DEPARTMENT OF HEALTH

Agency Mission

Year-to-Year Change

Over 70 percent of DOH’s budget is funded with Federal Funds, of which the major portion relates to the Federal share of Medicaid. The General Fund contributes about 24 percent to overall DOH program support while Special Revenue-Other funds the remaining 6 percent. General Fund dollars are closely tied to Federal Funds: for every $1 in the General Fund the Agency generates nearly $3 in Federal money.

For State Fiscal Year 1999-2000, the Executive proposes a total All Funds appropriation of $26,081,126,600 which reflects a net increase of $391,005,869, or 1.52 percent, from SFY 1998-99. This growth is wholly related to an increase in Special Revenue-Federal Funds.

The Executive recommends an increase of $36,500,000 in Medicaid General Fund local assistance spending over the enacted SFY 1998-99 appropriation of $5,561,109,000. The Executive, however, asserts that Medicaid spending will exceed the enacted appropriation before the end of the fiscal year and has requested a $92,000,000 deficiency in General Fund Medicaid for SFY 1998-99. Based on the Executive's estimate of a deficiency in the 1998-99 Medicaid appropriation, the Executive's SFY 1999-2000 General Fund Medicaid recommendation actually represents a decrease of $55,582,000. Inherent in the Executive's recommendation is the continuation of over $320,000,000 in current cuts to health care providers, as well as the proposed enactment of over $300,000,000 in new cuts. Taken together, the new and old cuts will result in the loss of nearly $1.9 billion in combined Federal, State and local reimbursement to health care providers.

MEDICAL ASSISTANCE PROGRAM

Program Mission

Legislative Changes

The Assembly proposes $5,000,000 as a reduction in nonpersonal services in the Medicaid Management Information System for new contractual services related to lack of contract agreement with a new fiscal agent for the State's Medicaid program. Selection of a new fiscal agent has been under consideration for over a year, yet no new contractor as yet been selected. In reaching final contract resolution with a new agent, the Assembly anticipates that the Agency will be mindful of the information needs of the Legislature and that it will endeavor to see that such information is provided in a timely, efficient and usable manner to the Legislature by the new agent.

The Assembly takes an agencywide reduction of ($3,000,000) in nonpersonal service based on the premise that the Department should adopt greater efficiencies and a more cost-conscious approach to the use and assignment of new technological equipment and the approval of travel.

The Assembly proposes to offset General Fund spending by $2,848,000, that is being carried as a cash balance for the Hospital and Nursing Home Management Account, Special Revenue-Other. The Assembly projects that sufficient revenues will flow into the Hospital and Nursing Home Management Account, negating the need for a cash balance to meet shortfalls.

The Assembly proposes to offset General Fund spending by an additional $1,521,000 that is being carried as a cash balance to the Nurses Aide Registry Account, Special Revenue-Other. The Assembly projects that sufficient funds will be available to meet required needs and that these monies can be more effectively used to reduce General Fund spending in the Department of Health.

The Assembly proposes a technical action needed to effectuate an additional offset of $1,521,000 to General Fund spending. As the Nurses Aide Registry Account, Special Revenue-Other, serves as an offset to the General Fund, the appropriation in such account must be raised by the amount proposed as the additional offset, in this instance $1,521,000, in order for these funds to be available as an offset.

This is a technical action needed to effectuate an additional offset of $2,848,000 to General Fund spending. As the Hospital and Nursing Home Management Account, Special Revenue-Other, serves an offset to the General Fund, the appropriation in such account must be raised by the amount intended as the additional offset, in this instance $2,848,000, in order for these additional funds to be available as an offset.

Legislative Proposals

Medical Assistance

The Assembly proposes no new cuts to the Medicaid Program. The Assembly also proposes to set aside $196,000,000 for restorations. Together with new spending initiatives, the Assembly's proposal will restore over $1.4 billion in total funding to New York's health care industry, which has sustained substantial losses over the past four years as a result of currently enacted cuts to providers.

The Assembly proposes $25,100,000 in new State share Medicaid funding. Of this amount, $5,000,000 will support a transition fund to assist clinics in moving from a fee-for-service reimbursement system to a managed care environment. Another $5,000,000 allows for an increase in Medicaid reimbursement rates for dental services on a fee-for-service basis. Dental rates have not been increased since 1983. The Assembly also proposes additional funding of $12,000,000 for an expansion of Medicaid eligibility to all legal immigrants and $500,000 to expand eligibility for family planning services which are reimbursed by the federal government at 90 percent.

The Assembly also supports language to provide establishing a demonstration program to expand Medicaid eligibility for disabled workers and to adjust the cap on reimbursement of administrative and fiscal costs of nursing homes to alleviate a disproportionate impact on certain homes without shifting costs to other nursing homes. The Assembly also supports both proposed and existing intergovernmental transfers. The Assembly also proposes changes to ensure appropriate implementation of the fiscal assessment.

The Assembly further provides funding for a $2 a visit rate increase for certain community providers offering comprehensive outpatient services to the mentally ill, as well as an inflation adjustment for certain clinics serving the developmentally disabled, consistent with inflation adjustments in State Aid proposed for other mental hygiene community providers. In addition, the Assembly provides $1,200,000 for additional Medicaid expenses related to proposed reforms to the Health Care Reform Act (HCRA) that would occur in the first quarter of the year 2000.

The Assembly proposes no changes to the Executive's proposal to eliminate all health care provider assessments, effective April 1, 1999.

The Assembly Ways and Means Committee staff estimates that Medicaid spending in SFY 1999-2000 will be $173,600,000 below that forecasted by the Executive. When these savings are deducted from the additional Medicaid spending proposed by the Assembly, a balance of $314,000,000 in General Funding spending is proposed to be added to the Medical Assistance Program. A corresponding addition of $473,180,000 is proposed to be made to the Special Revenue-Federal Funds.

Public Health

The Assembly recognizes the importance of promoting good health, assuring quality of care, and continuing efforts to fight infectious diseases. With this in mind, the Assembly proposes more than $84,000,000 in additional public health funding. This funding will afford local health providers and not-for-profit agencies the opportunity to carry on with their efforts to provide the necessary services to children, the elderly, HIV/AIDS patients, victims of rape, those afflicted with cancer and other illnesses, and families in need of primary and preventive care.

The Assembly recognizes that rising drug costs present a dilemma for many senior citizens struggling to survive on fixed incomes. Moreover, thousands of elderly have lost prescription insurance coverage with the disenrollment of many Medicare recipients from Medicare managed care plans. Consequently, the Assembly rejects the Executive's proposal to defer the 1990 enhancements to the Elderly Pharmaceutical Insurance Coverage (EPIC) Program and recommends that they be allowed to take effect. The Assembly further rejects the Executive's proposal to reduce the drug reimbursement rate for pharmacies participating in the EPIC program. Furthermore, the Assembly proposes expanding the EPIC program, effective January 1, 2000, by increasing the income eligibility limit to $30,000 for single persons and to $35,000 for married couples and by lowering the thresholds for co-payments by thirty percent for the lower income group.

The Assembly further recognizes that the Health Care Reform Act (HCRA) will expire at the end of the current calendar year. The Assembly proposes using certain unspent HCRA pool funds to supplement the hospital indigent care pool by $90,000,000 and the clinic indigent care pool by $12,000,000.

The Assembly provides an additional $1,000,000 for the Hunger Prevention and Nutrition Assistance Program (formerly SNAP) in acknowledgement of the importance of good nutrition in keeping individuals and families healthy. In awareness of the fact that the needs of community providers are escalating as AIDS/HIV caseloads continue to grow, due to a longer HIV/AIDS life expectancy through the use of improved drug therapies, the Assembly proposes $12,500,000 in additional funding for the AIDS Institute. The Assembly's proposal would restore funding for permanency planning, treatment compliance, and homeless housing assistance, as well as provide $10,000,000 in additional funding for AIDS programs.

The Assembly proposes $970,000 to support maternity & early childhood services. The Assembly also proposes additional funding of $1,500,000 for family planning services, as well as $1,000,000 to support efforts to ensure access to family planning clinics. An additional $1,000,000 in funding is proposed for school-based health programs. In addition, the Assembly proposes new funding of $2,000,000 for an asthma management program to combat the major health threat this disease presents to numerous residents, especially to children, in this State.

The Assembly proposes $2,000,000 in additional funding for cancer mapping to be directed toward efforts that are geographically specific enough to locate potential cancer clusters and point source emissions of carcinogens. The cancer mapping project shall be over laid against environmental and occupational risk factors and shall be designed to facilitate and promote epidemiological research to determine the environmental factor causing cancer. An additional $2,000,000 also is proposed for breast cancer and other cancers, including ovarian, prostate, and testicular cancer, for additional detection and education services, as well as supportive services for persons diagnosed with cancer.

The Assembly further proposes additional funding of $7,200,000 to support various public health programs related to diagnosis, treatment, rehabilitation, education, screening, research, consumer assistance, therapies and other general health services, as well as rape crisis counseling, sexually-related health and social services, and occupational health and safety.