Good afternoon,

PART ZZ at the end of the Education, Labor and Family Assistance (ELFA) bill discusses Workforce Bonuses beginning on page 253.

The bonus language remains largely consistent with the Governor’s original proposal (up to $3,000/employee with vesting, etc.); however, the language also now says the additional income will not count against public assistance income limits. There are lists of employees who are eligible for the bonuses in the language. They appear to have been broadened somewhat. This is a long
proposal that will take some time for us to work our way through. Stand by for more information.

Regarding the 5.4% COLA, it is our initial read that the deal is one-time (the budget language doesn’t extend to the outyears). However, the 5.4% COLA is recurring in that it goes out as rate increases and those new base rates do not revert back to the old (pre-COLA) rates once the fiscal year ends.

Here’s an interesting article from Politico, published a few minutes ago. Outgoing Medicaid Director Brett Friedman is quotes regarding the competitive procurement proposal that didn’t make it to the finish line. As we stated earlier, the final deal on procurement requires a study to help all stakeholders understand the benefits / costs of procurement in the Medicaid managed care program.

Albany lawmakers pass health, mental hygiene budget. Here are the highlights.
BY SHANNON YOUNG, | 04/08/2022 05:17 PM EDT

Albany lawmakers on Friday approved the health-related provisions of the state budget, just hours after the final budget language was released.

Key context: The Assembly voted 105 to 42 along party lines to advance the Health and Mental Hygiene budget bill, NY A9007/NY S8007. Shortly after, the Senate passed the wide-ranging measure by a 43 to 20 vote margin. It now heads to Gov. Kathy Hochul’s desk for final approval.

Among the major measures included in the final legislation was a change to how the state will calculate its global Medicaid spending cap and a study of managed care procurement.

But several more controversial issues announced Thursday, like the $3 hourly raise for home care workers and health coverage for immigrants aged 65-plus, were stripped from the measure. They are expected to appear in the Education, Labor and Family Assistance budget bill, which was released later Friday.

Floor debate: Assembly Health Chair Richard Gottfried, a Manhattan Democrat and the longest serving legislator, said the final budget agreement is not perfect — particularly when it comes to home care worker pay, health coverage for immigrants. But, he said, it is still the best on health care that he’s seen during his long tenure in Albany.

He added that “in a lot of areas in this budget that we’re disappointed about, we’ve taken first steps” that the state can build on in the future.

“As disappointing as it may be on some points, I believe that this is the best health budget that I’ve ever seen and my recollections go back more than half a century,” he said in floor remarks. “And if that isn’t worth voting for, I don’t know what is.”

Senate Finance Chair Liz Krueger (D-Manhattan) agreed that this “is a better bill for Health and Human Services” than she has seen in many years, adding that it “makes a first down payment on some of the work we have to continue to do.”

Sen. Gustavo Rivera, a Bronx Democrat who chairs his chamber’s Health Committee, said while the new budget makes “some steps forward” it still includes the Medicaid cap, which he has long called for repealing.

“All right, I’ll give you one more year,” he said. “We’ve got to definitely talk about it.”

Rivera, however, touted the new spending plan’s language that addresses previous across-the-board Medicaid cuts, identifies money for distressed hospitals and makes changes to telehealth.

“I think that we have done a little bit of what we need to do to kind of right the ship on this. But it is certainly not the last time that I will be on this floor talking about how we need to really come back from the austerity and the disinvestment that the last decade gave us,” he said in floor remarks.

Bill details: The final budget, among several things, includes the executive’s proposal to modify the year-to-year growth of the Department of Health’s state funds Medicaid spending and extend the Medicaid global cap through fiscal year 2024.

It updates the metric used to set the cap from a 10-year rolling average of the Medicaid component of the Consumer Price Index to a five-year average of Medicaid spending projections within the National Health Expenditure Accounts produced by the Centers for Medicare & Medicaid Services’ actuary.

Both the Assembly and the Senate’s one-house budgets called for repealing the cap.

Outgoing Medicaid Director Brett Friedman told POLITICO that change to the metric “will provide more funding for Medicaid for years to come.”

The budget agreement also scrapped the governor’s proposal to allow the Department of Health to competitively procure Managed Care Organizations participating in certain Medicaid managed care programs.

Instead, it calls for an independent contractor “to generate a report that reviews and makes recommendations concerning the status of services offered by managed care organizations contracting with the state to manage services provided under the Medicaid program.” That report is due to the governor and legislative leaders by Oct. 31.

Friedman said the legislature “felt strongly that [the proposal] would be disruptive towards members and towards providers,” even though the Department of Health disagreed. (The Assembly and Senate had omitted the procurement language from their one-house budgets.)

“The idea with the study was to provide an independent analysis of what the consequences would be, positive or negative, from a procurement, in hopes of [when] entering into next year’s budget cycle there’s a collective understanding of facts going in, so we make a more informed decision,” he said in an interview.

Friedman added that while he still believes procurement “would be a very valuable exercise,” he understands that “the legislature and stakeholders need more information.”