Relates to waiving recoupment of medical assistance payments for the capital costs of diagnostic and treatment centers primarily engaged in providing services to the developmentally disabled.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7665C
SPONSOR: Gottfried (MS) TITLE OF BILL: An act to amend the public health law, in relation to
medical assistance payments for capital costs for certain diagnostic and
treatment centers
PURPOSE: The purpose of this bill is to ensure the financial stability
of diagnostic and treatment centers that provide critical services to
persons with developmental disabilities.
SUMMARY OF PROVISIONS:
Section 1 of this bill provides that the Commissioner of Health may
waive recoupment of Medicaid payments for capital costs for the period
September 2009 to December 31, 2012 for a Diagnostic and Treatment
Center (D&TC) licensed under Article 28 of the Public Health Law that
provides, as its principal mission, services to individuals with devel-
opmental disabilities,
Section 2 provides that the bill takes effect immediately and is deemed
to be in full force and effect on and after September 1, 2009.
JUSTIFICATION: Article 28 Diagnostic and Treatment Centers (DTCs),
with a primary mission to serve individuals with developmental disabili-
ties, were established to provide healthcare for individuals with disa-
bilities who other health care providers could not or would not serve.
These DTCs were established by not-for-profit providers and family
members who could not find healthcare services for individuals with
developmental disabilities. The reimbursement for these DTCs was cost
based until the rates were frozen in 1994. From 1994 until September
2009, these clinics did not receive any increase, trend or COLA to their
reimbursement rate even though health care costs rose by double digits
annually. Overall, these DTC reimbursement rates were inadequate to
cover costs and led to deficits which averaged 20% of operating costs.
Then in September 2009, New York State began implementation of the APG
reimbursement system.
In the transition to APGs there was no recognition of the fifteen years
of unreimbursed costs. There was a recognition that in moving forward,
New York State wanted to invest in more primary and preventive care in
order to save money on acute and emergency care and provide better
health outcomes. DTCs, with a primary mission to serve individuals with
developmental disabilities, struggled to position themselves in the
evolving healthcare landscape to meet the needs of their local communi-
ties and New York State.
In February 2013, as these DTCs continued to lose about 20% on oper-
ations, the Department of Health (DOH) began to recoup 15% of Medicaid
payments. This 15% recoupment of clinics' Medicaid payment was based on
the retroactive recalculation of capital payments back to September 1,
2009. The capital reimbursement that DTCs were receiving up to this
point had been calculated by DOH based on the DTCs 1992 cost report.
When DOH implemented APGs they continued the capital reimbursement and
then three and a half years later decided to retroactively recalculate
these capital payments. As a result, these DTCs, which serve extremely
vulnerable New Yorkers and have been experiencing 20% losses, were
suddenly and without warning losing an additional 15% of their Medicaid
payments. For some clinics, the total capital recoupment amount repres-
ents a significant portion of their total operating funds. One clinic,
in Upstate New York, would have a $700,000 recoupment on a $2 million
annual budget. Recoupments of this magnitude will close these DTCs that
serve patients who will otherwise have no or extremely limited access to
healthcare.
This legislation will mitigate the impact of the capital recalculation
by allowing the Commissioner of Health to fully or partially waive or
modify retroactive recoupments from the 2009-2012 period when necessary
in order to keep DTCs open and able to provide healthcare services to
the most vulnerable New Yorkers.
PRIOR LEGISLATIVE HISTORY: None.
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: Immediately and deemed to be in full force and effect
on and after September 1, 2009.
