Cuomo plan for federal health care funds lacks proper oversight, critics say

April 5, 2021

As you know, the NYS Council has spent a great deal of time tracking incoming federal funds such as COVID Relief to include federal block grant funds, and enhanced FMAP, to ensure we could properly educate lawmakers when it came time for them to protect these new funds during budget negotiations.  And now, that day has come.

As the article below indicates, the Governor has made a play for broad – and possibly unchecked – authority to spend massive amounts of federal funds.  We must continue to support lawmakers who are pushing for far greater accountability when it comes to matching appropriations with actual federal intent for these new funds.

Cuomo plan for federal health care funds lacks proper oversight, critics say
By Shannon Young
04/05/2021 07:12 PM EDT

Gov. Andrew Cuomo is reportedly seeking broad — and critics warn possibly unchecked — authority to spend more than an estimated $1.6 billion in federal Covid-19 relief funding, as he and state lawmakers negotiate a final Fiscal Year 2022 budget package.

Budget language, which sources said was being requested by the governor’s office, would allow the state health commissioner — in consultation with legislative leaders and subject to the budget director’s approval — to spend American Rescue Plan Act funds earmarked for home- and community-based services “notwithstanding the State Administrative Procedures Act or any inconsistent provision of law to the contrary.”

Critics argued that the proposal would essentially exempt the federal spending, which must occur by March 31, 2022, from all state laws — including those governing ethics and public disclosure requirements — and that its “consultation” requirement falls short of legislative approval.

Assembly Health Committee Chair Richard Gottfried (D-Manhattan) said he has “major concerns” about the language and its implications. For example, he said that it could hypothetically allow the administration to spend the federal funds on home care costs for campaign donors’ elderly relatives “because all the laws that say you can’t do things like that are waived.”

“I don’t think the governor contemplates doing that, but you have to take bill language seriously,” he said. “It waives every state law: Penal law, human rights law — any statute you can imagine in New York is waived for purposes of spending this $1.6 billion, which is just astonishing and, as far as I’m concerned, totally uncalled for.”

And that, the Manhattan Democrat said, is especially concerning given the recent scandals plaguing the governor, including reports that he secured special access to Covid-19 testing for family and friends.

“The governor is utterly shameless in demanding not only one-man rule, but one-man rule exempt from any laws or public disclosure,” he said in an interview. “You would think that recent news events would give people pause before agreeing to something like this. But you haven’t read a word about this proposal anywhere.”

Division of Budget spokesperson Freeman Klopott did not comment directly on critics’ concerns.

“The budget is under negotiation, however, the state is receiving enhanced Medicaid reimbursement for home and community based care and we are awaiting federal guidance before determining how it will be spent,” he said in an email. “Uses of these funds will be included in the State’s Financial Plan.”

Gottfried said he supports giving the health commissioner “fairly broad discretion” in spending the federal funds, but argued there should be more legislative sign-off or, at the very least, a more normal process of public disclosure.

Senate Health Committee Chair Gustavo Rivera (D-Bronx), however, said he was “not that concerned” about the language, adding that he trusts officials at the Department of Health to “actually use this money correctly.”

Health and Mental Hygiene Budget: While the Legislature and the governor’s office continue to hammer out the final details of the budget, much of the work has wrapped up on the spending package’s health care-related provisions. The Health and Mental Hygiene budget language was released late Saturday 

The legislation, NY A3007 (21R) / NY S2507 (21R) would:

  • Require the state budget director, in consultation with the health commissioner, to assess and report on certain Medicaid expenditures on a quarterly basis, including how they affect the global cap annual projection. Lawmakers had sought to eliminate the global cap, which puts a self-imposed limit on Medicaid spending, but faced strong pushback from the governor’s office. Negotiators ultimately agreed to the language that seeks to increase transparency around the global cap and Medicaid spending.
  • Delay a Medicaid Redesign Team II-backed Medicaid drug carve-out from taking effect until April 2023. The policy, which sought to move the Medicaid pharmacy benefit from managed care to fee-for-service in 2021, drew vocal criticism from a broad coalition of health-care advocates and organizations. Opponents had urged Cuomo and state lawmakers to repeal the policy altogether or at least delay its implementation date as part of the Fiscal Year 2022 budget.
  • Set new minimum direct care spending requirements for residential health care facilities, including nursing homes. All residential health care facilities will have to spend at least 70 percent of revenue on direct resident care and 40 percent on resident-facing staffing. The Senate passed similar legislation in late February, NY S4336 (21R) , as part of a package of nursing home overhaul bills. The vote came days after Cuomo called for new direct care spending requirements as part of his 30-day budget amendments.

Other proposals: The final budget package is not expected to contain most of the Medicaid cuts proposed in Cuomo’s initial spending plan, including a 1 percent-across-the-board cut or those affecting major public hospitals. It does not restore previous cuts, including the 1 percent across-the-board reduction that took effect at the end of 2019.

Gottfried said he and others are also still pushing for budget language that would increase pay for home care workers to ensure it remains higher than the minimum wage — a policy which could be funded at least in the first year by the $1.6 billion in federal home- and community-based care funding.