IMPORTANT: Proposed 1% Reduction to Certain Medicaid Payments

December 31, 2019


Today’s NYS Register includes a PUBLIC NOTICE on page 101 that includes the following information (this is a proposal):

“Effective for dates of service on or after January 1, 2020, through March 31, 2020, and each State Fiscal Year thereafter, all non-exempt Department of Health state funds Medicaid payments will be uniformly reduced by 1.0%.”


The State Register entry goes on to say:

“…Medicaid payments that will be exempted from the uniform reduction include:

  • Federally Qualified Health Center services
  • Indian Health Services and services provided to Native Americans;
  • Supplemental Medical Insurance – Part A and Part B;
  • State Contribution for Prescription Drug Benefit (aka Medicare Part D payments);
  • Any local share cap payment required by the Federal Medical Assistance Percentage (FMAP) increase legislation;
  • Required payments related to the School Supportive Health Services Program and Preschool -Supportive Health Services Program;
  • Services provided to American citizen repatriates;
  • Payments pursuant to the mental hygiene law; 
  • Court orders and judgments; and
  • Hospice Services…”

There is more information in the Notice than what we have excerpted (above).

Again, this is a PROPOSAL that is embedded in today’s State Register indicating New York’s intention to amend a SPA proposal.  The public is entitled to comment on the proposal.


We have confirmed that the reductions discussed in the Notice would apply to DOH providers as discussed in the chart below.  Note:  Payments where applying the rate reduction would result in a lower FMAP as determined by the Commissioner of Health and the Director of the Budget will also be exempt.


Please note:  We are working to fully comprehend the implications of the Notice in today’s State Register.   We will have more shortly.  Until then please do not make any financial decisions based on the information we’ve shared to date on this matter.


Category Program or Service Area
Inpatient Services
  • Hospital Inpatient Reimbursement;
  • Indigent Care Pool payments;
  • Graduate Medical Education payments for Medicaid Managed Care patients;
  • Hospital Disproportionate Share payments and Indigent Care Adjustments made to governmental hospitals operated by the State of New York or the State University of New York; and
  • Supplemental Medicaid payments and Hospital Disproportionate Share payments made to voluntary hospitals.


Nursing Homes
  • In State Nursing Homes; and
  • Out of State Nursing Homes.
Non-Institutional Long-Term Care Services
  • Assisted Living programs;
  • Foster Care;
  • Home Health; and
  • Personal Care.
Other Services
  • Freestanding Clinics;
  • Hospital Based Outpatient;
  • Methadone Maintenance Treatment programs (MMTP);
  • Pharmacy;
  • Physicians both office-based and other places of service; and
  • Dental, Eye, X-ray, etc.).
Managed Care
  • Managed Long Term Care (including Partial Capitation, Medicaid, Advantage, Medicaid Advantage Plus (MAP) and Programs of All-Inclusive Care for the Elderly (PACE); and
  • Managed Care (including Mainstream Managed Care (MMC), Health and Recovery Plans (HARP), HIV Special Needs Plans (SNP) and