NYS Budget 2015

Updated: August 22, 2016

Primary Care in the New York State Budget: Mostly Preserving the Status Quo for a Sector that Must Grow  

By Dan Lowenstein, 2015

The Primary Care Development Corporation (PCDC) is grateful to the Assembly and Senate leadership and members that worked hard to support primary care in the New York State Budget, particularly the Health Committees chaired by Assembly Member Richard Gottfried and Senator Kemp Hannon. Both were instrumental in preserving vital initiatives and establishing new ones. We also thank Governor Andrew Cuomo and the New York State Department of Health for their ongoing commitment to making healthcare more affordable and effective for all New Yorkers.

Primary care is essential to reducing healthcare costs and improving the health of families and communities. With only about 5% of health care spending directed to primary care, more than two million New Yorkers still lacking primary care access and the growing recognition of its importance, we thought when it came to the New York State Budget, the only way primary care could go was up. Instead, the Budget mostly maintained the status quo and missed some important opportunities for growth and reform, but also produced an important new initiative. This is a report on how key primary care issues fared in the New York State Budget.

Few Capital Grant Resources for Community Health

Capital is the lifeblood of any sector, and access to capital for community‐based safety net providers has been an ongoing challenge. The sector needs more than $1 billion in capital to expand access to patients in low income communities. We were disappointed that practically all of the $1.4 billion in the Budget is directed to or through hospitals, with no significant capital grant resources made available to community based providers. The $1.2 billion Capital Restructuring Financing Program (CRFP) enacted in the 2014‐15 State Budget and now slated to be “rebid,” is now the only source of capital grants available to community based providers. We will be watching the process closely to make sure it supports the growth of this sector.

Community Health Care Revolving Capital Fund Established

We are grateful that the final budget provides $19.5 million to establish a Community Healthcare Revolving Capital Fund to provide a permanent source of low‐cost capital financing to expand access to community‐based healthcare. An initiative PCDC has sought for years, this fund would use public funds to leverage private sector resources, bringing in more bank investment and making capital more affordable for this vital sector. Community healthcare providers need both grant funding and affordable financing. Indeed, a public‐private partnership is most viable when the government demonstrates a strong commitment and public funds that go with it.

Patient Centered Medical Homes (PCMH) Incentive Program Restored

While not part of the final budget agreement, NYS Department of Health delayed proposed cuts to the PCMH Medicaid Incentive Program until January 1, 2016. DOH had planned to reduce incentive payments on April 1, 2015 to approximately 6,000 primary care providers who were PCMH recognized under NCQA 2011 standards while increasing incentives for those who reached NCQA’s much tougher 2014 standards (no providers are currently recognized under these standards). The incentive cut would have reduced payments to New York’s top primary care providers in private practices, community health centers and hospitals by hundreds of thousands and sometimes millions of dollars. The delay gives providers the time and resources to reach the new standards.

340B Prescription Drug Program Restored

The final budget preserved the current structure of the 340B Prescription Drug program, which enables safety net healthcare providers to purchase prescription drugs at discounted rates for their low income patients and reinvest those savings in unreimbursed patient care. Community health centers would have lost an estimated $20 million if the program cuts had been approved.

$54.4 Million for the Diagnostic & Treatment Center Uncompensated Care Pool included

While health insurance and Medicaid expansion will cover a great many lives, there will remain a significant population for whom health insurance is beyond their reach or are ineligible. An average 22% of health center patients are uninsured, with fully half of patients at some health centers uninsured. A federal Medicaid match of these funds was approved in 2011, but CMS has not yet approved a renewal of this match.

PCDC Funding Restored

PCDC provides affordable capital, technical assistance and policy expertise to expand and transform primary care in underserved communities throughout New York State. $400,000 restored by the Assembly Health Committee and approved in the final budget helps PCDC ensure sustainable growth of the primary care safety net, support growth of Patient Centered Medical Homes and train health care workers to improve primary care access and quality.

No fix for Expiration of Fair Medicaid rates for Primary Care Providers

New York State Medicaid pays only 42% of Medicare rates for primary care providers – the second lowest in the nation (Medicaid Managed Care averages 75% of Medicare). The Affordable Care Act provided a two‐year “bump‐up” that increased rates to Medicare levels, but this provision expired in January, 2015. The higher rates promote greater access – more doctors treating Medicaid enrollees, and more of them. While some states have made up the difference, New York did not.

No Expansion of State Authority over Value Based Payments

The final budget did not include an Executive Budget proposal to give New York State authority to determine and regulate value based payment (VBP) methodologies for health plan under its regulatory authority. The State currently has the authority under the DSRIP program to regulate VBP for Medicaid, but a certain level of standardization and alignment of methodologies across all payers is critical to the successful implementation of VBP.

No Certificate of Need Fast Tracking for Primary Care  

A measure to exclude primary care from the standard certificate of need (CON) process was not included in the final budget. CON has primarily been used to prevent oversupply of medical services driven by a fee‐for‐service reimbursement system, but primary care capacity is in such demand that that the CON process becomes a barrier to increasing supply.

No Regulation of Retail and Urgent Care Clinics

The Executive Budget had proposed a regulatory framework for urgent care centers and retail clinics (i.e., minute clinics).  These clinics are convenient to patients and clearly fill a need in the market. It is a priority to ensure that they are connected to the health care system – and not further fragmenting it. They have the potential to connect patients to primary care, but could also supplant primary care. The framework would have allowed DOH to set rules that promoted their integration with primary care.