Advocacy groups sue New York state over Medicaid cuts

ALBANY, N.Y. >> Two lawsuits filed this year against Gov. Andrew Cuomo’s administration argue that state health officials facing a $1.7 billion shortfall bypassed the public and the state Legislature in moving to slash hundreds of millions of Medicaid dollars for elderly and disabled people.

Groups serving more than 75,000 senior and disabled New Yorkers are cautiously celebrating a judge’s Oct. 11 reversal of what advocates say would amount to a $150 million cut to Medicaid. And nursing home advocacy groups on Thursday lodged a lawsuit saying Cuomo’s administration is trying to address the shortfall by jeopardizing $352 million in state and federal funding.

At the heart of both lawsuits is the Democratic administration’s strong push to curb ballooning Medicaid spending. About $3.5 billion in Medicaid money this year is going to programs serving people who hire their own personal aides. Another $5 billion is going to nursing homes, which last fall received the first cost-of-living increase in more than a decade.

The lawsuit and Oct. 11 decision are under review, according to a Department of Health spokeswoman.

Twelve nursing homes have closed over the past five years, and two dozen Democratic lawmakers have called nursing home cuts “unrealistic and dangerous.” Leaders of groups serving elderly and disabled New Yorkers who hire their own personal care aides are worried the state will still push ahead with cuts amid budgetary scrutiny.

What’s causing New York’s Medicaid shortfall?

Rising long-term care costs, the minimum wage, declining federal funds and increasing enrollment are fueling the shortfall, according to New York’s budget office spokesman. This year, Cuomo proposed and withdrew $500 million in across-the-board Medicaid cuts, and later delayed $1.7 billion in Medicaid payments by three days, into the next fiscal year, to abide by a spending cap and avoid payment cuts.

But as budget officials consider implementing more delayed payments or cuts, the state hasn’t shared details that could shed light on how the shortfall appears to have suddenly ballooned. Cuomo’s budget office, for example, hasn’t responded to an Associated Press request for a breakdown of previous delayed payments.

Long-term care providers facing a workforce shortage said it has been clear for two decades that New York’s population is aging and more people are receiving services. They questioned how much immediate savings budget officials could find and said individuals living with disabilities and in nursing homes shouldn’t suffer because of larger national trends.

“The question is — are there savings to be had?” said Jim Clyne, president of LeadingAge NY, an association representing more than 500 not-for-profit nursing homes and providers. “The fastest-growing demographic in New York State is over 65; the fastest of that is over 80.”

He said the state should work with providers on solutions, such as addressing the practice of sheltering assets to qualify for Medicaid. New York could also eliminate twice-a-year assessments of disabled and elderly Medicaid recipients who hire aides, said Bryan O’Malley, executive director of the Consumer Directed Personal Assistance Association of New York State.

Are state agencies cutting funds unilaterally?

Health officials claim the cuts come from formula changes that lawmakers approved in the budget to save money.

“The rate changes approved by the Legislature in the FY 2020 budget were necessary to address inefficiencies in the reimbursement system so that providers are paid accurately and fairly while protecting New York consumers from disruptions,” said Department of Health spokeswoman Erin Hammond.

But advocacy groups argue Cuomo’s administration is bypassing lawmakers and the public and endangering vulnerable individuals to save money.

The budget said a new reimbursement formula expected to cut nursing home funding couldn’t go into effect before June 30, when a workgroup of nursing home leaders and experts were given a deadline to weigh in.

The state “ignored” the workgroup’s warnings that the cuts were based on faulty data and would endanger “financially fragile nursing homes,” according to the lawsuit.

About two dozen Democratic lawmakers called in a Sept. 11 letter for Cuomo’s administration to delay cuts. On Oct. 9, the health department sent nursing homes letters saying cuts were effective retroactive to July 1.

The lawsuit filed Thursday asks the state court to halt the “irrational, beancounting” formula, which advocates say will lead to higher-than-expected cuts. It comes nearly two weeks after a state judge ruled Cuomo’s health agency should have gone through the public rulemaking process before trying to cut $150 million in administrative costs from the program serving Medicaid recipients who hire their own aides.

In that case, Cuomo’s administration also argued lawmakers approved tweaking the program’s reimbursement formula.

But advocacy groups for the disabled and elderly pointed out there was nothing in the budget that spelled out the cuts.

For now, it’s unclear how nursing home groups will fare in their lawsuit.

“Whether that sets an example of the department overreaching on implementation of budget directives remains to be seen,” Clyne said.