Sen. Kemp Hannon, (R-Garden City), speaks during a Senate health...

Sen. Kemp Hannon, (R-Garden City), speaks during a Senate health and insurance hearing, Jan. 6, 2016, in Albany, N.Y. Credit: AP / Mike Groll

ALBANY – A major Medicaid provider of long-term care has told state officials it will no longer accept new Long Island patients due to New York’s “calamitous” reimbursement process, a sign of a system-wide problem, a key state Senator said Wednesday.

GuildNet, a Manhattan-based provider, sent a letter last week informing state health officials that “effective immediately” it will not add any new enrollees from Suffolk, Nassau, and Westchester. GuildNet also services clients in Manhattan’s five boroughs.

The company has incurred “very substantial deficits” because of “a disconnect between” program mandates, failure to provide enough revenue to cover the state’s share of costs and “constant regulatory changes,” GuildNet CEO Alan Morse wrote in the letter.

GuildNet covers several thousand Long Island residents who won’t be impacted by the announcement.

But many families of patients in long-term care are concerned and GuildNet’s position underscores a “building problem” in the state’s health-care system, said Sen. Kemp Hannon (R-Garden City).

In short, home care services say they aren’t getting an adequate reimbursement rate from state government and nursing homes aren’t getting timely payments, said Hannon, chairman of the Senate Health Committee.

Needing to meet Medicaid spending caps, the health-care plans are reducing what they pay to care providers, who cut employee pay. GuildNet effectively has cut the pay for certain health-care workers from $13 per hour to $10, triggering some to find other jobs, Hannon said in a letter to the state Health Department in September.

“It’s just that there is too little going into the system to care for people,” Hannon said Wednesday. The answer isn’t necessarily “all sorts of money going in” to the system, he said, but could involve a hard look at the state’s reimbursement process.

Assemb. Richard Gottfried (D-Manhattan), chairman of the Assembly Health Committee, countered that it’s “hard to see a solution that doesn’t involve spending more money.”

Patients needing to enroll in managed long-term care can choose from other companies, Gottfried said, but GuildNet’s decision is a “sign of a bad situation.”

State health department officials didn’t immediately comment Wednesday.

Hannon warned fellow lawmakers in March during state budget negotiations that the problem was “building.” And it’s gotten more acute, he said.

“About eight weeks ago, we started getting screams from all over the Island: [programs] were not getting the money. . . . They can’t pay the aides,” Hannon said.

Part of the issue is that the Cuomo administration, in order to stem the skyrocketing costs of Medicaid, moved “home care” services under the wing of managed long-term care along with making other structural changes, Hannon said.

The state’s average annual growth in Medicaid has dropped from 10 percent or great to around 3 percent. Meanwhile, the number of patients in managed long-term care jumped from about 20,000 in 2012 to 180,000 currently. And payments for home care can be delayed because of the new structure, he said.

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