2002 Yellow Book
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DEPARTMENT OF HEALTH
 


                                  Adjusted     Executive
                             Appropriation       Request               Percent
                                   2001-02       2002-03        Change  Change


AGENCY SUMMARY
  General Fund               7,177,038,600 6,961,009,000 (216,029,600)  -3.01%
  Special Rev.-Fed.         21,523,732,00022,968,192,0001,444,460,000    6.71%
  Special Rev.-Other         2,202,495,900 3,629,898,0001,427,402,100   64.81%
  Fiduciary                      3,965,000     4,125,000      160,000    4.04%
  Enterprise                        10,000        10,000            0    0.00%
  Capital Projects Fund         11,600,000    11,600,000            0    0.00%
  Capital Projects Fund-1996     
    CWA (Bondable)              50,000,000    70,000,000   20,000,000   40.00%
  Federal Capital Projects Fund 53,659,000    75,000,000   21,341,000   39.77%
  Total for Agency:         31,022,500,50033,719,834,0002,697,333,500    8.69%
  Total Contingency:           850,000,000   963,500,000  113,500,000   13.35%
  Total for AGENCY SUMMARY: 31,872,500,50034,683,334,0002,810,833,500    8.82%


STATE OPERATIONS
  General Fund                 203,858,600   195,954,000   (7,904,600)  -3.88%
  Special Rev.-Fed.          3,404,828,000 3,901,179,000  496,351,000   14.58%
  Special Rev.-Other           347,062,900   389,734,000   42,671,100   12.29%
  Fiduciary                      3,965,000     4,125,000      160,000    4.04%
  Enterprise                        10,000        10,000            0    0.00%
  Total for STATE OPERATIONS:3,959,724,500 4,491,002,000  531,277,500   13.42%

Administration and Executive Direction
  General Fund                  14,056,200    22,365,000    8,308,800   59.11%
  Special Rev.-Fed.             12,839,000    10,473,000   (2,366,000) -18.43%
  Special Rev.-Other            26,209,000    29,389,000    3,180,000   12.13%
  Total for Program:            53,104,200    62,227,000    9,122,800   17.18%

AIDS Institute
  General Fund                  16,851,000    16,818,000      (33,000)  -0.20%
  Special Rev.-Other             2,136,000             0   (2,136,000)-100.00%
  Total for Program:            18,987,000    16,818,000   (2,169,000) -11.42%

Environmental Health
  General Fund                  10,059,000     9,987,000      (72,000)  -0.72%
  Special Rev.-Fed.             11,105,000    12,670,000    1,565,000   14.09%
  Special Rev.-Other            14,270,000    15,999,000    1,729,000   12.12%
  Total for Program:            35,434,000    38,656,000    3,222,000    9.09%

Community Health
  General Fund                   9,670,000     9,852,000      182,000    1.88%
  Special Rev.-Fed.             98,268,000   102,151,000    3,883,000    3.95%
  Special Rev.-Other             5,554,000     5,554,000            0    0.00%
  Fiduciary                      1,000,000     1,200,000      200,000   20.00%
  Total for Program:           114,492,000   118,757,000    4,265,000    3.73%

Laboratories and Research
  General Fund                  35,252,000    36,434,000    1,182,000    3.35%
  Special Rev.-Fed.              7,932,000     9,124,000    1,192,000   15.03%
  Special Rev.-Other            29,234,900    28,795,000     (439,900)  -1.50%
  Fiduciary                      2,600,000     2,600,000            0    0.00%
  Total for Program:            75,018,900    76,953,000    1,934,100    2.58%

Managed Care
  General Fund                  15,297,000    15,416,000      119,000    0.78%
  Total for Program:            15,297,000    15,416,000      119,000    0.78%

Health Care Standards and Surveillance
  General Fund                  30,319,000    25,620,000   (4,699,000) -15.50%
  Special Rev.-Other            42,860,000    48,044,000    5,184,000   12.10%
  Total for Program:            73,179,000    73,664,000      485,000    0.66%

Health Care Financing
  General Fund                   5,575,000     5,116,000     (459,000)  -8.23%
  Special Rev.-Other             5,945,000     6,915,000      970,000   16.32%
  Total for Program:            11,520,000    12,031,000      511,000    4.44%

Institution Management
  Special Rev.-Other           104,960,000   112,890,000    7,930,000    7.56%
  Fiduciary                        325,000       325,000            0    0.00%
  Enterprise                        10,000        10,000            0    0.00%
  Total for Program:           105,295,000   113,225,000    7,930,000    7.53%

Medicaid Management Information System
  General Fund                  48,676,000    55,275,000    6,599,000   13.56%
  Special Rev.-Fed.             67,510,000    67,510,000            0    0.00%
  Total for Program:           116,186,000   122,785,000    6,599,000    5.68%

Elderly Pharmaceutical Insurance Coverage
  General Fund                  11,039,000             0  (11,039,000)-100.00%
  Special Rev.-Other                     0    15,447,000   15,447,000     --  
  Total for Program:            11,039,000    15,447,000    4,408,000   39.93%

Office of Medicaid Audit and Fraud Prevention
  General Fund                  18,665,000    18,591,000      (74,000)  -0.40%
  Special Rev.-Fed.             36,278,000    37,856,000    1,578,000    4.35%
  Special Rev.-Other            14,500,000    14,500,000            0    0.00%
  Total for Program:            69,443,000    70,947,000    1,504,000    2.17%

Office of Continuing Care
  General Fund                  20,654,000    22,095,000    1,441,000    6.98%
  Special Rev.-Fed.             13,116,000    13,055,000      (61,000)  -0.47%
  Special Rev.-Other             3,626,000     3,893,000      267,000    7.36%
  Fiduciary                         40,000             0      (40,000)-100.00%
  Total for Program:            37,436,000    39,043,000    1,607,000    4.29%

Child Health Insurance
  Special Rev.-Fed.             30,280,000    28,340,000   (1,940,000)  -6.41%
  Special Rev.-Other            11,680,000    11,920,000      240,000    2.05%
  Total for Program:            41,960,000    40,260,000   (1,700,000)  -4.05%

Maintenance Undistributed
  General Fund                (78,338,000)  (88,638,000)  (10,300,000)  13.15%
  Special Rev.-Other            78,338,000    88,638,000   10,300,000   13.15%
  Total for Program:                     0             0            0     --  

Office of Medicaid Management
  General Fund                  46,083,400    47,023,000      939,600    2.04%
  Special Rev.-Fed.          3,127,500,000 3,620,000,000  492,500,000   15.75%
  Special Rev.-Other             7,750,000     7,750,000            0    0.00%
  Total for Program:         3,181,333,400 3,674,773,000  493,439,600   15.51%

AID TO LOCALITIES
  General Fund               6,973,180,000 6,765,055,000 (208,125,000)  -2.98%
  Special Rev.-Fed.         18,118,904,00019,067,013,000  948,109,000    5.23%
  Special Rev.-Other         1,855,433,000 3,240,164,0001,384,731,000   74.63%
  Total for AID TO LOCALITIES:26,947,517,00029,072,232,0002,124,715,000  7.88%

Administration and Executive Direction
  General Fund                     869,000       869,000            0    0.00%
  Total for Program:               869,000       869,000            0    0.00%

AIDS Institute
  General Fund                  53,656,000             0  (53,656,000)-100.00%
  Special Rev.-Other            34,597,000    88,253,000   53,656,000  155.09%
  Total for Program:            88,253,000    88,253,000            0    0.00%

Environmental Health
  General Fund                   1,500,000             0   (1,500,000)-100.00%
  Special Rev.-Fed.              2,208,000     2,540,000      332,000   15.04%
  Special Rev.-Other               200,000     6,200,000    6,000,000 3000.00%
  Total for Program:             3,908,000     8,740,000    4,832,000  123.64%

Community Health
  General Fund                 526,588,000   484,451,000  (42,137,000)  -8.00%
  Special Rev.-Fed.            574,806,000   605,193,000   30,387,000    5.29%
  Special Rev.-Other            36,578,000    58,823,000   22,245,000   60.82%
  Total for Program:         1,137,972,000 1,148,467,000   10,495,000    0.92%

Laboratories and Research
  General Fund                   1,071,000     1,071,000            0    0.00%
  Special Rev.-Fed.              2,105,000     2,420,000      315,000   14.96%
  Total for Program:             3,176,000     3,491,000      315,000    9.92%

Health Care Standards and Surveillance
  General Fund                   9,535,000     9,185,000     (350,000)  -3.67%
  Total for Program:             9,535,000     9,185,000     (350,000)  -3.67%

Medical Assistance
  General Fund               6,134,300,000 6,156,000,000   21,700,000    0.35%
  Special Rev.-Fed.         16,424,000,00017,054,000,000  630,000,000    3.84%
  Special Rev.-Other         1,231,400,000 2,124,700,000  893,300,000   72.54%
  Total for Program:        23,789,700,00025,334,700,0001,545,000,000    6.49%

Medical Assistance Administration
  General Fund                 108,557,000   114,350,000    5,793,000    5.34%
  Special Rev.-Fed.            388,750,000   481,800,000   93,050,000   23.94%
  Total for Program:           497,307,000   596,150,000   98,843,000   19.88%

Elderly Pharmaceutical Insurance Coverage
  General Fund                 401,100,000             0 (401,100,000)-100.00%
  Special Rev.-Other                     0   484,900,000  484,900,000     --  
  Total for Program:           401,100,000   484,900,000   83,800,000   20.89%

Office of Continuing Care
  General Fund                   2,546,000       621,000   (1,925,000) -75.61%
  Special Rev.-Fed.                315,000             0     (315,000)-100.00%
  Total for Program:             2,861,000       621,000   (2,240,000) -78.29%

Child Health Insurance
  Special Rev.-Fed.            726,720,000   921,060,000  194,340,000   26.74%
  Special Rev.-Other           280,320,000   470,000,000  189,680,000   67.67%
  Total for Program:         1,007,040,000 1,391,060,000  384,020,000   38.13%

Maintenance Undistributed
  General Fund               (272,338,000)   (7,288,000)  265,050,000  -97.32%
  Special Rev.-Other           272,338,000     7,288,000 (265,050,000) -97.32%
  Total for Program:                     0             0            0     --  

Office of Medicaid Management
  General Fund                   5,796,000     5,796,000            0    0.00%
  Total for Program:             5,796,000     5,796,000            0    0.00%

CAPITAL PROJECTS
  Capital Projects Fund         11,600,000    11,600,000            0    0.00%
  Capital Projects Fund-1996     
    CWA (Bondable)              50,000,000    70,000,000   20,000,000   40.00%
  Federal Capital Projects Fund 53,659,000    75,000,000   21,341,000   39.77%
  Total for CAPITAL PROJECTS:  115,259,000   156,600,000   41,341,000   35.87%

Laboratories and Research
  Capital Projects Fund          4,000,000     4,000,000            0    0.00%
  Total for Program:             4,000,000     4,000,000            0    0.00%

Water Resources
  Federal Capital Projects Fund 53,659,000    75,000,000   21,341,000   39.77%
  Total for Program:            53,659,000    75,000,000   21,341,000   39.77%

Safe Drinking Water - Clean Water/Clean Air 96
  Capital Projects Fund-1996     
    CWA (Bondable)              50,000,000    70,000,000   20,000,000   40.00%
  Total for Program:            50,000,000    70,000,000   20,000,000   40.00%

Preservation of Facilities Purpose
  Capital Projects Fund          7,600,000     7,600,000            0    0.00%
  Total for Program:             7,600,000     7,600,000            0    0.00%

CONTINGENCY
  General Fund                           0    13,500,000   13,500,000     --  
  Fiduciary                    850,000,000   950,000,000  100,000,000   11.76%
  Total for CONTINGENCY:       850,000,000   963,500,000  113,500,000   13.35%

Laboratories and Research
  General Fund                           0    13,500,000   13,500,000     --  
  Total for Program:                     0    13,500,000   13,500,000     --  

Medical Assistance
  Fiduciary                    850,000,000   950,000,000  100,000,000   11.76%
  Total for Program:           850,000,000   950,000,000  100,000,000   11.76%

                                                                    
                                                                    
      

                         ALL FUNDS PERSONNEL
                        BUDGETED FILL LEVELS
                                                                    
                                                                    
      
                                   Current     Requested
Program                            2001-02       2002-03   Change
                                                                    
                                                                    
      
Suballocation                           12            12        0
Administration and Executive   
  Direction                            494           480     (14)
AIDS Institute                         214           190     (24)
Environmental Health                   423           406     (17)
Community Health                       651           649      (2)
Laboratories and Research              658           674       16
Managed Care                           169           162      (7)
Health Care Standards and   
  Surveillance                         541           492     (49)
Health Care Financing                  129           127      (2)
Institution Management               1,516         1,552       36
Elderly Pharmaceutical   
  Insurance Coverage                    28            28        0
Office of Medicaid Audit and   
  Fraud Prevention                     509           500      (9)
Office of Continuing Care              373           366      (7)
Child Health Insurance                  42            41      (1)
Office of Medicaid Management          402           394      (8)

Total General Fund :                 2,525         2,418    (107)
Total All Other Funds :              3,636         3,655       19

TOTAL:                               6,161         6,073     (88)
                                                                    
                                                                    
       

                          BUDGET HIGHLIGHTS
                   (Executive Budget: pp. 121-132)

As the designated State agency responsible for promoting and
supervising public health activities, ensuring sound and cost
effective quality medical care, and reducing infectious diseases, the
Department of Health (DOH) works towards its goal of ensuring the
highest quality, most appropriate and cost-effective health care for
all New Yorkers.  Since State Fiscal Year (SFY) 1996-97, when
authority for the State's Medical Assistance (Medicaid) Program was
transferred from the former Department of Social Services, the
Department of Health has also served as the principal State agency
responsible for interacting with the Federal and local governments,
health care providers, and program participants on behalf of the
Medicaid Program in New York.  Transfer of all Medicaid functions to
the Department of Health consolidated for the first time in one agency
the operational and oversight responsibilities for the Medicaid
Program, thereby clarifying State accountability for Medicaid policy
and allowing for greater efficiencies in the administration of health
care programs.

This Agency is included in the Health, Mental Hygiene and
Environmental Conservation appropriation bill.

The Governor recommends All Funds appropriations for the Department
of Health totaling $34,683,334,000, an increase of $2,810,833,500, or
8.82 percent, over State Fiscal Year (SFY) 2001-02, primarily
attributable to an increase in both Special Revenue Fund Federal and
Special Revenue Fund Other.  The Governor recommends General Fund
appropriations for the Agency totaling $6,961,009,000, a decrease of
$216,029,600, or three percent below the current fiscal year. 
Additionally, the Governor recommends Special Revenue Funds Federal
appropriations for the Agency totaling $22,968,192,000, an increase
of $1,444,460,000, or 6.7 percent over last year.  The Executive
further recommends Special Revenue Fund Other of $3,629,898,000, an
increase of $1,427,402,100, or 64.8 percent, primarily due to a shift
from General Fund spending.

The adjusted appropriation for the Department of Health includes
recommended deficiency appropriations for the General Fund in Aid to
Localities totaling $471,800,000.  The proposal allocation of those
funds is as follows: the Medicaid Program, $179,600,000; the Early
Intervention (EI) Program, $70,000,000; the Elderly Pharmaceutical
Insurance Coverage (EPIC) Program, $40,700,000; the General Public
Health Works Program, $48,900,000; the West Nile Encephalitis
Outbreak, $21,900,000; the Immunization Program, $3,700,000; and
$107,000,000 for the HCRA Transfer Fund/Medical Assistance Account to
offset Medicaid General Fund spending.

The Executive proposes to sweep $31,500,000 from various Special
Revenue Other (SRO) accounts within the agency to offset General Fund
spending in SFY 2002-03. Specifically, the Executive proposes to
sweep: 

--     $9,000,000 from the Emergency Medical Services (EMS) Account;

--     $3,000,000 from the Professional Medical Conduct Account;

--     $1,000,000 from the Environmental Laboratory Reference and
       Accreditation Program (E-LAP);

--     $13,500,000 from the Spinal Cord Injury Research Fund; and 

--     $5,000,000 from the Occupational Health Clinics Account.

Other actions proposed by the Executive that would further offset
General Fund spending throughout the agency include:

--     a $4,000,000 General Fund offset related to an increase in the
       Article 28 Mortgage Loan Fee, from .2 percent to .3 percent. 
       This fee increase would be changed administratively; and

--     a $6,000,000 General Fund offset realized by exceeding the
       recoupment target in the Quality of Care Account.

State Operations

The Executive recommends a total All Funds appropriation for State
Operations of $4,491,002,000, which reflects an increase of
$531,277,500, or 13.4 percent over SFY 2001-02.  This increase is
primarily due to increased Federal funds.  The Executive proposes
General Fund State Operations appropriations totaling $195,954,000,
a net decrease of $7,904,600, or 3.9 percent.  The Executive also
recommends Special Revenue Funds Federal totaling $3,901,179,000, an
increase of $496,351,000, or 14.6 percent. 

The Executive proposes the attrition of 50 positions throughout the
agency in SFY 2002-03, which would generate a General Fund savings of
$1,500,000. The Executive also proposes to shift the funding of 10
positions from the General Fund to the Health Care Reform Act of 2000
(HCRA 2000) to generate savings of $647,000.  In addition, the
Executive proposes to adopt stringent turnover requirements, which
would generate an additional $1,500,000 in General Fund savings. 

The Executive further proposes to combine the AIDS newborn screening
program with the genetic newborn screening program in the Wadsworth
Center for Laboratories and Research.  The $5,000,000  proposed for
this initiative is deemed by the Executive to be sufficient to meet
the full spending needs of both programs.  Of the $5,000,000,
$1,800,000 is associated with costs related to the AIDS newborn
screening program and $3,200,000 is associated with costs related to
the genetic screening program.

Other notable changes proposed by the Executive in State Operations
include:

--     a new $3,000,000 General Fund increase in the Administration
       and Executive Direction Program related to a time and activity
       system;

--     a new $1,300,000 Maintenance Undistributed appropriation in the
       Statewide Planning and Research Cooperative System (SPARCS) for
       compliance with Federal data security standards; and

--     a new $150,000 Maintenance Undistributed appropriation in the
       Center for Environmental Health Program, to be suballocated to
       the Department of Agriculture and Markets, for the protection
       of drinking water supplies.
 
Institutional Management

As part of the major health care package (S.6084/A.9610) passed in
January 2002, the Roswell Park Cancer Institute will receive
$60,000,000 in additional funding in SFY 2002-03 from the HCRA 2000.
It is anticipated that the Roswell Park Cancer Institute will receive
an additional $45,000,000 in SFY 2003-04 above the expected HCRA 2000
allocation.  There is a commitment to fund $45,000,000 for Roswell
Park Cancer Institute in SFY 2004-05 from an extension of HCRA. 

The Department of Health currently maintains five direct care
institutions: Helen Hayes Hospital in West Haverstraw and four nursing
homes for the care of veterans and their dependents, Oxford, New York
City, Montrose and Western New York. The Executive proposes a
$3,933,000 funding increase for the Montrose Veterans' Nursing Home,
which is a new, 252-bed facility in the lower Hudson Valley that
opened in mid October 2001.  Additionally, the Executive proposes a
$2,225,000 increase for Helen Hayes Hospital and a $1,025,000 increase
for Oxford Veterans' Nursing Home, associated with increased
operational costs.

Aid to Localities

The Executive recommends All Funds Aid to Localities appropriations
totaling $29,072,232,000, an increase of $2,124,715,000, or 7.9
percent over the SFY 2001-02 funding level.  This increase is
primarily attributable to an increase in Special Revenue Fund Federal
and Special Revenue Funds Other.

The Executive proposes General Fund appropriations totaling
$6,765,055,000, a decrease of $208,125,000, or 3.0 percent from SFY
2001-02. The Executive also recommends a Special Revenue Fund Federal
appropriation totaling $19,067,013,000, an increase of $948,109,000,
or 5.2 percent.  The proposed $1,384,731,000 increase in Special
Revenue Funds Other is largely the result of a shift from General Fund
spending.

For the Early Intervention (EI) Program, the Executive recommends an
appropriation of $210,000,000 for SFY 2002-03. In SFY 2001-02, the
Executive is requesting a deficiency appropriation of $70,000,000 to
meet a cash deficiency of $60,00,000, which is attributed to increased
services provided to infants and toddlers with disabilities.  The
proposed SFY 2002-03 appropriation anticipates both enrollment growth
and an increased use in services that the Executive expects to offset
in part by taking new audit and fraud prevention actions in the EI
program.  Such actions are expected to save the EI program $5,000,000
in SFY 2002-03.

The Executive proposes a $40,700,000 deficiency appropriation in the
Elderly Pharmaceutical Insurance Coverage Program (EPIC) in SFY 2001-
02.  As part of the recently enacted health care package
(S.6084/A.9610), the expansion of the Elderly Pharmaceutical Insurance
Coverage (EPIC) Program will now be funded from HCRA 2000 funds,
rather than the General Fund, at a level consistent with current
program growth.  In addition, the health care package cut pharmacy
reimbursement to mirror that of the Medicaid program by reducing
reimbursement for all pharmacists to the Average Wholesale Price (AWP)
minus 10 percent.  This action is expected to generate a $25,000,000
savings to the EPIC program in SFY 2002-03.  The Plan also changed the
drug rebate methodology, again to mirror the Medicaid program, to
generate $6,600,000 in savings to the EPIC program in SFY 2002-03. 
The Plan also requires private health insurers to match membership
files, starting April 1, 2002, with EPIC enrollees files to facilitate
the coordination of benefits.  This action is expected to generate a
$2,000,000 savings to the EPIC program in SFY 2002-03.

The Executive recommends an appropriation of $209,500,000 in SFY 2002-
03 in the General Public Health Works Program to support local public
health activities.  The Executive is currently proposing a deficiency
appropriation of $48,900,000 for this program, as well as a separate
$21,900,000 deficiency appropriation to pay for activities related to
the West Nile encephalitis outbreak.

In addition, the Executive proposes to shift the lead poisoning
prevention program and a portion of the abstinence program, a total
of $4,600,000 in current year General Fund spending, to the Maternal
and Child Health Federal Block Grant.  
In the AIDS Institute, appropriations totaling $53,656,000 were
transferred from the General Fund to HCRA 2000, as part of the health
care workforce bill (S.6084/A.9610) that passed in January 2002.  As
a result of this action, all Aid to Localities General Fund programs
in the AIDS Institute will now be funded through HCRA 2000.

Other notable changes proposed by the Executive in Aid to Localities
include: 

--     a new $2,500,000 General Fund appropriation for the health and
       social services sexuality-related program;

--     an additional $1,600,000 in funding to the Healthy Women
       Partnerships Program for SFY 2002-03 to increase breast and/or
       cervical screening services; and

--     a $1,925,000 decrease in funding for the adult care facility
       Quality Incentive Payment (QUIP) program.

Medical Assistance (Medicaid) Program

The Executive recommends an All Funds Medicaid appropriation in Aid
to Localities of $25,334,700,000, which is an increase of
$1,545,000,000, or 6.5 percent, resulting from an increase in both
Federal funds and Special Revenue Funds Other.

The Executive estimates General Fund disbursements in the Department
of Health will be $6,134,300,000 in SFY 2001-02. This total includes
the requested deficiency appropriation of $179,600,000.  The Executive
attributes the deficiency to:  the Legislature's rejection of the
Executive's proposed Medicaid cost-containment package in SFY 2001-02,
$138,900,000; additional litigation and Federal mandate requirements,
$25,600,000; and the implementation of the new Disaster Relief
Medicaid/Family Health Plus Program, $15,100,000. 

For State Fiscal Year 2002-03, the Executive proposes a total General
Fund Medicaid appropriation of $6,156,000,000, a net increase of
$21,700,000, or 0.4 percent over the SFY 2001-02 adjusted
appropriation.  The Executive estimates an increase in Medicaid
General Fund expenditures in SFY 2002-03 of $441,800,000 associated
with year-to-year program growth.  In addition, the Executive
increases the General Fund Medicaid appropriation by $81,000,000 to
reflect the loss of a portion of the nursing home Inter-Governmental
Transfer (IGT), and by $17,800,000 for costs associated with
litigation and Federal mandate requirements.

These increases in General Fund Medicaid spending are offset by
$364,700,000 in SFY 2002-03 due to the passage of a health care
package (S.6084/A.9610) in January 2002, prior to the release of the
Executive Budget.  Specifically, the bill: re-establishes the six
percent assessment on residential health care facilities for
$288,600,000 in savings; mandates the generic substitution of brand
name pharmaceuticals unless a physician secures prior approval from
the Department, for $2,500,000 in savings; increases the Inter-
Governmental Transfer (IGT) on public hospitals and updates the base
year from 1995 to 2000 for savings of $18,700,000; and extends the
Medicaid Upper Payment Limit (UPL) benefit to outpatient services for
$54,900,000.

Medicaid General Fund spending is further decreased in the Executive
Budget by $73,400,000, transferring both the Working Disabled 1619-B
Program and the Medicaid Physicians Services Program from the General
Fund to the HCRA 2000 Tobacco Control and Insurance Initiatives Pool. 
The Executive also proposes a $81,000,000 Medicaid General Fund
savings related to Bad Debt and Charity Care, $72,000,000; various
pharmacy initiatives, $1,500,000; and savings generated from the
Office of Alcoholism and Substance Abuse Services (OASAS) from a new
community-based detox program, $7,500,000. 

Health Care Reform Act of 2000 (HCRA 2000)

In actions taken in January 2002, prior to the release of the
Executive Budget, the Legislature passed a major health care package
(S.6084/ A.9610) that significantly adds to HCRA 2000.  In addition,
portions of the package, mentioned below, take action to provide
savings in the Medicaid/Health budget.  Specifically, the bill re-
establishes the six percent assessment on residential health care
facilities for three years, which would generate a State share savings
of $288,600,000 in SFY 2002-03. The bill also mandates the generic
substitution of brand name pharmaceuticals under the Medicaid Program
unless a physician secures prior approval from the Department, which
would generate a $2,500,000 State Share savings in SFY 2002-03, and
increases the Inter-Governmental Transfer on public hospitals and
updates the base year from 1995 to 2000, which would offset General
Fund spending by $18,700,000 in SFY 2002-03.  In addition, the bill
extends the Medicaid Upper Payment Limit (UPL) benefit to outpatient
services, which would create a $54,900,000 General Fund savings in SFY
2002-03.

In other savings actions, the bill also requires insurance companies
to cover appropriate medical and therapeutic services in the Early
Intervention (EI) Program.  Although no savings are anticipated in SFY
2002-03 for this initiative, it is anticipated that this action would
generate $60,000,000 in General Fund savings by the end of SFY 2004-
05.

In the Elderly Pharmaceutical Insurance Coverage (EPIC) Program, the
bill cuts pharmacy reimbursement to mirror that of the Medicaid
program by reducing reimbursement for all pharmacists to the Average
Wholesale Price (AWP) minus 10 percent. This action would generate a
savings of $25,000,000 in SFY 2002-03 to the EPIC program.  In
addition, the bill changes the drug rebate methodology in the EPIC
program, which would generate $6,600,000 in SFY 2002-03 in savings to
the EPIC program.  The bill also requires private health insurers to
match membership files, starting April 1, 2002, with EPIC enrollees
files to facilitate the coordination of benefits.  This action is
expected to generate a savings of $2,000,000 in SFY 2002-03.

The bill also provides for the transfer of the expansion of the
Elderly Pharmaceutical Insurance Coverage (EPIC) program, as well as
of certain public health programs, from the General Fund to the HCRA
2000 to provide General Fund relief of $211,900,000 in SFY 2002-03.

The bill also removes various obstacles to enrollment in the Child
Health Plus, Family Health Plus, and Medicaid programs.  Specifically,
the bill eliminates the face-to-face interview during the
recertification process for the Medicaid program; directs the
Commissioner of Health to develop a simplified recertification form
for persons renewing coverage in the Child Health Plus, the Family
Health Plus, and the Medicaid Program; allows persons who are applying
for community-based Medicaid to self-attest to their resource level;
provides a grace period (60 days) during the recertification process
for persons renewing Child Health Plus B coverage; allows individuals
to self-attest to income during the recertification process in the
Child Health Plus B program; and includes the use of an ambulance as
an added service under the Child Health Plus benefit package.  

The bill also provides $2,700,000 to support administrative costs in
SFY 2002-03 related to a Medicaid Buy-In Program for the working
disabled.  The program would provide Medicaid coverage for disabled
persons, up to 250 percent of the Federal Poverty Level (FPL), and
with assets up to $10,000, effective April 1, 2003.  Workers with
incomes above 150 percent of the FPL will pay a premium for coverage
based on a sliding fee scale.  In addition, the bill provides $900,000
in SFY 2002-03 for Medicaid coverage up to 250 percent of the FPL to
uninsured and underinsured women diagnosed with breast cancer or
cervical cancer who are screened through the Center for Disease
Control's program, effective October 1, 2002.  

Article VII

In an Article VII bill, the Executive proposes:

--     authorizing the transfer of the Working Disabled 1619-b program
       from the General Fund to the Health Care Reform Act of 2000.
       The scheduled allocation amounts proposed by the Executive are
       $6,400,000 in Calendar Year (CY) 2002 and $4,300,000 from
       January 1, 2003 to June 30, 2003 from the HCRA 2000 Tobacco
       Control and Insurance Initiatives Pool;

--     authorizing the transfer of the Medicaid Physicians Services
       Program from the General Fund to the Health Care Reform Act of
       2000.  The scheduled allocation amounts proposed by the
       Executive are $52,000,000 in CY 2002 and up to $43,000,000 from
       January 1, 2003 to June 30, 2003 from the HCRA 2000 Tobacco
       Control and Insurance Initiatives Pool;

--     directing all of the cigarette tax receipts from the 39 cent
       increase to be deposited into the HCRA 2000 Tobacco Control and
       Initiatives Pool;

--     increasing the HCRA 2000 allocations by $15,700,000 for the
       period January 1, 2002 to December 31, 2002, and $9,000,000 for
       the period January 1, 2003 to June 30, 2003 for the Elderly
       Pharmaceutical Insurance Coverage (EPIC) Program.

Capital Projects

The Executive recommends an All Funds Capital Projects appropriation
of $156,600,000, an increase of $41,341,000 or 35.9 percent over SFY
2001-02 due to an increase in the Capital Projects Fund - 1996 Clean
Water/Clean Air (CWA) (Bondable) and the Federal Capital Projects
Fund.

New York State Assembly
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