Panel: Reform state Medicaid system

ALBANY - A panel charged with reforming the state's $53 billion Medicaid system recommended sweeping changes Thursday to health care for New York's poor and elderly, capping state spending, limiting medical malpractice damages and moving nearly all patients into managed care.

Long Island health providers were still digesting the surprise news that the Medicaid Redesign Team voted on its proposals Thursday. The 27-member panel had scheduled another day of hearings Friday, but co-chairman Michael Dowling, head of North Shore-LIJ Health System, pushed the package through with a vote late in the afternoon.

Among the most dramatic potential ramifications would be the privatization of the A. Holly Patterson Extended Care Facility, Nassau's quasi-public nursing home. Talks with state officials have begun about selling the home to a private operator should it begin losing money in the coming year, said Art Gianelli, president of Nassau Health Care Corporation, the government-backed company that runs Patterson.

"I'm at the point where I have to decide whether I need to get out of the business," Gianelli said, emphasizing no decision had been made. He cited state reimbursement changes and pension costs along with the panel's plan. "It's the cumulative effect."

Gov. Andrew M. Cuomo embraced the panel's recommendations and said it silenced "cynics and pessimists" who said his health care budget lacked specifics.

"Well, we just filled in the blanks," Cuomo said at a news conference. "The questions have been answered and now we need the Legislature to fill in the blank and to do their job and to get a budget passed on time."

The governor's office will draft legislation based on the proposals over the weekend and submit it to the State Legislature by March 1.

The 79 recommendations include $345 million in savings by cutting payouts to hospitals and all other providers by 2 percent; $208 million by capping non-economic malpractice awards at $250,000 and creating a fund for babies who suffer brain damage at birth; $5 million by creating organizations to manage care for the mentally ill; and $1.1 billion through small reductions in a host of programs.

And by capping state spending growth to 4 percent, the state would force hospitals, nursing homes and other providers to find $640 million in savings on their own this year and untold amounts in the future.

Some said that was preferable to even steeper reimbursement cuts. But Long Island providers said they would be hard-pressed to find savings as Medicaid enrollment swells. "Providers cannot be held accountable for an increase in [patients] or an easing of requirements for enrollment," said John F. Collins, chief of Winthrop-University Hospital.

Even Dowling said he was not sure what the impact at North Shore-LIJ facilities will be, or how he would find savings.

Kenneth Raske, president of the Greater New York Hospital Association and a member of the panel, said the spending cap would force changes. "This is a loaded weapon," he said.