Assembly Speaker Sheldon Silver and Ways and Means Committee Chair Herman D. Farrell, Jr. said today that the Assembly budget proposal approved on March 24 includes a proposal to shift all Medicaid administration costs from counties to the state.

Each year, hundreds of millions of dollars are spent to administer Medicaid in New York. This measure would help save taxpayer dollars by streamlining eligibility and service determinations, implementing operational efficiencies and consolidating services and contracts. If enacted, the measure would be implemented over a five-year period, starting in 2011-12.

Total Medicaid administration costs are estimated at $1.1 billion for 2010-11. The total county contribution toward the administrative component of Medicaid is expected to be $329.8 million in 2010-11. The remainder of the non-federal share, $221.5 million, will be paid by the state. Local administration costs have nearly doubled over the past five years; a state takeover of such costs would help to relieve the burden on localities.

"A structural overhaul of Medicaid administration in New York State is long overdue," said Silver (D-Manhattan). "This measure will potentially save hundreds of millions in taxpayer dollars. By allowing the state to take over the cost of the counties' share, we will see a more uniform system and eliminate spending that is associated with duplicative services and decentralization."

"It's necessary and sensible that during this economic downturn, we take steps to consolidate entities and streamline services," said Farrell (D-Manhattan). "This proposal represents a major change in the way that Medicaid administration is handled in New York State, and will ultimately save local taxpayer dollars."

Medicaid administration activities performed by the Local Departments of Social Services and the New York City Human Resources Administration (HRA) include screening applicants for eligibility and monitoring Medicaid recipients on an ongoing basis to ensure that they are still eligible for coverage. Administration activities also include distributing information about Medicaid managed care, determining if enrollees are exempt from mandatory managed care enrollment and automatically enrolling those who qualify for managed care but have not chosen a plan.

The Assembly proposal to shift costs and duties related to Medicaid administration from counties to the State would:

• Streamline Medicaid eligibility determinations, which often vary between counties;
• Allow for the transition of local employees to the state service; and
• Require the State Department of Health to limit annual growth at a fixed percentage or at an amount to be determined in the state budget.

The Medicaid eligibility structure in New York State is highly decentralized, with the New York State Department of Health setting eligibility policies and many other entities in charge of overseeing the eligibility system. The Welfare Management System, operated by the State Office of Temporary and Disability Assistance, assesses eligibility for the Medicaid program and all other health, public assistance and social services programs. Oversight of eligibility is further entrusted to the 58 local social services departments and the New York City HRA.

There is variance between states as well. California and Ohio, for example, allow for eligibility determinations to be made on the county level while Florida and Massachusetts make determinations on a statewide basis.