Some thoughts on the state’s $4 billion Medicaid shortfall. story is here https://subscriber.politicopro.com/states/new-york/city-hall/story/2019/11/22/medicaid-shortfall-1229157 [$] with @ShannonYoung413 CC: @JimmyVielkind @J__Velasquez @nahmias @EjmEj @cbcny @NYHammond 1/

Nothing in this $4 billion shortfall wasn’t known for at least a year begging the question why the state is only now saying it will address the problem. Long-term care costs have been an incoming tsunami for a decade. Reduction in federal medicaid share was part of 2010 ACA 2/

Distressed Hospitals, well the state’s been warning about that for years. And, apparently, they’ve been rolling over payments for years as well, including a $1.7 billion deferral last year. Which means the enacted budget wasn’t balanced …not really, anyway 3/

Despite these known knowns (h/t Rumsfeld) the state increased rates to hospitals to the tune of $140 million. That might be good policy but it’s curious choice in the face of such an overwhelming deficit. 4/

And a word about thed global cap. It is neither global nor a cap (h/t CBC). Min wage is outside the cap, DOB takes about $400 million from the cap to plug general budget shortfall. And it’s consistently over, hence the need to make deferred payments every year. 5/

@NYGovCuomo prides himself on (small “c”) conservative budgets and plenty of evidence suggests state’s fiscal house is in order, but in this case it’s hard to understand how this shortfall happened. The state can’t point to an unanticipated event that is its cause 6/

And the solution - deferring $2.2 billion in payments to next fiscal year - just kicks can down the road. Also – this comes as the state touts the success of the DSRIP program, which reduced avoidable hospital use, i.e. huge savings to the Medicaid program. 7/

So this big deficit comes despite big successes in delivery reform. Also, the state says that this year there was $2.2 billion in cost overruns. Where does that number come from? How much over budget is long term care? Or minimum wage increase? We don’t know, which 8/

makes it hard to evlaute the problem or address any solutions the state might offer. One other thing to consider. Cutting rates to providers is quick but every $1 the state doesn’t spend is a $2 hit to providers b/c of the federal match. 9/

And CMS just said they are going to take a harder look at supplemental payments, the kind that could make up for a rate cut. Also, the legislature has very rarely been cool to “savings” and hospital/union lobbies are strong. So finding $1.8 Billion won’t be easy. 10/

Remember a 2012 law gives DOH commissioner (and by extension Cuomo) broad powers to make cuts. Will he use it? One other thing. The state used to provide monthly global cap updates that kept people abreast of spending. Theat ended in Nov. 2018 and that lack of transparency

makes it hard to stay on top of this stuff. Yes, the state puts a lot in its budget reports but you have to wonder why it stopped providing a digestable nugget? I welcome your feedback /Fin