2020 Budget Cuts to Medicaid in New York

Recently, New York State announced budget cuts to its Medicaid program. These budget cuts will have severe negative repercussions on the millions of New Yorkers that rely on Medicaid for their long-term care and other needs.

In October, 2019, New York State announced that the 2020 state budget would change the method used to calculate the Medicaid reimbursement rate for nursing homes. A coalition of nursing homes subsequently filed a lawsuit against the state, challenging the change as unlawful. The lawsuit alleges the change would unfairly prejudice nursing homes, and was made solely for budgetary reasons.  The lawsuit further claims that the rate changes were made without the necessary approval of the federal government, and that the state failed to follow its own state laws. Nursing homes and health care groups are concerned that the cuts would result in staff reductions and jeopardize the care that consumers receive, and that the reductions were not established with the needs of nursing home patients in mind. The trial court hearing the matter granted a preliminary injunction to the plaintiffs.

In December, 2019, the State Health Department announced a plan to reduce Medicaid spending growth that included a one percent cut to Medicaid payments, including to home care providers and Medicaid managed-care plans. In addition, the Health Department intends to change the reimbursements made under Medicaid’s Consumer Directed Personal Assistance Program. That program provides seniors and disabled individuals in need of care with the flexibility to remain in their homes, while being cared for by a caretaker of their choice.

In the long-term, cumulatively, these Medicaid cuts will affect the ability of nursing homes, and of managed long-term care agencies that contract with agencies to provide home care, to provide quality care to Medicaid patients.  Medicaid long-term care recipients will be harmed by these budget cuts, which will impact their ability to reside safely at home, and to be cared for safely in a nursing home. As a practical matter, if these budget cuts go forward, we can expect approval of reduced hours for home care and difficulty obtaining nursing home placement for Medicaid patients.

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