• New York State Budget Makes Significant Changes to Home Care Reimbursement
  • April 25, 2011
  • Law Firm: Wilson Elser Moskowitz Edelman Dicker LLP - New York Office
  • While the recently passed New York State Budget for 2011-2012 reduces Medicaid payments to virtually all types of health care providers participating in the State Medicaid Program, the budget will have a particular impact on home health care providers. Here are some of the changes that became effective April 1:

    • A 2 percent across the board cut, which is applicable to all Medicaid providers.
    • The elimination of the trend factor for a two-year period.
    • For a period of one year, a ceiling on payments made to certified home health agencies
       (CHHAs) for services furnished to adults (but not children under the age of 18).
    • The elimination of an HIV/AIDS add-on to payments made to CHHAs and long-term
       home health care programs (LTHHCPs).

    Looking ahead, effective April 1, 2012, the budget also changes the Medicaid reimbursement methodology for CHHAs. Currently, Medicaid reimburses CHHAs based largely on cost reports they submit to the State of New York. Next year, however, Medicaid will reimburse CHHAs under a pricing methodology that will pay for care furnished during 60-day episodes of care. The pricing will be adjusted based on a CHHA's patient case mix and regional wage index factor.

    The budget legislation also imposes a living wage mandate on home care agencies operating in New York City, and Nassau, Suffolk and Westchester counties. Under the new law, no Medicaid payment may be made to a CHHA, long-term home health program or managed care plan for an episode of care furnished by a home health aide if the home health aide is paid less than certain wage levels, which would be phased in over several years.

    Also effective April 1, 2012, and subject to federal approval, patients 21 years and older who receive home care services for a period of more than 120 days will be required to enroll in managed long-term care (MLTC) programs (or other program models meeting the Department of Health's guidelines) that are intended to furnish or arrange for home care services. Although further details will likely be set forth in future regulations and administrative pronouncements, it is expected that, in return for furnishing or arranging for such services, the state would make capitated payments to an MLTC based on the number of patients enrolled in the MLTC.