NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5339
SPONSOR: Paulin TITLE OF BILL:
An act to amend the public health law, in relation to funding early
intervention services; and to repeal certain provisions of the public
health law and the insurance law relating thereto
PURPOSE OR GENERAL IDEA OF BILL:
To provide a system that streamlines the process by which funds are
distributed to municipalities to finance early intervention programs,
thereby providing vital relief to the municipalities across the state,
and to improve their ability to more effectively administer early inter-
vention services to children who need such services.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends the public health law by adding a new section 2807-o
that provides definitions for terms used in this section of law. Section
one also provides that the commissioner of health shall make payments to
municipalities for the delivery of early intervention services. Such
payments shall be a share of payments equal to the proportionate share
of the municipality and the State, as the case may be, of the total
approved statewide dollars not reimbursable by the medical assistance
program paid by municipalities and the State to providers of early
intervention services in the last complete state fiscal year for which
such data is available.
Section two amends subdivision 6 of section 2807-s of the public health
law by adding two new paragraphs (g) and (h). Paragraph (g) provides
that a further gross statewide amount for two thousand twenty-two shall
be forty million dollars. Paragraph (h) provides that the forty million
dollars specified in paragraph (g) shall be allocated among the munici-
palities and the State based on the share of each municipality and the
State of early intervention program expenditures not reimbursable by the
medical assistance program for the latest twelve-month period for which
such data is available.
Section three amends subdivision 7 of section 2807-s of the public
health law by adding a new paragraph (d) that provides that funds shall
be added to the funds collected by the commissioner for distribution in
accordance with section 2807-o, in the amount of forty million dollars
for the period beginning April 1, 2022 and continuing each state fiscal
year thereafter.
Section four amends subdivision 1 of section 2557 of the public health
law, as amended by section 4 of part C of chapter 1 of the laws of 2002,
to delete the reference to a plan of insurance so that benefits under
this title shall be considered secondary only to any state government
benefit program under which an eligible child may have coverage, and to
delete the provision that nothing in this section shall increase or
enhance coverages provided for within an insurance contract subject to
the provisions of this title.
Section five amends subdivision 2 of section 2557 of the public health
law to provide that the department shall reimburse the approved costs
paid by a municipality other than those reimbursable by the medical
assistance program, eliminating the exclusion of costs reimbursable by
third party payors.
Section six amends the section heading of section 2559 of the public
health law, as added by chapter 428 of the laws of 1992, to eliminate
the reference to third party insurance.
Section seven amends subdivision 3 of section 2559 of the public health
law, as added by chapter 428 of the laws of 1992, paragraphs (a), (c)
and (d) as amended by section 11 of part A of chapter 56 of the laws of
2012 and paragraph b as further amended by section 104 of Part A of
chapter 62 of the laws of 2011, to delete parts of paragraph (a). This
section also deletes paragraphs (b) requiring the commissioner to
promulgate regulations providing public reimbursement for deductibles
and copayments imposed under an insurance policy or health benefit plan
to the extent that such deductibles and copayments are applicable to
early intervention services and (c) requiring that payments made for
early intervention services under an insurance policy or health benefit
plan provided as part of an IFSP shall not be applied against any maxi-
mum lifetime or annual limits specified in the policy or health benefit
plan. In addition, section seven provides that a municipality shall be
subrogated to the extent of its expenditures for early intervention
services furnished to eligible persons to the rights such person may
have from the medical assistance program rather than from third party
reimbursement. Except as provided in this article, no third party payor
other than the medical assistance program shall be required to reimburse
for early intervention services.
Section eight repeals subdivision 3 of section 2543 of the public health
law.
Section nine repeals section 3235-a of the insurance law.
Section ten repeals subparagraph (F) of paragraph 25 of subsection (i)
of section 3216 of the insurance law.
Section eleven repeals subparagraph (F) of paragraph 17 of subsection
(1) of section 3221 of the insurance law.
Section twelve repeals paragraph 6 of subsection (ee) of section 4303 of
the insurance law.
Section thirteen provides the effective date.
JUSTIFICATION:
The early intervention program was established under the Public Health
Law and the federal Individuals with Disabilities Education Act (IDEA)
to enhance the development of infants and toddlers from birth to age
three who have a significant developmental delay or disability, as well
as enhance the capacity of families to meet their children's special
needs. The program seeks to identify and evaluate as early as possible
those infants and toddlers whose healthy development is compromised and
to provide for appropriate therapeutic and supportive services. With
early intervention, we can reduce the number of children with disabili-
ties or reduce the severity of their disabling conditions.
All early intervention (EI) services must be provided to eligible chil-
dren at no cost to their families. The EI program is financed through a
combination of state and county funds, Medicaid and commercial insur-
ance.
Counties, which are required by the State to finance and administer the
EI program, are entitled to be reimbursed by the State for 50% of their
unreimbursed costs for EI services (36% for administration costs).
Although Public Health Law and IDEA mandate that public and private
commercial insurance be maximized in financing FT services, reimburse-
ment from third party payors, other than Medicaid, has been minimal,
leaving the cost of this entitlement to be paid by state and municipal
tax dollars.
In 2013, implementation of a statewide fiscal agent was designed to
increase third party reimbursement. Four years later, commercial payors
still deny claims. Since EI claims billed to commercial insurance have
decreased as a percentage of total claims - with more being billed to
Medicaid - the dollar amount paid by commercial insurance has actually
decreased since the state hired the fiscal agent.
In 2017, approximately $70 million in claims was billed to commercial
insurance with only about $11.5 million paid from about 1.1 million
services rendered. As a result, 70% of the claims were denied.
The partial funding by the State, combined with the low rate of recoup-
ment from third party insurers, has required municipalities to bear an
estimated 43% of the costs of providing EI services.
Furthermore, the prolonged and systematic underfunding of EI providers
has driven smaller providers out of business and led to provider consol-
idation and increased wait times for parents. From 2012 to 2015, the New
York City EI office saw a 910% increase in the number of calls from
parents unable to find El providers for children who qualified for
services.
Since a substantial portion of municipal budgets must be spent on EI
services, municipalities must face a shrinking balance of available
funds, forcing them to decrease or eliminate altogether other needed
services.
To require municipalities to bear such a significant portion of the
costs of the program where the number of children served as well as the
level of services provided continues to increase imposes a significant
strain on local budgets.
Recognizing that the current structure of financing El costs is inade-
quate, this bill provides a different approach to funding. The bill
would set up a statewide pool. from which municipalities and the State
would be allocated funds to pay EI costs. This bill would use the
covered lives assessment (a long-standing tax paid by health plans,
including self-insured plans) to contribute to the cost of the program.
Implementing this change would remove any obligation on insurers to pay
for EI services and replace it with a lump sum payment, dramatically
reducing the administrative burden on providers as well as on the plans
themselves. For the first year, an amount of $40M would be paid into the
pool. This amount is based on the approximate percentage commercial
insurers pay of total EI program cost(utilizing data from the 2012-13
program year) increased by the estimated amount paid by commercial
insurers related to mandated coverage for autism spectrum disorder.
This direct allocation of funds to municipalities from the statewide
pool will eliminate the unwieldy and inefficient step of requiring muni-
cipalities (in the case where the insured is not eligible for medical
assistance) to seek reimbursement of EI costs first from third party
insurers and then, only upon denial or other disposition of the claim,
from the State. In cases where the insured is eligible for medical
assistance, municipalities will remain obligated to seek reimbursement
first from the medical assistance program.
Making funds readily available and streamlining the process by which the
funds are distributed to municipalities and the State will provide vital
relief to the State and the municipalities that have been struggling to
finance the EI program. It will improve the administration of EI
services to children who need those services.
PRIOR LEGISLATIVE HISTORY:
A.2569A, 2017 and 2018, referred to ways and means.
S. 1727-A, 2017 and 2018, referred to health.
A.273A, 2015 and 2016, reported and referred to ways and means in both
years.
Same as S.4372-A, 2015 and 2016, referred to health.
A.6517-A, 2013 and 2014 referred to health.
A.812, 2011 and 2012 reported referred to ways and means.
A.4058-A, 2009 reported referred to ways and means and 2010 held for
consideration in ways and means.
A.6814-A, 2007 and 2008, reported and referred to ways and means in both
years.
FISCAL IMPLICATIONS:
This bill will have no fiscal impact to the State and will in fact
generate revenue to the State. The State currently bears approximately
97% of the total EI program costs, with commercial insurers paying 3%.
The bill contemplates that commercial insurers will pay into a fund 15%
of the program costs with the State and municipalities sharing such
funded amount.
EFFECTIVE DATE:
This act shall take effect January 1, 2022; provided, however, that the
amendments to section 2807-s of the public health law made by sections
two and three of this act shall not affect the expiration of such
section and shall be deemed to expire therewith. Effective immediately,
the addition, amendment and/or repeal of any rule or regulation neces-
sary for the implementation of this act on its effective date are
authorized to be made and completed by the commissioner of health, on or
before such effective date.
