January 17, 2022
Governor Hochul is expected to release her FY 2023 executive budget proposal tomorrow at 11:00 am. You can watch the live broadcast here: www.governor.ny.gov
Over the past five months, we have worked with our members to advocate for numerous NYS Council high priority budget requests including (but not limited to):
- 5.4% COLA Plus $500M for our workforce
- Outpatient Clinic Rate Increases
- Reinvestment of savings from the BH Medicaid managed care carve in and overpayment of fees paid to MCOs where some insurers failed to meet certain expenditure targets
- Our request for a carve out of BH Services from Medicaid managed care
Below is an update on some of our priorities, pointing out areas where we need more detail. PLEASE NOTE: Until we see it in print, all of the information below is subject to change.
The Governor’s State of the State (SOS) proposal mentioned a specific allocation of $500M for COLA for ‘workforce wage increases’. This amount may be enough to fund a 5.4% COLA for the Human Services sector. However, there are many related questions/open issues that require further details including:
- Since the COLA statute is set to expire on 3/31/2022. Will the executive budget proposal extend the effective date of the statute into the out years, or is this a one year commitment to a COLA?
- Will the executive budget proposal amend the COLA statute to include various Programs and Services that did not exist when the statute was first enacted (2006-2007)?
- If the COLA statute is updated and continued, will the increase each year remain tied to inflation?
- Will the proposed increase be restricted to certain staff lines or areas of the agency budget, or will the COLA apply across the entire agency budget?
The Governor’s State of the State proposal mentioned workforce bonuses of up to $3,000/employee based on hours worked. As such, we will be looking for additional information that answers questions including:
- Is the proposed bonus targeted to client facing and supervisory staff only or are all employees eligible for the bonus regardless of their job title in the agency?
- Since bonuses are typically one shots, is there a longer-term plan to sustain and increase our workforce and make jobs in community behavioral health competitive with other industries?
BH CARVE OUT, MCO EXPENDITURE TARGETS and ISSUES WITH SURVEILLANCE, MONITORING & ENFORCEMENT OF CARVE IN
Over the past decade, the NYS Council has taken extraordinary measures to secure budget language and regulatory changes designed to ensure protections for care recipients and providers in the mental health and substance use disorder systems of care. This includes budget language that adds requirements for the state to collect data regarding rate adequacy, network adequacy, continuity of care, service penetration and other ‘protective metrics’ that tell the story of what is happening in our system of care, particularly during and after a major transition such as the carve in of BH services to Medicaid managed care. But laws and regulations are only effective when regulators do their part to monitor and enforce them. Unfortunately, and in our opinion, the state has not implemented a robust surveillance, monitoring and enforcement plan that ensures all of the laws and contract provisions governing the carve in are enforced.
BACKGROUND: Beginning in February 2017, the NYS Council met with DoH leaders to report the numerous systemic problems providers were experiencing with some MCOs. We pushed for enforcement to remedy a number of problems including: 1) failure by some MCOs to pay APG government rates, as required by law, 2) some MCOs inserting prohibited clauses and phrases into contracts with providers, and 3) inappropriate demands on providers that had the effect of increasing administrative burdens and limiting access to care. Since then, we have been pushing DoH, OASAS, OMH and DFS, arguing for solutions to the long list of systemic issues providers face in their transactions with some MCOs. Our members have filed countless complaints with OMH, OASAS, DoH and DFS, however NYS Council members have learned the complaint process is broken and puts undue burden on them. Since 2017, we have incrementally turned up the heat and intensified our advocacy efforts. In 2019, the Legislature passed and former Governor Cuomo signed our Timely Payment bill that codified regulations and contract provisions governing reimbursement, and DoH has issued several transmittals to MCOs regarding their continued use of prohibited phrases and clauses in contracts such as use of ‘lesser of’ language and ‘all products’ clauses. Nevertheless, the list of serious problems experienced by providers is growing.
In October and November 2020 the NYS Council began submitting FOIL requests to DoH, OASAS, OMH, the Attorney General’s Office and the Comptroller’s Office through our attorneys, requesting MCO performance data and other information pertaining to the carve in of BH services to include information regarding over 200 citations the state has issued to some insurers in two main categories: Mental Health Parity Compliance deficiencies, and improper claims denials. Recently, the DoH posted a subset of the citations online, some of which go back to 2017. Our FOILs also confirmed for us that the state had failed to enforce certain expenditure targets MCOs are required to meet. You may recall that before the implementation of the carve-in, the NYS Council fought hard for the inclusion of expenditure targets that require MCOs to spend the vast majority of the fees they receive from the state on actual care for beneficiaries. In instances where the MCO failed to meet these expenditure targets, the state was required to recoup what are essentially overpayments made to MCOs. Once we began issuing FOILs seeking data and information regarding these requirements, the state began to enforce some of these requirements. Based on the information we have, the state has recouped some of these funds. However, the state has not reinvested funds into behavioral health equivalent to the savings associated with the behavioral health carve-in, as required. In addition, although the state was supposed to promulgate a regulation that would explain how it intended to calculate the ‘savings’ associated with our services being carved in, it has failed to do so to this point.
The MCO overpayments discussed above represent many millions of dollars that our systems of care are entitled to and could have put to good use over the past 5 years. Given all of this and because we also know that the state recently amended the Model Contract without stakeholder input and (in our opinion) reduced the total amount of recoupments when the state determines how much should be spent on behavioral health services. in July 2021, we formally requested a carve out of BH services from Medicaid managed care from state leaders. We have held firm to our request to this day. Our hardline stance in conjunction with our understanding of the laws, regulations and contractual requirements governing the carve in, and our intense advocacy efforts arguing for the immediate return of these funds to OASAS and OMH has had the effect of elevating our concerns to the highest levels of government where we have presented our case for immediate reinvestment. We also know our request for a carve out has been taken seriously and caused state leaders to consider their options going forward. Throughout all of our meetings with state leaders, we have highlighted the fact that inadequate surveillance, monitoring and enforcement of contract provisions, regulations and other elements of the carve in has deprived our systems of care of badly needed resources.
If we have succeeded in compelling the state to examine its’ current oversight of the carve-in and address the numerous burdens placed on providers that have resulted in their having to employ an entire back office of experts who chase payments and respond to MCO demands, we would expect to see the following included in the executive budget proposal:
- Appropriations of funds to OASAS and OMH that reflects the savings associated with the behavioral health carve-in (discussed in paragraph above);
- Language that begins to address some of the more significant issues facing providers in the carve-in that impact access to care and provider fiscal viability;
- Language that explicates how the state intends recoup ALL of the funds associated with the overpayments (mentioned earlier);
- Since we have advocated for the inclusion of language that has the effect of decreasing the number of MCOs participating in the carve-in going forward, we would also hope to see changes to the carve in model that result in a significant reduction in the overall administrative burden on providers who must currently comply with the unique demands placed on them by each and every MCO they do business with.
OUTPATIENT CLINIC RATE REFORM
This fall the NYS Council worked collaboratively with our colleague associations to draft and advocate for a practical update to the current reimbursement methodology and rates for OASAS and OMH Outpatient Clinic services. It may be that the state will follow our lead and use our suggested model for how to increase rates, or it may choose an alternate strategy. At the end of the day, what matters most is that rates are increased quickly and substantially.
Here’s what we think is happening:
The state has filed an update to the eFMAP Spending Plan it sent to CMS for approval in August 2021. One of the proposal updates has to do with the fact that the OMH Outpatient Clinic received federal approval to move from the (federal) ‘Clinic’ option to the (federal) ‘Rehab’ option during the COVID enhanced FMAP funding period, thereby making the OMH Clinic eligible for additional federal funds. In situations like this, a notice will be promulgated in the NYS Register that indicates the state intends to draw down eFMAP funds for the OMH Clinic and proceed with comparable clinic investments, assuming federal approval. We would expect the Notice to be included in the Register at the end of this month. This would increase rates for the OMH Outpatient Clinic. The OASAS Outpatient Clinic (already under the ‘Rehab’ option and therefore eligible for eFMAP funds) can expect increases (pending SPA approval) as follows:
- $15M for freestanding OASAS 822 Programs that will be awarded as workforce grants but that can be used flexibly (temporary increase)
- $6-10M to enhance “in community” services (intention is to make this a permanent rate increase)
So here is our thinking: The aforementioned COLA should benefit all OMH and OASAS Programs and Services to include Outpatient Clinics. If the COLA is significant AND there is funding going to the OASAS and OMH Outpatient Clinics as result of enhanced federal funds, AND there are funds returned to OASAS and OMH as result of our advocacy pushing the state to collect overpayments made to some MCOs, we have to believe there are now funds available to increase Outpatient Clinic rates, among other rate increases already in the works.
Again, all of this is subject to change pending the executive budget proposal. Assuming the weather holds and the budget is released tomorrow, we will do our best to share information with you as soon as possible.