Credit: ISTOCK/

With one rushed vote Thursday, the committee appointed by New York Gov. Andrew M. Cuomo to cut billions of dollars from Medicaid created a plan concrete enough to begin a real conversation on the program's future and the state budget.

The committee included state, hospital and union leaders and represented a shift: changes of a type that the employee unions and hospitals fought ferociously in the past, they have now signed on to.

This willingness by the stakeholders to be a part of the restructuring from day one underscores the seriousness of the situation. The cuts are coming. Health care providers and workers are no longer certain that their traditional champions in Albany can erase or soften the blows, as they have in the past, with last-minute funding restorations. The hospitals, nursing homes and unions realize that if they want a say in how Medicaid is reshaped, they need to participate in this new process.

Some of the expected $2.3 billion in savings will come from an annual cap on state Medicaid spending of just over $15 billion. How the cap will be reached is where a lot of the wiggle room lies.

The plan calls for reimbursement cuts of $345 million and allows providers to find their own ways to reduce spending another $640 million. If the providers fail, additional reimbursement cuts must make up that money.

 

New ways to pay providers

It's no surprise that Medicaid cuts include reductions in what providers are paid, because that's where most of the money is. But this plan also features 79 sensible structural changes, including: putting most patients and their prescription-drug benefits in managed care within three years, expanding managed long-term care, cost controls on home health care, ending mandates that automatically increase some spending regardless of need, and limiting malpractice damages.

The changes represent a tremendous opportunity to reform Medicaid, but they also carry risk. One problem, with the fee-for-service Medicaid model, particularly in a state as legendarily generous as New York, is that it often rewarded providers for giving patients more care than might have been necessary.

The gradual move to managed care is wise, but brings the opposite risk. When in the past providers were paid for each service they performed, they benefited best from scanning, probing and X-raying most. Now they will be paid flat fees to care for patients, a system that rewards providers more when they provide fewer services.

Assuring that patients get essential care will be of paramount importance in managing Medicaid in the future.

This plan lays out real cuts, lets providers find savings, abolishes some wasteful laws and marks a starting point toward getting a state budget passed on time. Because of that, and because players from all sides of the debate have signed on, an opportunity to create some of the structural changes New York State needs now exists.

SUBSCRIBE

Unlimited Digital AccessOnly 25¢for 6 months

ACT NOWSALE ENDS SOON | CANCEL ANYTIME