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New York Medicaid Funds Slashed by Federal Government

As has been often discussed, in the last two years the New York Medicaid system was rocked by revelations that the federal government overpaid the system billions of dollars over a period of years. The overpayments were caused by billing problems, with state officials submitting reimbursement requests four times higher than allowed for about 1,400 developmentally disabled residents using the state Medicaid system. Over the course of twenty years, those overpayments amounted to as much as $15 billion.

Since the revelations were made, state officials (and all New Yorkers who rely on Medicaid) have been waiting to figure out the consequences. It was initially unclear how much payment would be cut in the future and whether or not the state would have to repay part or all of the overpayments. Obviously, coming up with $15 billion in an incredibly tight budget environment is next impossible, and many worry about service cuts as a result.

Lowered NY Medicaid Payments
Last week several news outlets reported on the first resolution in that matter, as federal officials announced funding cuts to appropriate levels. In the past, the state charged $5,000 per patient per day in institutional care for the developmentally disabled. However, that will now drop to $1,200 according to an agreement between federal and state Medicaid officials. Originally, per a 2011 agreement, the change in payments would occur over a five year period. However, because of vocal opposition to the delay by certain federal officials, that steady change was scraped, and an immediate reduction will now take effect.

Importantly, the agreement does not make any mention of repayment of past overbilling. Some member of Congress are calling for such repayment, but it is unclear if those calls are mere political posturing.

Consequences on New York Medicaid
Regardless of how the repayment issues is resolved, the payment reductions alone will have clear impacts on the state budget. The Poughkeepsie Journal reported how the nonprofit organizations who provide necessary care under agreements with Medicaid are already facing a 4.5% budget cut. Those cuts will likely affect various services, including at-home support and day programs used by many New Yorkers with these disabilities.

For help learning about how you or a loved one can qualify for New York Medicaid services, consider contacting the attorneys at our firm. We work with families across the state who may need to utilize the program, including seniors in need of nursing home care and adults with developmental disabilities.

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