State Budget Updates

January 20, 2021

As we continue to review budget bills we will update members on issues that may not be crystal clear yet but that we feel are important to mention and/or update  as needed.  See below for a few updates:

State Aid Payment Withholds Page 10 of the State’s 21-22 executive budget Financial Plan says:  “At the time, the cuts were expected to be needed to bridge the estimated difference between $79.1 billion in General Fund disbursements (prior to the execution of mid-year cuts) and $70.9 billion in General Fund resources. It was further anticipated that the FY 2022 Executive Budget would propose making the FY 2021 local assistance cuts permanent..”  

Here is the corresponding section (page 16 of the state’s executive budget Financial Plan):  “In June 2020, DOB began temporarily withholding 20 percent of most local aid payments. It initiated the withholds to ensure that up to $8.2 billion in local aid payments could be withheld permanently, if needed, by the end of FY 2021. This was consistent with the assumptions in the DOB Mid-Year Financial Update. Through December 2020, withholds are estimated to have totaled $2.9 billion. An improved receipts picture, the availability of Coronavirus Relief resources, and the extension of the higher Federal matching rate on Medicaid expenditures through June 30, 2021 has reduced the need for local assistance reductions. DOB now expects to reduce most local aid payments by a total of 5 percent from the Enacted Budget estimate, rather than the 20 percent that was anticipated in the Mid-Year Update and that has been executed to date. Amounts that have been withheld in excess of the 5 percent are expected to be reconciled and repaid in the final quarter of FY 2021. The local aid reductions will be executed pursuant to section 1 (f) of the FY 2021 ATL bill, which allows the director to withhold payments in response to the direct and indirect financial effects of the COVID-19 pandemic.”   

With all this you may be wondering… how does this all work?

State agencies must receive monetary targets for each of the initiatives in the exec budget proposal.  In this case, they need to know the total amount in reductions assigned to each state agency to enact this provision as currently written.   As such, state agencies (and advocates) can’t say with 100% certainty the exact % reductions that will ultimately result from this proposal.  It is also important to remember that the 5% Aid to Localities reduction proposed in the Governor’s budget depends how much federal funding the state receives.


More executive budget proposals revealed:

  • The executive budget defers the statutory Human Services COLA until 3/31/2022.
  • The commitment to fund the statewide Minimum Wage adjustments is (fully) funded at the following levels:  $5.1M for OMH; 1.8M for OASAS and $31.6M for OPWDD
  • Projected Revenue:  Adult Use Cannabis @$20 m;  Opioid Excise Tax @$34M; and Centene/Fidelis plan sale proceeds @$110M

Regarding OASAS Block Grant Authority, the executive budget does not appear to account for the federal block grant increases that states will receive as result of the recently enacted federal budget that includes increases for the Block Grants.  The language says:   “Notwithstanding any inconsistent provision of law, $5m of the funds hereby appropriated may, subject to the approval of the director of the budget, be used for services and expenses associated with federal grant awards yet to be allocated.  Appropriation authority contained herein may be transferred to state operations and/or any appropriation of the office of addiction services and supports.  

DSRIP 2.0 ?

The executive budget proposal released last night includes a section that discusses NY’s intent to seek approval from CMS for an additional 3 years on the state’s Medicaid 1115 waiver.  This is the waiver that included NY’s DSRIP waiver.  As you  may recall, shortly after the DSRIP waiver expired New York attempted to get an extension, but the Trump Administration wasn’t having it.  About 6 months later, NYS made another approach with a model that looked a lot like DSRIP with a request for big bucks but to our knowledge CMS never responded to that proposal.

The announcement below states that the Biden Administration has selected an acting administrator for CMS.  The article includes a paragraph (in red below) that indicates there may not be any big decisions or major new program initiatives coming from CMS under the acting administrator, and until such time as a permanent leader takes over at CMS.  It’s unclear whether this will delay New York’s full court press to get a 3 year extension on the 1115 waiver, to include DSRIP 2.0.  We’ll see if the Senate Republicans (now in the minority)  give the White House a hard time with the appointments President Biden sends to the Senate for confirmation.

(Modern Healthcare, 1/20)

Elizabeth Richter will serve as acting administrator for CMS, according to the agency’s website on Wednesday.

The career civil servant previously served as CMS’ deputy center director, leading policy development and operations management for Medicare’s fee-for-service program since 2007. She has held several roles focused on Medicare payment issues since she joined the agency in 1990.

Healthcare insiders have waited with bated breath for Biden to announce his pick for CMS administrator. But he hasn’t done it yet, even though the agency’s Medicare and Medicaid programs cover nearly one in three Americans. CMS’ budget is more than $1 trillion, accounting for over a quarter of federal spending.

Richter will likely provide a steady hand on the tiller until Biden nominates a candidate to be confirmed by the Senate. But CMS probably won’t make any major policy decisions or roll out big, new initiatives until someone permanently takes over the agency.

Micky Tripathi, chief alliance officer at population health software company Arcadia, has been named chief of the Office of the National Coordinator for Health Information Technology.

He previously served as president and CEO of the Massachusetts eHealth Collaborative, which wound down its operations last year, and founding president and CEO of the Indiana Health Information Exchange.

Tripathi also sits on the board of directors for interoperability groups including the the Sequoia Project, the CommonWell Health Alliance, the CARIN Alliance and the HL7 FHIR Foundation.