412 State Street, Rochester, NY 14608
111 Washington Avenue, Suite 101, Albany, NY 12210
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Center for Disability Rights, Inc. 412 State Street, Rochester, NY 14608 111 Washington Avenue, Suite 101, Albany, NY 12210 |
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Analysis of Governor Pataki's 2004-2005 Executive Budget |
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Governor Pataki anticipates a $5.1 billion deficit for fiscal year 2004-2005. In order to close this budget shortfall, the Governor proposes a variety of measures, including $425 million in Medicaid cost containment measures. As part of these measures, the Governor proposes changes in Medicaid eligibility rules, cuts to home care, and other cost containment activities. As part of the executive budget presentation, the Governor also proposed restructuring the long-term care system. The following is an analysis of some of the Governor's proposals, specifically focusing on how the proposed budget will affect the state's ability to comply with the Olmstead decision. State Take Over of Local Medicaid Costs Governor Pataki proposes shifting the entire local cost of the long-term care program to the State over a ten-year period. New York is one of very few states that require local government to pay a share of Medicaid costs. This required county share, along with increased Medicaid costs, have burdened counties in New York and resulted in significant cuts to local operations and increases in local property taxes. The Governor's proposal addresses these concerns. Although the Center for Disability Rights (CDR) supports the State takeover of the county Medicaid share, we are concerned because the proposed State takeover is contingent upon a variety of other Medicaid cost containment measures. It appears that the Governor hopes to fund Medicaid relief to the counties by cutting services to people with disabilities. Despite the Governor's claim that his proposed reforms will allow the long term care system to better meet the needs of the elderly and persons with disabilities, we believe that many of these measures will, in fact, be harmful to seniors and the disability community and promote more expensive institutional placement. We are looking for the Legislature to take the lead on this by exploring ways to finance this State takeover while maintaining access to vital Medicaid services. Some of the possible means to finance such a takeover include placing an assessment on pharmaceutical companies for their advertising in New York State, using savings achieved by purchasing prescription drugs in bulk or purchasing drugs from Canada, and using savings achieved from a true restructuring that eliminates the institutional bias of our long term care system. Changing Medicaid Eligibility Rules The Governor's budget anticipates saving $61.6 million by instituting various Medicaid eligibility changes. These measures include:
Spousal impoverishment budgeting rules apply to married individuals when one spouse is in a nursing home. These rules shelter some of the spouse's income and assets from Medicaid when the other spouse enters a nursing home, allowing the spouse who remains in the community to maintain a modest amount of savings and the income to support their housing. These rules do not apply to married individuals in the community seeking home care services who are not eligible for a 1915(c) waiver but need community based home care services. Because these rules do not apply to married individuals seeking community-based services, when a spouse needs home care services, the other spouse currently can avoid impoverishment by refusing to pay for their spouse's medical expenses. The Governor proposes eliminating this alternative. Consequently, when a married individual applies for home care, his or her family will be forced to impoverish themselves in order for the spouse to receive community based services even though this would not be required if the spouse were placed in a nursing home. The Governor's proposal clearly reinforces the institutional bias and will result in people being unnecessarily institutionalized by family members who have been forced to choose between their spouse and the savings they need to remain in the community themselves. Home Care Assessment The Governor proposes permanently re-establishing a 0.7 percent non-reimbursable assessment on total home care revenue. This includes assessments on Certified Home Health Agencies (CHHAs), Long Term Home Health Care Program providers, Licensed Home Care providers and providers of personal care services. The imposition of this tax on gross revenue will negatively impact the ability of providers to provide adequate services and will further exacerbate the ability of home care providers to retain workers. Subsequently, individuals with disabilities may not be able to access the home care services that are needed to remain in the community. Home Care Savings Targets Governor Pataki proposes increasing the home care savings targets from $33 million (state share) to $44 million. This means that in order to avoid penalties, counties must decrease expenditures by limiting home care services. The home care targets have negatively affected New York City, Westchester, Ulster and Nassau counties. To achieve the savings targets, they must make $110 million in cuts to home care services. These home care savings targets clearly have negative consequences for individuals with disabilities who want to remain in the Most Integrated Setting. As counties strive to meet their targets, they must cut services to individuals. This policy reduces the availability of home care services and results in unwanted and unnecessary institutionalization. Preferred Drug Program The Governor's Budget calls for the establishment of a Preferred Drug Program as a Medicaid cost containment measure. The Preferred Drug Program would not affect "atypical psychotics, anti-depressants, anti-retrovirals used in the treatment of HIV/AIDS, and drugs associated with organ and tissue transplants". The cost of prescription drugs in New York State continues to skyrocket, growing each year. However, restricting access to medication is not the solution to this problem. This policy has significant Olmstead implications. This policy could create barriers for individuals seeking to return to the community from a nursing home. Currently, people who want to leave nursing homes must coordinate the complicated transition of benefits from the nursing home to community. Securing prescription medications can be one of the most difficult aspects of returning to the community. Prescriptions cannot be filled until the person has left the nursing facility and has "community" Medicaid. Prior approval delays for necessary medications could create insurmountable barriers for returning to the community. Additionally, unlike the restrictions that may be placed on medications in the community, there would not be similar restrictions on prescription medications in a nursing facility because medications are included in nursing home rates. Such a policy is a clear violation of the Olmstead decision. In fact, policies by other states that limited prescriptions in the community but not the nursing home have been successfully challenged in the courts. It is understandable that New York would want to explore ways to address the burgeoning expense of prescription drugs. Nationally, Medicaid spending on prescription drugs grew twice as fast as the total Medicaid budget. However, instead of restricting access to important medications, New York State should explore alternatives that would result in savings to the New York State Medicaid program without unnecessarily harming individuals with disabilities. The state need not look any farther that the pharmaceutical industry itself which is generating record profits and pumping massive amounts of funding into marketing campaigns for its products. Other alternatives include purchasing prescription medications in bulk to get better-negotiated prices and purchasing drugs from Canada. If New York State does establish a Preferred Drug Program, the plan must include strong consumer protections. The Budget's recommendations for the Preferred Drug Program lack necessary consumer protections. Specifically, the Preferred Drug Program, as proposed, encourages the approval of certain drugs based on estimated savings instead of what is best for the consumer. The program should allow the prescriber's judgment to ultimately determine what medication a person uses. Although the proposal allows for a 72-hour supply of a drug when an emergency condition exists, the proposal does not specify what constitutes an emergency situation. Individuals with chronic illnesses who are taking an excluded drug should be "grandfathered" in and not forced to change medications or go through the prior authorization process. Furthermore, the list of classes of drugs that are exempted from the Preferred Drug Program is too limited. Approved Multiple Sclerosis therapies should be exempt from prior authorization requirements and other medications, such as those used for seizure disorders, are often times patient-specific and must be included in the drugs that are exempted from this program. Increasing Pharmacy Co-pays The Governor's budget proposes increasing pharmacy co-pays to $1.00 for generic prescription drugs and $3.00 for each brand-name prescription drug, with a maximum payment of $150.00 per recipient per year. While this may seem like a small co-payment, it is prohibitive to individuals with disabilities who live on fixed incomes. State officials were proud that they left the SSI COLA intact, but are still looking to the pocketbooks of the State's poorest citizens to balance the budget. This co-pay increase will be especially detrimental for individuals that rely on brand name prescription medications. For example, some people with developmental disabilities depend on the standard appearance of brand name medications in order to manage their medications independently. With as few as four brand-name prescriptions, their entire SSI COLA is effectively eliminated with these co-pays. Eliminating Several Optional Services The Budget proposes eliminating several optional Medicaid services for adults. The proposed eliminated services include podiatry and services provided by private practicing dentists, nurses, audiologists and psychologists. Cutting needed services is not the answer. Services provided by podiatrists, clinical psychologists, nurses, and audiologists are often essential to individuals with disabilities who wish to remain independent. The elimination of such services will have negative consequences on the well being of individuals with disabilities. Alternative Approaches to Medicaid Cost Containment The Center for Disability Rights shares the Governor's concerns about the rising costs of Medicaid. However, one of the major factors for these costs is the state's over-reliance on nursing homes and other institutions. The state has a model 1915(c) waiver program serving persons with Traumatic Brain Injury. This program has been demonstrated to save Medicaid over $1,600 per person per month. The Governor could have expanded this program to serve seniors and younger people with all types of disabilities. In doing so the state would both comply with the Olmstead decision and address the increasing cost of long-term care. Instead of addressing this institutional bias, the Governor's budget proposals will actually reduce the availability of community-based services for individuals with disabilities and force individuals with disabilities into unwanted and more costly institutional placement. This is in direct opposition to the Supreme Court's Olmstead decision and the state's Most Integrated Setting Law, which Governor Pataki signed in September of 2002. Missing from budget proposal… Notably absent from the Governor's proposal was any attempt to deal with the housing crisis that is faced by individuals with disabilities. Without adequate affordable, accessible, and integrated housing, New York State will be hard-pressed to meet the requirements of the Olmstead decision. Some of our recommendations for solving this housing crisis include enacting statewide visitability legislation, creating an accessible housing trust fund, creating a mandatory statewide accessible housing registry, and banning source of income/payment discrimination. CDR Supports… Continuation of the SSI COLA: The Governor's budget does not reduce SSI in order to capture the COLA from the federal government. Although we oppose other proposed budget policies that would have the same net effect on individuals' budgets, we were pleased that the Governor did not propose directly eliminating this cost of living adjustment for our state's poorest citizens. State Takeover of Local Medicaid Costs: The Governor proposes having the State assume the county share of long-term care costs over a ten-year period. CDR supports the state takeover of county long-term care costs, but we oppose making this contingent on the other proposed long-term care savings measures. As previously stated, we want the NYS Legislature to explore ways to finance this State takeover, while at the same time preserving access to vital Medicaid services. Elimination of Nursing Home Supplemental Payment Add-on: The Governor's budget proposes eliminating the nursing home rate add-on for facilities with 300 or more beds. CDR supports the elimination of this policy that promotes the development of larger institutional settings. |
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