Now that it has federal OK on Medicaid plan, New York must get enough plans, providers to participate.
NY Medicaid / Managed Care
August 31, 1997
Now that New York finally has won a federal waiver to enroll Medicaid beneficiaries in a statewide mandatory managed care program, the concerns that bogged down negotiations for more than two years have not gone away. They’ve simply become implementation issues.
One of those key concerns is the adequacy of provider networks. A central term and condition in the waiver approved by the Health Care Financing Administration (HCFA) July 15 is that there must be adequate capacity in the system to serve the Medicaid population.
"The state has to assure the feds that it has an adequate number of providers in any area, so there has to be an adequate choice of plans and adequate networks," says Assemblyman Richard Gottfried, the Manhattan Democrat who chairs the Assembly Health Committee.
In recent months, about a dozen managed care organizations have either dropped out of the existing voluntary Medicaid program in the state or cut back on their participation, in most cases citing inadequate reimbursement rates.
"We don’t think they’re adequate currently," says Leslie Moran, spokeswoman for the state HMO Conference. The HMOs had been pushing the state legislature to add $40 million (or about 15%) to the rates approved by the Health Department, but when the state budget was finally passed earlier this month, HMOs got only half that.
"Obviously it’s less than we had argued for," Ms. Moran added. "But we hope it will help plans that are on the fence about participating in Medicaid managed care stay in the program."
Assemblyman Gottfried agrees with the HMOs that the $20 million is "far from adequate."
"There’s a conscious effort by the Pataki Administration to use Medicaid managed care as a way to ratchet down spending on care in a way that lets the HMOs take the complaints about the quality of care," he says. HCFA’s terms and conditions don’t specifically address the issue of rates, he says.
Health Department spokesman, Robert Hinckley, noted that in addition to the $20 million rate hike approved by the Legislature, managed care providers participating in the voluntary program get an automatic 5% increase as soon as the mandatory system goes into effect.
Earlier this year, the Health Department increased reimbursement rates by 7% after an outside audit required by the Legislature concluded that the rates paid by the state shortchanged managed care organizations.
Senate Health Committee Chairman Kemp Hannon, a Long Island Republican, downplays the importance of HMOs dropping out of the program. He says the organizations that dropped out were losing money in their commercial business as well. "Those 11 or 12 were almost matched by people entering it," he added.
Safety net providers
But, for some consumer groups, the capacity issue isn’t limited to how many HMOs will participate. It is also a matter of whether traditional providers, such as community health centers, will be able to survive under Medicaid managed care.
Hospitals won an agreement to get $1.25 billion over the next five years, with the bulk going to those in New York City. The funding is to help hospitals "adapt" to the managed care environment and retrain their workers.
However, consumer advocates are concerned that hospitals could open clinics that drive some community health centers and non-profit primary care networks out of business. In fact, the funding is seen in many quarters as a bow by the Democratic administration in Washington to Dennis Rivera, the head of the hospital workers’ union District 1199 in New York City. With a union that pours money into Democratic campaign coffers, Mr. Rivera is one of the most influential figures in New York politics. The money also reflects the political influence of hospitals.
The agreement omits any specific funding for the community health centers or for networks like the Bronx Plan, which provide much of the managed care in poor, inner city areas. Hospitals are "encouraged to form linkages" with such providers, but Ina Labiner, executive director of the Community Health Centers Association of New York State, finds small solace in that language."It’s absolutely meaningless. It’s as if I were to say to you, I encourage you to eat three meals a day.’ "
"What is a linkage?" asked Susan Dooha, a member of the Medicaid Managed Care Task Force, a consumers group. "Is it a contract? Is it a requirement that the hospitals and the HMOs make referrals to community providers? Is it a requirement that the payment be adequate?"
The federal money is intended to help hospitals set up primary care centers in communities that are underserved, but Ms. Dooha, Ms. Labiner and others worry that the hospitals will open new clinics that drive existing providers out of business. That, they argue, would have a devastating effect on the uninsured, many of whom rely on community health centers.
Mr. Hinckley says it’s much more
likely that hospitals will choose to include the centers in their networks, to save the cost of building new clinics. And Ms. Labiner acknowledged that Cesar Perales, one-time state social services commissioner under former Gov. Mario Cuomo who now heads the Presbyterian Ambulatory Care Network operated by Columbia Presbyterian Hospital, has already contacted her about working out an arrangement with existing community health care providers. "He was really doing what the terms and conditions suggested the hospitals should be doing," Ms. Labiner says. But, she cautioned, "Talk is one thing; a final contract is another."
As for the waiver’s requirement that there be adequate provider capacity in the system, Mr. Gottfried doesn’t know how vigilant the federal government will be in making sure the state complies with those requirements. "It’s not clear whether the state has to provide adequate capacity, or whether the state just has to swear to provide adequate capacity. I’m not sure the extent to which the feds will look carefully at the program once it’s operating."
—Harvy Lipman
Contact Ms. Labiner at 212-870-2272; Ms. Dooha at 212-367-1228; Mr. Gottfried at 418-455-4941; Mr. Hinckley at 518-474-7354; or Ms. Moran at 518-462-2293.
Now that it has federal OK on Medicaid plan, New York must get enough plans, providers to participate.
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