thousands of immigrants who rely on those commuter vans, even today without insurance.

And so that is a continuing failure on the part of your department. I wish that you would not simply abdicate on this responsibility but come up with some kind of solution. And maybe the answer could be in -- lie in what you're doing with the for-hire vehicles.

DFS SUPERINTENDENT HARRIS:Thank you, Senator. As you know, ESD runs the pilot program for commuter vans.

SENATOR LIU:No, ESD was -- you passed it off to ESD when the responsibility lies squarely with DFS.

DFS SUPERINTENDENT HARRIS:Sir, unfortunately, it's unethical for DFS to subsidize the insurance companies that we regulate --

SENATOR LIU:We never asked you to subsidize.

(Overtalk.)

SENATOR LIU:Our legislation as part of the budget deal three years ago simply said for DFS to make up the shortfall in the insurance premiums that the commuter van companies were no longer able to provide -- to pay.

(Overtalk.)

SENATOR LIU:But forget about all of that. Just try to roll it into what you're trying to do for for-hire vehicles. Do you think there's some kind of solution there?

DFS SUPERINTENDENT HARRIS:I think subsidizing, as ESD is doing through its grant program for commuter vans -- I understand those monies are going out. 1979 was before I was born. But we have published the first-ever -- the first report in 40 years for the for-hire vehicle insurance market.

SENATOR LIU:Well, unfortunately, I was already born in 1979.

(Laughter.)

SENATOR LIU:Thank you.

CHAIRMAN PRETLOW:Thank you, Senator Liu.

Assemblyman Bores.

(Pause.)

ASSEMBLYMAN BORES:Thank you all for being here.

First I have a question for Commissioner McDonald. You're probably expecting it, because I've asked you the same question now three years in a row.

The Department of Health is great with sharing data because in the country, it's very hard to view epidemics across states. One database that we do not participate in is NoroSTAT. This winter we saw a real surge in norovirus that's affected many people. Is this the year that we join NoroSTAT? And if not, what's stopping us from joining it?

DOH COMMISSIONER McDONALD: So norovirus right now is a reportable disease in nine states. It's not reportable in New York unless it's an outbreak, and then we do report the data and investigate outbreaks.

I am looking at whether or not we should become a state that makes it a reportable disease. There's moving parts to that, because it puts an impact and stress on hospitals. But we might be able to do something like what we did with RSV where it's just lab data we get, and then we can share the data.

One of the things that, you know, I have to be able to explain is what are we going to do differently with the information. And I can't tax local health departments more with this information. So there's moving parts to deciding whether we make it a reportable disease in New York. And I don't have the authority, I have to go to the Public Health and Health Planning Council to get that. But we're looking at it.

But norovirus concerns me because of how many people it just, quite frankly, makes miserable.

ASSEMBLYMAN BORES:So my understanding -- and please correct me -- is that we do already report outbreaks through a different CDC database.

DOH COMMISSIONER McDONALD: You're right. Yup.

ASSEMBLYMAN BORES:And all that's really required with norovirus is standardizing data and reporting it in a similar way so that it can be shared across states and get things more quickly.

If that's true, would love to see if there's any fiscal attached to that. And if there's no need for a fiscal, would really love to see that move forward.

DOH COMMISSIONER McDONALD: It's not a fiscal, because I shift the cost to the hospitals. That's the reason why there's not a fiscal. That's what I have to be really thoughtful about, is if I'm going to get data from hospitals --

ASSEMBLYMAN BORES:Do you require hospitals to change how they're reporting the data in order to --

DOH COMMISSIONER McDONALD: They have to do the extra work to report it to me. We just absorb the data, then, at that point.

Like when we did RSV as a reportable disease, you know, we didn't add any additional staff, we just shifted the cost to them. They get a little grumpy about these things from time to time.

ASSEMBLYMAN BORES:So I've heard.

Would love to follow up with your office on what could be done there.

DOH COMMISSIONER McDONALD: Okay.

ASSEMBLYMAN BORES:Superintendent Harris, loved in your testimony calling out that you really have become a regulator that many states and countries rely upon, especially around crypto.

I know there's been efforts in the past to take some of the regulations that have been built up over the years and actually put them in state so they're clear and you can even cement that position. There's been a change in federal administration, there was other things.

Just if you could update us on your approach to that and if there's more things we need to put into statute.

DFS SUPERINTENDENT HARRIS:Yeah, always happy to work with you and your colleagues on additional authorities that may help the department continue in its leadership position.

I think we've been working very closely with Congress over the last two and a half years on their federal legislation. Obviously the administration and the Congress have changed. But I think one thing that's paramount for us is making sure that states maintain their ability to regulate in the space and that we don't get preempted by the federal government. And we'll continue that work.

ASSEMBLYMAN BORES:Thank you.

SENATOR LIU:Thank you.

Senator Kristen Gonzalez.

(Pause.)

SENATOR GONZALEZ:There we go. All right. Good morning. Thank you so much for being here, and thank you for your testimony.

My questions are for Commissioner McDonald.

As you know, I represent Senate District 59, on the East Side of Manhattan. And based on our work together, I've understood that the vast majority of emergency departments serving Lower Manhattan are currently at over 90 percent of capacity.

And by the Department of Health's own estimation, if Mount Sinai Beth Israel is allowed to close, of course, by the courts, these EDs will be responsible for absorbing those patients, pushing occupancy rates even higher.

Does that pose a danger to the 400,000 constituents and New Yorkers that exist in Lower Manhattan?

DOH COMMISSIONER McDONALD: Yeah, so when you look at Mount Sinai, we did approve their closure plan, but they can't close till the court says so.

SENATOR GONZALEZ:Right.

DOH COMMISSIONER McDONALD: One of the contingencies on the closure plan is they have to put together a 24-hour, 7-day-a-week urgent care center. When we did our assessment of the data, the absorption analysis shows that this can happen and this would work.

SENATOR GONZALEZ:Yeah. But what I'm getting at is not the emergency room or 24-hour urgent care, which is insufficient.

What I'm asking about is, by your own estimation, most hospitals being at over 90 percent capacity across Manhattan as a result of Mount Sinai's closure, for example, Mount Sinai's Urgent Care going from 89 percent to 95 percent, NYU Langone going from 93 percent to 94 percent, Bellevue going from 92 to 96 percent, and more.

So how do you think that will impact residents in Manhattan?

DOH COMMISSIONER McDONALD: Yeah, there's only so much detail I could enter because of the ongoing litigation that we're involved in as well. But we've done the analysis, and our analysis supports that the work can be done.

SENATOR GONZALEZ:All right. Earlier last week hatcheries statewide were closed due to the prevalence of avian flu. Our federal government provides little confidence in resolving this issue.

If we had another COVID-style outbreak or another public health crisis, given the 90 percent capacity levels I just cited, are you concerned about how this lack of capacity will impact care for Lower Manhattan residents?

DOH COMMISSIONER McDONALD: So avian influenza right now, we're talking about 68 people have been infected since 2022. You're asking about if there's another pandemic?

SENATOR GONZALEZ:If there's a public health crisis, yes.

DOH COMMISSIONER McDONALD: So if you're looking at another pandemic, we have the lab capacity -- not just in New York, but we have a network across the country to address that. We have plenty of stockpiles of personal protective equipment, plenty of stockpiles of antivirals.

Now, if you're talking about another pandemic, we're going to have to think differently about everything -- about how we're going to meet patient care, because the patient care problem in New York is a function of workforce, not just in Manhattan but everywhere. We need real workforce solutions. We are doing our best to solve that at the department, but we could use some help with scope of practice.

SENATOR GONZALEZ:So how does having this capacity strain prepare us for the next public health crisis, given the workforce development constraints that you just mentioned?

DOH COMMISSIONER McDONALD: So the workforce development constraints are statewide, they're not just unique to that little neighborhood of Manhattan. So I'm not just worried about that little neighborhood in Manhattan. There's nothing little in Manhattan, I shouldn't say little. But --

(Time clock sounds.)

SENATOR GONZALEZ:Well, happy to take this offline.

CHAIRMAN PRETLOW:Assemblyman Slater.

ASSEMBLYMAN SLATER:Thank you very much.

Good morning. I had a question regarding the Medical Indemnity Fund, if you could provide some answers.

As you know, this fund provides funding for healthcare expenses associated with birth-related neurological injuries and reduced medical malpractice insurance costs for hospitals and OB providers.

Last year's budget provided 52 million for the program, which was level with previous years. However, shortly after the budget was passed enrollment in the MIF was suspended after the funds estimated liabilities were found to exceed 80 percent of its assets.

Enrollment was reopened following the infusion of an additional 58 million in state funding, bringing last year's total MIF appropriation to 110.

I raise this because the Executive's budget only appropriates 52 million once again, and DOB has signaled that MIF will again breach that 80 percent circuit-breaker this year.

And so compared to last year, my question is have there been any changes to the program or its financial status which renders additional investments such as last year's 58 million unnecessary?

COMMISSIONER McDONALD: Yeah, so New York is one of three states that have something like a Medical Indemnity Fund. And if there isn't additional investment in this year's budget, then the fund will not be solvent, more than likely.

So what we need to do is work together to collaborate and find solutions. We have ideas. If you have ideas, we'd love to hear them.

There's a lot of things I think we can do to make the fund solvent. One is just simply invest more money. But I do think there's other strategies we could explore together that I think would be helpful, engage stakeholders, so we can really have a sustainable plan for the long run.

When you look at how many people are in the fund and how many people are coming into the fund, the -- we look at the assets and liabilities issue. I am obligated by law to close enrollment once it gets over 80 percent. I don't have a lot of flexibility there. But I think we need to look at long-term solutions together. Love to work with people to see what's possible here.

ASSEMBLYMAN SLATER:Just to follow up on that, if one of the solutions is more money, why didn't the Governor propose additional MIF funding or any substantial reform of the program for the upcoming state fiscal year?

DOH COMMISSIONER McDONALD: I think the optimal approach is to work together and try to collaborate on solutions.

I think adding money is a possibility, but I think there's things we could do together that would make the MIF long-term sustainable. Because just adding money this year doesn't change it for future years or future years or future years.

ASSEMBLYMAN SLATER:Was there any meaningful reforms proposed in the Executive Budget dealing with MIF?

DOH COMMISSIONER McDONALD: So one of the things we've learned is that you don't love policy proposals in the budget, my friend.

And I'm trying to be a little honest with you about this. We'd love to offer you the ideas, but we're waiting for folks to say do you want to sit down and talk about it. Because if you're not interested in sitting and talking about it, I respect it. Understood.

ASSEMBLYMAN SLATER:But that means that we're just going to run into the same problem year after year, is what you're telling me.

DOH COMMISSIONER McDONALD: I think we need to look at meaningful reforms we can do together. I think there's low-hanging fruit we could do together, I really do. But I'd love to sit down with people and have a conversation.

ASSEMBLYMAN SLATER:I look forward to partnering with you on that as well. I do have an individual specifically in my district dealing with MIF, and it's been a disaster for their family. So I look forward to partnering with you on that.

DOH COMMISSIONER McDONALD: Love to work with you on that, thank you.

CHAIRWOMAN KRUEGER:Senator Gustavo Rivera, 10 minutes, chair of Health.

SENATOR RIVERA:Thank you, Madam Chair.

All right, a lot of the questions have been asked, at least versions of them. I'll pick up on the MIF issue later. But let's start at the top. Let's start off with CDPAP.

How many total workers -- total consumers -- let's start with consumers first. How many total consumers are there in the program?

MEDICAID DIRECTOR BASSIRI:It's going up each month, but it's around 300 -- 280,000.

SENATOR RIVERA:A little bit closer to the mic would be great.

MEDICAID DIRECTOR BASSIRI:It's about 280,000.

SENATOR RIVERA:Two hundred eighty thousand, okay. And as of -- based on the numbers that PPL and you folks have told us, as of a couple of days ago, as of the 31st of January, there were 22,000 folks, in your words, that had started or at least were in the process.

MEDICAID DIRECTOR BASSIRI:Forty thousand have started or completed; 22,000 have completed.

SENATOR RIVERA:Okay, so there's 40,000. I want to make sure that I got the math right. So do you know how many days are there between now and April 1st?

MEDICAID DIRECTOR BASSIRI:Under 60.

SENATOR RIVERA:Forty-nine.

MEDICAID DIRECTOR BASSIRI:Forty-nine.

SENATOR RIVERA:Do you know how many of those are -- is PPL open six days a week or seven days a week?

MEDICAID DIRECTOR BASSIRI:Seven days a week, 24 hours a day.

SENATOR RIVERA:Seven days a week and -- I was under the impression that they were open six days a week.

MEDICAID DIRECTOR BASSIRI:Yes, on Sunday their hours are different. But they are still reachable, as are we, if there are any issues that need to be worked through from now until April 1st.

SENATOR RIVERA:All right. So let's say hypothetically that that is correct, only because the experience that I've heard from constituents -- and one thing that I want to actually say publicly, there's a confluence that you folks are doing which I don't particularly appreciate. The fact that there are some folks who are advocating to stay in the status quo, I don't think anybody -- I'm not asking them to stay in the status quo, most of the folks who want the program to continue do not believe that the status quo is acceptable. We've said that many, many times. There may be some folks who are bad actors who are also quite wealthy who might be, as I told you the other day, attacking in unfair ways both the administration and the way that the program is transitioning.

However, the concerns that are expressed by people like myself and the constituents that I hear from directly are not these wealthy folks who want the status quo to remain. As opposed to that, we believe that the program is necessary, we believe the program needs to transition effectively.

And from the experiences that these folks are living -- not from the misleading ads or misinformation, as you say, that's fine -- I don't believe that the individuals who have approached me directly, the workers who approach me directly are misinforming me. Unless you're suggesting that they're lying, they're telling me that they're having issues with calls, they're being put on hold, they're not being given the correct information.

So at end -- so I just wanted to say that for the record. But let's say hypothetically that they do open seven days a week. So that is about 240,000 people that would be left. Right? And in the next 49 days, that means that you would have to get -- that PPL would have to have 4,898 people -- so basically 5,000 people a day.

And you're suggesting that this is actually possible?

MEDICAID DIRECTOR BASSIRI:I'm suggesting that we had a plan and we are meeting the targets in that plan for the people that should be enrolling and informed. It does exponentially go up. We're monitoring it very, very closely. There is the potential that we don't meet the steep --

SENATOR RIVERA:That's something I want to get to, because I have not heard anything about a Plan B.

The Plan A is like if everything is, you know, hunky-dory and everything happens beautifully, then you will have 280,000 consumers actually transition. I don't know how the math maths on that, but you all insist that it will.

Let's say what you just said for the first time -- and I had not heard you say that before, that there's a possibility that some folks might not make -- this might not happen, that the transition might not occur for some folks. Right?

If that's the case, what is the Plan B for those individuals? Because I'll remind you, last year in the budget April 1st is the last date that any -- that any other fiscal intermediary can perform their duties legally. After April 1st, they can't. Right?

MEDICAID DIRECTOR BASSIRI:Correct.

SENATOR RIVERA:So what's Plan B?

MEDICAID DIRECTOR BASSIRI:So first I want to just say that we completely share your concern about meeting members where they are and having the focus of members having all their issues addressed.

And so I ask that everybody inform us when those issues occur, because as they have occurred up to this point, we have resolved them with our partner vendor, PPL.

The Plan B is -- the Plan B is essentially going to be dependent on where we get to and when. The minute we don't meet benchmarks, people will know. But in essence we have confidence that there will be no disruption for members or their workers. And the reason for that is that's what we pay health plans to do, is to be accountable for those members.

So they're going to make sure that their members receive care and the workers get paid whether or not the members --

SENATOR RIVERA:Okay. See, the issue I have with this is that it seems that you are -- two things I want to suggest. I want to say this publicly. I've said it to you privately, I've said it publicly. April 1st doesn't work. All right? I know you all are saying that that's going to be the case, that's going to go forward and everything is, again, hunky-dory. April 1st does not work.

And I would suggest to the administration that they privately talking amongst themselves to see whether this is the case. Because if you all stick to the idea that you're going to have the single fiscal intermediary, which many of us -- me included -- do not think is a good idea -- but if you're going to stick to that, then April 1st you might need to move that deadline. Because the Plan B that you're talking about seems to be just pointing the finger at them and saying, You all didn't do it, so it's your fault. It seems that that's what you're setting up.

And the problem is that that leaves a whole bunch of folks -- now, granted, if the thing works perfectly and beautifully, it might just be a couple of hundred or a couple of thousand people. Still, it is a couple of hundred or a couple of thousand people that might need these services to be able to live their lives effectively, to be able to feed themselves, clothe themselves, et cetera. It is essential that we get it right.

So -- and I only have four minutes left and I want to get to other stuff, but I cannot underline this enough. It is incredibly important that you all get this right. And if you insist on the single FI, then please reconsider April 1st. It does not work out by April 1st. If it does, beautiful, and I will be the first one to say I was wrong. But please let's do that.

Second, let's talk about school-based health centers. School-based health centers as a transition. The first thing is, there was an agreement made in last year's budget that there was not going to be a transition to managed care for -- they have always been a fee-for-service model. Yet late last year there was an announcement, boom, we're going to go to managed care.

So first of all -- two things. First, who supports this change outside of the administration? Is there anybody that's an advocate out there who supports this? And number two, what cost savings, if any, are attached to this proposal?

DOH COMMISSIONER McDONALD: So as far as who supports it, I haven't heard anybody support it outside the administration, to be brutally honest with you.

Part of what I'm --

SENATOR RIVERA:What happens -- could you repeat that, please? I'm not sure I heard it right.

DOH COMMISSIONER McDONALD: No one's supporting it outside the administration --

(Overtalk.)

SENATOR RIVERA:No one's supporting it outside the administration. Shouldn't that be a sign, bro?

(Laughter.)

DOH COMMISSIONER McDONALD: Well, let me -- let me tell me you why we're doing this. Because sometimes we have to do things that don't seem popular.

One is we authorized a 10 percent increase last year for school-based health centers. We still can't give it to them because we're at the upper payment limit --

(Overtalk.)

SENATOR RIVERA:The health plans -- the health plans who potentially would benefit from this, they're opposed to it. So I'm just saying -- and I've only got 2:47, and I've got like seven or more things to talk about.

But I just -- this is another thing I need to underline. The transition that you all are insisting on, you're saying it's not popular but you need to do it, there are already sponsors of these organizations -- and we talked about this before privately as well. There's sponsors of these organizations that are already saying that they're not going to be able to manage the change.

And if we're talking about cost savings that might be attached to it, the fact -- there's concerns about the fact that there's going to be increased costs. If you pay at the fee-for-service rate -- if you maintain the reimbursements at the fee-for-service level, you still -- that would actually potentially inflate the costs because you've still got plan administration and profits on that side.

DOH COMMISSIONER McDONALD: I don't see how they're sustainable outside of managed care. We can't get them extra money right now. And we're trying to help them, we're trying to protect them. We're going to guarantee fee for service for at least two years.

There's other things we can do to make sure they're successful, because we can direct the managed care plans what to do. I'm very interested in school-based health centers succeeding. I'm trying my best.

SENATOR RIVERA:Okay, so there's two -- I have many concerns about this. And the thing is, if the organizations that are sponsoring them are saying that they're not willing to put up with this change, that they can't manage it, so they're closing the school-based health centers, that is the impact that we're looking at. And that's already happening. So I'm concerned about that.

I've got two more things, and I'll do it as quickly as I can.

MIF -- Assemblymember Slater talked about this before -- you all cut the funding last year. This has -- we have to dig into this. And I want to make sure that we talk about it both privately and publicly.

This was created, as you know, many years ago to maintain -- to medically support an incredibly fragile population. And the fact that we are not fulfilling the responsibility as a state to make sure that it is run well and that it is well-funded is a problem, because the folks who are being served by it, again, are kids with very serious medical issues and the parents who take care of them. Right? So that's something that I need to make sure we talk about.

And as far as the staffing is concerned, there's a couple of things that -- I would suggest that one of the things that you will need to do, that the administration needs to do, is put more funding into staffing the Department of Health. And I think that there's been plenty already said, like whether we're talking about the safe staffing that Assemblymember Forrest talked to you about earlier, there might be some things that you've done as far as actions that you've taken. But if you had more staff, then you could do it more effectively.

Whether we're talking about oversight of nursing homes -- there's a lot of concerns about that. The Living Donor Support Act that we talked about before has not been put into effect. Maybe it has to do with staffing in the Department of Health.

There is a Rural Ambulance Task Force. (Mic issue.) Sorry. See? Somebody was slapping this before. I think I wasn't going to do it, but I did it.

Anyway, the point is that maybe we should focus on actually more fully staffing the Department of Health so that we -- because these are just a couple of things off the top of my head that are not happening effectively, and a lot of it may have to do with the staffing. And there's more people there, but they're newer, God bless 'em, but we need more experienced folks, more priority.

I might take more minutes later. Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Assembly.

CHAIRMAN PRETLOW:Thank you.

Assemblyman Andrew Hevesi.

ASSEMBLYMAN HEVESI:Thank you, Mr. Chairman.

Good morning. How are you?

One question. If you could explain the rationale behind the cut to applied behavioral services for the 9.6 million this year, which is going to be worse next year at 19.

DOH COMMISSIONER McDONALD: So the applied behavioral analysis cut that we're talking about is simply aligning with what other states do. Which is if you're an unlicensed person, instead of getting paid $77 an hour, you get paid half of that.

And that's just aligning with what other states do. It's, I think, just a more stewardship approach towards the investment there.

MEDICAID DIRECTOR BASSIRI:If I could add to what the commissioner is saying, also, you know, we expanded this benefit recently and there's other legislation to go beyond the current implementation.

And thus far we have about three or four years of implementation experience, and the spending has increased quite rapidly. We're at over $100 million in spending. And 90 percent of that spending is to unlicensed practitioners.

So it's not going to the licensed behavioral analysts, it's going to unlicensed practitioners at a rate that is about $77 per hour. That's significant as compared to other licensed and even unlicensed practitioners and their reimbursement levels. So it --

ASSEMBLYMAN HEVESI:That's interesting. But let me -- let me --

(Overtalk.)

MEDICAID DIRECTOR BASSIRI:-- we're rationalizing.

ASSEMBLYMAN HEVESI:Forgive me. Let me go back to the original point of how many kids who have autism who are currently in the juvenile justice system or in foster care are going to lose access to this benefit.

DOH COMMISSIONER McDONALD: It's still a fair wage. For an unlicensed person to make 38.50 an hour is still a fair wage.

ASSEMBLYMAN HEVESI:It's still a fair wage.

DOH COMMISSIONER McDONALD: Yes.

ASSEMBLYMAN HEVESI:So you're saying -- so --

DOH COMMISSIONER McDONALD: This is what most other states have done. I mean, I think -- we were different.

ASSEMBLYMAN HEVESI:Forgive me, Commissioner. The fact that most other states have done it doesn't make me feel better about --

DOH COMMISSIONER McDONALD: You really should, because -- quickly -- New York is sometimes the only state that does something, and we're not usually succeeding when we're doing that.

One of the things we have to accept is other states have good ideas too. And so I have to tell you, every time I see us where we're just the one or two states that does it this way, we're usually getting taken advantage of or we're not getting what's best for our public.

So generally we should look at what other states do. It's a really good idea.

ASSEMBLYMAN HEVESI:You can, but in this particular circumstance it results in a cut to kids in New York State, does it not?

Are you going to -- do you expect the same level of service that we're going to have from before?

MEDICAID DIRECTOR BASSIRI:Absolutely.

ASSEMBLYMAN HEVESI:Oh. Okay. Okay. Okay, I'm going to leave it there. Thank you, sir.

DOH COMMISSIONER McDONALD: Thank you.

CHAIRWOMAN KRUEGER:Okay, thank you.

Senator Borrello.

SENATOR BORRELLO:Thank you, Madam Chair.

Thank you all for being here.

My question is on Medicaid. According to your website, there are roughly -- this is last year, about a year ago -- there are 7.3 million people that are on Medicaid here in New York State. However, the Empire Center asked you for qualifications -- verification that all of those people on it are actually qualified and meet the requirements. But you were only able to come up with 6.4 million.

So there's a delta there of almost a million people that you have been unable since -- in the last nine months been able to confirm, from the FOIL request from the Empire Center, that they are actually indeed eligible.

Now my math, simple math, if it's $10,000 a year cost to the taxpayers in New York State, that's $10 billion potentially that we are spending on people that are not eligible to be on Medicaid.

Can you please tell me why it's taken so long to verify this?

MEDICAID DIRECTOR BASSIRI:I'm going to have to check with the FOIL office, but I can tell you there is no discrepancy. We're happy to share any and all Medicaid eligibility data, and everyone is eligible.

SENATOR BORRELLO:Wouldn't that just be in a database somewhere? Wouldn't that take five minutes to print out? Why are we -- why is this --

MEDICAID DIRECTOR BASSIRI:It's not that simple --

SENATOR BORRELLO:-- taking so long?

MEDICAID DIRECTOR BASSIRI:-- because of the way eligibility works. We have retroactive eligibility. There are time periods where people drop off, there's something called churn. There's different types of coverage, there's Medicare-only coverage. So --

SENATOR BORRELLO:Yeah, I understand that there are --

MEDICAID DIRECTOR BASSIRI:-- people want it to be simple, but it's not.

SENATOR BORRELLO:They're non-DOH also as well.

So, you know, we've seen a dramatic increase in Medicaid in the last four years, roughly 40 percent, almost, of New Yorkers are on Medicaid right now. But in the last four years, in coordination with Biden's open-border crisis, we've seen the most drastic increase.

So can you tell me about -- if we have people that are not eligible for Medicaid that are on Medicaid right now, and how many that might be.

MEDICAID DIRECTOR BASSIRI:I can't answer that definitively.

I mean, we did cover -- you know, as part of -- with the Legislature's support, we did expand coverage to the undocumented, 65-plus population have comprehensive coverage. There are many people who are undocumented who are eligible for Emergency Medicaid. That is currently --

SENATOR BORRELLO:I understand that. But we have -- you know -- outside of DOH we've got about 8.4 -- it looks like it's 8.4 percent of the total amount of people are not DOH Medicaid recipients, these are other agencies that are somehow able to give Medicaid, you know, authorization.

So I just see a lot of correlation between not being able to answer that question on a million people's eligibility and the fact that we had such a dramatic increase in the last four years.

MEDICAID DIRECTOR BASSIRI:There is no -- we can address any discrepancy of a million people.

SENATOR BORRELLO:When can we get the million people that are -- when can we get the eligibility status of those million people? When can we get that answer? Because they're actually -- the Empire Center is pursuing legal action. So I don't want to see the New York State taxpayers having to pay for a lawsuit because your FOIL department haven't delivered what they should have delivered nine months ago.

MEDICAID DIRECTOR BASSIRI:We will check with them. But I assure you the federal government cares more about their money than the Empire Center does.

SENATOR BORRELLO:(Laughing.) I think all taxpayers here in New York State are concerned about the fact that nearly four in 10 New Yorkers are on Medicaid. That's a big issue.

MEDICAID DIRECTOR BASSIRI:That is consistent in many other states with the same eligibility policies and levels that we have, like California and Oregon. Forty percent is sort of average.

SENATOR BORRELLO:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Assembly.

CHAIRMAN PRETLOW:Assemblyman Epstein.

ASSEMBLYMAN EPSTEIN:Good morning, all.

I'll start with Superintendent Harris. So the issue around private student debt in the state where it's really somewhat of an unregulated industry and we've been trying to figure out how we can do it. Is there anything in this budget that helps regulate the private student debt industry?

DFS SUPERINTENDENT HARRIS:Sir, there's nothing in the budget, but our team works very hard as we examine and supervise private student loan servicers.

ASSEMBLYMAN EPSTEIN:Yeah, so I know this has been an ongoing issue. I'd love to continue to work with you to try to resolve this issue.

DFS SUPERINTENDENT HARRIS:Happy to do so.

ASSEMBLYMAN EPSTEIN:And then a couple of years ago we passed a bill around immigration bond that we're seeing, especially with the potential rise in immigration detentions and potential deportations, making sure we're regulating the bond industry for immigrants.

I'm wondering, what have you seen in relationship to that? Have you seen an increase in people using immigration bonds, bail bonds folks, and the impact that it has on immigrant communities?

DFS SUPERINTENDENT HARRIS:Yeah, thank you so much for the question and for your engagement on this issue.

As you know, when we register producers we don't delineate between those who are doing immigration bonds only or primarily and other types of producers. We don't have a number of complaints on this issue, but happy to continue to work on it to make sure we're supervising them appropriately.

ASSEMBLYMAN EPSTEIN:Thank you.

And then Commissioner McDonald, just on -- you know, you agreed to close Mount Sinai Beth Israel Hospital a year ago, and it's really had a really detrimental impact on my community. Hospital beds at Bellevue are going through the roof. And so there's real widespread impact.

Do you believe that hospital closings is a good thing for neighborhoods when we're seeing reduction in opportunity for emergency rooms?

DOH COMMISSIONER McDONALD: So I don't like it when any hospital closes, but we do have to acknowledge that sometimes what's needed for a community isn't necessarily a hospital, it might be something else.

And one of the things I've already seen with Mount Sinai Beth Israel is their census has gone down dramatically, not just for their ED utilization but also for their inpatient utilization.

So there's a regional impact to this. I can't get too much into our assessment because of ongoing litigation, but our assessment shows that they will be -- the area will have their healthcare needs met.

ASSEMBLYMAN EPSTEIN:Just so you know the impact that it's had on Bellevue is Bellevue beds went from 550 in 2019 to over 850, 900 people every night at Bellevue.

So it's not about access to people needing beds, it's them -- it's a system issue. And I'd love to talk to you more about that offline there; we've been talking to you for the last couple of years.

DOH COMMISSIONER McDONALD: Sure. Yeah.

ASSEMBLYMAN EPSTEIN:Just on CDPAP, do you think if the change wasn't going to save government money you'd still want to do it?

DOH COMMISSIONER McDONALD: We need to do this because every taxpayer should be assured --

ASSEMBLYMAN EPSTEIN:Do you think you'd still do it even if it would cost us more money?

DOH COMMISSIONER McDONALD: Would I still transition us if it would cost us more money?

ASSEMBLYMAN EPSTEIN:Yes.

DOH COMMISSIONER McDONALD: Yes, because we would get a better responsible stewardship of tax dollars here.

We're spending way more than any other state -- I'm going to quote you a 2020 CMS report. New York State, for home care, spent 43 percent of what the United States spent in home care. We were paying a fiscal intermediary 150 to -- over a thousand dollars a month, way more than the national average here.

ASSEMBLYMAN EPSTEIN:Yeah, and seeing people lose their services, that's okay.

DOH COMMISSIONER McDONALD: I don't want anybody to lose their service. And we're very committed to people keeping their services. Very committed to that.

MEDICAID DIRECTOR BASSIRI:Nobody will lose services. We are not changing eligibility for services, so we're clear.

CHAIRWOMAN KRUEGER:(Mic off; inaudible.)

SENATOR ASHBY:Thank you, Madam Chair.

Why has New York State not rebased their nursing home Medicaid rates since 2007?

MEDICAID DIRECTOR BASSIRI:Well, we haven't rebased a lot of rates, going back to 2007 to 2010, when we shifted our rate-setting methodology to pricing.

And we've done a number of things to invest in those rates over time. And there are limitations to how we can rebase rates and whether we do that budget-neutrally or whether there's an investment.

But like other providers, many, many providers have not had their rates rebased.

SENATOR ASHBY:Why?

MEDICAID DIRECTOR BASSIRI:Because the law --

SENATOR ASHBY:Despite -- despite the rising operational costs, staffing shortages, you know, really loss of providers as well. I mean, since 2007, that's a long time. And when you cite the law, explicitly what law is preventing us from doing that?

MEDICAID DIRECTOR BASSIRI:Well, the budget-neutrality aspect of the law, like we have with the hospital rates. When we rebase, it has to be budget-neutral. Which means it can't cost more money.

So dollars move around within the rate, as opposed to the rates just going up. Some providers may actually have their rates go down. So that's --

SENATOR ASHBY:Is there a way to phase that in? Given that many other states do this every three years, for example, they rebase. We haven't rebased since 2007 and are expecting our nursing homes somehow to remain operational. They're closing.

MEDICAID DIRECTOR BASSIRI:Well, they have remained operational in large --

SENATOR ASHBY:Some of them have not. Some of them have not remained operational. Some of them have closed.

MEDICAID DIRECTOR BASSIRI:We've made -- this Governor, Governor Hochul, has put in the largest rate increases in nursing homes in 10 to 20 years, and that's been compounding. So there's a 1 percent compounding --

SENATOR ASHBY:Correct, it has been compounding.

And if you rebase, you don't have to have those increases every year. You don't have to come back here every year and increase astronomically, because the rates have been rebased. That's the whole point.

So that type of investment is more sustainable. Why haven't we even approached this since 2007?

MEDICAID DIRECTOR BASSIRI:I think there's a misunderstanding of what rebasing actually means. And it does not mean everybody's rate goes up.

So that's why we haven't done it, and the law has limitations. So what we've done is invest in the reimbursement rates, which have gone up by over 10 percent in the last two or three years. And there's more investment in this year's budget as funded through the MCO tax.

SENATOR ASHBY:Do you see it moving to scale, getting up to speed to the point where we're not having to adjust rates? To equalize.

MEDICAID DIRECTOR BASSIRI:I would say that the nursing home PDMP or PDPM methodology is going to be updating some acuity-based factors and will include rebasing and reweighting. So in the meantime we're going to be keeping investing in the rates.

CHAIRWOMAN KRUEGER:And I'm sorry, but I have to --

SENATOR ASHBY:Thank you. Thank you.

CHAIRWOMAN KRUEGER:-- cut off the rest of that answer.

CHAIRMAN PRETLOW:Assemblyman McDonald.

ASSEMBLYMAN McDONALD: Good morning.

Three questions, one for each of you.

To Jim, in regards to the federal administration's recent orders to halt the flow of federal funding, has DOH had any issues with disruption receiving or disbursing any of the Bipartisan Infrastructure Law funds?

DOH COMMISSIONER McDONALD: We've solved every problem we've had with the federal government so far. There was some disruption, but we've been able to remedy it.

ASSEMBLYMAN McDONALD: All right.

Amir, it's almost two years since Medicaid, the pharmacy benefit came back as a fee for service. As you know, there was a lot of angst, a lot of frustration and concern. I guess my question simply is, how are things working? Are we meeting our targets on rebates? Are we meeting our targets on processing claims? And are we also able to help -- have we been able to help those friends and those entities that we were worried about?

MEDICAID DIRECTOR BASSIRI:Thank you for the question, Assemblymember.

Yes, I'm proud to say we did meet and exceed our savings target in the initial year. That was primarily driven by the increase in rebates, as you alluded to.

And so that's been very successful. All of the reinvestments to hospitals, the FQHCs as well as the Ryan White Centers, have been made and they're working well. It's a very big success story.

We're doing other things with expanding access on the formularies. So, you know, for now, things have gone very well and we've heard very positive feedback.

ASSEMBLYMAN McDONALD: I will tell you the entities that were very anxious are the same ones who said "I've been proven wrong, it works." So thank you to the department.

Adrienne, I mentioned rebates purposely because in the Governor's proposal, which I support, we talk about greater reporting of prescription drug rebates. As you know, this is a bipartisan issue that's been playing out on a federal level. The FTC has really brought the PBMs home to roost.

Once again, they serve an important purpose, but when they're negotiating and collecting billions of dollars of drug rebates on federal- and state-funded programs -- and, by the way, union programs and business programs -- there's no transparency.

So I understand the intention is to have them start to report those rebates. My question is that since there's been such a highlight on them about five, six years ago they started moving all of their rebates to aggregators that are located in other parts of the world, not in the country. Are we going to be able to have a look at those numbers as well?

DFS SUPERINTENDENT HARRIS:Sir, first I want to thank you for the question and for your participation on the Drug Accountability Board. We really do value your partnership.

I think it's an important question and we're working hard to make sure we can look at all aspects of the prescription drug supply chain. And always happy to work with you and your colleagues on additional proposals to shed some light here.

ASSEMBLYMAN McDONALD: Thank you.

CHAIRWOMAN KRUEGER:Senator Rhoads.

SENATOR RHOADS:Thank you, Madam Chair.

Commissioner McDonald, first off, I want to say good morning to the panel. It is still morning, by the way. Just so you know.

I wanted to ask you a question about Nassau University Medical Center. I have the honor of representing the East Meadow community where Nassau County Medical Center is located -- Nassau University Medical Center is located.

One of the things that I brought up to you during your confirmation hearing was the fact that NUMC has been underfunded by the state. Over the course of the last six years, seven years, Nassau University Medical Center has lost -- Nassau Healthcare Corporation has lost about half a billion dollars in funding, grant funding from the state that it traditionally had received.

In addition, over the last two years -- and we speak about Distressed Hospital Funding. There's additional funding in the budget this year. Nassau University Medical Center, even in spite of its financial challenges -- which have been well documented -- has received zero dollars in Distressed Hospital Funding.

Now, in this year's budget, we see changes to the Temporary Operator Statute which would apply directly to Nassau University Medical Center and portend the possibility of a state takeover.

I've written your office numerous times trying to find out when it is that we're going to address the financial crisis at Nassau University Medical Center. Their administrative staff has taken steps to balance their budget, but the simple reality is that without state funding, with Medicare reimbursement rates being at 72 cents per dollar so that they're losing 28 cents for every dollar of care that they provide a patient who's being covered by Medicare, it is simply not possible for them to be profitable.

That's a safety-net hospital. Right? They are treating patients -- and I'm going on a bit, and I'm going to give you the opportunity to give an answer in a second -- they are treating patients -- I'm a volunteer firefighter, right? They have the only burn center. They're a Level I trauma center, one of the few Level I trauma centers that we have. They are treating patients, regardless of their ability to pay, from all of the surrounding community.

We are continuing to put the healthcare of 1.4 million New Yorkers at risk by failing to address funding from the state for Nassau University Medical Center. When are we going to do that? What is the plan? What are you and the Governor doing?

DOH COMMISSIONER McDONALD: So I don't know that we have agreement on the state's investment in Nassau. As far as we're concerned, there's been a substantial investment with Nassau.

I don't know that -- some of the investments were one-time. They do get Disproportionate Share funding, like every other safety-net hospital does as well.

We have concerns with Nassau that are quite significant. You know, I was very specific with them about what I thought they should do regarding leadership. They went in a completely different direction. There's been a 2020 report from A&M about how they were supposed to look at their future --

SENATOR RHOADS:In fairness, most of the things that were in your letter have been addressed, except for the leadership change.

DOH COMMISSIONER McDONALD: No, no --

SENATOR RHOADS:Are we going to allow the leadership change of that hospital to put in jeopardy the healthcare of Nassau County residents?

DOH COMMISSIONER McDONALD: The transformation plan that we asked for isn't there. And quite frankly, there's things they should be doing that I think could make them more successful. And I think they really should work on what they can do in --

(Overtalk.)

SENATOR RHOADS:In the meantime, the situation's getting worse, Commissioner.

CHAIRWOMAN KRUEGER:I'm sorry, we have to cut off this conversation. Thank you.

Assembly.

CHAIRMAN PRETLOW:Thank you, Senator.

Assemblyman Jacobson.

ASSEMBLYMAN JACOBSON:Thank you.

Dr. McDonald, you mentioned about the money you have from the Clean Water Act, the Federal Infrastructure Act, for lead-line replacement. That's fine. The problem is, the money is not getting out the door. The money is sitting there, it's not getting out. There's a feeding frenzy, one city against another. The money's got to get out the door.

I mean, the federal money could be impounded tomorrow. We don't know. Let's get the money out the door. I mean, I have two cities, Poughkeepsie and Newburgh, but Newburgh's been more aggressive. They've done 250 replacements since the Lead Service Line Replacement Program went into effect in 2018, but they've got 3,000 more to do. That's 72 more years, assuming they get that funding. That's three more generations of children that are going to be poisoned with lead.

Please, let's get the money, let's try to streamline the program, let's get a little less bureaucratic, and let's just say, Hey, you got the problem? We know you've got to do the surveys and all that, but you can't get it done along the way and then you lose another six months, 12 months, and another year and a half. And so I really need that to be done.

Superintendent Harris, we all watched in horror about the fires in California and the resulting insurance crisis, including their FAIR program, the state program. I feel that we're sleepwalking into a similar California-like crisis here in New York. If homes become uninsurable, that means they're not mortgageable. And if they can't get a mortgage, they can't be sold, and you've got 2008 all over again. You've got a financial crisis of all the banks.

So I want to know what steps New York State is taking so we're not sleepwalking and going to have another 2008 crisis.

DFS SUPERINTENDENT HARRIS:Absolutely. And I appreciate the question.

One thing that we do here that's very different than California, as you know, California had an artificially low cap on rate increases. And although nobody likes rate increases, we don't like rate increases, one way to ensure accessibility to the insurance market is to make sure that actuarially sound rates are available in the market.

The law requires us to set rates that are adequate, not excessive and not unfairly discriminatory. And the actuarial team at DFS works very hard to balance the safety and soundness of the insurance companies with affordability for consumers. But without -- because we don't have an artificial cap like California --

ASSEMBLYMAN JACOBSON:Are you studying whether the State Insurance Fund -- I can't believe this, because I did workers' comp law and I don't love the State Insurance Fund. But are you seeing whether they can be reformed to handle a crisis as the insurer of last resort?

DFS SUPERINTENDENT HARRIS:So happy to talk more about that and to engage our colleagues at SIF.

ASSEMBLYMAN JACOBSON:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

I'm going to take my 10 minutes as chair now.

First, I want to thank all of you.

The Insurance chair had a family emergency. He's trying to get back here in time, to this panel. But I just want to highlight for you, Superintendent, there are many concerns about insurance. But you're not really in the budget, and so you ended up in this Health hearing and we have a roomful of people who want to ask questions about health.

So I'm hoping you will agree to a hearing involving finance, insurance, banking, and consumer affairs at another time, because there are endless questions for your agency.

DFS SUPERINTENDENT HARRIS:Happy to do so.

CHAIRWOMAN KRUEGER:We think you're doing excellent work, and I think many of us in those arenas are particularly concerned about the changes at the federal level where they may be completely dropping their responsibility for any kind of regulatory needs. And that's going to mean more responsibility for us in the state. So I don't want you to feel that you're dissed that all the questions are really for these two gentlemen.

Having said that, my questions are for these two gentlemen also.

(Laughter.)

DFS SUPERINTENDENT HARRIS:Fair enough.

CHAIRWOMAN KRUEGER:So, Commissioner, there's incredibly mixed messages going on throughout the state specifically around access to healthcare if you don't have legal status and you show up at a hospital or a public health clinic or a school health clinic -- different memos going out from different local electeds.

Isn't it a public health crisis for all of us if people don't get the healthcare they need because they think they could be at risk of ICE coming into the location and taking them away?

DOH COMMISSIONER McDONALD: You know, it is a concern. We're hearing anecdotally that people aren't going to healthcare because of the word about the federal intervention right now. It concerns me.

We're planning on sending some guidance out to hospitals right now. We talked to State Ed; I wanted to make sure that we're working together with State Ed on this, because they regulate the healthcare professionals too. And we want to find a joint statement that makes sense for hospitals about how to interact.

But part of why it's important to bring in State Ed is State Ed regulates private practices and doctors and people who work in clinics. And I need people going to all their doctor's appointments, not just to the hospital.

So, you know, we're going to try to send some guidance out. Healthcare providers are caught in the middle. We are not wired to be in the middle of this debate, we really aren't. What we're wired to do is help people, and that's really what healthcare providers need to know. But they need to know what legal footing they're on with this. And I think it's also important that they know what federal law exists. So ICE just can't come into a hospital, pull someone off a ventilator and take them on their way. That just can't happen.

CHAIRWOMAN KRUEGER:I'll just point out, towards your guidance: Our Constitution is clear, we do not allow discrimination based on national origin. So yes, the feds are confusing. And yes, what our roles are may be confusing. But we have a clear constitutional obligation to provide healthcare to everyone in the state. And so I'm hoping your guidance does that make clear.

Because I know I come from New York City and the messages coming out of City Hall versus some of the guidance going to some agencies versus some of the guidance being provided by certain hospitals is not only inconsistent, it's just so confusing it makes it worse.

DOH COMMISSIONER McDONALD: I agree. I think that's -- it's really confusing.

And I think you're putting healthcare workers in a very awkward space here, because we are designed to protect our patient. We're not going to interfere with law enforcement, that is clear. But there's things healthcare workers need to know how to do -- check I.D., make sure there's a warrant.

But on the other hand, if you are a federal agent and you're going to take one of my patients out of one of my hospitals, you'd better make sure they're going to be transferred safely, effectively, and get optimal healthcare. Because that's something that's a right.

And you're absolutely right. And I think part of what we're trying to do is make sure people understand: You're not powerless in this. And I think hospitals are kind of confused about dealing with this thing. Part of why I wanted to bring State Ed into it, though, is that it's more than just hospitals. My people need outpatient care too.

CHAIRWOMAN KRUEGER:No, I agree completely. And it's not just healthcare. But when we talk about public health safety, it is about healthcare.

DOH COMMISSIONER McDONALD: In schools too, right?

CHAIRWOMAN KRUEGER:Because if that person has a communicable disease because they didn't get healthcare, all of us are going to get it too, even though we don't have a legal argument against us.

DOH COMMISSIONER McDONALD: That's right. You're absolutely right.

CHAIRWOMAN KRUEGER:All right, thank you.

One of my colleagues -- actually, Assemblymember Slater started it earlier, and Senator Gustavo Rivera I don't think got a chance, so I want to talk about MIF. I completely agree with the analysis provided by Assemblymember Slater, that there's not enough money put into the state budget to actually cover the cost of this growing program.

For the record, I never liked this program. I thought that we shouldn't have allowed Governor Cuomo to start it. And yet it started. And at the time there was supposed to be money committed through the hospitals, but it seems like that money isn't necessarily forthcoming from the hospitals now and into the future, and that's a real problem.

We thought we were going to see a decrease in the number of children who are born with this kind of damage because of increased models for I guess better oversight and training to prevent these storylines happening. And yet we don't see that happening.

You said there needs to be policy issues addressed. I agree. I asked the Governor to convene a roundtable of the stakeholders -- hospitals, liability lawyers, medical insurance malpractice coverers, people represented whose children are in the fund. And the Governor's office didn't actually quite say yes or no.

I'm asking you. Will you convene a roundtable to have this very difficult but critical decision? Because there are a thousand kids in that program now. I'm hoping we don't see the same thing this year right after budget we did last year where suddenly a note went up on your website, Oh, we're not accepting any more kids. Well, that was a disaster, and it was reversed. Don't want to see that again.

But we have I believe an estimated over $3 billion in longer-term liability for the thousand kids who are already in the system. There might be 1100 by now, I'm not sure. So don't you think we just have to force ourselves to sit down and figure this out?

DOH COMMISSIONER McDONALD: I would love to have people sit down and talk about this, because I think you're hitting on exactly the right issues here.

And one of the things I think we have to look at is not just eligibility, but who should be eligible. But there's other ideas that I think could be great to hear.

And it's not that we don't want to share our ideas with you, but sometimes if we bring the ideas, then other people sitting become the critic. What I'd rather do is sit around tables where people bring their ideas; we can create together.

You know, too often in our culture it's much easier to be a critic than a creator. And I'd rather not have an us-versus-them conversation. I'd rather be real with people about, like, where do you want to land with this? If you want it to be sustainable, we have ideas, but I'd really rather hear people's ideas first.

It's very different the way the MIF is constructed in the other two states that have it. But that doesn't mean our way isn't okay in this space. We need to find common ground here.

CHAIRWOMAN KRUEGER:Thank you.

So, Commissioner, I have a bill, others have other bills -- we're very concerned that you don't have adequate staffing to do the kind of oversight and review that we've asked through laws we've already passed. And I know one of the bills that I am working very hard on is a bill that would ensure that when doctors or other healthcare professionals are accused of bad behavior with their patients -- I'm not talking malpractice, I'm talking illegal behavior with their patients -- that you have a better system for investigating and following up.

Because I've heard that you are desperately short-staffed in the unit that should do these investigations, and that some of them are taking four, five, six years. You can't allow a doctor to continue to sexually assault a patient and not have any kind of follow-up and stop order against them for years and years.

My bill would simply require that if they are under a state investigation, they have to tell their patients, I'm under investigation for this. If you want to cancel, fine. If you want to continue fine -- although I'm not sure who would say sure, lets go into the office with you.

But would you agree that we just need to up our game on making sure a small number of bad apples in the healthcare field aren't getting away with this over and over again?

COMMISSIONER McDONALD: Yeah, so I'm probably the only health commissioner who's actually ran a state medical board for 10 years, so I understand a little about this. It's a -- I'd love to look at your bill, and I will do that. But I couldn't agree more, we certainly don't want anybody to be in jeopardy.

I can't comment on your bill specifically, but I do think it's important that we look at just how it's constructed the way it's currently set up. One of the things that's interesting is -- like I said, I regulated doctors for 10 years; it's interesting how each state does the laws differently.

New York's laws are set up in a way that does seem to protect the doctors a little bit more than I'm used to. So I don't know that you should just look at one issue. I think it would be interesting if you looked at all the issues and how we can actually, you know, enforce what we're doing here.

We're doing what we can at our side to make things more efficient. But I'd love to hear more about the bill, and I'll have my team look at it with me.

Thank you.

CHAIRWOMAN KRUEGER:Thank you.

I have more questions, but no more time, so I will pass it to the Assembly.

CHAIRMAN PRETLOW:You do have 10 seconds, but we'll take them.

Assemblywoman González-Rojas.

ASSEMBLYWOMAN GONZÁLEZ-ROJAS: There we go.

Good morning. Commissioner, you've mentioned your concerns over the federal threats. And I am equally concerned. I'm also concerned about a 2019 directive from Governor Cuomo on Article VI funding to New York City. So as you know, Article VI funding provides every county department of health 36 percent of cost coverage, but his directive cut New York City to only 20 percent.

This reduction has led to a reduction of 60 million to $90 million for the city's health department. And again, this is for various crisis response services, including immunizations. New York City has a large number of vulnerable New Yorkers, including undocumented people, low-income folks, people who are uninsured.

Given your mission on racial equity and providing the best health coverage for every New Yorker, would you support a restoration of that back to the same 36 percent so that New York City is treated equitably with other counties across the state?

DOH COMMISSIONER McDONALD: Yeah, I'm glad you're bringing this issue up. I can't take an official position on the bill during this time, but I do want to acknowledge that Dr. Morse, the acting commissioner of the New York City Department of Health and Mental Hygiene, and I talk often. She's talked to me about how this impacts New York City. Right?

You know, you brought up a lot of the health issues that I worry about with New York City. I worry a little bit about tuberculosis, which is going up in New York City as well. And New York City does have different challenges. They have different resources too. And we do a lot of support for the city, but the city does generate a lot of revenue for the state.

So you're bringing up to me a very fair question. I think it's, you know, the question of equity. It's a fair question. I wasn't here when what was done was done, and I can't imagine why it was done that way. But it is odd that that's what we're living with, because it's really the very definition of the word "disparity," isn't it?

ASSEMBLYWOMAN GONZÁLEZ-ROJAS: Yeah. I have my suspicions of why it was done. It was quite political, honestly.

But to the superintendent, thank you for your work on executing our laws to reduce costs for -- or eliminate costs for insulin and EpiPens. I have a bill with Senator Rivera that does the same thing for asthma inhalers. We know asthma inhalers are a lifesaving device that people count on. It could cost as much as $640 for our neighbors here in New York. I represent Asthma Alley in Queens; Senator Rivera represents a district with high asthma rates.

Does your department have a position on reducing or eliminating costs for inhalers? Is this something that you would support in terms of eliminating copays, co-insurance and deductibles for inhalers?

DFS SUPERINTENDENT HARRIS:Thank you so much for the question. I think the disparities you highlight when you talk about asthma are a really important consideration for us.

We're happy to work with you on the bill and look at the potential savings for consumers and for healthcare overall.

ASSEMBLYWOMAN GONZÁLEZ-ROJAS: Great. Thank you so much.

CHAIRWOMAN KRUEGER:Thank you.

Senator Weber.

SENATOR WEBER:Good afternoon.

So I have some just questions regarding the CDPAP transition. Right? April 1st is right around the corner, and as you know, we have a lot of FI providers and residents who are very concerned. You know, the hundreds of thousands of New Yorkers who use CDPAP to manage their care at home, right, they're concerned that they're going to be left without services on April 1st.

You know, we've seen in the past Pennsylvania, Massachusetts are examples of what happened with a plan that caused a lot of people to lose their care.

So what assurances can the state give to the residents that they won't lose their care come April 1st?

DOH COMMISSIONER McDONALD: So there is no change in eligibility for anyone, so everyone's eligible. And there's no change in services.

The vendor has a ramp-up plan. They are ahead of schedule on their ramp-up plan. It's an aggressive ramp-up plan. But part of the way they're doing this is they have phone numbers, they have a website, they have over 150 physical locations in the state. If you don't call them, they will call you.

The intention is to make sure that everyone does move over. There's incentives for PPL to actually do this, and they're very committed to doing it. So that's the plan, that no one be left behind in this regard.

SENATOR WEBER:Has there been any consideration that as we get closer to that April 1st timeline, there will be considerations for extensions or that date being moved?

MEDICAID DIRECTOR BASSIRI:We're laser-focused right now, and there's no reason to assume that we will need an extension, because we are hitting the metrics that we have set forth at this time.

ASSEMBLYMAN WEBER:Okay, thank you.

And one other point -- I'm just switching gears a little bit. You know, Senator Rhoads brought up, you know, Nassau County and safety-net hospitals. In Rockland County, we have two safety-net hospitals, Good Samaritan Hospital and Nyack Hospital. They, like most safety-net hospitals, are really struggling.

And, you know, what can I go back to them and tell them that's in this year's budget that can give them assurances that -- you know, that they'll be able to survive, essentially? Because a lot of them are struggling.

DOH COMMISSIONER McDONALD: I would love them both to look at the Safety Net Transformation Program. It's really designed for a safety-net hospital to partner with someone else to find a way -- and we have over a billion dollars committed this year, and I have money left over from last year that I still haven't allocated.

So, you know, I would encourage you to bring to them something real and tangible, which is that Safety Net Transformation Program. I think they're both positioned well to succeed in that space.

I think if they look -- Nassau in particular, if they look up the Alvarez and Marsal report of 2020, there's concepts in there that were very critical to them. I would encourage them to look at that and see what's possible. I'd be very open to hearing what they have to say in that regard.

SENATOR WEBER:Great. We'll go back to them. Great, thank you. Appreciate it.

CHAIRMAN PRETLOW:Assemblyman Blumencranz.

ASSEMBLYMAN BLUMENCRANZ:Thank you, Chair.

Good morning. Superintendent Harris, thank you for being here today and thank you for always being a great working partner on so many issues.

But the numbers don't lie. They paint a disturbing picture. New York's insurance market is in crisis. New Yorkers were facing upwards of 20 percent increases in their homeowner's insurance premiums last year. New Yorkers saw the fourth-highest increase in insurance premiums in the nation. And according to the FBI, insurance fraud costs the average U.S. family between $400 and $700 per year.

New York has played no small role in this crisis. According to a report from DFS, your department received 35,722 reports of suspected insurance fraud last year alone. Yet only 77 cases were even investigated. Of that, only 24 led to arrests. Fraud is rampant, prosecutions seem nearly nonexistent by these numbers. Albany's policies are driving insurers and customers out of this state.

Now, instead of fixing this broken system, the budget proposed slashes nearly $50 million from your department. Other states like Florida have put money towards a significant crackdown on fraud, with aggressive prosecution and mandatory reporting laws. But New York is slashing budgets for departments like yours that are actively trying to go after these things.

What can we do to do better in this department? And what do you need to arm yourself with the tools to actually fight against fraud in a significant way?

DFS SUPERINTENDENT HARRIS:Thank you, Assemblymember, for the question and for your partnership and engagement on these important issues.

We take fraud seriously. And as you know, insurers are required to file reports with us on their own fraud prevention efforts. When you talk about the numbers of fraud complaints we receive, most of those, something like 80 percent, are for surveillance issues. They are not meant to be actionable complaints. It is just the insurer filing with us as the law requires them to do, but they're not asking us to take action.

ASSEMBLYMAN BLUMENCRANZ:So you tell me that the process exists and it seems like that's not necessary, yet they still have to do it.

And 35,000 cases and only 77 cases reported, do you have the resources you need to actually investigate these cases? That seems like a significant disparity.

DFS SUPERINTENDENT HARRIS:Yeah, I think even though most of those filings are for surveillance purposes, we have made progress in having more investigations, more arrests, more convictions, partnering with law enforcement.

But you will probably never meet a regulator that would say that they have enough resources. Because I think fraud is such a big part of the insurance cost that we see here in the state, along with social inflation.

So we have remade the leadership of it, of our fraud division. We have six open postings now for insurance investigators. But we could certainly use more resources there.

ASSEMBLYMAN BLUMENCRANZ:Thank you.

DFS SUPERINTENDENT HARRIS:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Next is our Senator Bailey, the chair of Insurance, who I'm so glad got here on time. And he gets 10 minutes, and he'll take my chair.

SENATOR BAILEY:This is difficult, these are difficult shoes to fill, a difficult seat to fill.

Good afternoon, everybody. Thank you for coming and testifying before us today.

The majority of my questions will be geared towards Superintendent Harris.

Gentlemen, thank you for your service as well.

I just want to say, you know, thank you for working with us, working with the state even before I became the chair of insurance.

But I want to piggyback off the Assemblymember's question in terms of insurance fraud. Anything that drives up costs is a concern. Affordability is one of the major kitchen-table issues that we have, and it relates to insurance. We have the issues with auto insurance going up and homeowner's insurance going up and premiums going up. And fraud may be possibly driving the cost.

Could you -- a two-part question. One, how much does fraud, if at all -- I'm not saying it doesn't, but how much does fraud drive up policy costs? And what can DFS do, in partnership with the Legislature, to help ameliorate some of these cost concerns?

DFS SUPERINTENDENT HARRIS:Absolutely. Thank you so much, Senator, for your partnership, and I look forward to working with you in your new role as chair.

As you and I have talked about, we have a responsibility to set rates that are adequate, not excessive, and not unfairly discriminatory, and that is the law. So we work very hard to balance making sure we have solvent insurance companies that can pay claims when they come due, and so that there's an accessible and competitive market with affordability for consumers.

But as you noted, costs are going up not just in New York but around the country. Despite the increase in costs we've seen here in New York -- in homeowner's, for instance, New York isn't even among the top 10 most expensive states in the country. Of course people think about California and Florida, but Nebraska, Oklahoma and others are more expensive than New York.

When we think about auto insurance, yes, costs are going up and we do everything we can to control that, but New York is the seventh least profitable state for auto insurers in the nation.

So I think we are doing a good job to strike the balance between accessibility and affordability, safety and soundness and affordability.

Fraud is a big component, and I know the Governor is committed to convening a working group around fraud because it affects not just homeowner's and auto but also health insurance. So I think there's a lot of work for us to do there, including growing our fraud team using better technology and data analytics, which we're committed to doing.

Social inflation is a big issue and a big contributor to insurance costs in New York. And when we say social inflation, we mean litigation costs. New York is in the top three consistently of nuclear verdicts. And so I think that's a big contributor and something we should be looking at as well.

SENATOR BAILEY:Certainly. So back to the fraud question on one point, and I'll pivot elsewhere.

You mentioned fraud and having a multipronged approach. Would DFS be working with other agencies in order to -- so is DFS solely responsible for the investigation of fraud, or is it a multi-agency approach?

DFS SUPERINTENDENT HARRIS:It's a multi-agency approach. And I thank you for asking that question.

We work very closely with law enforcement at local, state and federal levels in most of our investigations, and so we really do rely quite heavily on those partnerships.

SENATOR BAILEY:So as a legislature, what can we do? Are there things that the policymakers before you can do in terms of being forward-thinking about the costs of insurance? Like are there pieces of legislation that we can put into place?

I'm not asking for any specific thing, but is there something that we can do to stem the tide? Because all of our constituents are feeling the pain of affordability of their policies. Is there something that statutorily that we would be able to look into?

DFS SUPERINTENDENT HARRIS:I think there are lots of things that we could address as we think about social inflation, as we think about fraud, as we think about those fixes that will make New York a competitive environment and make more insurers want to be here.

Of course increased competition helps drive costs down, and we have a thriving marketplace here. But I think there's always more we can do. And so I'm happy to work with you and your colleagues on a number of ideas.

SENATOR BAILEY:Certainly. So there's a lot of conversation, a lot of concern in our condolences -- I think it's safe for the first time to speak for everybody here when I say that California, and every family affected, we can safely say that it's a terrible tragedy.

And a lot of people are concerned about insurers walking out in the manner that they have been walking out in California. Is that possible here in New York, is the first question. And if -- let me ask that first question. Is that possible here in New York for them to walk out in the manner that they have in California?

DFS SUPERINTENDENT HARRIS:So it is possible. And last year we did give a presentation to the Legislature, and I think we'll look to do one again this year, and come and meet with the committee as well.

One I think big difference between New York and California is that California had capped rate increases. So any rate increases over 4 percent, the insurers were required to go to a public hearing. They didn't have the rate they needed to cover the losses, and so it didn't make sense for them to be in that state. And that's why you see half of homeowners in the Palisades didn't have homeowner's insurance, which is -- it just adds insult to injury with this tragedy.

We don't have that here because the Insurance Law requires us to set adequate rates, and we work very hard to do so.

SENATOR BAILEY:Certainly. And so in the budget last year, we -- you know, the Governor and the Legislature accepted a provision relating to discrimination in insurance. And it's something that my colleagues and I, we tackled legislatively and we would look into.

I represent the Bronx and the City of Mount Vernon in the Legislature, and one of the large concerns I have is that there are many property and casualty insurers who are no longer looking to insure buildings of a certain size, thus decreasing the market, thus increasing the cost.

Are there steps that we can take with DFS to try to open that pool up and to have more insurers insure so that what I consider to be redlining, frankly, doesn't happen?

DFS SUPERINTENDENT HARRIS:Yeah, absolutely. I would say of course we can't make insurers insure certain things, but what we can do is make sure that they are not unfairly discriminating.

And the Legislature last year passed and the Governor signed a prohibition on discrimination against affordable housing developments. When that law was passed and signed, of course we followed up with regulatory guidance, and it's something we will continue to examine for in our examinations of insurance companies, and bring enforcement actions as appropriate.

SENATOR BAILEY:Well, it's -- unfortunately, it's still happening.

Whereas, you know, some of the buildings and property owners in the district, small property owners, are coming to me, coming to some of my colleagues as well, and saying, We can't afford to own this building. We cannot afford to have this building without increasing the rent as the costs are passed on to them.

And so it becomes not just an insurance issue, it becomes a housing issue. And it becomes a quality-of-life issue. So it's something that I'm hopeful that we can ameliorate.

I do want to ask Commissioner McDonald a question. And thank you, Superintendent Harris. I appreciate your time.

Commissioner, having -- I have three children and I live through the lens of my children. And everything I do is for them. And I know there's been a conversation -- if I missed this -- Senator Rivera, I know he's been a big proponent of school-based health centers.

What if anything can we do to ensure that children who may not be as fortunate as mine are afforded adequate care in school-based health centers throughout the state?

COMMISSIONER McDONALD: Yeah, so school-based health centers are important to the department. One of the things we're struggling with is we're trying to get them more resources.

We had a 10 percent rate increase from last year. We weren't able to give it to them because we're at the upper payment limit. So by moving them to Medicaid managed care -- which I agree isn't popular -- that's one way we can do that.

There's guarantees we're putting in place to make sure that at least they get the fee-for-service rate for at least another two years. We can't commit beyond the two years. But, you know, we're willing to be open to that.

There's other things we can do through the managed-care entities. Like we can make sure that -- one of the things I heard was that I don't need to have a referral, you know, to get my kids in a school-based health center. We can make the school-based health centers like the way managed-care companies look like urgent cares, so the kids have to be seen.

Another thing I'll just throw in there is we do subsidize the school-based health centers to $11.5 million a year, and we're doing what we can to not just improve medical outcomes but dental outcomes as well, because I think you're exactly right. When you look at where kids get services, school-based health centers are often the best place.

But we do want to have that comprehensive approach; we could look at care with their pediatrician as well. And this really gets to that larger issue of we're trying to meet everyone's needs as best we can.

So it's not a popular decision, but it's where we're headed because we think that's what's for the best in the long run.

SENATOR BAILEY:I just have one more question and then a general statement.

In relation to mental health, obviously there's need in schools. I guess this is a quasi-question. I would hope that there would be more of an emphasis placed on making sure there are qualified providers for mental health in schools. There seems to be, now more than ever, a conversation and a crisis to make sure that -- {closer to mic} I didn't realize I was speaking that low -- a conversation and a crisis in relation to making sure that there is there.

Now, I've been speaking to individuals from the Children's Aid Society and other foster-care agencies, and it's been brought to my attention that there are insurers that are not willing to insure the foster-care system. And it would have a ripple effect not just on those children in foster care, but other families.

I'm not sure if you are aware of it or if there is a -- if we can have a further conversation about that, because that seems to be a crisis because they can least afford not to be in these locations.

MEDICAID DIRECTOR BASSIRI:I would love to have a follow-up conversation. That is not necessarily true.

We've been transitioning foster care to managed care for a number of years and imposing -- or instituting quality-improvement standards and other things. And it's actually been pretty successful, given the sensitivity and difficulty of the population. So love to connect.

SENATOR BAILEY:I would love to.

I just want to say just one more thing. I was just told that 16,000 kids --

CHAIRMAN PRETLOW:Sorry, Senator --

SENATOR BAILEY:-- may lose coverage.

Game 6 at the buzzer, sorry.

CHAIRMAN PRETLOW:I'm sorry.

We've been joined by Assemblywoman Jo Anne Simon.

And the next questioner is Assemblywoman Giglio.

ASSEMBLYWOMAN GIGLIO:Good morning, and thank you very much for being here today.

Commissioner, my questions are for you. And if you could please provide "yes" or "no" answers. And if we have time, then you can elaborate.

But the Early Intervention program was not as seamless of a rollout as we thought it would be. Thousands of claims rejected, thousands of people are dropping out of the industry, to be honest with you. It's creating huge financial burdens on agencies and providers.

Do you believe that CDPAP should maybe take a break on its rollout until we can figure out Early Intervention?

DOH COMMISSIONER McDONALD: No, I don't believe we should stop the CDPAP rollout at all.

The EI Hub rollout had challenges. Almost all of those have been addressed. We did send money to providers three times, to make sure that they could make payroll and do things.

But we also, when we look at how much money we're paying now compared to what we paid last year before the rollout, we're paying almost the same amount of money out there. And keep in mind, this was a change of five databases into one database.

You know, the training that we offered may not have been enough. On the other hand, we have people reaching out right now to -- every day to provide customer support for people who are getting denied claims. Right now 44 percent of the denied claims are really from eight different providers.

ASSEMBLYWOMAN GIGLIO:Yes, I've heard the commercials, Commissioner.

But what I'm saying is that I'm on the phone with PCG, and PCG is fixing these problems every day. So there are problems. It's not just user error, but there are a lot of error codes that are coming up. There's a lot of work that needs to be done so that providers can get paid, children can get the services that they need, and agencies and providers are not dropping out of the industry.

I got three emails this morning from people -- that's three agencies with a hundred providers that are not going to be providing Early Intervention services as of March 1st. This needs to be fixed, and I'm concerned about CDPAP and the rollout of it, but hope to talk to you more about that.

DOH COMMISSIONER McDONALD: If you send me the names of the three, we'll talk to them today.

ASSEMBLYWOMAN GIGLIO:Yes, I certainly will. I've been dealing directly with PCG, but I will send those to you.

DOH COMMISSIONER McDONALD: If you send it to Melissa DeRosa, we'll interact today on them.

ASSEMBLYWOMAN GIGLIO:And the increases are not coming either.

But my next question, the Executive Budget proposes shifting 2.1 billion of other state agency costs outside of the Medicaid global cap. This includes OPWDD.

Do you think that OPWDD should be setting their own rates?

DOH COMMISSIONER McDONALD: I mean, it's just shifting that had to happen because otherwise we're going to exceed the global cap.

ASSEMBLYWOMAN GIGLIO:Well, do you think OPWDD should be setting their own rates?

The 7/1 increases and the payments that were supposed to come out, those rates were just set two weeks ago. And those people can expect their money seven months later and are borrowing hundreds of millions of dollars just to keep operation costs floating, because they were waiting for DOH to set the rates.

Do you think that OPWDD should be setting their own rates?

MEDICAID DIRECTOR BASSIRI:No. They used to set their own rates, and there's a reason that the Department of Health sets their rates now.

ASSEMBLYWOMAN GIGLIO:Thank you. It hasn't gotten any better, so I think it should go back to OPWDD.

Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Senator Stec.

SENATOR STEC:Thank you.

Good morning, Commissioner. Good to see you, thank you.

I want to talk a little bit more about nursing homes. As you know, my Senate district's one of the largest in the state, very rural Northern New York, so I'm focused on upstate not-for-profit nursing homes as opposed to the downstate model.

And as you know, between inflation -- I mean, these are things that have impacted their costs. Inflation, which is and isn't directly attributable to government, but certainly workers' comp, unemployment insurance debt, minimum wage increases, staffing ratio mandates, utility costs have all added a great deal over time to the cost in nursing homes.

At the same time, though, with the exception of the last two years of moderate increases in the Medicaid rate reimbursements, for decades it was very flat. So we have rapidly increasing costs, not-rapidly-keeping-up-with-those-costs reimbursement rates.

And as a result, I'm seeing and I continue to hear from my nursing homes in my district -- and I'm sure it's true upstate -- they're in financial peril. St. Lawrence County just lost its last assisted living center last year. That's the largest geographic county in the state. So we're putting a lot of pressure on people to have to travel great distances to find homes and care for their loved ones.

What is the state's plan to address this divergence of cost to revenue for these nursing homes before they all close?

DOH COMMISSIONER McDONALD: Yeah, so we need to approach it from multiple angles.

One is there is a substantial investment in this budget, up to $400 million that's for nursing homes and long-term cares. And the way the investment is constructed, it's using the MCO assessment. But it's not an across-the-board rate increase, so we can have the flexibility to target investments where they're needed most.

Because you're right, the rural areas are having different challenges. I think that's just one example. But we need to -- you know, last year there was a $285 million investment that was a per-diem increase. Before that, there was a 7.5 percent increase, one of the most historic increases we've had.

I think the other thing we need to be looking at, though, is one of the things I hear when I talk to nursing homes, and it's about workforce. When you're looking at workforce, one of the things they all tell me is -- and I've got to listen to them, because they're the ones in this business. They want certified medication aides, just like 38 other states do this.

One of the things they're struggling with is hiring nurses. This is one way to help them as well. And then we need to look at strategies to help places hire nurses. One of the things that concerns me in New York State is have the nurses who have a license to practice nursing don't involve themselves in direct patient care.

I think there's a multitude of reasons why that's the case. Some of the points brought up earlier is looking at working conditions people work in. I'm willing to look at that. I partner with State Ed in that in particular as well, because I want to look at what are the options we can do to make working as a nurse easier in New York State.

We've convened our health workforce team to look at this issue --

SENATOR STEC:I only have 10 seconds left. My point here is this has been an ask from the nursing home community for five years, and they're not saying it's getting better. So we're behind.

DOH COMMISSIONER McDONALD: Understood. And we're doing more than we've ever done in the past.

SENATOR STEC:We need to do more.

Thank you.

CHAIRMAN PRETLOW:Thank you, Senator.

Assemblyman Norber.

ASSEMBLYMAN NORBER:Thank you, Commissioner, for being here today and for taking all the questions.

As you know, State DOH has had a sole-source contract with Emergent, the manufacturer of Narcan for over a decade. For a long time they were the only 4-milligram nasal product on the market. Now there are several formulations and doses and, most importantly, generic options that cost significantly less than the brand itself.

Despite these market changes, DOH elected to extend their sole-source contract with Narcan last fall, continuing to pay a very high premium for this product.

Given the millions of dollars that are being spent on Narcan, when there more cost-effective products available, does DOH have any plans to have a competitive RFP?

DOH COMMISSIONER McDONALD: So a couple of things.

The first is I can't disclose the price we pay for Narcan, but it's the lowest price in the country.

The second thing I can say is we are interested in doing competitive procurement, and we will do that next year.

The third thing I'll say is there's a reason why we only use naloxone or Narcan and not the other ones. Narcan's over the counter; they went through the process getting the FDA to approve that. The other products like nalmefene or Opvee that's longer-acting. National experts, including myself, are concerned that there isn't actual data that shows it actually helps people without them going into withdrawal because of the half-life of being 11 hours.

Of course every drug needs five half-lives to clear. Putting someone in withdrawal for two days with the nalmefene product concerns me deeply. That's why so many national experts, including myself, are very concerned.

We've met with the company that makes nalmefene three times, asking the same question three times. We still don't have the answer, which is where is the clinical data that shows you can use it in the field? Because they got approved from the Food and Drug Administration was through a bridging study showing they had the same bioavailability as the injectable, as the nasal spray.

There's no data in human beings that they actually can help people to recover and stay out of withdrawal and actually have a better outcome. So that's why we're doing that.

ASSEMBLYMAN NORBER:Are you trying to find other methods, other ways to handle this, to cut costs?

DOH COMMISSIONER McDONALD: Well, naloxone is still the best drug out there. And like I said, we have the lowest price in the United States. But we are going to do another procurement next year to do that. But having said that, we're trying to get a better price and hope we do.

But we have the lowest price in the country. People who are saying we're paying too much don't know what we're paying. And I know what we're paying. I can't tell you, but we are the lowest price in the country.

ASSEMBLYMAN NORBER:Okay. All right, one more question I have for you.

Could you explain why the Governor's proposal included a cut to the physicians' Excess Medical Malpractice Insurance Pool when it has been in place for over 40 years and the cost of the 50 percent cut is only approximately 39 million?

DOH COMMISSIONER McDONALD: Yeah, we had to look at savings this year. But I think one of the things New York needs to be looking closely at is how do you solve the malpractice issue. I think taxpayers subsidizing malpractice rates is an approach, but perhaps not the best one.

I think looking at what other states have done to solve this problem would be in New York's best interest. We need long-term sustainable solutions. When we met with stakeholders -- I'm not saying they wanted us to cut this, but what I do say is stakeholders, doctors, hospitals are looking for long-term sustainable solutions to malpractice in New York State.

We pay the highest malpractice rates in the country. If you're an obstetrician in Long Island or in New York City, you're paying the highest rates in the country.

ASSEMBLYMAN NORBER:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Senator Stec. No, Senator Stec went, excuse me.

Senator O'Mara, five-minute ranker.

SENATOR O'MARA:Yes, thank you, Chairwoman.

Thank you all for your testimony today and being with us.

Commissioner McDonald, I don't think anybody's brought up the Rural Ambulance Task Force or where we stand on that. You know, we're in a crisis situation across upstate with EMS services. Where is that? I believe there was a study -- a task force was put together, a study's been done.

Where's that stand?

DOH COMMISSIONER McDONALD: So the study should be released.

The study that's being done is not a DOH-led study. It's not led to a report required from the DOH, it's led to a report due from the task force.

I saw the report, I told them to release it. It hasn't been released yet. I can find out why. But we're not -- I'm not holding up that report. Because I've read the report and think it should be out there.

We have stuff in the budget this year, though, to address EMS -- not just the essential service part, which I think is critical to the rural areas, but giving money to each county that will help them come up with a strategic plan for each county and how it will fit into the state.

And that money doesn't include New York City, because they don't need it right now, they have a strategic plan for New York City.

But that's real money to help counties, no matter how big they are, to actually address the issues they have in there. So there's an investment going on.

SENATOR O'MARA:So is it DOH's and the Executive's position, then, that this should be being done on a countywide basis?

DOH COMMISSIONER McDONALD: Yes. In other words -- well, it may not be a county, it could be a district. Like it depends how the state is looked at for people there.

But when you look at the EMCAP proposal that's in this budget, it's really about giving counties what they need in order to solve this problem, to make it an essential service, but to really, more importantly, come up with a strategic plan that not just addresses what's needed in the county or the district they're in, but actually just how it fits into the state. Because what we really want is a statewide EMS program that works for everybody.

And, you know, one of the things about New York that concerns me, if you call 911, you're not sure someone's coming. In some of the rural areas in particular, I worry about that.

SENATOR O'MARA:No, there's a big worry of that, and the delays are significant.

So you're saying this task force has released a report, you have their recommendations, but it's not in your lap as far as how we're moving forward?

DOH COMMISSIONER McDONALD: I'm not holding up the report.

SENATOR O'MARA:Who's -- who --

DOH COMMISSIONER McDONALD: The report wasn't required to be submitted by the Department of Health, but by the task force. So they can submit the report whenever they'd like to, as far as I'm concerned.

SENATOR O'MARA:So you don't have the report.

DOH COMMISSIONER McDONALD: I don't have it, no.

SENATOR O'MARA:You don't have the draft report?

DOH COMMISSIONER McDONALD: I saw it, but I don't have it. No. I mean, but it's not my report. It's their report.

SENATOR O'MARA:Whose court is the ball in, then, at this point? Who needs to move on this?

DOH COMMISSIONER McDONALD: I'll have to get back to you. It's -- I'm not holding up the report.

SENATOR O'MARA:Okay. On the Interstate Compact Licensure of nurses, something I've been pushing for for years, there's another proposal in the budget this year.

What has been the opposition to this? It just doesn't make sense to me in years why we've had so much trouble moving forward on this issue when we have a need for nurses. And particularly in a district like mine, that runs along the Pennsylvania border an extensive amount, it just makes sense to me that we're a member of this Interstate Compact.

Does this proposal in the budget for New York to join the existing Interstate Compact? Or is it a different formulation of that?

DOH COMMISSIONER McDONALD: No, it's the proposal to join the compact. And 43 states now have done -- have joined the compact.

You know, interestingly, during the crisis in North Carolina -- the terrible hurricane, floods -- nurses from New York wanted to go help, but since they weren't in the compact, they couldn't. Just one more example of why we should do this.

I don't know a rational argument why New York isn't in there. I know the BSN-in-10 law is a bit of a conflict, but there's a way around that. So I think -- I'm probably not the best person to talk about who's opposed to it, because every hospital I go to they ask me "Why can't we be in the compact?" And I say to them it is not me who is the obstacle to that.

SENATOR O'MARA:Do you know who is?

DOH COMMISSIONER McDONALD: Not the Department of Health.

SENATOR O'MARA:Okay. You know, we just -- we need to move on this. We need to get involved. Forty-three other states in this, it's just nonsensical to me that we're not in it. But that's all I have.

Thank you very much.

DOH COMMISSIONER McDONALD: Thank you.

CHAIRMAN PRETLOW:Assemblyman Eichenstein.

ASSEMBLYMAN EICHENSTEIN:Thank you, Chair Pretlow.

Good afternoon, Commissioner. Thank you for being here.

I want to talk to you about this disastrous CDPAP transition the department has deemed necessary of hiring one out-of-state company in place of hardworking New Yorkers.

Look, should there be 700 FIs? No. Is the program in major need of reform? Yes. This is not about saving money. I have nonprofit FIs being put out of business and transitioned into a for-profit company. So this is not about saving money.

I want to go back to a response that was given to my colleague Senator Rivera. Of the 40,000, 22,000 have been fully transitioned, correct?

MEDICAID DIRECTOR BASSIRI:Yes.

ASSEMBLYMAN EICHENSTEIN:Of the 22,000, are these 22,000 consumers? Because I saw the department is combining the numbers of consumers and caregivers.

MEDICAID DIRECTOR BASSIRI:So when we say 40,000, it's 40,000 consumers and 40,000 workers. So 80,000 total people, but 40,000 --

ASSEMBLYMAN EICHENSTEIN:So 22,000 consumers have transitioned.

MEDICAID DIRECTOR BASSIRI:No, workers have transitioned.

ASSEMBLYMAN EICHENSTEIN:How many consumers have fully transitioned?

MEDICAID DIRECTOR BASSIRI:I will have to get back to you on that.

ASSEMBLYMAN EICHENSTEIN:Okay. So the 22,000 is not even a real number.

MEDICAID DIRECTOR BASSIRI:Sorry?

ASSEMBLYMAN EICHENSTEIN:So the 22,000 is not even a real number. We're trying to figure out how many consumers have transitioned to PPL.

MEDICAID DIRECTOR BASSIRI:Forty thousand. Forty thousand have started or completed.

ASSEMBLYMAN EICHENSTEIN:Not started. How many consumers have fully transitioned into PPL? Not caregivers.

MEDICAID DIRECTOR BASSIRI:They're not required to transition until March 1st. So that's why we say started and completed.

ASSEMBLYMAN EICHENSTEIN:So but my point is if you're combining consumers and caregivers, then the number's 280,000, then it's 600,000. Right?

MEDICAID DIRECTOR BASSIRI:Maybe.

ASSEMBLYMAN EICHENSTEIN:Not maybe.

So it's not 22,000 fully transitioned out of 280,000. I'm trying to figure out -- there are 280,000 consumers in the program, correct?

MEDICAID DIRECTOR BASSIRI:At least.

ASSEMBLYMAN EICHENSTEIN:Okay. How many of those 280,000 consumers have fully transitioned into PPL?

MEDICAID DIRECTOR BASSIRI:Twenty-two thousand have fully transitioned.

ASSEMBLYMAN EICHENSTEIN:Okay. So it's twenty --

MEDICAID DIRECTOR BASSIRI:And completed the registration.

ASSEMBLYMAN EICHENSTEIN:Well, a minute ago you said that includes caregivers. But it's 22,000 consumers have fully transitioned into PPL. That means 258,000 have not.

MEDICAID DIRECTOR BASSIRI:Yet.

ASSEMBLYMAN EICHENSTEIN:Okay. Commissioner, I see I'm almost out of time. In 20 seconds, I -- I assume we share a goal that -- to ensure that nobody loses service.

DOH COMMISSIONER McDONALD: That's right.

ASSEMBLYMAN EICHENSTEIN:How could you -- the transition started five weeks ago, 22,000 have been transitioned. It's now 49 days away from April 1st. How are you going to transition 258,000 people?

CHAIRMAN PRETLOW:Hold that question.

Assemblyman Braunstein.

ASSEMBLYMAN BRAUNSTEIN:Thank you, Chairman Pretlow.

My question is for Dr. McDonald.

In 2023 the Governor established the Commission on the Future of Healthcare. That commission was scheduled to issue recommendations late 2024. To this date we haven't seen any recommendations. Do you have a time frame on when we will see recommendations from the commission?

DOH COMMISSIONER McDONALD: Yeah, we met with them and we're giving them data. We're working with them. They're focusing on long-term care, and then they're focusing on the hospitals as well.

But, you know, as far as recommendations go, I think what they're really doing is -- I think in the time they need to look at the data, and they come up with the recommendations. I'm not worried that they haven't come up with recommendations. They're looking at complex issues. So we'll see if they come up this year with them.

But, I mean, I've met with them, they're highly engaged, we're grateful to have their support and their work.

ASSEMBLYMAN BRAUNSTEIN:So there's no time frame, it's a we'll see --

DOH COMMISSIONER McDONALD: There's no deadline. But, you know, they're highly engaged, they're working on it, so I don't know exactly when they'll release recommendations.

I think what they're trying to do is come up with good recommendations, looking at a very complex system throughout New York State, as to how they can make things better. Because there's a lot of variables right now. But they've been very good about requesting the data. We've been very good about getting them the data. And I'd like to see what they have to come up with. We'll see.

ASSEMBLYMAN BRAUNSTEIN:Okay, thank you.

CHAIRMAN PRETLOW:Assemblyman Chludzinski.

ASSEMBLYMAN CHLUDZINSKI:Good afternoon, Commissioner and Director, Superintendent. Thank you for your testimony. And I'm sure you're ready to stretch your legs by now.

But I just -- I represent part of Western New York, part of the City of Buffalo, and my question is in regards to dental services. University of Buffalo Dental is the largest dental Medicaid provider in Western New York. There was just an article in the Democrat and Chronicle a couple of days ago that reported 30,000-plus are waiting for dental care.

We know all across New York State residents, especially those who have Medicaid as their payor source, are struggling for dental access. Is the Department of Health supportive of increasing the overall Medicaid rate for dentistry in the six academic dental centers?

DOH COMMISSIONER McDONALD: So I don't know that there will be a rate increase with dental this year. I think there's other things in the budget that will address this.

One of the things we're doing through the New York State of Health is looking at offering a standalone dental product so people can get into that. There's some scope of practice proposals. One is dental hygienists are very important. And I don't think a dental hygienist needs to physically be with the dentist.

Other states have done this, which is a really good idea, which is to let dental hygienists work in spaces where the dentist isn't right there. So having these collaborative practice agreements can be another way of extending dentists.

Other strategies we can look at is dental therapists. I think people look at that, other states have done this. The dental therapist is like a PA for a doctor -- a dental therapist for a dentist.

We are a state of 600 million teeth. We're not going to get there without being a little bit interested in what other states have done. There are solutions here. The dental hygienist in particular, though, is so critical. Because if we get people to get their teeth cleaned twice a year -- and we're not even close -- we're going to do so much better.

And, you know, it's an old expression, an apple a day keeps the doctor away; you cannot eat an apple a day without good, sound teeth. So we really need to see what we can do to get more people in to see the dental hygienist. That's why I'm hoping that scope-of-practice proposal gets a little bit more attention than it has in the past.

ASSEMBLYMAN CHLUDZINSKI:So would you support increasing Medicaid coverage for that?

DOH COMMISSIONER McDONALD: You know, so we're looking at our rates, but I can't promise anything today because it's not in the budget.

ASSEMBLYMAN CHLUDZINSKI:And one other question in regards to Medicaid. Enrollment remains high. The use of current employment data is essential.

Will you commit the Department of Health to exploring options for the use of expedited verification processes?

MEDICAID DIRECTOR BASSIRI:We currently do that today for anyone enrolled in the New York State of Health marketplace. We hit up against federal data sources, state wage data sources. So that occurs today. And commit to doing it per the federal and state requirements moving forward.

ASSEMBLYMAN CHLUDZINSKI:Thank you.

CHAIRMAN PRETLOW:Senator?

CHAIRWOMAN KRUEGER:We have a new Senator -- well, she's not a new Senator, but a new Senator to us this morning, Julia Salazar, for a three-minute question.

SENATOR SALAZAR:Thank you.

So I wanted to actually ask about the New York State Drinking Water Quality Council, which recommended that DOH designate PFAS chemicals, 23 toxic PFAS chemicals as emerging contaminants and require statewide drinking water testing. However, over a year later, DOH has still not proposed regulations to move this recommendation forward.

When does DOH intent to propose regulations to designate PFAS as emerging contaminants?

DOH COMMISSIONER McDONALD: So I think we're waiting for the Environmental Protection Agency on that. But let me double-check and get back to you on that, because I think that's what's holding that up right now, is the EPA standard on that.

SENATOR SALAZAR:Okay, that's disconcerting.

DOH COMMISSIONER McDONALD: You know, in the current climate, I understand what you're saying.

SENATOR SALAZAR:Yeah.

DOH COMMISSIONER McDONALD: I do. So it's on the -- there's a lot that I'm looking at with the federal transition, just so you know. Because as the federal transition unfolds, it does change how I look at public health in New York State. You're right.

SENATOR SALAZAR:Yeah. Yeah. Inevitably. Thank you, I appreciate that.

In April of last year the EPA finalized landmark federal drinking water standards on PFAS chemicals, including standards on PFOA and PFAS that are more health protective than New York's current standards are. However, these regulations are of course at risk because of what we both recognize under the current administration.

Will DOH commit to codifying or supporting the codification of EPA's PFAS standards if they are rolled back?

DOH COMMISSIONER McDONALD: Yes.

SENATOR SALAZAR:Thank you. Appreciate it.

CHAIRMAN PRETLOW:Assemblyman Anderson.

ASSEMBLYMAN ANDERSON:Good afternoon. Thank you to the commissioner for being here as well as the superintendent for being here.

I have three quick questions. I hope I can get them out. The first one, to Commissioner McDonald.

What are the responsibilities of the seven additional full-time employees recommended in the budget for hospital enforcement?

DOH COMMISSIONER McDONALD: So that actually speaks to what's called sexual assault forensic examiners. And the seven staff that we're hiring are to actually make sure the hospitals are doing this and trained to do this.

So what's required in the budget this year is that every hospital have at least one sexual assault forensic examiner on 24 hours a day, seven days a week, 365 days a year. A lot of the money in there -- it's like 2 million and change -- goes towards a contract so hospitals can get training for this to make sure they can have their staff trained for that.

The rest of the money is for me to have seven staff to make sure it's regulated and it happens and that we help facilitate the training so it works.

It's an important proposal; I hope it goes through this year.

ASSEMBLYMAN ANDERSON:Thank you so much, Commissioner.

And my next two questions are for Superintendent Harris. Thank you for being here this morning -- or this afternoon.

Are there any costs or funding issues that explain why DFS has not made effective use of the BDD program? You know, I always go back-and-forth with you all about this. And you all have only opened four branches in the last few years, and that's just not meeting the banking needs of neighborhoods like mine where the ratio is 50,000, 40,000 to one ATM, not a physical branch.

So if you can answer that question.

DFS SUPERINTENDENT HARRIS:Yeah, absolutely. We've actually opened seven BDDs in my time as superintendent, which I think is more than any of my predecessors have done.

As you know, we administer the program in connection with the Comptroller's office. It also requires an application from the local government, either a borough president or --

ASSEMBLYMAN ANDERSON:But the process takes entirely too long, Superintendent. And I've put in bills to try to fix it, and the agency just keeps pushing back as if the program is running really well when it's not.

DFS SUPERINTENDENT HARRIS:So always happy to look at bills.

I think the staff works very diligently. Often we do get applications that don't meet the requirements of the BDD program --

ASSEMBLYMAN ANDERSON:But no one hears anything from you if it doesn't meet the requirements until months, months later. That's something you can fix tomorrow.

DFS SUPERINTENDENT HARRIS:I'd be happy to talk with you about any delays. The team is very diligent and I think very responsive. But happy to continue working to make sure we can get as many BDDs up and running as possible.

ASSEMBLYMAN ANDERSON:Thank you.

Let me just use my last 30 seconds to align my comments with Senator Liu as it relates to commuter van insurance.

I would love to get a commitment from you today, Superintendent, to hold a roundtable around this issue, with stakeholders. I think punting it and vetoing legislation, which the Executive has done, is not the right way forward, and the Stabilization Fund is not moving forward.

Can I get a commitment from you to hold a roundtable?

DFS SUPERINTENDENT HARRIS:The Stabilization Fund is run by ESD, so I would direct you to the commissioner on the Stabilization Fund.

CHAIRMAN PRETLOW:Thank you, Madam Superintendent.

ASSEMBLYMAN ANDERSON:Thank you, Superintendent.

(Interruption by protestor.)

CHAIRMAN PRETLOW:Assemblymember Kelles.

ASSEMBLYWOMAN KELLES:It's one of those moments where you say "I have a bill on that," to address participation with torture in prisons, so I'm glad he brought that up.

I wanted to go to the CDPAP program. One of the things that I'm very -- well, let me just step back for a second. Some things that I've been hearing about it that I'm a little worried about, concerned about, I want to hear your response.

Particularly that PPL is saying that if someone doesn't have the ability to access technology, they can't qualify for the program. If -- and that there's the expectation that they will be required to fill out all the forms. FIs up to now have been the ones to fill out the 15 different forms.

Is your policy that the FI, PPL, will still be required to fill out those forms?

MEDICAID DIRECTOR BASSIRI:So I just want to first say to the extent concerns continue to be raised, please do reach out to the department directly and we will address those concerns, because the 15 forms that you're referencing that workers need to complete, a lot of those documents are federally required.

ASSEMBLYWOMAN KELLES:I'm just asking a yes or no requirement, whether or not we were going to have the FI -- PPL will continue to do it as the FIs have? Or are we going to require the people who are seeking care to fill out those forms? Just yes or no on that.

MEDICAID DIRECTOR BASSIRI:The people seeking care are going to fill out a much shorter form that's four pages.

ASSEMBLYWOMAN KELLES:Okay, so we're going to have the people filling out the forms, okay. I'm very concerned about that, I don't --

MEDICAID DIRECTOR BASSIRI:FIs were not supposed to be filling out the forms.

ASSEMBLYWOMAN KELLES:I think PPL should do it just like all the FIs have.

MEDICAID DIRECTOR BASSIRI:I would ask that, like -- please have those members reach out to us directly. We will answer any questions.

ASSEMBLYWOMAN KELLES:I will, but we can maybe follow up on that.

So other things that I am concerned about, we -- what I'm hearing here is that we're still on track. We have about 40,000, but half of them are just started, which could be maybe opening a file. We have no idea what that means.

We have to get to 240,000, plus all the caregivers. That's about 700,000. Except that we've never collected any data on how many people are in the program. We don't know how many caregivers there are. We don't have any information on where they are, because we never collected any of that data. So we can't fully know, when we do transition, if we have fully transitioned.

I hope this is not prophetic, but one of the things I'm very concerned about is on April 1st we say everybody who should have transitioned has transitioned to the new system, and anyone who hasn't, well, they -- we really determined that they shouldn't have been in the program to begin with. I hope we don't say that. Because there have been times in the past that we have reduced the cost of programs by making it much more stringent for people to get into the program.

Now, here's the problem, is that that will force more people into nursing homes, which is multiple times more expensive for the state. We'll be back here with more expensive problems to deal with, or they will have to lean on their families as caregivers, who will have to leave the workforce, putting the family further in debt and crippling the family and hurting the economy.

So I'm just hoping that that isn't what we end up saying on April 1st.

MEDICAID DIRECTOR BASSIRI:We will not be saying that --

CHAIRMAN PRETLOW:Thank you --

MEDICAID DIRECTOR BASSIRI:-- completely understand your question. No assumptions are --

CHAIRMAN PRETLOW:-- Assemblywoman Kelles.

(Overtalk.)

MEDICAID DIRECTOR BASSIRI:-- reduced levels of care.

CHAIRMAN PRETLOW:I remind people that if you ask a three-minute question, you get a zero-minute answer.

We've been joined by Assemblyman Meeks. And the next person to ask questions is Assemblywoman Reyes.

ASSEMBLYWOMAN REYES:Good afternoon.

So my question is on CHHAs, certified home healthcare.

So we've gotten reports that certified home healthcare -- not CDPAPs, not aide services, but post-acute home-based nursing and therapy -- has declined across New York State. In the Bronx, access has declined by one-third. In Rochester and the Finger Lakes area, it's down about 40 percent. Since 2019, in the Capital District, down about 35 percent. And that's Medicare, not Medicaid.

So my question is, what is New York State doing to ensure that managed-care plans, including Medicaid managed care, are paying what they need to ensure low-income New Yorkers are able to receive CHHAs and we're able to discharge patients safely and kind of fix that bottleneck that we have in the hospitals?

MEDICAID DIRECTOR BASSIRI:Thank you for the question, Assemblymember.

I'm just -- as you reference, it is a Medicare expense. So are you asking what the Medicaid managed-care plans are doing to make up for the Medicare reductions?

ASSEMBLYWOMAN REYES:I'm asking what the state is doing to address an issue where we've seen a decline in CHHA slots, and that is impacting our ability to discharge patients safely because there are no services for them.

And this is not about home care services, this is like very specialized acute care at home.

MEDICAID DIRECTOR BASSIRI:Understood.

No, I mean I think the department has a number of different workforce programs to help get CHHAs certified and trained.

But with respect to Medicaid managed-care plans, we're not asking them to cover costs that may have been reduced from Medicare necessarily. We would be focusing on doing things on the training and certification side to get more CHHAs in the delivery system.

ASSEMBLYWOMAN REYES:Okay, thank you for your answer.

I have another question. This is around the Governor's involuntary commitment proposal in her Executive Budget.

And there is an aspect of it that is the hearing process by which hospitals can, at any point after admission, request a court order of retention to involuntarily commit a patient longer than the baseline 72-hour or 15-day periods.

And her proposal is silent on that. And I anticipate that when they are in the process of involuntarily committing somebody, they I'm assuming will first be going to an emergency room.

Is there any look into putting resources, staffing, expanding space -- like how is this going to actually work if we don't do anything at the point of entry by which we are evaluating people who may need further services?

CHAIRMAN PRETLOW:Thank you for that answer, Doctor.

(Laughter.)

CHAIRMAN PRETLOW:Assemblyman Maher.

ASSEMBLYMAN MAHER:Thank you very much. Appreciate all of you being here.

I just want to start with saying that the liaisons in your office have really been great in terms of timely responses for constituent services, which help people and inform them every single day. So thank you to your teams for that. Appreciate the support.

The first thing I wanted to talk about was I believe our Medicaid director -- you had talked about increasing the Medicaid rates on our way to rebasing. I just wanted to ask if you believe the continuation of last year's approximate 3 percent increase, only about 100 million of new investment, is really enough to address what has become a $1.6 billion Medicaid gap.

MEDICAID DIRECTOR BASSIRI:Can you repeat which increase you're referring to?

ASSEMBLYMAN MAHER:Sure. This was the investing in nursing home Medicaid rates and the continuation of last year's approximate 3 percent increase in the Medicaid rates.

MEDICAID DIRECTOR BASSIRI:There it's actually about 4 percent.

And yes, that is included and assumed as part of the MCO tax, that that would be recurring for the next three years.

ASSEMBLYMAN MAHER:Okay. With the capital cuts taking away from the money that we are investing in it, how can really mission-driven quality-care-oriented providers who value their staff and offer the best wages, how are we expecting for them continue to kind of live with such a minimal investment --

MEDICAID DIRECTOR BASSIRI:Yeah. Sure.

ASSEMBLYMAN MAHER:-- in some people's minds, to prioritize that quality care of our home and nursing staff?

MEDICAID DIRECTOR BASSIRI:I can assure you that the nursing homes aren't paying workers with capital funding.

But then most of the funding we provide them is the operating component of the reimbursement rate, which the Governor has put in double-digit rate increases over the past few years. So those are the dollars that would be supporting the staff needed to provide the high-quality care, not the capital funding.

ASSEMBLYMAN MAHER:Thank you for addressing that on the record. I appreciate that.

I wanted to shift to EMS. Obviously when it comes to our EMS services we've heard from many of my colleagues on some of the issues that we're facing. I'm looking forward to also reading that report, eagerly.

One thing that is very clear is revenue isn't really catching up to what the expenses are, specifically with Medicaid reimbursements. And I know this is true across the board in a lot of different areas.

But that 128 percent of base rate for BLS and then ALS 152 and 220 that was passed in 2023, that's $249, you know, per transport, 429 for the Level II advanced life support services. Is that enough?

DOH COMMISSIONER McDONALD: No, I understand the concern. I think it's something we need to continue to look at.

You know, when you go to certain parts of the state I hear loud and clear that they would like more. One of the things right now we have to own, though, is there's so much pressure on Medicaid right now. We're already up 8 billion over last year. There's only so many we could address this year. But I understand people are concerned about it, so we're looking at it.

ASSEMBLYMAN MAHER:Thank you. Thank you for your time.

DOH COMMISSIONER McDONALD: You're welcome.

CHAIRMAN PRETLOW:Are you finished?

Okay. Assemblywoman Lucas.

(Pause.)

ASSEMBLYWOMAN LUCAS:Got it.

Good afternoon, everyone.

Two things. One, do you have any available data on the healthcare workforce by district or zip codes?

DOH COMMISSIONER McDONALD: So you want to know how many healthcare workers are in there per district?

ASSEMBLYWOMAN LUCAS:Actually in terms of the workforce, how many people are benefiting from these different programs. Because some of this stuff is a little bit new to me. I represent the 60th Assembly District. And I don't see the impact of these programs in this district, so I'm interested in some data to determine whether or not it's equitably distributed in the programs as well as the link to employment.

DOH COMMISSIONER McDONALD: So we probably have a lot of data on what you're asking. But I think what might be best is to maybe send the question to us as focused as you want it to be. Because one of the things I want to do is I don't want to answer the question there, but specifically for you.

ASSEMBLYWOMAN LUCAS:That's great. Let me just get to the next question because I don't want to run out of time.

We are hearing also, in a totally different direction, that Public Partnership Limited, which insanely is a single fiscal intermediary that's contracted with DOH, that they are seeking additional funds to pay wages immediately. They're contracted to have 100 million in their budget for wages up-front.

They're being sued in Pennsylvania for wage theft, not paying wages to workers. Did DOH make a mistake in not asking for proof of a higher line of credit from PPL, or are they just not fulfilling?

Just if you can confirm that information, and then also let me know what level of oversight existed when it came to that. Because this is extremely alarming.

MEDICAID DIRECTOR BASSIRI:I want to make sure I understand the question.

ASSEMBLYWOMAN LUCAS:Sure.

MEDICAID DIRECTOR BASSIRI:But I can tell you that we do not feel that there was any mistake made. They do have the line of credit they're required to have. And workers are going to get paid and receive what they're eligible and entitled for --

ASSEMBLYWOMAN LUCAS:Do they have the 100 million that they said --

MEDICAID DIRECTOR BASSIRI:Yes. Yes.

ASSEMBLYWOMAN LUCAS:And was there oversight to confirm that they have it?

MEDICAID DIRECTOR BASSIRI:Yes.

ASSEMBLYWOMAN LUCAS:Are you aware of the lawsuit that's currently --

MEDICAID DIRECTOR BASSIRI:And we have much more oversight on them than we did --

ASSEMBLYWOMAN LUCAS:Are you aware of this lawsuit that exists?

MEDICAID DIRECTOR BASSIRI:I'm aware of many lawsuits that exist. I'm not sure of this --

ASSEMBLYWOMAN LUCAS:Are you aware of the one that I specifically asked?

MEDICAID DIRECTOR BASSIRI:-- one, no. Pennsylvania --

ASSEMBLYWOMAN LUCAS:You're not, okay.

MEDICAID DIRECTOR BASSIRI:-- the transition was over I think like 10 years ago.

ASSEMBLYWOMAN LUCAS:Great. Are the wages being paid? And are managed care systems, are they --

CHAIRMAN PRETLOW:Thank you, Assemblywoman.

ASSEMBLYWOMAN LUCAS:-- asked to provide additional wages?

CHAIRMAN PRETLOW:Assemblywoman Simon.

ASSEMBLYWOMAN SIMON:All righty. Got to look to find my question, so hang on a second.

Okay. So thank you for your testimony.

I have a couple of questions, two questions. One is with regard to outpatient behavioral health and substance use services, which were carved into Medicaid about a decade ago, allegedly to save the state money, and perhaps to provide better care.

What we're finding is that the providers, the -- that's not changing the nature of care at all and it's costing the state $400 million that we could save if we carved them back out of Medicaid managed care.

I'd like to know if I can work with you on doing that.

MEDICAID DIRECTOR BASSIRI:Yes, we're happy to work with you on anything.

But just so -- you're referring to carving out which services?

ASSEMBLYWOMAN SIMON:Behavioral health and substance abuse.

MEDICAID DIRECTOR BASSIRI:And you believe that's $40 million?

ASSEMBLYWOMAN SIMON:Four hundred million.

MEDICAID DIRECTOR BASSIRI:Four hundred million dollars, okay.

ASSEMBLYWOMAN SIMON:So we're not getting any bang for our buck, and the people aren't getting better care, and the providers are -- it's costing them a fortune to comply, and they're not able to provide the care.

MEDICAID DIRECTOR BASSIRI:We work very closely with the Office of Mental Health in administration and design of the health and recovery plans I believe you're referring to, and we're happy to keep talking about it. But, you know, we work very closely --

ASSEMBLYWOMAN SIMON:Well, maybe the three of us need to get together.

MEDICAID DIRECTOR BASSIRI:Yeah.

ASSEMBLYWOMAN SIMON:Thank you.

And then the other question I have is there was a report about a year, year and a half ago by the Attorney General about ghost networks for -- I think it was called inaccurate narcotic and inadequate health plans, mental health provider network directories.

And so it appears that one of the big problems with getting help is when people call, there's nobody there. Or the number is out of service.

What is the department doing to address those concerns?

DOH COMMISSIONER McDONALD: Yeah, so that's a concern of mine too. Right? So network adequacy regs we just did -- not just on our side, and the superintendent can speak about her side. But one of the things we're doing in the New York State of Health for our qualified health plans and essential plans is we're actually going through that this year to make sure that the network adequacy is there.

Because I agree with you, if you call for behavioral health and there's no one available, that's a concern. I don't know if the superintendent wants to add.

DFS SUPERINTENDENT HARRIS:And, you know, we worked very closely with DOH, OASAS, OMH on the network adequacy regs that have been adopted and that require 10-day -- appointments within 10 days for an initial appointment, seven days upon discharge.

So it's something we care very much about. I think we've worked in great partnership to get those regs across the finish line.

And to your point about directories, we do, under our regs, make sure that insurers provide accurate directories. And where the directories are inaccurate, they have to hold the consumer harmless.

ASSEMBLYWOMAN SIMON:So are we doing something to just keep double-checking those things? Because I'm sure that that's part of the problem, the numbers go out -- or just stop working.

DFS SUPERINTENDENT HARRIS:So the regulations have just been adopted. I know we will be working together to examine our institutions and make sure they're complying.

ASSEMBLYWOMAN SIMON:If you could share them with me, I'd appreciate it very much. Thank you.

CHAIRMAN PRETLOW:Assemblyman Otis.

ASSEMBLYMAN OTIS:Thank you.

Thank you, Commissioner McDonald. We are look forward to working with you on the EMS essential services issue. Most of the bill that I carry is in the Governor's budget, with some differences, and I think we can work out those differences with the executive team and your team. So thank you for that.

Superintendent Harris, a question for you. Earlier you spoke about theft enforcement. I'm wondering if you could give us your sense of the state of play of cybersecurity, cyber theft enforcement in New York and around the country, someplace -- it's sort of a sector that there are problems with enforcement, there's really not that much enforcement -- FBI does certain things. Tell us what's going on in New York and your sense of where this is all moving.

DFS SUPERINTENDENT HARRIS:Absolutely. Thank you for the question.

As you know, we amended our cybersecurity regulation at DFS at the end of 2023. It was first put in place in 2017, and so six years is a long time in the cybersecurity space.

That regulation has become the model for federal regulators, for over half of states.

But when we updated it, we looked at things like ransomware, for instance. We looked at the tailoring in the regulation to make sure it was suitable for our largest banks and insurance companies as well as our small insurance brokers. We looked at governance requirements for our regulated entities as well.

It doesn't break out sort of theft as a result of cyber incidents as part of the regulation. But of course when we get complaints, we work very closely with consumers to help them get their money back where we can.

ASSEMBLYMAN OTIS:Look forward to continuing that discussion post these hearings. But thank you for the great work that you've done, your agency. You really have a national profile, and New York benefits from that. So thank you.

DFS SUPERINTENDENT HARRIS:Thank you.

CHAIRMAN PRETLOW:Assemblyman Palmesano.

ASSEMBLYMAN PALMESANO:Yes, my question is for Superintendent Harris.

My question is, why does DFS allow insurance carriers to set prices for services they don't actually cover? As we know, there's a statute and it is enforced for everyone in the healthcare field except dental care. And then, of course, the Governor vetoed a dental care non-coverage services bill because she said DFS interprets and enforces it.

Why the double standard?

DFS SUPERINTENDENT HARRIS:I'm not sure I'm entirely clear on what you're referring to. I would refer you to the executive chamber on any vetoes.

Dental health generally is something we've worked closely with DOH on, and I think it's on all of our agendas to make sure that New Yorkers have the plans they need and that there are standardized care plans for New Yorkers to make sure that they're getting that care so they can eat those apples.

ASSEMBLYMAN PALMESANO:Yeah, we can follow up on that, because my understanding is this bill that the Governor vetoed would have brought more parity in line with the other providers.

So that's why we're asking the question, because it seems like --

DFS SUPERINTENDENT HARRIS:Happy to work with you on that, sir.

ASSEMBLYMAN PALMESANO:Thank you.

I would also like to go to a question around electric vehicles and insurance. I've had conversations -- I've been very concerned about this proliferation of electric vehicles. I know it's a push by the Governor and those in the majority. I've talked to people in the insurance industry, we've seen things -- I even read on the floor where -- in a GM manual where they recommended you don't charge the vehicles inside a structure.

So what are you seeing or hearing relative to the impact on homeowner's insurance, auto insurance rates, and are you doing anything to look into that? Because auto insurance and homeowner's insurance is high enough now, and that's going to certainly have an impact on it, from what I'm hearing from people I've talked to in the insurance sector. That's something that's coming down the tracks that's going to impact our consumers as we push this mandate further and further.

What are you hearing, and what can be done?

DFS SUPERINTENDENT HARRIS:Yeah, one of the big contributors to rising insurance costs, especially in auto, is the technology inside cars. Right? So one insurer gave us the example the other day that 20 years ago, if you had a fender-bender, you were replacing a bumper. Now you're replacing the bumper and the hundreds of sensors inside of it.

And so the parts costs go up, the labor costs go up, and that therefore drives insurance costs up.

ASSEMBLYMAN PALMESANO:And I understand that point. But I'm more concerned about the lithium-ion batteries catching on fire.

DFS SUPERINTENDENT HARRIS:Yeah. And I think that's part of that, yeah.

ASSEMBLYMAN PALMESANO:We've seen what's going on down in New York City with the scooters, but we've seen fires with these batteries -- most people are going to charge their car inside their garage, even though the manual -- and I read it on the floor of the Assembly -- says it doesn't recommend it. If it catches on fire, it could be the garage, it could be their entire house.

What's being done to educate, what's being done to address this? Because -- and what are you seeing in insurance rates or projections from your contacts with the insurance underwriters? This has to be a red flag and a caution that no one in the Legislature's talking about, the Governor's not talking about it. This is another part of this train wreck that's heading down the tracks at the public that they don't understand.

So what are you guys doing about it?

DFS SUPERINTENDENT HARRIS:Yeah, I think you'll find that what we see with loss trends in auto or in homeowner's, the data tends to lag. Right? It's not like when somebody buys an electric vehicle, they have a fire that shows up that same year.

So as we see more electric vehicles, it's a trend we'll watch closely and look forward to working with you on.

ASSEMBLYMAN PALMESANO:Thank you.

CHAIRMAN PRETLOW:Thank you, Madam Superintendent.

Assemblyman Ra, ranker, five minutes.

ASSEMBLYMAN RA:Thank you.

Good afternoon. So we've talked a lot about CDPAP today, and people enrolling and all of that. And I certainly share the concerns of my colleagues with regard to that. But I want to talk a little bit about what happens on April 1st and PPL.

So, number one, is PPL adequately capitalized to ensure the smooth management of the services and payment for the services?

MEDICAID DIRECTOR BASSIRI:Yes.

ASSEMBLYMAN RA:And am I correct that it was a requirement of the contract that they have $100 million in financing?

MEDICAID DIRECTOR BASSIRI:In a line of credit, yes.

ASSEMBLYMAN RA:And do you know what that number represents? Is it based on having a certain number of days' payroll, or is it just, you know, a lump-sum number that was arrived at?

MEDICAID DIRECTOR BASSIRI:It's the requirement that was included in the RFP.

ASSEMBLYMAN RA:Okay, so it doesn't necessarily represent a certain number of days' payroll that they would be able to meet of care providers?

MEDICAID DIRECTOR BASSIRI:No. It's not specified in that way.

ASSEMBLYMAN RA:Okay. You mentioned earlier about basically plans and their responsibility, making sure people have continued care. My understanding is that obviously because there's only going to be one FI, the plans have been directed by DOH to terminate their contracts with all FIs other than PPL. So if it's up to them to ensure continued care, what happens on April 1st if there is an FI that, you know, hasn't enrolled or, you know, some caregiver that hasn't enrolled? Is there any type of infrastructure contingency plan so that the health plans can ensure continued care for their enrollees?

MEDICAID DIRECTOR BASSIRI:So what I would say is that today the health plan is accountable for that member. And after April 1st the health plan is accountable for that member. That doesn't change as part of this transition.

And because the member is their responsibility, they will ensure that the member receives the care they're entitled to and that the worker gets paid.

ASSEMBLYMAN RA:But they are required to terminate any other contracts other than with PPL, correct?

MEDICAID DIRECTOR BASSIRI:Right. But if they have a contract with PPL, there's no reason that someone should not receive a service or a worker shouldn't get paid.

ASSEMBLYMAN RA:I do think there's a potential gap there, because they're kind of -- they have to ensure that their enrollee gets the coverage, but there may be things that are -- you know, somebody not going through the enrollment process could be something that is not within their, you know, power to fix.

MEDICAID DIRECTOR BASSIRI:Well, we're meeting with the plans every week, we're talking to the vendor every day. They're doing a lot of outreach in the community, there's community events, there's virtual events. So there's plenty of engagement points to get in front of these issues.

And we encourage you all to make us aware as they come up, because we've been successful in resolving them thus far.

ASSEMBLYMAN RA:We will certainly make you aware. Because they're not going to be calling you guys, they're going to be calling all of us, so.

Lastly, with -- regarding plans, my understanding is PPL is asking health plans for advances in payment. Are you aware of that? And why would that be the case given that they were required to have a certain amount of financing in place?

MEDICAID DIRECTOR BASSIRI:That's between the plans and PPL. All we've said is what the rates need to be and what workers are going to get paid. They're working on those contracts with the plans. Most of them have been signed. That's how it works in most other states, with the plans advancing money, but we're not -- we're not involved in that.

ASSEMBLYMAN RA:Okay. Thank you.

Commissioner McDonald, I want to pivot back to something that my colleague from Nassau had talked about earlier, NUMC. Obviously, you know, there's been a lot of back and forth between the department and NUMC.

But I want to, in particular, ask about -- there is an update in this budget proposal of the Temporary Operator Statute. Some have speculated that that is intended to potentially deal with NUMC. Is that provision something the department requested that the Executive put in the budget? Did it come from the Executive? And what is the reason for this being included in the budget proposal?

DOH COMMISSIONER McDONALD: So there's multiple updates in that particular statute, and it's just really encompassing every particular hospital.

And there's also timeline changes as well in that particular bill. So that's what's in the bill.

ASSEMBLYMAN RA:But it would -- am I correct it would allow public benefit corporations to be part of the list of facilities that may have a temporary operator appointed?

DOH COMMISSIONER McDONALD: It just makes it apply to every hospital, that's all.

ASSEMBLYMAN RA:Okay, thank you. I'm running out of time, so thank you for answering our questions.

CHAIRMAN PRETLOW:Assemblyman Meeks.

ASSEMBLYMAN MEEKS:Thank you.

To the commissioner, what exactly is the department doing to reduce incidents of violence in healthcare facilities across the state?

DOH COMMISSIONER McDONALD: Yeah, I love the question.

I've traveled a ton of places; this is one of the things I hear everywhere. I did meet with unions on this issue, and I've met with the hospitals on this, and one of the things I'm finding is we don't have a standard definition of workplace violence.

The other thing I've learned is we don't have a mechanism for reporting. So I'm not a big fan of doing things at people, I'm a big fan of doing things with people. So what we're doing this year is convening stakeholders in a large group to really tackle the issue together.

Workplace violence isn't unique to New York, it's all across the country. And healthcare workers are bearing the brunt of it. I think it's one of the things that contributes to healthcare workers not wanting to be healthcare workers, and it concerns me.

State Ed's been a partner in this, by the way, since they regulate most of the healthcare workers. They've been very good about joining us and looking at this issue. Because one of the things I'd say is I don't think anyone's really been looking at this issue, so the Department of Health is trying to lead on this issue and see where we can get on this.

ASSEMBLYMAN MEEKS:Okay. And also, when will the Statewide Healthcare Facility Transformation Grants be awarded? And currently how many are pending?

DOH COMMISSIONER McDONALD: So the Statewide Transformation Grants for Statewide IV are expected to be announced in the next six weeks or so.

As far as Statewide V, it's going to go on through sometime in 2025.

And I don't know exactly how many awards are in Statewide IV. It's roughly $250 million, though. If I give you the number I might be giving away who the awardees are, and I don't mean to do that.

ASSEMBLYMAN MEEKS:Okay. And how many Certified Home Health Agencies in the state have closed since 2019? And what is generally the cause of closure?

DOH COMMISSIONER McDONALD: So I don't know the exact answer to that, about how many of those agencies have closed. I'll just have to get back to you on it.

ASSEMBLYMAN MEEKS:Okay. Do you have an idea what's causing the closures, generally?

DOH COMMISSIONER McDONALD: No, I don't. Home care is actually pretty big in New York. We actually are investing a lot in home care. But I don't know the reasons. I'll have to get back to you on it.

ASSEMBLYMAN MEEKS:Okay. Thank you.

DOH COMMISSIONER McDONALD: You're welcome.

CHAIRMAN PRETLOW:Is that it?

I guess I'll take a couple of minutes since we're winding this down.

Dr. McDonald, I know we're living in an Orwellian world -- and 1984 was a book I found fascinating in the time period. But with regard to durable medical devices, we're reimbursing people at a rate -- as a percentage of 1984 reimbursement rates, which is 41 years ago.

And when you're talking about wheelchairs that cost several thousand dollars, you're talking about items that are expensive but the people that are manufacturing them are going out of business rapidly right now. I know that we do have legislation that was introduced by someone that you know fairly well to update the period that we're using for reimbursement.

But to take a percentage of a 41-year-old rate and give that to a manufacturer I think is obscene, to use a light word.

Is there any attempt on the part of the department to update these dates?

MEDICAID DIRECTOR BASSIRI:Thank you for the question. I'm assuming you're talking about Medicaid reimbursement for durable medical equipment.

We are not benchmarking to anything from 1984. We benchmark to Medicare reimbursement, and there's actually a rolling process by which DME suppliers and providers can appeal any reimbursement rate during the year, and we will update it as appropriate.

We are making investments into areas of DME like orthotics, prosthetics. We have a State of the State initiative to increase and improve our policies for wheelchair and other repairs, to make it easier for persons with physical disabilities to go through the prior-approval process.

So we have taken steps. We're very interested in doing more, and willing to do more and address some of the inconsistencies --

CHAIRMAN PRETLOW:It's interesting you mention prosthetics, because my understanding is that the department has consolidated everything down to a company called Integra. And companies that manufacture prosthetics have to go through Integra, they pay a fee for that. Then when the states pays Integra, the operators of the -- the people that made the prosthetics get -- I believe it's marked down 30 percent lower than the Medicaid rate.

Now, you know, growing up, I grew up in the theater, I saw the movie Captain Hook on Broadway. And it was like a hook. If we're using the rates that the state is reimbursing the manufacturers of these devices, we're going to be in the Dark Ages when it comes to prosthetics. We don't do just a hook anymore or a wooden leg --

MEDICAID DIRECTOR BASSIRI:Yeah. I understand now, you're referring to --

(Overtalk.)

CHAIRMAN PRETLOW:-- lace it up, actually operate titanium, expensive stuff. And it's not being reimbursed properly by the state.

MEDICAID DIRECTOR BASSIRI:Well, actually it is being -- well, I don't want to say properly. That is reimbursement from the managed-care plans for durable medical equipment.

There is no -- what you're describing and the company or entity you referenced is an intermediary that a health plan uses on DME. It's like the PBMs for durable medical equipment. So I would ask that question to the health plan associations later on in today's hearing.

CHAIRMAN PRETLOW:See, this scares me, because we're talking about doing the same thing with home care. And if the -- if people are using this third-party entity to pay the bills and now we're going to do the same thing with home care, will I get the same complaints from individuals that they're being reimbursed at 30 percent of an ancient reimbursement rate?

MEDICAID DIRECTOR BASSIRI:No. I mean, with home care there's 600 middlemen today; we're moving to one with full accountability, audit and transparency. So you'll get your answers if there are any issues, I assure you of that.

CHAIRMAN PRETLOW:Okay. And just another -- since we're living in the past here, community health centers are being paid based on costs from 1999. Knowing that community health centers are the only choices for many New Yorkers that receive preventive or primary care, when do you plan to update the year that these Medicaid rates are based on?

MEDICAID DIRECTOR BASSIRI:So we've been looking into that, and it's not actually possible in the way that you're describing it. There is no way, quote, unquote, to rebase community health center rates.

What we can do is pursue alternative payment methodologies to increase funding for those health centers. And I think the Governor's budget includes an investment for clinics and health centers, and we're very interested in finding more ways to support them, given the federal situation and some of the other pressures that they're facing.

CHAIRMAN PRETLOW:Well, I think they're going to be in dire straits based on what I'm seeing coming out of Washington right now. And there has to be some way that we can update them, because they do supply -- or provide, I should say, a large percentage of the healthcare to several communities in the State of New York.

Thank you.

Commissioner Harris, I just have one quick question for you. I've already run this past you, and I'm going to beat it to death if I have to.

Insurance companies pay in excess of $2 billion per annum on advertising. It's a known fact that less than 10 percent of people ever change their auto insurance, so these are billions of dollars that are being spent, in my eyes, unnecessarily.

I also know that insurance rates are based on profit, premiums less whatever the expenses are. And if we reduce the expenses of these insurance companies by over $2 billion, would that have a positive effect on rates, which is to lower those rates?

DFS SUPERINTENDENT HARRIS:Thank you so much for the question. I think it's an important thing. And as you and I have discussed, we're happy to look further into it.

I would say we do see risk continuing to increase as -- when I was chatting with your colleague earlier we talked about the cost of parts going up, the cost of labor has gone up, there's a lot of evidence to suggest that people are becoming increasingly worse drivers, so that there's more frequent accidents and more severe accidents.

So I think making sure we're looking at expenses, whether it be advertising or other administrative costs, might help mitigate cost increases. I want to be careful not to suggest that it might result in a net decrease to premiums.

CHAIRMAN PRETLOW:All right, thank you.

Senator?

CHAIRWOMAN KRUEGER:Thank you.

Three minutes, second up for Gustavo Rivera, chair.

SENATOR RIVERA:I'm back!

All right, I'll be quick, since I have a couple of things that I want to get to.

First, just again for the record, talked about it plenty, global cap, bad idea, old metric, we should get rid of it. You folks decide what's going to be under it, not under it every year. It's an old metric. We should get rid of it. I have a bill to do just that. But it would be great if you all didn't bring it up. Just number one.

Number two, on the MCO tax, I'm just going to say for the record I'm very, very, very thankful for all your efforts to get them approved before the last administration went away. That is a good thing.

There is however, one thing I wanted to point out. So currently, as far as what's going to be invested, 10 million of it goes to federal qualified health centers, 500 million of it goes to general budgetary relief. It would be my very respectful suggestion that of that 500, maybe a little bit more could come through FQHCs, considering these are -- they are incredibly essential in places around the state that are very much in need. So there's that.

Number three -- this one is a question. So EIs, on Early Intervention -- a couple of folks have asked about it. So last year there was an agreed-upon increase of 5 percent that was supposed to go into effect on April 1st, but it was not submitted by the state to the feds until December 31st. So we're going to see potentially a delay here? Tell me a little bit about what's happening there.

DOH COMMISSIONER McDONALD: So the State Plan Amendment was submitted December 31st. When it's approved, we'll be able to pay people retroactive to October 1st.

The State Plan Amendment -- you know, we did everything we could. You know, we were ready to submit it on time, but we had to find the savings that were included in last year's budget. When we couldn't find it, Division of Budget just gave us permission to submit the State Plan Amendment because they knew it was so important. That's what happened.

SENATOR RIVERA:I'm going to definitely follow up on that one since that is -- it's essential that these folks get the --

(Overtalk.)

DOH COMMISSIONER McDONALD: Please do. No, no, great.

SENATOR RIVERA:-- that big lag could kill some of them as far as providers are concerned.

Two more quick things. As far as -- many of my colleagues have expressed concerns about CDPAP. Can you tell me how many workers there are? We've been talking about consumers. Can you tell me about how many workers are in the program?

MEDICAID DIRECTOR BASSIRI:So we don't have all that data, but we believe that there's between 200,000 to 300,000 workers. Some are licensed agency workers that are going back to LHCSAs, so --

SENATOR RIVERA:Between 200,000 and 300,000. It makes sense at least -- if there's 280,000 consumers, it would make sense that at least one per. So there's at least 280,000, probably more. Because in certain instances there are certain folks who have more than one person taking care of them.

So I would say that is -- so that's a concern that we all have, right, because we not only have to -- certainly the people that are making the transition are the consumers, but the workers are the ones that are going to provide the services. So we've got to make sure that they transition over.

And I'm sad to say that at least from what we've heard here -- I don't know about anybody else, but the fears have not been assuaged. I have not -- I don't think it's sufficient what we heard today.

So, last thing, to end on a positive note, nice red velvet jacket, sir. It's a nice one.

(Laughter.)

DOH COMMISSIONER McDONALD: Seventy percent off at Macy's.

(Laughter.)

SENATOR RIVERA:I'm good, Madam Chair.

CHAIRMAN PRETLOW:Thank you, Senator.

Assemblywoman Paulin for her three minutes of follow-up.

ASSEMBLYWOMAN PAULIN:Thank you so much.

First just some comments from hearing from my colleagues.

CDPAP, we encourage you to please come to us way before -- or before the April 1st deadline, because we here feel pretty convinced that that's not going to be fulfilled.

Two, on MIF, I share my colleague Senator Krueger's comments and Assemblyman Slater's comments. I worry that without a plan in place that we're going to see closure and we do not want to see that. So if the intent is to go forward with a plan, we should have that plan prior to shutting people down, especially people in the middle of the process.

Three, school-based health centers. I point you to the Connecticut study that was done just recently which showed that managed care -- that actually fee-for-service is cheaper than managed care. So if the goal of the school-based health centers is money, I point you to that analysis.

Two, on that same point -- and to a point you made, Commissioner, which is on dental care -- I share your passion. I carry those bills for increased services for people across the state by allowing dental hygienists to do more.

I really am concerned with school-based health centers and the -- the -- I'm not going to say the threat, but the concern that the providers particularly of dental health have, that they won't be able to continue serving. They are not -- they are contracted separately, and we really have to be sure that dental health is taken care of, in addition to not burdening the school-based health centers.

Now, a couple of follow-up questions if I have time. Not really. I will ask one.

The HERDS data that was collected during the pandemic -- it's been now five years since the onset of the pandemic. We know about the workforce shortage. Why are we still collecting that data? What is it being used for?

DOH COMMISSIONER McDONALD: We're going to move towards weekly surveys instead of daily surveys. And we're moving in the next couple of weeks to do that.

You asked what it's used for. It's to monitor hospital capacity. Where we're at a point, though, is I don't think we need to look at it every day anymore. I know it's a burden on the hospitals, so we're moving to weekly. I need to get some information on this.

ASSEMBLYWOMAN PAULIN:Thank you. I know I don't have time, but I'm going to let you know my question is to give follow-up and tell me later.

Adult daycare health programs. Again, they were shut down during COVID. Only 60 of the 120 have come back. And we know that what will happen is these individuals go into nursing homes. What is the plan?

CHAIRWOMAN KRUEGER:Thank you.

I think I'm your last three minutes. You're almost escaping.

So in the Governor's Budget Briefing Book, she said that she would include funding for DOH to complete a comprehensive review of New York's network adequacy requirements. But I don't find the funding line in the actual budget, and it seems to me, one, this is crucial. But two, you need staff to do this and you need a budget line.

So what is your understanding?

DOH COMMISSIONER McDONALD: So we're doing that through New York State of Health. And it will be covered through New York State of Health, is my understanding of that. And we just did our network adequacy regulations. That's where we're going with that. Because I think this is a very important issue.

I can't speak to a budget line that's not in there. Sometimes with New York State of Health things are in there and it's just not obvious.

CHAIRWOMAN KRUEGER:Okay. So you said you already did some kind of evaluation?

DOH COMMISSIONER McDONALD: We did -- network adequacy regulations were just promulgated. Literally, I signed them last week. I think it was -- today is Wednesday? I think I signed it last Thursday.

But as far as network adequacy study, that's being done by the New York State of Health. It is in the budget. But the money in there is federal money, so it's in the New York State of Health budget.

CHAIRWOMAN KRUEGER:Okay. So we will certainly look at the regulations. I just want to emphasize for the record people constantly call my office saying "My network lists all these doctors. I reach out, none of them are taking new patients. None of the specialists actually think they're in the network and are surprised to hear that the network is listing them."

So I hope that these regulations clarify what the rules of the road need to be, because doctors that don't take new patients aren't particularly useful. And doctors that don't even know they're in the system really don't help us.

DOH COMMISSIONER McDONALD: You're right. Yup.

DFS SUPERINTENDENT HARRIS:And I would just -- I can't speak to the providers, but we do have, as part of the regulation, requirements for accuracy in the directories. And if those directories are not accurate, the insurers have to hold the consumer harmless.

CHAIRWOMAN KRUEGER:Good. So I look forward to working with both of your agencies to make sure this is what it's supposed to be.

And with that, I think we're actually allowing you to leave.

CHAIRMAN PRETLOW:No, I have one more.

(Audience reaction.)

CHAIRWOMAN KRUEGER:Wait, wait, wait. Who snuck in?

CHAIRMAN PRETLOW:We don't want to just rush out. It's only been three and a half, four hours.

(Laughter.)

CHAIRMAN PRETLOW:David Weprin, for his follow-up three minutes.

CHAIRWOMAN KRUEGER:Sorry. Sorry.

CHAIRMAN PRETLOW:That's okay.

ASSEMBLYMAN WEPRIN:For Commissioner McDonald. You know, this house -- the Assembly and the Legislature in general have always been strong supporters of Early Intervention. And I know we had had discussions about a 4 percent enhancement on Early Intervention. Is there a plan for that? And is that going to happen?

DOH COMMISSIONER McDONALD: So Early Intervention has a 5 percent increase plus a 4 percent rural modifier. Early Intervention is incredibly important. It's a very cost-effective program. And, you know, it -- so that's what's going to happen.

And we have to wait for the Centers for Medicaid & Medicare Services to approve the State Plan Amendment, which we submitted December 31, 2024. But the money will be retroactive to October 1st.

ASSEMBLYMAN WEPRIN:Okay. I strongly support that.

DOH COMMISSIONER McDONALD: Good. I do too. Thank you.

ASSEMBLYMAN WEPRIN:Thank you.

CHAIRWOMAN KRUEGER:Okay? Good. Now we will actually let you leave. But as you're walking out, everyone, let them go.

(Laughter.)

CHAIRWOMAN KRUEGER:They need to have personal moments. And we need to not have conversations here because we have a whole afternoon's worth of additional people. So you move on through. Legislators, leave them alone.

And the next panel, come on up, which is -- and thank you all. So now we have HANYS; 1199SEIU; 32BJ Benefit Fund; New York State Nurses Association; and the Greater New York Hospital Association.

Let's make sure we have enough chairs for five testifiers. I think we're going to need an extra -- thank you, Ian. All right.

(Pause, off the record.)

CHAIRWOMAN KRUEGER:Why don't we start. First what you do is you introduce yourself -- you just go down. That's so that the tech guys know what name to put up when you're actually testifying. So if you'd just run down the line first.

Thank you.

MS. GRAUSE:Sure.

CHAIRWOMAN KRUEGER:And you have to press the button till it turns green. There's like a sweet spot right above the word "PUSH."

MS. GRAUSE:Good afternoon. My name is Bea Grause, from HANYS.

MR. BELL:Leon Bell, policy director at the New York State Nurses Association.

MS. OPSAHL:Cora Opsahl, 32BJ Health Fund.

MS. SCHAUB:Helen Schaub, 1199SEIU.

MR. RASKE:Ken Raske, Greater New York Hospital Association.

CHAIRWOMAN KRUEGER:Great. Welcome.

Shall we just continue in that order, is that okay?

MS. GRAUSE:Sure.

CHAIRWOMAN KRUEGER:Great. And you each have three minutes, so you know to summarize.

MS. GRAUSE:Yes.

CHAIRWOMAN KRUEGER:Thank you.

MS. GRAUSE:All right, thank you.

Good afternoon, Chairs Krueger, Pretlow, Rivera, and Paulin, and committee members. As I said before, I'm Bea Grause, president of the Healthcare Association of New York State, representing nonprofit and public hospitals, health systems and post-acute providers across New York. Thank you for this opportunity to testify on the '25-'26 Executive Budget.

The testimony and discussion at today's hearing has made us all keenly aware of the unprecedented and unpredictable immediate threats that could destabilize or even dismantle New York's healthcare system. Whether through executive order or by action of Congress, New York faces the very real possibility of significantly reduced or eliminated federal funding this year.

Access to care is created and preserved through federal and state funding. Our hospitals and health systems across New York are working diligently to navigate this world of uncertainty as they deliver care to individual patients and preserve care to patients in their community.

Keeping our hospitals and nursing homes open and capable of serving New York's communities isn't just an immediate challenge -- it's also a major concern for the weeks, months, and years ahead.

For example, by 2030, in New York we will have 860,000 more senior citizens than we did in 2020. So from 2020 to 2030. Their care needs are fueling increasing and changing patient demand across all care settings.

We have a workforce gap, as you talked about earlier, that New York must close to meet that demand. And meanwhile, millions of New Yorkers still don't have equitable access to care in their communities.

And lastly, affordability for government, businesses, providers and individuals remains a core issue. We fully support the Governor's decision to leverage the revenue from the approved tax on managed care organizations to provide additional federal Medicaid funding. But as important as the funding, we also strongly support Governor Hochul's strategic healthcare framework. This framework calls for sustained investment, workforce support, innovative care models, and other proposals designed to preserve access to care and, over time, bend the cost curve by making the delivery of healthcare less costly.

One important example within the strategic framework is the proposal to continue and expand the Safety Net Transformation Program, a multiyear program created in last year's budget that offers both capital and operational assistance to help support and transform safety net facilities.

This proposal is designed with an eye toward innovation, access and affordability. I urge you to support and build on it.

CHAIRWOMAN KRUEGER:Thank you.

MS. GRAUSE:Thank you.

CHAIRWOMAN KRUEGER:Next?

MR. BELL:Thank you for the opportunity to speak to you today. My name is Leon Bell. I'm policy director at the New York State Nurses Association.

NYSNA's strongly supportive of and is heartened to see the proposals in the budget that would affect increased coverage, increased benefits for New Yorkers. We favor a single-payer health system, so anything that gets us closer to that goal, we are supportive of.

We also welcome the increased support for safety-net providers. But we would urge that you use the full funding created by the MCO tax and revoke some of the cutbacks in other safety-net funding areas in order to actually get that money to safety nets, to the hospitals, increasing reimbursement rates across the board, and other measures to make sure that our providers continue to operate.

We support the proposals, various proposals in the budget that would increase the regulation and oversight of business practices of insurers, PBMs, and providers. We're particularly concerned by some of the abuses with for-profit providers, the PBM industry, and even some large hospital systems which seem to be more concerned with their bottom lines than providing care to patients.

We are concerned, however, that the budget does not effectively address the staffing crisis that we're seeing in our hospitals and nursing homes, and it does not take steps to stabilize the workforce that we have, particularly the RN workforce. It is our view that the staffing crisis is primarily driven by poor working conditions and inadequate pay and benefits that are driving nurses out of the workforce or toward less stressful jobs away from patient care.

And Commissioner McDonald recognized that. He noted, for example, that out of the 305,000 licensed nurse RNs that we had in 2018, New York State now has 453,000 licensed RNs, roughly a 50 percent increase between 2018 and 2025. But the workforce has remained relatively stagnant. According to BLS statistics, it's only gone up from 182,000 to 190,000 in 2023.

To us, that indicates that the issue is working conditions and not a need to get more licensed nurses or more nurses into the workforce. The problem is that we are getting them but then they're not staying.

So we would urge -- on that issue we would urge very strongly that you consider rejecting the interstate compact. That's not going to do anything but get us more expensive agency nurses. It's going to get us cross-state telehealth provided by, you know, corporations in low-wage states, and it's also going to continue to disrupt and undermine the existing nursing workforce.

And I can answer any questions about that issue if you have any.

CHAIRWOMAN KRUEGER:Thank you.

MS. OPSAHL:Thank you for the opportunity to testify on healthcare affordability issues that impact the Executive Budget.

My name is Cora Opsahl, and I'm here representing the 32BJ Health Fund, one of the largest self-insured funds in New York State. 32BJ Health Fund provides health benefits to over 200,000 32BJ union members and their families.

Today we want to note our support for several Executive Budget proposals that will create greater healthcare affordability and accountability for our participants, and encourage the Legislature to support the Fair Pricing Act, sponsored by Senator Krueger and Assemblymember Jackson.

We support the Executive Budget proposals to bolster the Department of Health's provider material transaction review process, and enhance hospital community benefit reporting requirements. Enhancing hospital merger and transaction oversight is particularly critical to maintaining a competitive and affordable healthcare market for our members.

New York State's hospital marketplace is becoming increasingly consolidated through multi-hospital system acquisitions and mergers, which in turn drives up prices of care. Since 2004, the cost of health benefits for our participants has increased from 17 percent of total compensation to 37 percent. Wages have risen 54 percent, while healthcare costs have gone up 230 percent.

As a self-funded plan, the price of health services directly impacts our budget and our ability to keep costs low for our members. While many factors drive the rising cost of healthcare, our data and that of others consistently points to one overwhelming contributor, rising hospital prices. Most recently, rising healthcare costs are being driven by shifting services and increasing prices in the hospital outpatient system.

In 2016, about 30 percent of non-emergency CT scans occurred in the hospital outpatient department. By 2022, over 40 percent occurred in the hospital outpatient department. This is worrisome because the average price we pay for a CT scan in the hospital setting is almost double that in a provider's or doctor's office.

This is why we urge the Legislature to support the Fair Pricing Act. This proposal seeks to establish a price cap on routine, low-complexity healthcare services so that prices more closely mirror those of lower-cost settings. A study released this morning by health economists at Brown University shows that this policy could save $1.1 billion each year in New York State, with up to 213 million in savings directly to patients through lower out-of-pocket expenses.

You've heard testimony today about hospitals being underfunded by public payors. This is especially true for many safety-net hospitals who do not charge the high prices of other consolidated hospital systems. They would be exempt from the Fair Pricing Act.

However, there's another side of our healthcare system that has an enormous impact on affordability for patients and plan sponsors.

I'm happy to take questions.

CHAIRWOMAN KRUEGER:Thank you.

MS. SCHAUB:Good afternoon. Thank you so much for this opportunity to testify. I think rather than repeat points that other folks have made that are contained in our written testimony, I'll just try to make a couple of points.

One, you know, the federal threats that Bea mentioned that other people have testified about are very, very real. They are particularly real to New York State because some of the proposals on the table, which, you know, I just like to flag, you know, the target of saving over 2 trillion dollars from Medicaid is 30 percent of Medicaid spending projected over the next 10 years. So if they get anywhere close to that number, that is a very dramatic cut to our state in particular, depending on which of their proposals they look at.

It is a very real threat. But we also think we have a very real ability, particularly to call on our New York State representatives to stand up for our state, to stand up for the people who depend on Medicaid, and to find the savings either not at all or elsewhere in order to preserve the healthcare that people so need in our state, whether it's home care, whether it's clinics, whether it's nursing home care or hospital care.

So it's a real threat. We have a real ability, all of us as New Yorkers, regardless of political party, to stand up and protect our Medicaid program. I would urge everybody to do that, because this debate is engaged right now in Washington. There's going to be a markup on Thursday that will start to tell us what's happening with those very, very large targets.

In terms of New York State, the state is actually in a pretty decent financial position, as is evidenced by the Governor's budget, and we're very pleased that we're starting where we're starting, with continuing last year's investments.

A couple of things to flag. One, you know, we believe all of the money that comes from the MCO tax ought to be invested in healthcare. Taking money off the top for the General Fund does not make sense. In particular, you know, the Legislature has wisely added 500 million each year for safety nets in the last three years. That is not optional money. That is not cream on the top. That is money that those hospitals desperately need to stay open, and that should be in the final budget.

We also need to make sure there's sufficient resources particularly for the lowest-rate nursing homes. We've seen significant closures, particularly upstate, that are impacting people's ability to access high-quality care.

We want to keep our North Star, closing the Medicaid gap, recognizing Medicaid has to pay the cost of care if we're going to have a fair equitable system that allows people to access care. This budget continues that progress, but we need to keep moving it as we fight the fights in Washington.

Thank you.

CHAIRWOMAN KRUEGER:Thank you.

MR. RASKE:Good afternoon, Madam Chairman. Ken Raske here.

I want to first thank this legislative body and also my colleague to my left from 1199SEIU for listening to the pleas that we made last year before you that was echoed in the Healthcare Justice Campaign, which was aimed at reducing healthcare disparities in communities of color and, at the same time, looked at the origin of the significant underpayment of the Medicaid program, to the tune of about 30 percent.

So thank you very much, and thank you, my colleague Helen at 1199, for engaging in that massive effort.

The Governor's budget heard this. The Governor has responded. We're very thankful to her budget and the proposals that are in it. We too, like Helen, want to add to it, because we think there's some areas of deficit. And we will bring those to your attention as we go on.

The need of the hospitals throughout the state are pretty obvious. Three out of five are losing money. They're old, antiquated plants to the tune of about 27 below the national average, and we still are darn near the bottom of financial performance in the United States. Not what you would consider a good record.

And, you know, this budget needs to correct some of those problems and begin the trajectory for recovery. And I believe, with your assistance, and with the guidance of the executive branch, we can achieve that.

But let's be clear. We have a clear and present danger, and it's in Washington. Yesterday the Greater New York Hospital Association joined with the AAMC, which is the American Association of Medical Colleges, as well as our colleagues in Boston, and filed suit in federal district against the National Institutes of Health for taking -- listen to this number -- $850 million out of research institutions in New York State, 9 billion across the United States.

This was just yesterday. Could you imagine what's going to happen when we get to Medicare and Medicaid? Okay?

So I need your help again. I need Republicans, I need Democrats, I need you all to work with us to fend off this problem. I have an issue with 32BJ on this Fair Pricing Act. We'll hear more about that in a minute. But my fight is in Washington, it ain't here. And let's go at the root cause of this problem.

So that, ladies and gentlemen, is my plea to you. You heard us last year. Let's all get on a train and head south, because that's where we need to be.

Thank you.

CHAIRWOMAN KRUEGER:Thank you very much.

Our first questioner is Gustavo -- no, not Gustavo Rivera.

SENATOR RIVERA:Never first.

CHAIRWOMAN KRUEGER:Never first.

Any other Senator? Senator Gonzalez asked me for a turn.

Senator Gonzalez.

SENATOR GONZALEZ:Thank you. Thank you so much, Chairwoman.

And thank you all so much for being here today. I am Kristen Gonzalez, I'm the State Senator for District 59. I represent NYU Langone.

And to your point, President Raske, we certainly feel the threat from the federal government. So today my questions are for you.

You stated in a Crain's article that Greater New York Hospital Association's immigration enforcement tool kit distributed to member hospitals offers no advice on whether hospitals should comply with immigration enforcement procedures.

Does not giving this guidance place patients in danger or make people less likely to seek care?

MR. RASKE:Forgive me, because I'm not being disrespectful, it was just -- there was a couple of moments I didn't hear.

On the immigration guidance, we have a total tool-book which is given to the hospitals which is intended to be customized at each institution as to how they handle the questions and problems presented by ICE officials. And it is not a code of conformity, it is just a bunch of assembled ideas that came out of the field to say how best to handle it.

We -- in the hospital community, we --

SENATOR GONZALEZ:All right. And just for the sake of time -- I don't mean to interrupt, but I want to clarify even if it is not a one-size-fits-all, the general guidance so far has nothing in it about whether or not to comply with Immigration and Customs Enforcement.

And so the question is, if you aren't at least providing a baseline of guidance that can or cannot be adopted across the hospitals in your network, are you -- do you think that will make people feel less safe when they go to one of your member hospitals?

MS. SCHAUB:Senator, if I may, we actually looked at the guidance. It was shared with us by the Hospital Association because we wanted to train our members about how to deal with this situation.

I think everybody is very clear, healthcare workers want to provide healthcare, do not want any interruption in that, and certainly do not want to be in the position of, you know, having that care interrupted by immigration enforcement.

The guidance outlines legally what the hospitals are required to comply with, which is a very narrow situation, right, where there is a judicial warrant specifically naming both the hospital and the individual.

So the guidance as I've seen it, shared by the Hospital Association, which we use to help train our members, does indicate that is the only situation in which there's a legal requirement to comply and then outlines all the other things that a hospital can do to set up a procedure.

MR. RASKE:We make it quite clear, Helen, in there that it has to be signed by a judge. And that is about as clear as you're going to get.

SENATOR GONZALEZ:We can continue the conversation offline. Thank you.

CHAIRWOMAN KRUEGER:Thank you, Senator.

CHAIRMAN PRETLOW:Assemblyman Jensen.

ASSEMBLYMAN JENSEN:Thank you very much, Chairman Pretlow.

As somebody from Rochester, I'm going to direct this question to Bea.

We heard a few minutes ago from the representative from 32BJ, who talked about a proposal that would cap hospital outpatient reimbursement. And there's a savings attached to that of $1.3 billion. Wouldn't that savings be coming from other providers? And how would that affect hospitals, especially upstate hospitals or safety-net hospitals?

MS. GRAUSE:Sure, thank you, Assemblyman.

Yes, the 32BJ bill is essentially a price cap. We would -- which New York has tried before and it failed. The 1.1 billion I think in the article today that was cited in terms of savings that would occur would come directly from hospitals. And so the savings to the 32BJ -- or to self-insured health funds would come from hospitals. And that, of course, would destabilize hospitals, as Ken said, three out of four hospitals in New York have a zero -- have an unsustainable margin.

And so capping the reimbursement that is coming from outpatient procedures -- which, as the commissioner said this morning, more and more care is happening in the outpatient side -- would be a direct cut to hospitals.

ASSEMBLYMAN JENSEN:So when we're talking about the access to care, how much of that is influenced by the throughput issues that hospitals are facing, especially for hospitals where you have nursing homes that have had to take beds offline due to staffing concerns?

MS. GRAUSE:Sure. The whole issue around throughput, which is how a patient enters a healthcare system and then enters a hospital and moves out of a hospital, is influenced by a number of factors, but it does require that there's both pre-hospital care and post-hospital care. So having access to nursing homes so that a patient can be admitted, then if appropriate, discharged to a nursing home, is an important factor as well.

And so that ties into adequate reimbursement for nursing homes so that they can hire enough healthcare workers to maintain that capacity.

ASSEMBLYMAN JENSEN:I asked the commissioner this morning about the Healthcare Transformation capital funding. How important is that funding to go out the door in an efficient and effective manner so that systems can prepare not just for the projects that they've already applied for, but looking to meet the needs of their community around them?

MS. GRAUSE:Well, I think it's critically important. Healthcare planning is a multiyear process, so it takes a number of years to build a plan and execute a plan. So I think securing that funding is a critical component in moving those projects along.

ASSEMBLYMAN JENSEN:Thank you.

And thank you all for your testimonies today.

CHAIRWOMAN KRUEGER:Thank you.

Senator Webb.

SENATOR WEBB:Good afternoon. Thank you all so much for being here.

Earlier we were asking Commissioner McDonald with regards to the CDPAP program, and I know 1199SEIU is working on that. As we continue this conversation around improving more equitable access to quality and affordable healthcare, what are some of the things that you are seeing with regards to challenges that people may be experiencing with this rollout?

I know I've spoken with constituents who -- my region was one of the first regions that was a part of the rollout, and I consistently get calls that it's very difficult to navigate the system. And while I know Senator Rivera had mentioned this earlier, that we recognize that there has to be more of a concerted effort on this program, and at the same time we recognize that there are bad actors who have also created more disparities.

So I was hoping if you could lift that up a little bit more. Thank you.

MS. SCHAUB:Thank you.

Here's what I would say. We think the Legislature made the right decision last year to seek savings in this program by reducing administrative costs, excess administrative costs and profit, rather than changing eligibility for the program, rather than cutting wages for workers in the program -- both of which were on the table, if people recall, at the beginning of the budget process.

You decided, we're not going to change eligibility, we're not going to cut wages, we are going to figure out how to drive more money down to the folks who benefit from this program and the people that serve them. We believe that was the right decision.

We also understand that making a change of this magnitude is very challenging, as there's been a lot of highlights of today. We would call ourselves Team Make It Work, to figure out how to do that. The April 1st deadline, I think as you know, is in statute. Right? In order to push that, the statute has to be changed, and I think that's a conversation you all may be engaged in.

In the meantime, I think what we're trying to do as much as we can when we're communicating with workers and other folks, is to make sure people have the correct information, make sure they're connected, flagging issues if they have difficulty being connected. And I really think it's incumbent upon all of us, whether we're an elected official or a community organization, to make sure people have the right information to do the warm handoff, to do a three-way call, to help people navigate the system.

I think it both makes sure people have the access, they're as set up as they can be on April 1st, but also the more people that do that, the more any problems will be flagged. Right? If your office is, you know, doing a three-way call to connect somebody and then you see there's an issue, you are able to know what that issue is and escalate it. We're trying to do that same thing.

I think we all got to help people make sure that they get access through this new system, and then use that process to flag any issues and escalate them.

SENATOR WEBB:Thank you.

CHAIRMAN PRETLOW:Thank you.

Assemblyman Ra.

ASSEMBLYMAN RA:Thank you.

So I just had a few questions, I think in particular for HANYS.

So the Executive Budget is proposing to require hospitals to report a significant number of data points to the department that reflect their community benefit spending. I know there's currently federal requirements to the IRS. So is this duplicative? Is it going to increase a -- you know, a burden on the institutions to report this to the State DOH?

MS. GRAUSE:Yes, thank you, Assemblymember.

Yes, it is duplicative. We don't support it. It's the -- those are the exact same data points that are required to the IRS, so we don't think it's necessary.

ASSEMBLYMAN RA:And then the -- I was looking through your testimony and you actually have this very helpful chart of different items, including --

MS. GRAUSE:We try to be helpful.

ASSEMBLYMAN RA:-- including the Empire Clinical Research Investigator Program and that proposed cut. You know, I know a lot of the programs involved in this are -- you know, do very important work. This dates back over 20 years and, you know, trains physicians in clinical research to advance biomedical research in the State of New York.

And last year the Legislature was successful in restoring funding. Any sense of why we're back here again with this being cut?

MS. GRAUSE:I'm sorry, I did not hear the name of the program.

ASSEMBLYMAN RA:The Empire Clinical Research Investigator Program.

MS. GRAUSE:I don't have any insight as to why the program would be cut, but we certainly support continued research.

ASSEMBLYMAN RA:And I know it came up, obviously, earlier talking about some federal issues, but I think it dovetails back into the importance of these type of research programs that we do fund in small ways in New York State. You know, obviously this is -- when you think about our healthcare spending, $3.45 million is not a lot of money to have to see a cut with it.

MS. GRAUSE:Right. Well, I think it's important to remember that the medical advances are always happening. And I think New Yorkers and, frankly, the American people want medical advances to continue to happen. And that takes years and research leadership and investment in both the clinical and in developing our workforce, training our workforce, as well as developing medical advances.

So I think it's penny-wise and pound-foolish to cut that funding. In fact, I think we should be increasing it.

ASSEMBLYMAN RA:And really quickly, 1199, do you share our concerns with that April 1st date and getting CDPAP completely transitioned over from the side of the workers?

MS. SCHAUB:Yes, I think we -- you know, we made recommendations to the state back in the summer about how to do a thoughtful transition. It included a longer time frame. We're certainly for anything that can make sure that everybody gets to where they need to go and that there's no fear or disruption of services.

ASSEMBLYMAN RA:Thank you.

CHAIRWOMAN KRUEGER:Okay, thank you.

I'm going to go next. Thank you all.

So I don't disagree when some of you highlight that the real crisis is at the federal level. I think we all know the real crisis is at the federal level, and we don't know what's coming next.

But because we don't know what's coming next, other than pretty much a guarantee of cuts across the board in everything we care about, what are each of you recommending to help New York State move forward with an expansion of primary care? Because we all know if we don't have primary care, you have more patients in your hospitals. And no disrespect, we don't want more patients in our hospitals, we don't want them to get sick.

So what would each of you recommend we focus on to increase primary care and fewer New Yorkers getting sick when we can't even count on federal money coming forward to help us with truly sick people?

MR. BELL:You want left to right or right to left?

CHAIRWOMAN KRUEGER:Any of you.

MR. RASKE:Senator, that's a great question.

We will begin by saying that the healthcare community is dedicated to eliminating the large number of disparities that exist within populations across the state -- a lot of which would be generated by the lack of primary care, which is I think getting to your point. And therefore it shows the dire need for an investment to be made.

Here's the dilemma that we're in. The dilemma is -- is because of the significant underpayments that exist within Medicaid primarily, and Medicare to a secondary sense. Because of that, there is no elasticity of investment wherewithal to be made by these institutions in these communities. They could be rural communities, they could be inner-city communities. It doesn't make any difference. But that lack of resilience is the problem.

It is that lack of resilience which forces hospitals to charge the commercial payors more to offset it. The beef that 32BJ has isn't with the hospitals, it's with the underpayments, because that is the driver. The root cause of that is the underpayments. That is the root cause of the lack of investment as well.

That is my opinion, Senator.

CHAIRWOMAN KRUEGER:Someone else?

MS. SCHAUB:Can I just -- I do think it's important to note the role of clinics, whether it's a hospital-based clinic or whether it's a federally qualified health clinic, in serving people, particularly who are underinsured or have Medicaid.

You know, many of the private primary practices around the state do not serve Medicaid patients, for example, and certainly do not serve people who are uninsured. So we do have to look at the health of those institutions, again, whether hospital-based or FQHCs, and make sure they're adequately reimbursed.

CHAIRWOMAN KRUEGER:So my time is up. At another time we can all talk about why I actually agree with 32BJ and am carrying that bill. But I think we have that on schedule as well.

CHAIRMAN PRETLOW:Thank you, Senator.

CHAIRWOMAN KRUEGER:Thank you.

CHAIRMAN PRETLOW:Assemblywoman Paulin.

ASSEMBLYWOMAN PAULIN:Thank you so much.

A question for Helen. You know, I know that you've been monitoring the CDPAP program very closely and having conversations with PPL to ensure the transition. And I heard you're open to potential change.

You know, what do you think that timeline for that possible postponement should look like? And what type of postponement are you supportive of?

MS. SCHAUB:So again, you know, I think, as I said, we believe you all made the right decision. You know, we think the current system is not sustainable. You know, having that many intermediaries, many of whom undertake questionable practices, whether it's wage theft, whether it's the million-dollar salaries, all of those things, that's not a good use of our Medicaid dollars.

Having one accountable institution is, we think -- makes a lot more sense. So we're supportive of the transition, but we want to make sure everybody gets there. I think we had originally said we thought a full transition could look like 18 months. I think it, you know, depending on how much progress has been made by this point, that could certainly be a shorter time frame.

But again, it's a statutory deadline, right? So it's up to the Legislature and the Governor to agree to move that deadline, and I think doing it in a way that keeps the transition on track but gives adequate time to get people there is certainly something that we would be supportive of and would make sense to us.

MR. RASKE:Chairman Paulin, could I add?

ASSEMBLYWOMAN PAULIN:Absolutely.

MR. RASKE:Okay, thank you.

I did an editorial the other day in the Albany Times Union which really speaks to the explosive growth of CDPAP -- 500 percent in a short period of time versus the overall growth of Medicaid at 46 percent. That's a pretty wicked difference. And what that does, that's going to crowd out the spending from the rest of the Medicaid program at that rate.

So something needs to be done. I think what you've done is you've set a course to try to put your arms around it. And we'll have to see if that works. But I think it's a course that needs to be followed through with. I think between you and the executive branch, you have done as much as you possibly can. Because we certainly in the hospital community support home health care. We need it. But we don't need it to crowd out everything else.

So let's see if this works, and let's give it a try in the next year or so, and then talk about it as we go forward.

ASSEMBLYWOMAN PAULIN:Thank you.

Back to the postponement date a little bit. It sounds like if we were going to postpone, the advice that we're hearing is that we should do it prior to the end of the budget process, because otherwise that transition will be problematic. Am I hearing that correctly?

MS. SCHAUB:Yeah, I don't think you want uncertainty on March 31st about what's happening the next day, so I think either doing it or declaring that you're not going to do it, you know, the sooner that happens, I think that would be helpful for everyone.

CHAIRWOMAN KRUEGER:I have to cut you off, sorry. Thank you.

Next, Senator Bailey.

SENATOR BAILEY:Good afternoon, everyone. Really quick -- I know this three minutes goes by quick, and I've wasted five seconds just saying that.

In relation to Greater New York and HANYS, we had brief conversations yesterday. I just want to clarify, what are some of the things that we as legislators can do statutorily to improve or ameliorate the relationship between you and insurance companies?

MR. RASKE:I would love to know what you could do.

(Laughter.)

MR. RASKE:But the first thing is you have to recognize the problem. And my major difficulty has been getting people to really recognize the following fact: One out of every four claims that we submit to insurers gets bounced. Okay?

One out of four. Could you imagine the amount of money that that represents in the aggregate, and the amount of hardship that goes on?

I would say, if I were in your shoes -- and I would use your regulatory apparatus at DFS to do it -- to say if one in four is outrageous, why don't you cut it in half? I would make a target. Let's make it one in eight. Let's see if we can hit a target.

Use your -- the power that you have over DFS to tell them they have to stop these abusive practices of the insurers. It is in the regulatory authority that they can do it.

Furthermore, in terms of your contracting authority with the federal government, you could do it through the Medicare Advantage plan, and it's something that we talked to the feds about, or you could do it through the plans that you have within Medicaid. You have a lot at your disposal if you only used it from that point of view.

But I would make a target. This one of four is baloney. Let's make it one out of eight and see if you can get there. And you know what, if you did that, sir --

SENATOR BAILEY:I want to give her an opportunity to respond. You got a lot to say; I want to talk to you later.

(Laughter.)

SENATOR BAILEY:So -- (pointing).

MS. GRAUSE:Just filling in on what Ken said, I think more data from -- better data from DFS would be very important and very helpful as we're trying to decrease that denial rate.

I think in some instances there have been collaborations between payors and providers, but I think a hallmark of that is really better data from the payors in terms of what they're seeing on their side, so that they work together to make sure that patients are actually getting the care that they need and they're working collaboratively to make sure that that care is happening outside of the hospital.

We actually -- Senator Krueger, we do think that our system works better when patients don't get care in the hospital -- they can get it other places.

SENATOR BAILEY:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Assembly.

CHAIRMAN PRETLOW:Assemblyman Slater.

ASSEMBLYMAN SLATER:Thank you very much.

I have a question regarding the sexual assault forensic examiners that I think would be best to HANYS. The Executive Budget includes a proposal that would require hospitals to designate hospital sexual violence response coordinators who integrate the hospital's response to sexual violence in the hospital's clinical oversight and quality improvement structure, and ensure the chain of custody of forensic evidence is maintained.

It would also require sexual assault forensic examiners that are on call and available at all times.

When I was reading the executive briefing book and Article VII memo, it referenced $2 million in investments or state costs in relation to this proposal. Can you explain to me what the purpose of the funding is? And also, if you could, is it available to help hospitals recruit and retain the practitioners required pursuant to this proposal?

MS. GRAUSE:Thank you for that question.

Actually, many years ago I worked as a sexual assault nurse examiner, so I do have personal experience in this area.

I think our concern primarily is that this is an unfunded mandate, and that the workforce issues alone of making sure that every hospital has a sexual assault nurse examiner -- actually, a team of sexual assault nurse examiners -- is a major undertaking, assuming you could get them through the training and actually recruit and retain them. So that's one thing.

And then actually building that program, which involves training not just nurses but physicians and others, as well as making sure you have the appropriate facility and supplies and follow-through and collaboration with local police, is a very big undertaking.

So obviously access to care, making sure we're providing care to those patients indeed is critically important. But we need the funding and full support of the state in order to make that a reality.

ASSEMBLYMAN SLATER:Understood.

And if we can continue, the Executive Budget language does not authorize or acknowledge the use of telehealth to meet this mandate, but the briefing book does reference that the funding may be used to potentially expand telehealth capacity in hospitals that have legitimate challenges securing their own trained examiners.

Is the Governor's intent that hospitals could meet the SAFE requirement via telehealth?

MS. GRAUSE:I'd have to look into that a little bit more. I don't know enough, and I certainly did not use that in my practice.

ASSEMBLYMAN SLATER:Understood. Understood. Could you share how many currently certified SAFE professionals there are in New York State? I don't know if you have that data.

MS. GRAUSE:I don't know that off the top of my head.

ASSEMBLYMAN SLATER:Does anybody else on the dais possibly know?

MR. RASKE:No idea.

ASSEMBLYMAN SLATER:No?

And the proposal would take effect on October 1st. Without knowing the number of currently available providers, it seems hard to evaluate the likelihood of hospitals being able to come into compliance by the 1st. So given the amount of time needed to recruit for these positions --

(Time clock sounds.)

ASSEMBLYMAN SLATER:Just in the middle.

MS. GRAUSE:It's a very short timeline, yes --

ASSEMBLYMAN SLATER:Three minutes goes fast.

MS. GRAUSE:-- we agree.

ASSEMBLYMAN SLATER:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Senator Rhoads.

SENATOR RHOADS:Thank you, Madam Chairwoman.

Just a quick question for the panel. And it -- my understanding, during COVID -- obviously, we've been talking a lot about nursing shortages, staffing shortages in hospitals. During COVID my understanding is that the refusal rate for the COVID vaccine was somewhere in the area of around 23 percent. As a result you had thousands of healthcare workers that lost their jobs.

Has there been any change, by the way, in the status of the requirement that hospital workers must have a COVID vaccine? A number of executive orders were withdrawn.

MR. RASKE:The orders were withdrawn.

SENATOR RHOADS:Okay. But has there been any effort for those who were dismissed, otherwise qualified individuals, in the face of a staffing shortage, to be given their jobs back? Is that something that you would advocate for?

MS. GRAUSE:I would have to look into that. I believe there are instances where those healthcare workers have gone back to the jobs. But I -- I would have to research that, but I believe that that has happened.

SENATOR RHOADS:Okay. Any other opinions?

MR. BELL:Just to briefly add to Bea's comment, it's not a requirement anymore. So any of those workers can walk into any provider that's hiring and apply for a job. It's not a requirement. So it's not a bar to anybody.

SENATOR RHOADS:Okay. Understood. Understood. I appreciate that.

The real question is for the ones that were dismissed, would it be appropriate to guarantee them their job back, since most facilities -- certainly hospitals -- are still having shortages? Rather than having to go through the process of reapplying if there happens to be an opening that's advertised for.

MS. GRAUSE:You know, I would go back to what Leon said. I think that in -- just from you're saying, I think a guarantee is every termination and rehiring has its own unique set of facts, so I think a guarantee would tend to complicate things rather than allowing a worker to reapply and work that process that already exists.

SENATOR RHOADS:I appreciate it. Thank you.

MS. SCHAUB:Could I just make two points?

You know, because of how early that happened for healthcare workers, we're talking about probably five years ago. So I think you're not hopefully having people sitting at home for five years. Maybe they found other work in not clinical settings, other things.

Secondly, you know, I think there's a lot of drivers of the healthcare workforce shortage. We would be happy to talk about any of them. We really have to work on that on all fronts to make sure that both the jobs are sustainable and we have the workforce we need to care for folks.

So that may be a small slice. I think there are a lot of other issues that we're confronting in terms of making sure we have an adequate workforce.

SENATOR RHOADS:Thank you very much.

CHAIRWOMAN KRUEGER:Assembly?

CHAIRMAN PRETLOW:Assemblywoman Kelles.

ASSEMBLYWOMAN KELLES:Just one follow-up. You were talking about the CDPAP, and I'm curious what data you think we should collect and criteria we need to assess and ensure that the FIs, the new sub-FIs that we are getting are not those that were misusing funds.

MS. SCHAUB:So, you know, there has been a pretty extensive vetting process of what they're calling the CDPAP facilitators, right? So PPL is the overarching FI. They're going to pay the workers. They're going to be the co-employer with the consumers for all the workers.

The facilitators have a more limited role. The companies that were FIs before that are now coming on as facilitators, including the Independent Living Centers, are going to be primarily assisting consumers.

ASSEMBLYWOMAN KELLES:Just a question. Do we have actually any criteria that we're assessing? Are we asking for any data? Do we have any information from these? Is that something that you have all seen?

I certainly would love to see that criteria, because clearly there are some groups that -- or some FIs that were maybe keeping more of the funds or paying their employees -- or, you know, their leadership. We don't -- I haven't seen any of that data, so I can't assess whether these ones are or aren't.

MS. SCHAUB:So, you know, I know the full list of facilitators, I believe there were a few more approved yesterday. So those are on the website. You know, it's possible to then use the same things that we've looked at with the industry in terms of the cost reports, other things to assess them.

The only point I would make is that they have a much more limited role. They're not going to be, for example, paying workers. Right?

So I think we want to evaluate them for the new role that they're going to be playing versus their old role.

ASSEMBLYWOMAN KELLES:My concern ultimately is that, you know, the burden will be put on blaming the people in the program that, you know, they were abusing the system and we know, of course, that a lot of it was coming from the FIs, which is why we have reduced it down. So --

MS. SCHAUB:Hundred percent. And, you know, we know it's a very important lifesaving service, and we want to make sure people continue to access it.

CHAIRWOMAN KRUEGER:Do you have more?

ASSEMBLYWOMAN KELLES:(Shaking head.)

CHAIRWOMAN KRUEGER:Okay.

Senator Gustavo Rivera.

SENATOR RIVERA:Thank you.

Since I only have three minutes, I'll be quick. A couple of things.

Certainly in agreement with what was said a little earlier as far as the 500 million that is from the MCO tax. It should absolutely be invested back into the system, as opposed to go someplace else. So I thank you for being supportive of that position.

I have three things that I want to see if we can get to. Number -- well, this one I'll say quickly. Obviously there's a disagreement between 1199 and folks like myself who believe that the transition of CDPAP is far more, you know, challenging than certainly the administration has said, and that you folks have said.

I am -- I would hope that if there are -- that if there's any influence on the process, and if we see that as we get closer to April 1st that things are not happening, that maybe we could push it. Certainly we -- I would be open to that. I asked them to -- it has to come from the administration, but that's something that should be out there.

Two things, though. One, we haven't really talked about this, but I wanted to hear actually on the issue of the nurse compact. I know that there's a position that NYSNA has about this. If you could take a little bit of time to tell us about what your opposition is to the compact.

And I have one more thing that I'd want to see if I can get to, but go ahead.

MR. BELL:Well, in addition to the more data-driven stuff -- for example, you know, the number of licenses, the number of nurse's licenses in New York, the participation rate is really low because nurses are leaving the workforce or not taking these jobs. And it was acknowledged by Commissioner McDonald this morning that only 50 percent of our licensed nurses --

SENATOR RIVERA:Can you move the microphone a little bit closer, please?

MR. BELL:Only 50 percent of our licensed nurses are actually working at the bedside.

But I think in this current political and budgetary context at the federal level, and also what's been going on at the states, I think you need to take serious consideration on the compact, on the issue that this opens the door to malicious intervention by foreign state actors -- the attorney general of Texas comes to mind -- that could come in and attempt to disrupt our healthcare system and disrupt the availability of abortion care, reproductive healthcare, transgender type healthcare issues --

SENATOR RIVERA:Sorry, I only have 45 more seconds. I will interrupt you there but say that I'd certainly -- that's an aspect that I had not heard about, and I would certainly like for us to privately talk about it more at length, because that's -- I'm certainly interested in that aspect of it, and I had not heard about that particular concern.

MR. BELL:We can certainly follow up outside of this, or I don't know if you want to --

SENATOR RIVERA:Yeah, outside of this. We can certainly follow up in your office.

The last thing is I don't know if there's -- school-based health centers. I know particularly from HANYS and Greater New York, these are -- there are concerns about what's happening right now. I'm not sure -- there's some of your members who have said that -- who are sponsors of these organizations and have been incredibly important all over the state, certainly in the Bronx. I don't know if you have any -- there's 10 seconds. But are you in support or opposition to the move?

MS. SCHAUB:I mean, we can say we represent school-based healthcare center workers, I think we're all aligned that they should remain carved out. It does not make sense to {inaudible}.

SENATOR RIVERA:Thank you so much.

Thank you, Madam Chair.

CHAIRMAN PRETLOW:Assemblywoman Solages.

ASSEMBLYWOMAN SOLAGES:Thank you so much for testifying before us.

You know, we have a healthcare workforce shortage, and I want to know: Do you have any ideas or are there any items within the Executive Budget that you support to help close that gap? I know we need to be creative because we are at a severe disadvantage.

MS. GRAUSE:I'll start. Thank you, Assemblymember.

There are a lot of ideas that we support. We support, strongly support having New York join the nursing compact, because we think it will increase the pool of available nurses to come in, and we think that that would be a net positive for us.

We also think that there's a lot that we could all work on together, looking particularly at Leon, around building the pipeline, doing more to widen the educational pipeline where we're recruiting more students to come in, and certainly doing more on retention to make sure that we're retaining our healthcare workers wherever they work across the care continuum.

And then finally, I think looking at scope of practice and making sure that all licensed professionals are operating at the top of their license and that we also together are exploring new models of care.

We do support the use of telemedicine. We do support innovating around different care models so that we can make sure we're preserving access to care as well as supporting the professionals who are providing that care.

ASSEMBLYWOMAN SOLAGES:Thank you.

MR. RASKE:I would only add to the question that this is a team sport. We need everybody. We need all of our colleagues in organized labor. There are no bad ideas; they all need to be explored.

We have pockets of severe shortages around this state, dire needs, Rochester being one. But we can find many more beyond that.

And -- and the pipeline to do this is so long that we need everybody to row in the very same direction. And on that score, the waiver that the state has, the workforce improvement areas that they've identified, the workforce that obviously 1199 has done in terms of retraining and training programs -- amazing stuff, but it is a long pipeline. We need more of it. We need to do it at a continuous basis and explore every new and better idea that comes along. That really is the solution.

And like I said, there are no bad ideas here.

MS. SCHAUB:Just to flag, the waiver investment is hundreds of millions of dollars in a career pathway, a career ladder for both coming into the healthcare field and new folks. Those things are just up and running, right? And I think we want to make sure that all the members of the Legislature really have those materials. There's ones in areas of the state so that you can share that with constituents to get folks into those paid training programs.

CHAIRMAN PRETLOW:Thank you.

Assemblymember Bores.

ASSEMBLYMAN BORES:Thank you all for being here and waiting through that morning panel.

First, I want to thank in particular NYSNA and HANYS for calling out in their written testimony support for the Governor's proposal about covering iatrogenic infertility, fertility preservation in those cases. New York obviously took the lead in 2019, was the first state to require private insurance to cover this, but we've been leaving those on Medicaid off. And I think it's such a crucial inclusion, and not controversial. But appreciate you for calling it out and putting it there as well.

I have a question for HANYS. In your -- I think it was in the appendix you listed 2024 projected operating margins for hospitals. Fifty percent negative, 25 percent unsustainable, 25 percent unlabeled. What's in the unsustainable?

MS. GRAUSE:Unsustainable is a 3 percent margin or less.

ASSEMBLYMAN BORES:Three percent margin or less. Okay, so that means if you have 3 percent or 3.1 percent you're in at least the 75th percentile of hospitals in the state?

MS. GRAUSE:If you're at 3.1, you're in -- yes, you're 75th or above for that -- for that time period, snapshot in time, yeah.

ASSEMBLYMAN BORES:Yeah, that point in time.

Do you have a sense, you know, what percentile, if you're in the -- you're getting 8 percent operating margins or 10 percent operating margins? Is that unheard of in this state?

MS. GRAUSE:It's probably unheard of in New York. It's not unheard of outside of New York. But I would be surprised to see that.

MR. RASKE:I would have to say 3 percent would be attractive to virtually ever hospital in this state, if we could achieve 3 percent. There's a couple that are above it, but very, very few.

And Bea is absolutely right, when you go around the country, we are at the bottom of the list as it relates to our ability to regenerate ourselves.

ASSEMBLYMAN BORES:Thank you. I totally agree, we need to find a way to support the safety-net hospitals and many of the hospitals in New York State. I just want to call out that, you know, 32BJ in your testimony referenced a hospital in my district that for the past 12 years, 13 years has had a minimum of 8 percent operating margin the entire time, up to 26 percent, which is the Lenox Hill Hospital. I just find that interesting as they approach a new renovation.

Thank you all.

CHAIRWOMAN KRUEGER:We have no more Senators. Are you done?

CHAIRMAN PRETLOW:We're done.

CHAIRWOMAN KRUEGER:All right. Then we want to thank you very much for your participation today. I know there's many follow-up discussions to be had in the future. So thank you all.

And we're not going to mob them as they leave, we're going to make room for the next panel to come up, and that is Panel B: Primary Care Development Corporation; Health Care For All New York; New York Health Plan Association; and Medicaid Matters New York.

(Pause; off the record.)

CHAIRWOMAN KRUEGER:Just a reminder for people who are keeping track of the -- if you know you're on the next panel after this one, if you wouldn't mind moving towards the front, because it makes it easier then for people to slide into the table.

So first we're going to start by each person introducing themselves so that the guys in the video room know what name to put up when you start to talk, and then we'll start the testimony. So starting on my right, your left.

MS. COHEN:Hi, I'm Louise Cohen. I'm the CEO of the Primary Care Development Corporation, which is a New York State not-for-profit --

CHAIRWOMAN KRUEGER:Thank you.

MS. COHEN:-- that is dedicated to primary care.

CHAIRWOMAN KRUEGER:That's all we need right now, because now we're going to the next person.

MS. COHEN:Oh, I'm sorry.

MS. WAGNER:Mia Wagner, with the Health Care For All New York Campaign.

CHAIRWOMAN KRUEGER:Next?

There's a sweet spot just above the letter -- the word.

MS. KASSEL:I'm Lara Kassel. I'm the coordinator of Medicaid Matters New York.

MR. LINZER:Eric Linzer, with the Health Plan Association.

CHAIRWOMAN KRUEGER:Thank you.

Okay, now your three minutes.

MS. COHEN:Great. Well, thank you for inviting us here today. I appreciate your longstanding support of the Primary Care Development Corporation.

The healthcare system in New York State is out of balance and there isn't enough primary care in New York State. Thank you, Senator Krueger, for your pointing this out earlier. I know it, you all know it, and frankly your constituents know it.

There was a recent survey of about 20,000 people in New York State. A young woman from Buffalo said she can't afford to go to the doctor; she knows that she got sicker, and then her medications cost more as a result, and she said: "How could an average New Yorker pay these bills?"

An older woman in Suffolk, her PCP doesn't have appointments, so they just send her to urgent care. So what's the point of primary care if we actually can't get in there?

So I've had trouble getting primary care, and this is my business. And I'm sure that that's true for many of you.

The healthcare system in New York State is unbalanced. Primary care doctors and nurses are really doing their best, but most of the money in the system goes elsewhere. Somewhere in the neighborhood of about 95 percent of the dollars go places other than in primary care. Which leaves about 5 to 7 cents on the healthcare dollar for primary care.

The best model that we have, which is Federally Qualified Health Centers, not the only type of primary care -- obviously, hospitals provide a lot of primary care, as do independent practices. But FQHCs haven't had their rates rebalanced in about 20 years.

So people go to urgent care, they go to the emergency room -- none of which can help them with what primary care does, which is prevention, early diagnosis, and early treatment. Which helps people, keeps them out of the hospital, keeps them out of long-term care, and supports healthier communities as well. And the cost of an ER visit is somewhere in the neighborhood, probably depending on where you are in the state, of about $1200. And it's about 150 to maybe 300 for a primary care visit.

So this costs New Yorkers and New York State an extraordinary amount of money. Many, many millions of dollars every month are getting paid for the sequela of not having primary care.

But we can do something about this. And you all have in front of you a bill called the Primary Care Investment Act -- thank you to Senator Rivera and Assemblymember Paulin. And this bill would require payors to measure their primary care spending, rebalancing it by increasing it slowly, 1 percent year over year, till they get to about 12.5 cents of their total healthcare spending.

This is not new. There's a number of states that -- California has set a 15 percent target, Massachusetts has set a high target, Oregon, Colorado, Delaware -- there's a whole host of states that are working on this or that have done this, and we are kind of lagging behind a little bit.

And you all want to ask me now, where's that money going to come from, right? And remember that ER visit that I referred to earlier? The money is going to come, ultimately, from our insuring that people stay out of the emergency room.

MS. WAGNER:Hi. My name's Mia Wagner, and I'm senior health policy analyst at the Community Service Society of New York, on behalf of the Health Care For All New York Campaign.

I'd like to thank the chairs and members of the Senate Finance and Assembly Ways and Means committees for allowing the public to weigh in on the state budget.

HCFANY is a statewide coalition of over 170 organizations dedicated to achieving quality, affordable health coverage for all New Yorkers.

An analysis of proposed cuts to federal health programs estimates over $10 billion in costs to the state to maintain coverage for New Yorkers. Given the uncertain federal landscape of healthcare programs, managed-care organizations' tax revenue provides an opportunity for the state to ensure New Yorkers can access and afford healthcare.

The Legislature should consider alternatives to the Governor's proposed distribution of $1.4 billion of this tax revenue, which does not include any direct support for patients.

First, make children's health insurance affordable for middle-income families. Once families pass the 400 percent FPL income threshold, their child's health insurance premium increases by around $3,000 per child annually. In addition, the Child Health Plus does not follow the same rules as Medicaid and the Essential Plan. The state should require coverage to begin on the first of the month in which a child becomes eligible for and enrolls in coverage.

Addressing these issues would cost an estimated $30 million to $50 million, which is only a fraction of the MCO tax revenue but would make a considerable difference in New York families' budgets.

Second, address New York's expensive healthcare system. New York is ranked second in the nation for most healthcare spending per person. Creating an independent New York office of healthcare affordability, similar to the model in California, would begin to remedy this.

In addition, the Legislature should consider including provisions of the Fair Pricing Act, S705 or A2140, to ensure consumers and payors are charged a fair reimbursement rate for routine medical services regardless of where the patient gets their care.

Brown University researchers estimate the Fair Pricing Act would yield savings of more than a billion dollars in New York.

The state can also take action to improve patient outcomes and reduce inequities by including provisions of the Primary Care Investment Act, S1634 and A1915A, in the final budget.

Third, the state should set aside some MCO tax revenue for principal reserves or a Rainy Day Fund, to ensure New Yorkers' access to care is protected under threat of federal cuts.

Lastly, Navigators and the Community Health Advocates program, or CHA, help people across the state enroll in and use their health insurance and otherwise access healthcare. The instability of the federal landscape makes these programs even more critical.

HCFANY would like to thank the Legislature for its past support of CHA. We are grateful the Governor's budget includes $5.5 million and request the Legislature to allocate an additional 1.5 million to support CHA's ability to continue helping New Yorkers navigate the healthcare system.

Similarly, HCFANY is grateful the Governor's budget includes $28 million for Navigators. However, the Navigator program has not received more than a single cost-of-living adjustment since 2013. HCFANY urges the Legislature to fund the Navigator program at $38 million to guarantee continued high-quality enrollment services.

Thank you for your consideration of our concerns.

MS. KASSEL:Thank you for the opportunity to address you today. I'm Lara Kassel. I'm the coordinator of Medicaid Matters New York.

Medicaid Matters is a statewide coalition, and our mission is to bring the interests of people who are served by Medicaid in New York to policy-making and budget-making in New York. That is our sole mission. We do that in a variety of ways, and we intentionally include people who are themselves consumers, people who have Medicaid for their insurance coverage, in the work that we do.

We are at this time, like so many other people have already talked about, bringing our attention to the very real threats that we are seeing at the congressional level, at the federal level, and we are doing that using our consumer perspective -- with our mission in mind, bringing to light what the potential cuts at the federal level would mean to the people who are served by Medicaid.

There is a lot of information, there's a lot of education to do of our New York congressional delegation, and our role we see as vitally important because it's about bringing the interests of people and what the potential threats would mean to them and their access to services.

I would take a moment to impress upon you to join us in this fight. These threats cannot be understated, and it's going to take all of us. So if you would be interested in potentially talking to your counterparts, we would be happy to provide you with materials, talking points, et cetera. You all know the Medicaid program in New York, and we would be happy to help you talk to your counterparts in the delegation.

With all of that said, we are not wavering from our vision for New York's Medicaid program. We maintain an agenda that is about making sure people have access to services where they are, when they need them, to keep them well and living independently in their homes.

This year's budget doesn't make significant wholesale cuts to the Medicaid program. However, there are measures proposed in the budget that are proposed to find, quote unquote, savings. We refer to those things as cuts, because there are several things that are proposed that would be cut from the program that would endanger people's access to services.

We think that this is a time when the Division of the Budget has identified surplus. There are ways that the Governor is using some of that surplus to provide some affordability relief, shall we say. We think that there is an opportunity to reprioritize using some of the surplus, perhaps reprioritizing the use of the MCO tax credit, et cetera.

I'm happy to say more later.

CHAIRWOMAN KRUEGER:Thank you.

MR. LINZER:Thank you for the opportunity to testify. While our written comments outline a number of issues that we both support and oppose in the Executive Budget, I'd like to use my time in response to some of the concerns and comments that have come up today related to the single FI transition.

Our primary concern, and the concern of our members, has been and continues to be that the transition doesn't disrupt care for members, so that they can remain independent, and that PPL pays the members' personal assistants. We recognize the short turnaround time. And by comparison, the move to mandatory MLTC enrollment took over several years and was done by region; the transition of the pharmacy carveout benefit took about a year, with clear guidance from DOH.

On the comment that if PPL isn't ready, this is what the state has plans for, I think it's important to note that plans have been working collaboratively with both the Department of Health and with PPL, sending member information to PPL so that those individuals get registered. But it's important to remember that it's PPL's responsibility to ensure that both the member and the personal assistant are enrolled in their system by April 1st.

Now, if PPL is not ready -- I know there was a lot of concerns about that during the course of the morning and early sessions -- plans will work with members, but those members may face some disruptions because PPL will be the only remaining FI in the market. So the state has directed plans to terminate all other FI contracts by April 1st, at which point we're only dealing with PPL.

And as the single FI, this has given PPL undue leverage in contract negotiations with plans. They've demanded significant funding advances, we believe in the hundreds of millions of dollars for it to cover the CDPAP payroll. If PPL has cash-flow issues after April 1st, plans should not be asked or expected to finance paying their pay-givers outside the normal claims process.

Let me put it simply. Plans should not be expected to be PPL's bank.

PPL has also demanded excessive reimbursement rates, which in many cases are more than what plans are currently paying, and it's contrary -- we think it's contrary to the state's expectation that the move to a single FI would create substantial savings. We have raised these issues on a regular basis with the state.

Now, with implementation seven weeks away, our focus remains on protecting these members, protecting the services, avoiding disruptions for both the member and their PAs. And we remain committed to working diligently with DOH and PPL so that there's a smooth transition for the New Yorkers who rely on this program.

Appreciate the opportunity to testify, and happy to answer any questions on this or other items that were enclosed in our testimony.

CHAIRWOMAN KRUEGER:Thank you.

Senator Rivera.

SENATOR RIVERA:I'm usually not first, but there's a couple of things that I wanted to follow up on.

First, Lara, you have -- like right at the end you got cut off when you were talking about -- and I want to make sure that you finish that thought, since we've had -- we're all thankful that the MCO tax, we've got it, we got some of that money, we can reinvest it, and you got cut off there because the time ran out. So give us 30 seconds on where you think that should be invested.

MS. KASSEL:Sure. Thank you, Senator.

And I will add that that is only one source for funding. That as you and others, you and your colleagues have identified, there are other places where we could be finding funding.

SENATOR RIVERA:Like raising taxes on the wealthy, perhaps?

MS. KASSEL:We support progressive tax reform.

We also support perhaps reconsidering managed long-term care. That would be another place to find some savings, real savings in the Medicaid program.

And we think that this is a time to, again, reprioritize, invest in primary care. We support the Primary Care Investment Act, invest in access to long-term services and supports through enhancing the workforce. And also the Legislature buying back the MRT cuts that were made in 2020, specifically the ADL restriction to services. And community-based mental health care for both children and adults. Many -- many places where we can find that funding, including reorganizing the MCO tax.

SENATOR RIVERA:I wanted to make sure some of that was on the record. On primary care, I'm obviously on board, I carry this bill, I think we should be spending more money on it.

Eric, I want to get to a couple of things. I know that you folks have taken a position on school-based health centers. Could you share with us as far as the transition from managed care to -- I'm sorry, from fee-for-service to managed care?

MR. LINZER:We've submitted -- as you're aware as chair of the Health Committee, we've submitted our memo in support of your bill to keep it outside of managed care. I think there are concerns in plans that we've expressed, you know, with -- in that memo about some of the administrative operational challenges.

You know, the only caveat I would say is that as that proceeds forward, even though we don't think that's the right approach -- plans do have to be operationally ready for April 1st. Much the same way that we had similar concerns related to the pharmacy carveout, at a certain point we've got to be ready to go.

SENATOR RIVERA:Gotcha. I just wanted to make sure that was on the record.

And lastly, you mentioned some of this is related to the concern that we all have about the transition that is supposed to happen by April 1st. And you mentioned some of the things that the administration is saying, et cetera.

Would you be -- is the Health Plan Association, would they be supportive of a move of the date?

MR. LINZER:I think a reasonable -- you know, I think a reasonable -- you know, an extension of the time frame is reasonable. What that would look like, I think a lot really depends upon where PPL is at in the process.

SENATOR RIVERA:Thank you.

Thank you, Madam Chair.

CHAIRWOMAN KRUEGER:Thank you.

CHAIRMAN PRETLOW:Thank you.

Assemblywoman Paulin.

ASSEMBLYWOMAN PAULIN:Got it. Thank you. Thank you so much.

So the concerns of CDPAP you know we share. The goal, as I remember, for managed care is so that you manage individuals and their care. How does that translate when we're talking about rolling in the school-based health centers and dental care, which is done often by large contract, and to a group of children who are even uninsured?

So I just wondered if you'd taken a position or any thoughts about that transition.

MR. LINZER:Yeah, on the school-based health centers transition, as I mentioned, we've supported the bill to keep it carved out of managed care. I think -- you know, as I mentioned, I think the real challenge is that similar to the single FI, we're seven weeks away from implementation. Plans have to be -- you know, have been working towards that.

And this is I think similar to, you know, previous transitions -- again, the example being the pharmacy benefit carveout. At a certain point, plans have to be ready to go in order to be compliant.

ASSEMBLYWOMAN PAULIN:And I know notices have gone out, you know, to the school-based health centers and to the dental providers who are often, again, separately contracted with, claiming that they won't be able to survive. I wonder if you have -- because of the way it would be structured, that's what they're fearful of.

Is it your concern as well?

MR. LINZER:You know, our concern -- I think our concern has been some of the administrative processes in place here have to be built out. Plans are doing -- are engaged in that right now.

We'd certainly be happy to, you know, get additional information from our members and follow up with your office with additional details.

ASSEMBLYWOMAN PAULIN:So you think the rationale is money-driven, I'm assuming.

MR. LINZER:You know, I don't know what the rationale is from the administration, you know, beyond what Commissioner McDonald had articulated earlier today.

ASSEMBLYWOMAN PAULIN:That's what I think. Thank you.

CHAIRWOMAN KRUEGER:Other Senators?

Oh, hello.

SENATOR RHOADS:Hi.

CHAIRWOMAN KRUEGER:Another Senator.

Sorry. Senator Rhoads.

SENATOR RHOADS:Thank you. Thank you, Madam Chairwoman.

Question for you, Mr. Linzer.

Part AA of Chapter 57 of the Laws of 2024 required New York State regulated insurers to reimburse providers licensed by the Office of Mental Health and Office of Addiction Services and Supports at or above the Medicaid rate for outpatient behavioral health services.

Health plans have worked closely with the Department of Financial Services and the Office of Mental Health to implement these requirements before the effective date of January 1st of this year. In the Executive Budget Briefing Book the Governor proposed to allocate a million dollars to the Office of Mental Health to monitor plan compliance with this reimbursement mandate for fiscal year '25.

Can you explain the impact of this mandate?

MR. LINZER:Yeah, so I think there's, you know, two points I would want to make on this. You know, first and foremost, plans didn't necessarily oppose this issue. The big concern that we had was ensuring that we had sufficient guidance because the way Medicaid pays, you know, looks different than the way commercial payors may pay. So, you know, in some instances you're talking about different systems.

I think the concerns we had were the timing of the guidance. The first, you know, really set of conversations or formal conversations that took place occurred in October of last year. The final set of guidance that we had for January 1 implementation was December -- you know, mid-December, around December 16th.

What we would like to see as an approach would be directing OMH to provide or having them provide a fee schedule in order to really, one, simplify the process and, two, alleviate some of the concerns between plans and providers.

You know, that said, I think the comments that Commissioner Sullivan had made last week as part of the Mental Health hearing, you know, noting that they've been working with the industry, that things have been improving, I think demonstrates our industry's commitment to making sure that individuals get the care and services that they need.

SENATOR RHOADS:I appreciate that.

In the limited time that I have left, there's another portion of the Governor's proposal specifically with respect to workers' compensation, suggesting that private insurance cover worker-related healthcare costs and then seek reimbursement after there's been a decision from the Workers' Compensation Board from workers' compensation insurers.

Does HPA have a position with respect to that?

MR. LINZER:We'll take a look at that. We haven't taken a formal position. But we'll, you know, certainly go back and have another look at it and follow up with you.

SENATOR RHOADS:It's almost like using our health plans as a sort of a bank. Good luck getting reimbursed, but --

MR. LINZER:Well, as you heard me before, you know, the ind -- you know, should not be viewed as, you know, any particular -- you know, an organization's or an industry's bank reserves are there for -- you know, in the event of a rainy day.

SENATOR RHOADS:Thank you so much.

CHAIRWOMAN KRUEGER:Thank you.

CHAIRMAN PRETLOW:Thank you.

Assemblyman Jensen.

ASSEMBLYMAN JENSEN:Thank you, Chairman. This question's going to be for HPA. I know in the commissioner's question time, one of my colleagues asked about the Medicaid Quality Incentive Funding Pool. And certainly in the Governor's proposed budget she's proposing $15 million used for this program, which has been vital in enhancing quality of care for individuals on Medicaid, supporting a wide range of initiatives between plans and providers.

What do the plans currently spend Quality Pool dollars on now? And what programs might negatively be affected if these funds are cut?

MR. LINZER:Well, I think certainly we want to express our appreciation to the Executive for including funding for the QI program in the Executive Budget. In past years typically it's been zeroed out, and it's you and your colleagues in the Legislature that have been the folks who've worked to restore that funding.

The dollars typically go through -- go to support programs that plans engage with their provider partners, organizations in the community, really to address the social determinants of health, address the disparities and address equity in care for underserved populations.

So as examples, some of the programs plans will fund will be covering the cost of healthy food home delivery programs to members with chronic illnesses, funding for physician's offices and community health centers to conduct outreach around important preventative services, providing in-home wellness visits and vaccinations.

So it's a whole host of things, but it really depends upon, you know, plans working with their community providers to see what the need is in the community.

The loss of these funds, you know, would mean that these types of programs, these types of investments wouldn't be able to continue to ultimately benefit individuals enrolled in the Medicaid program.

ASSEMBLYMAN JENSEN:Thank you.

You know, it's part of the budget dance when you don't know if these funds are actually going to be appropriated or not.

What does that do to the plans and the planning process with their provider partners when they may be looking at in the future trying to build these initiatives, if they don't know the money's going to be there on --

MR. LINZER:The uncertainty makes it really difficult for plans, providers, their community partners to make those longer-term investments.

So sort of the back-and-forth or the investments you make without knowing that the dollars are going to be there I think creates a lot of uncertainty and some trepidation among providers. Fully funding it, codifying this program into statute would go a long way to really giving some assurances to the community.

ASSEMBLYMAN JENSEN:So I know legislation requiring a statute has been vetoed by the Governor. You would support legislation to do such?

MR. LINZER:Yes, we would support it.

And we certainly appreciate the support of the caucus of this in the past.

ASSEMBLYMAN JENSEN:Thank you.

CHAIRWOMAN KRUEGER:Okay, thank you. I think I'm the last Senator.

Thank you all very much.

I guess my question is really for Louise. So I'm a big believer that we have to do more for primary care.

And I'm also carrying this bill that was extremely unpopular with most people on the previous panel, to actually require fair pricing and site-neutral payments.

And the research done shows that as more and more what I thought of as primary care doctor's visits, like a new patient visit, end up moving into a hospital-based facility, the research shows the cost has gone up from $88.39 to $436.

It seems to me that's sort of counterintuitive to what you're trying to point out we need to be doing more of. So I was curious what your perspective on all this is.

MS. COHEN:So I think there's a whole host of ways in which hospitals get cross-subsidized by all kinds of things, and site-neutral payments is one of the ways in which hospitals get cross-subsidized. But we also know that most of that money probably doesn't go back into the primary care arm of the hospital, it probably goes back to something else in the hospital.

So from a primary care perspective, we actually think it's critically important to get the funding for primary care to the primary care team so that they can do what they need to do.

CHAIRWOMAN KRUEGER:It's also true that there is an actual maximum availability of money for healthcare, although sometimes some people aren't sure about that. And so if you spend it in one way, you're not spending it in the other.

Do you agree?

MS. COHEN:Absolutely. I mean, I think we need hospitals when we need them, but we need to stop having hospitals taking care of people who could have -- their diseases could have been prevented. You know, you don't want -- if you need an amputation of your leg because you have diabetes and you've gotten to that point, yes, you need a hospital, that's critically important. You need a good one, and you need one in your county.

But we need to get people not -- well before that, right? And that's where we need to put a lot of emphasis on prevention, we need to stop raising barriers to get to primary care. We need to increase the primary care workforce, obviously, just like everything else. But I think that, again, sort of the bottom line driving those price costs is what it is.

There's also a phenomenon where a lot of independent practices have been bought up recently in the last couple of years. And what we know is -- and what we know, because we do a lot of work with those independent practices to help them get to patient-centered medical home recognition. And what we have learned is that being affiliated with a hospital often means very little. But yet the costs now are being accrued to -- you know, a lot of that money is going back to the hospital.

Even the PCMH payments may or may not actually be going directly to the primary care provider.

So we think that there's a whole host of ways in which not only is primary care not resourced, but it's not actually getting the benefit that it's supposed to be getting.

CHAIRWOMAN KRUEGER:Thank you.

Assembly?

CHAIRMAN PRETLOW:Assemblyman Weprin.

ASSEMBLYMAN WEPRIN:Thank you, Mr. Chairman.

I have a question for Mr. Linzer.

I don't know if you were here during the commissioner's testimony on the whole CDPAP timetable and he's convinced everything's going to happen by April 1st and, you know, it's all going to be smooth and there aren't going to be any problems and it's proceeding accordingly.

I tend to agree with you, and many of my colleagues here are a little nervous about PPL being the only fiscal intermediary and not meeting the needs of the hundreds of thousands of recipients of consumers, of patients.

What would your suggestion be to us in light of the commissioner seems to have, you know, taken his position and it's -- everything's working well and moving fast and everything else.

Is there any advice you could give us? Because I'm very skeptical and I tend to agree with your analysis. What can we do at this point? What would you suggest?

MR. LINZER:So just so I'm clear, we haven't necessarily been opposed to the single FI as this went through last year's budget. I think our concern becomes, you know, making sure that the transition runs smoothly.

So on your question about how to be thinking about this, I think first and foremost, you know, the focus needs to be on ensuring that the member continues to get the care that they need, the PAs continue to get -- you know, get paid as they should.

Plans have experience with this, having, as I mentioned, gone through a number of different transitions. The information that the commissioner and the Medicaid director had spoken to, you know, earlier today about the benchmarks that they're meeting, you know, if that information is probably clearer to folks as far as the distribution between the number of members that have been enrolled and registered with PPL, the number of, you know, PAs.

The challenge for the plans is we don't have line of sight into the number of PAs. I mean, we're certainly, you know, engaging with PPL and with DOH, sending out letters, following up with phone calls and outreach.

I think where the challenge comes in is if you've got individuals come April 1st who haven't registered, whether it's the individual or the PA, they're not going to be able to access their services. Plans will be there and can certainly work with the member. But remember, this is consumer-directed. The member can choose if they want to continue with their particular PA, but if they're not in the system, they're not going to be able to access them.

Where the plans would -- you know, would be, I think the recourse for plans would be then to work with the member, see if they want to get their services through a LHCSA. But if the individual chooses not to go that route, there's not going to be an opportunity for them.

CHAIRMAN PRETLOW:Thank you.

Assemblyman Ra.

ASSEMBLYMAN WEPRIN:I hear you. Thank you.

ASSEMBLYMAN RA:Thank you.

For HPA, I'm sure you heard on the previous panel there was a discussion about the frequency of claim denials. Do you have any data regarding that? Is that one in four number accurate?

MR. LINZER:We disagree with that number. And also the premise that there's not sufficient data out there. So, you know, two points.

On the comment about the percentage of denials, plans have to submit on an every-six-month basis to the Department of Financial Services, you know, a significant report on what their claims denials are, you know, number of claims, number denied, number paid, number denied in part, numbers paid in full, et cetera, as well as the major reasons for denials.

So to give you a sense of this, in 2023, you know, almost 75 percent of claims that plans have received -- and this is about 312 million claims in New York that got submitted, nearly 75 percent of the claims got paid in full. Fifteen percent got denied in full, about 10 percent were paid in part, denied in part.

But the reason for the denials, you know, often are what we've come to see -- and I'm happy to send follow-up information to the committee, to your offices and others on this -- is that the major reasons are things such as it's not a covered benefit. You know, about 23 percent of those denials are in that bucket, 13 percent are for coding-related issues, another 7 to 8 percent are a result of duplicate claims.

So this notion that, you know, cutting the number of denials or the number of denials is taking money away from hospitals, well, many of these denials are a result of errors, mistakes, or in some instances upcoding on the part of the hospitals, which is money that's coming out of the pocket of the employer, the consumer or the labor union.

ASSEMBLYMAN RA:Thank you. And this isn't really a question, but unfortunately one of my takeaways I think from the first panel was that we're going to have issues with this CDPAP transition where people are going to lose care, and basically the finger's probably going to get pointed at you guys when that happens.

And I feel like, as I said to the commissioner, you know, when you have -- you're being told you have to terminate every other FI, you're kind of -- the patient is going to be looking at you, saying "I can't get my care," and you're going to be stuck with it. Right?

MR. LINZER:It's a valid concern. You know, as I mentioned earlier, you know, plans are doing everything that they can to communicate. But come April 1st, if you have an individual or a PA that didn't register, that's going to have the potential for disruptions. Plans will still have -- you know, there are ways for plans to work with that particular member, but they may not be able to go the CDPAP route.

ASSEMBLYMAN RA:Thank you.

CHAIRMAN PRETLOW:Thank you.

Assemblywoman Solages.

ASSEMBLYWOMAN SOLAGES:I want to go back to talking about the Quality Incentive Program, because it's a program that I think is vital to the state, especially when you discuss marginalized communities and getting into the root causes of health disparities and poverty, ensuring that we incentivize those to do better.

And so I know we had a thorough discussion prior, but I wanted to find out, were there any issues and delays in payment or do you hear of any providers, you know, complaining about the budget uncertainties?

MR. LINZER:I think where we hear that concern is through our member plans. That if you're trying to think about investments you're going to make -- and again, it's going to vary from community to community, meeting the needs of particular communities, because it's not a one-size-fits-all approach. But to engage in the conversation of, you know, would a provider practice be willing to engage in outreach to folks off-hours so people who aren't able to get in 9-to-5 are able to get their vaccinations and their wellness visits.

But that requires those providers to make investments. And there has to be at least some level of assurance that that money's going to come back, provided that you hit certain -- with the QI Program, if you hit those quality marks, then you'll receive -- you get the quality award for it.

But the lack of certainty around that I think does create some challenges among plans, providers, community organizations as to how much of an investment are you going to be willing to make. Because the money is finite.

ASSEMBLYWOMAN SOLAGES:And if the plan were to be discontinued -- I know it's a relatively new plan, but if it was discontinued, what impact would you see in communities?

MR. LINZER:It obviously would depend on what the type of program is. But I think it's a real takeaway and it's a loss for those communities, and particularly those providers and organizations that have come to rely on it to make those investments, because it means, you know, either loss of staff, loss of outreach, but really loss for patients, families and individuals enrolled in Medicaid, because those services may not be there for them.

ASSEMBLYWOMAN SOLAGES:And some of those are the neediest people. So we're going to continue advocating for additional funding and also to codify it in law so we can protect this wonderful program.

Thank you.

MR. LINZER:Well, we certainly appreciate your leadership and the leadership of the caucus. And we think this is just such an important and valuable program, given the focus on equity and addressing underserved communities.

ASSEMBLYWOMAN SOLAGES:Yeah, especially in this time where we know the federal government is going after the diversity, equity programs.

MR. LINZER:Right.

ASSEMBLYWOMAN SOLAGES:Thank you.

CHAIRMAN PRETLOW:Assemblyman Slater?

MS. COHEN:If I could just say that providers cobble together money from all kinds of places, right? There's reimbursement, there's grants, and then there's programs like this.

And that's why we're calling for sort of a much broader investment in primary care and really thinking about how we don't necessarily think about a program year after year, but really a broader investment.

CHAIRWOMAN KRUEGER:All right, I think we have run out of legislators. Just double-checking.

Then I want to thank all of you for participating today. Thank you very much for your work.

And I'm going to call up Panel C: Empire Center for Public Policy; LeadingAge New York; New York State Association of County Health Officials; Nassau Health Care Corporation; and CHCANYS, Community Health Care Association of New York State.

We'll get an extra chair, don't worry. We won't make you stand.

Hi, everyone. Good afternoon. I'm going to ask you first to introduce yourself by name so that the tech people know what name to put up under you, and then we'll start the testimony.

Bill?

MR. HAMMOND:Bill Hammond with --

CHAIRWOMAN KRUEGER:Bill, you have to press the button -- oh, there you go. They did it for you.

MR. HAMMOND:Bill Hammond, senior fellow for health policy at the Empire Center.

CHAIRWOMAN KRUEGER:Thank you.

Next?

MS. BARRETT:Sebrina Barrett, CEO of LeadingAge New York.

CHAIRWOMAN KRUEGER:Thank you.

MS. BEERS:Linda Beers, Essex County, New York, public health director, for NYSACHO.

CHAIRWOMAN KRUEGER:Thank you.

MS. RYAN:Meg Ryan, CEO of Nassau Health Care Corporation.

MS. DUHAN:Rose Duhan, CEO of the Community Health Care Association of New York State.

CHAIRWOMAN KRUEGER:Great. So now we'll start the clock. You each get three minutes. I'll go back and start with Bill, if that's okay.

MR. HAMMOND:So I wanted to -- we've heard a lot about nitty-gritty details of Medicaid; I wanted to look at the big picture. This budget calls for the state share of Medicaid spending to increase by 6.4 billion, or 17 percent. I think like the -- some of these numbers can get a little numbing, but over the past four years the state share has increased by 60 percent.

Senator Gallivan brought up earlier that at the comprehensive level, including federal aid and the local contribution, it's gone from 89 billion to 124 billion in four years. I didn't believe that at first; I had to look it up and double-check.

The rate of growth is more than three times the average of the previous decade. So we're undergoing a really remarkable period of pouring money into Medicaid at this moment in the State of New York -- which, by the way, even in 2022, even in 2015, had the highest per-capita Medicaid spending of any state. So we're -- we're increasing what's already a very expensive program.

It's happening in a time when the economy is generally good, it's growing. Unemployment is low, poverty is stable or declining. So it's not in response to some drastic change in the nature of our population.

The Governor herself has said that this rate of increase is unsustainable -- said it two or three times, I think -- but did not offer any major plan for bringing it under control.

There's also very little in the way of an agenda for addressing the problems in our healthcare system. All of this spending has not prevented us from having hospitals that are among the lowest-rated in the country by the federal government's rating system. It hasn't prevented us from having the problems in the nursing homes that the Attorney General's lawsuits have brought out, the really, you know, horrible conditions and the profiteering.

And meanwhile, I guess to borrow a phrase from Governor Carey -- Hugh Carey, the late Hugh Carey -- we're acting as if the days of wine and roses are going to continue forever. But if you're paying attention to headlines in Washington, it doesn't seem like that's the case. There's talk about cutting trillions of dollars from the federal budget -- that's probably a 10-year figure. Medicaid is one of the biggest targets, it appears, although there's been some mixed messaging on that.

But if there is significant cutting to Medicaid, New York is going to bear a disproportionate share of it because New York is disproportionately a big spender on Medicaid.

CHAIRWOMAN KRUEGER:Thank you.

Next?

MS. BARRETT:I'm Sebrina Barrett, CEO of LeadingAge New York, a position I began on January 21 when the Executive Budget was released.

With a paltry 1.3 percent funding increase and no restoration of the cap cut, the budget does not address the urgent needs of older adults and people who need long-term-care services. We need more permanent funding.

Claiming that "Your family is my fight," the Governor's budget doesn't do enough for a key component of most of New York's families: Our grandfathers, grandmothers, great-aunts and uncles, as well as the New Yorkers who care for our older adults either as family members or paid long-term caregivers.

Year after year we tell you that we will lose services due to inadequate funding, and that is happening now. In 2024, United Helpers closed its assisted living program, leaving St. Lawrence County with no assisted living services. In the Oswego-Syracuse region, St. Luke and Community Wellness Partners had four nursing homes with 800 beds; now they have three, with about 400. In Rochester, the inability to discharge people to hospitals due to lack of services has resulted in overcrowding of hospitals. The same dynamic has resulted in backups in ERs in the Capital District, resulting in long ER wait times and first responders waiting hours in parking lots.

I experienced this firsthand on Friday when my 75-year-old father waited 17 hours for a hospital bed.

Reimbursement for long-term care has been so low for so long that more and more of our members are closing their doors. To make sure there's no misunderstanding, we have lost 3500 nursing home beds since 2014, more than 7200 beds are offline due to staffing shortages. If things continue more than 72,000 beds run by financially distressed providers could close.

Added together, that is nearly 83,000 beds. The closures would fill Madison Square Garden four times.

Where are your constituents going to go? Many will relocate hours away from their loved ones, nursing home residents will lose their home and their caregivers. What about the economic impacts to your communities and the families who will have to care for loved ones?

Any new funding has been diluted by the capital cut and other take-backs. The Governor's proposal adds only 1.3 percent new dollars, and the 15 percent cap cut must be restored so providers can offer home-like facilities and honor their debt commitments made before the state broke its promise and eliminated those funds. They have to pay the debt. With capital funds cut, the money has to come from somewhere.

Unless it is addressed, this is going to get worse. Between 2015 and 2040, the number of adults over 85 will double in New York, while the number of working-age people to help them is shrinking. We can't compete for this already-stretched-thin workforce. Investments in a system trying to survive on rates last set in 2007 are needed today.

We do appreciate the Governor's proposal that would allow medication aides in nursing homes.

Finally, for long-term care in New York to work, all parts of the system must be supported. We need funding increases in the Assisted Living Program, Adult Day Health Care Medicaid rate, and home care. We need to expand the Assisted Living Program this year. It is the only Medicaid assisted living option in the state. And we can save 4.5 million in Medicaid annually by creating a new Resident Assistant position to help older adults.

Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Next?

MS. BEERS:Hello. Chairs Krueger, Pretlow, Rivera and Paulin, and members of the Joint Health Budget Committee, thank you today for the opportunity to deliver testimony regarding the Governor's proposed '24-'25 state budget.

My name is Linda Beers. I serve as the director of public health for Essex County. I'm here today in my role as the president of New York State Association of County Health Officials, known as NYSACHO, which represents local health departments across New York State.

NYSACHO's mission is to support, advocate for and empower local health departments' workforce to promote health and wellness, protect communities, and prevent disease, disability and injury throughout New York State.

You may be wondering who local health officials are beyond our professional roles. We are parents, active military servicemembers, farmers, hunters, musicians, dedicated community volunteers. We're deeply invested in the well-being and the economic strength of our communities because we live, work and raise our families here. Public health is the foundation of a thriving, successful community.

We've submitted our formal written testimony articulating the priorities of the public health community, and the NYSACHO team is prepared to address any questions or concerns you or your staff may have relative to our submission.

Many of our priorities have not changed. They range from workforce shortages, Article 6 state aid, which is the cornerstone of public health funding, lead poisoning prevention, and clean drinking water, to tick-borne diseases, maternal child health, and the Early Intervention Program, among many others.

From our written testimony I'd like to call your attention to our comments related to the Early Intervention Program and the crisis that it is facing.

What has changed, however, is the context of our efforts. As you know, transition in leadership at any level often brings uncertainty and public health is no exception. That sense of uncertainty for public health has rarely been more profound than it is today, so we look to you, our state leaders and partners, to be a reliable, steady hand that ensures our public health infrastructure and supported, sustained prioritization.

We ask you to maintain a steadfast focus on public health even as change and uncertainty challenges us. The local health directors and commissioners of NYSACHO serve the very communities you represent, and they're counting on us to keep public health at the forefront. It is our duty to prioritize their needs and continue our efforts to protect them.

We appreciate your partnership over the years, and we remain at the ready to provide any information or assistance you may need. Thank you for the opportunity.

CHAIRWOMAN KRUEGER:Thank you.

MS. RYAN:NHCC is the public benefit corporation that manages Nassau County's only public hospital, NUMC; public SNF; A. Holly Patterson; jail; infirmary; and co-operates health centers. We are a Level 1 trauma center, recertified again in 2024. We have the only burn unit in the county and the only multi-place hyperbaric chamber on Long Island.

We served over 275,000 patients in our award-winning emergency room last year. We are a teaching hospital with over 350 residents that are learning from the best at a mission-driven institution.

Currently we have over 440 people who call A. Holly Patterson their home. We have over 3,600 dedicated employees, mostly CSEA, who have been out of a contract for over two years. Two years is too long, especially as this is our first contract after caring for our community during COVID.

NUMC is a designated hospital for inmates and for all presidents of the United States. We provide high-quality healthcare to all.

I'd like to note that I submitted written testimony with details of our robust services and our improvements, as I'd like to spend my time today to advise you of the reforms implemented, the expansion of the access of care, and our improvements since I last came before you.

I pledged to you a year ago, after only a few days as the interim CEO, that I would institute a series of reforms that would require less aid year after year, a reduction in gap funding. I am proud to inform you today that this pledge has been fulfilled. Over the past 12 months we expanded access of care and increased services to our community, all without a dollar from New York State.

We increased our clinic hours, which resulted in an additional 16,700 visits in 2024 compared to 2023. We began MRIs under sedation as an additional revenue stream. We restructured departments to optimize savings. We waived copays for our employees who opted to get healthcare at our facilities. And so much more.

Despite certain press and others misrepresenting that we were running out of cash in 30 days -- proven to be false, we did not -- we recruited and retained employees. We closed the 2024 year with over 600 percent more cash in the bank than 2023. This is with a patient/payor mix of 80 percent Medicaid, Medicare, and no pay.

While reviewing all of our funding sources, we uncovered that NUMC has been fronting the state's share of Medicaid DSH payments, which has hurt our bottom line for decades. We currently are disputing this with the state, raised the issue with the feds, and we hope to resolve this issue soon. Because the law is quite clear: The poor Medicaid hospitals should not be paying millions of dollars annually in order to access federal funds.

Last year we applied for four New York State VAPAP grants and two Transformation grants and, sadly, were not awarded any. I am pleased to report that we no longer qualify for VAP today because our finances are stronger than a year ago.

I'd like to also note the Executive Budget proposal to amend a law that was never used in the history of New York State to give DOH the increased power to install a temporary operator without a hearing first. This move is inappropriate in the budget process, and I look forward to discussing this proposal with you.

We have been under NIFA authority for five years. This administration provides daily cash balances, timely financials to NIFA and to our board.

I'm asking for a restoration of our aid and for funds to help advance a 2025 CSEA contract. Our employee salaries are less than any other public hospital. We have dedicated employees that care for the poorest and sickest in our community, and they deserve to be paid a fair and equitable wage.

New York State is funding all other hospitals, and it's unacceptable that NHCC has its Medicaid payments halved.

Thank you. I appreciate your support.

(Scattered applause.)

MS. RYAN:I had more.

(Laughter.)

MS. RYAN:I'll save it for later.

MS. DUHAN:Good afternoon. I want to start by just thanking the Legislature and acknowledging all this discussion that has been on primary care. I really appreciate that focus because it is so critical.

The Community Health Care Association of New York State represents 80 community health center or FQHC, Federally Qualified Health Center organizations that have over 900 sites and serve 2.4 million New Yorkers across the state.

On behalf of our members I want to thank the Legislature for your ongoing commitment and support to community health centers, and we need your help now more than ever to fix two and a half decades of underinvestment in community health centers. As I think has been noted, our rates have not been updated since the year 2000, so it's been some time, and longer than others that have been mentioned.

As Senator Rivera noted, there is a small increase for community health centers in the budget, which we appreciated. But as Senator Rivera noted, it is not enough. It is not enough to ensure that there is continued access to primary care in the communities that need it most.

So I'm asking you -- we need rate reform. And so I'm asking you to include the language that is in Senator Rivera's bill, S5489, and Assemblywoman Paulin's bill, A67. So thank you for introducing those. I'm asking you to include that -- the Legislature to include the language in those bills in their one-house budgets.

I'm also asking, in a direct response to Senator Krueger's question about primary care, I'm asking that the Legislature dedicate 15 percent of the MCO tax revenues specifically to primary care, including 75 million for community health center rate increases.

Without this investment and rate reform, we cannot guarantee that health centers will survive at a time when more New Yorkers than ever have come to rely on them.

One in eight New Yorkers get primary care at their community health center. New Yorkers count on us. Can we count on you? Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Senator Gallivan.

SENATOR GALLIVAN:Thank you, Madam Chair.

Thank you all for being here today. I have -- well, I guess two questions.

How do you talk so fast, is the first question.

(Laughter.)

SENATOR GALLIVAN:You don't have to answer.

MS. RYAN:Middle child.

(Laughter.)

SENATOR GALLIVAN:Mr. Hammond, a question. I think you were going in a certain direction, and I want to give you an opportunity to follow through on it. And if not, I'm still interested in your response.

What recommendations would you have for our state to get control of Medicaid spending and ensure proper oversight and accountability of that spending?

MR. HAMMOND:I mean, it would just start with, you know, not spending as much. I mean, like the -- there was this -- I'm sorry --

(Overtalk.)

SENATOR GALLIVAN:Specific steps, if you have them. If you have specific recommendations.

MR. HAMMOND:One big thing to do would be to reduce enrollment. We now have enrollment that's 40 percent of the state, if you include the Essential Plan, it's 44 percent of the state. And in New York City, it's 60 percent.

This is supposed to be a safety net health plan. It's not supposed to be covering that many people. A large number of those people appear to have incomes that are outside of the eligibility range. So -- and we've -- I think it's a truism in healthcare that private insurance pays better than Medicaid does. So if more people were in private insurance, the providers would benefit from that.

MS. DUHAN:I can take a different perspective than Mr. Hammond.

I really think that health insurance is essential for coverage so that people can get the primary and preventive care they need. And so ensuring that as many people as possible have that coverage really helps to reduce costs in the long run because a healthier population is going to be a less expensive population.

MR. HAMMOND:Yeah, I didn't mean to say that we should reduce --

SENATOR GALLIVAN:For the sake of time, let me jump in. I want to get into one specific thing. I think it has to do with accountability.

I think everybody agrees, you've heard many comments from the panel -- from the legislators up here and the concern for the CDPAP program. We have -- the spending, it's grown incredibly. But now we have a problem with the oversight of it. And many of us think it's because the Department of Health did not properly oversee it in the first place that we end up in this mess.

So what specific recommendations would you have for oversight of that particular program?

MR. HAMMOND:Well, there are two measures that were already enacted into state law in 2020 and just haven't been implemented yet, haven't been made effective. One would sort of restructure how you decide who's eligible in terms of their level of disability. I don't have the details in my head, but it basically involves using activities of daily life.

And the other would be a more serious look back at assets for financial eligibility.

SENATOR GALLIVAN:Thank you.

CHAIRWOMAN KRUEGER:Assembly.

CHAIRMAN PRETLOW:Assemblymember Jensen.

ASSEMBLYMAN JENSEN:Thank you, Mr. Chairman.

This question is going to be for LeadingAge.

I asked the commissioner when he was up on the hot seat about the cuts to capital funding for nursing homes. Could you share a little bit about what kind of capital projects or enhancements to resident care would this capital funding usually support?

MS. BARRETT:Capital funding would usually support projects that would make nursing homes safer, that would make them more home-like for the residents.

And the reality is a lot of our LeadingAge members made these type of improvements relying on that capital funding. And now they're having -- they're stuck with that debt that they can't pay because we've had a 15 percent capital cut. That can be restored for about $41 million.

The other thing that's a hardship is they rely on it to fund those projects going forward. So if they don't have the security and the backing of the state with respect to that funding, they're not going to be able to make those kind of improvements that make nursing homes safer, more home-like. We have a lot of nursing homes that are older and they need improvements -- you know, good ventilation, things like that.

So it's really important, it's crucial that those funds be restored.

And because they were cut, it really diluted the modest increases that happened last year, the 285 million, which was a one-time addition in funding. That 285 million is in the proposed budget with just an addition of 50 million in state share. And it really means little -- less than 1 percent -- to our members if that capital cut continues to be in place.

ASSEMBLYMAN JENSEN:So when you talk about facilities that may have spent the money for capital projects with the assumption that it was going to be reimbursed on the back end, where we're talking about, you know, reliance on agency or traveling nurses, combined with losses from having to take units offline to do short staffing, are these all indicative about why we're seeing an increase in closure numbers of facilities across the state?

MS. BARRETT:Yeah. So the closures -- there's two things that are happening.

One, beds are offline because nonprofit nursing homes are not able to staff, they don't have the funding to recruit and retain staff. And so they're mindful of their mission, they want to provide the best care possible. And they're not going to put folks in beds if they can't properly care for those folks because of staffing. So that's part of it.

And the second is, yeah, we're looking at real shortages in staff -- I'm sorry, funding, that's going to cause these closures.

It's -- you know, I heard our members -- we had our Lobby Day last week, and I've heard them talking about going from 900 beds to 400 beds and maybe, by the end of the year, 100 beds. And, you know, it's going to -- the reality of that is people are going to have to drive hours to see their loved ones.

ASSEMBLYMAN JENSEN:Thank you.

CHAIRWOMAN KRUEGER:Thank you.

Senator Ryan.

SENATOR CHRIS RYAN:Good afternoon.

Thank you, Chairman. And thank you to our panel.

I guess to that same question, I think it's sort of -- my colleague -- you know, obviously this is a real concern. Real, real concern with the access or in-access to those beds.

I just want to look forward a little bit. I guess the question is -- because I just want to make sure that I understand. And I think I know the question: What is the single biggest contributor to those beds coming offline?

MS. BARRETT:Funding. Our rates haven't been rebased since 2007. We are facing rising costs, like everywhere else. I've got members that have union contracts that have had 18 percent increases for wages that will -- another 5 percent, as part of that 18 percent, is coming this year.

Upstate, similar problem. Folks can go and work retail or restaurants for more money, and so those jobs are just not being filled. So that's a huge part of it. You know, you've got to have staff in order to provide care.

SENATOR CHRIS RYAN:And obviously as wage costs and costs go up.

But what, in your estimation, would be the ballpark for the funding gap? Cents on the dollar.

MS. BARRETT:Yeah. Well, we need a -- 1.6 billion. When you don't fund things properly for year after year after year, it's going to grow, the funding gap is going to grow. And basically this gap is just the difference between what things cost, actually cost, and what they're being reimbursed.

And so, you know, I think it's, you know, 400-and-some-odd-million state share. We're asking for a 20 percent increase. We understand that's a heavy lift. But this is the need that we have. It's not going away.

SENATOR CHRIS RYAN:Last question. It's a question that you probably -- well, you won't be able to answer it because it's kind of a hypothetical.

But if this trend continues and the funding continues to be a funding gap, whereas you continue to see costs rise, do you anticipate how many more beds would come offline or -- I guess it's -- again, it's a hypothetical question. I have 30 seconds. But glad to hear it.

MS. BARRETT:Yeah, in our written materials you can see a map that shows the nursing homes that are financially in distress, or the percentage of where those are at, because it's spread throughout the state.

And we estimate a total of about 83,000 beds. And like I said, that would fill Madison Square Garden four times. And I'm not sure where those folks are going to go. And it's preventing -- it's hurting the hospitals too. Because if they can't discharge folks to nursing homes, they're taking up hospital beds.

SENATOR CHRIS RYAN:I'll just say, with two seconds left here, that no room at the inn is not an answer.

MS. BARRETT:Right.

CHAIRWOMAN KRUEGER:Thank you.

Assembly.

CHAIRMAN PRETLOW:Assemblyman Ra.

ASSEMBLYMAN RA:Thank you.

Thanks for making the trip up. I just wanted to ask a couple of questions regarding the current state of the hospital.

So we know DOH has had some I guess back-and-forth with you guys. You know, letters and things of that nature. But has the New York State Department of Health actually sat down with you and your team at the hospital to discuss the hospital, its finances and all of these issues?

MS. RYAN:No, Assemblyman.

ASSEMBLYMAN RA:So it's basically been, you know, letters that have come to you and --

MS. RYAN:Yes. So DOH has asked us for -- has corresponded with us since last year. We have responded to all requests. And we have asked for meetings from DOH, and sadly they have not fulfilled our request.

So we have not had a meeting with the commissioner of Health or his team, and the last time the commissioner of Health team or the commissioner of Health came in was in 2017. So it's been a while. And the last time we had a call with DOH was back in March regarding our VAPAP application, which I said we're no longer qualified for that program anyway right now, because our finances are in a stronger position.

ASSEMBLYMAN RA:Okay. And can you just detail that again where the progress that has been made with regard to finances over the last couple of years -- because it is pretty remarkable the progress you've made.

MS. RYAN:Sure. So early in 2024 we had $11 million in the bank. That covered one payroll. We ended 2024 with $90 million in the bank. We do pay our bills.

We are -- you know, we have restructured our departments, we have optimized our savings. The reforms are working. We improved our quality scores. We went from a "D" for -- that was stuck at a "D" for six years -- to a national score of a "C." We passed every DOH survey that occurred, 10 of them in the past 11 months.

And we were recertified as a Level 1 trauma center the same day that we had our Joint Commission accreditation. So we got hit twice in the same day, and we passed both with flying colors.

So we are making finance improvements, quality improvements, and it's disappointing that we're not able to sit down and reveal these great improvements with DOH and the state.

ASSEMBLYMAN RA:Okay. Thank you.

And I think just in terms of your services -- I know Senator Rhoads brought this up with the commissioner earlier -- you know, the burn center, something obviously that's important to our volunteer firefighters community. All of the other resources that are there and would disappear for Nassau County residents, particularly, you know, central, western Nassau County if, you know, NUMC doesn't survive. So I appreciate the strides you and our staff and your team there have made in moving forward, and know that while sometimes you hear different noise coming from Albany, I think amongst your legislative delegation you have a lot of support here to help move you guys forward.

MS. RYAN:Thank you so much.

ASSEMBLYMAN RA:Thank you.

CHAIRWOMAN KRUEGER:Senator Rivera.

SENATOR RIVERA:Bro. You know I respect you, but you suggested earlier that we should just spend less money and then you said, about Medicaid, this is supposed to be a safety-net program. Would you agree that perhaps it's because there's a big chunk of the people in this state that require that safety net? Would you not agree with that?

MR. HAMMOND:Our poverty level is somewhere in the neighborhood of 15 or 16 percent, and our enrollment is 40 -- or 44 percent. I mean, we are -- our poverty level is a little bit above average. We're sort of in the middle of the pack. Our Medicaid spending is absolutely at the top.

SENATOR RIVERA:Gotcha. It is at the top because we have a more robust Medicaid program than other states. And that is a, I would argue, a positive. And turning to some of the folks that actually provide that care across the state, and federally qualified health centers, I certainly would invite you to see the type of stuff that happens in those places and the transformative things that they do there. And the fact that we need to invest in them more.

So yes, I am indeed saying we should spend more money, and more money that would actually go to places that actually give people more stability in their lives. Which costs the system less as a whole.

And one of these days I'm going to convince you on the single-payer issue. Because insurance is the problem here.

MR. HAMMOND:One of my points, though, is that we're not getting the good quality. We're putting in the money and we're not getting the good quality. We're not -- we have the imbalance, the lack of primary care. We have some of the longest emergency room wait times in the country. Our hospitals are -- you know, I think I said this during my testimony. If you look at our average scores in the federal Hospital Compare system, they're typically in the bottom five.

So, you know, it's not working. Just writing checks year after year isn't getting us the results that we deserve.

SENATOR RIVERA:And I would argue, and I would argue that there's certainly -- there's certainly -- and the reason why I respect you is there's a lot of work that you do that does point out some of these things that we could actually be better at. I just have an issue with the notion that we should just spend less and we'll be fine, particularly considering some of the folks that I represent and some of the folks that are served by federally qualified health centers and other safety-net institutions across the state.

MR. HAMMOND:A significant share of what we're spending does not take the form of reimbursing a provider for care. It takes the form of grants: Operating grants, capital grants --

SENATOR RIVERA:And on that end, by the way, I would argue and I have consistently argued this, the reason we should raise Medicaid rates is because giving higher Medicaid rates to institutions that require them to survive would allow them to provide themselves a little bit of stability, as opposed to having to come to the state on hands and knees saying, Hey, we're going to run out of money.

This is our fault. We've done this over a long period of time.

MR. HAMMOND:If you had a smaller Medicaid program that was focused more on the populations that it was originally intended to serve, you could pay better rates because it wouldn't be such a sprawling --

SENATOR RIVERA:Two seconds. Still like ya, but you're wrong on a lot of this. But God love ya.

(Laughter.)