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Empire Justice Testimony For the Joint Legislative Budget Hearing: Health

Geoffrey Hale February 07, 2014

INTRODUCTION

Thank you for the opportunity to submit this testimony commenting on the 2014-2015 Health Care Budget.

Empire Justice Center is a statewide, multi-issue, multi-strategy public interest law firm focused on changing the “systems” within which poor and low income families live.  With a focus on poverty law, Empire Justice undertakes research and training, acts as an informational clearinghouse, and provides litigation backup to local legal services programs and community based organizations.  As an advocacy organization, we engage in legislative and administrative advocacy on behalf of those impacted by poverty and discrimination.  As a non-profit law firm, we provide legal assistance to those in need and undertake impact litigation in order to protect and defend the rights of disenfranchised New Yorkers.

Empire Justice has had the opportunity to serve on numerous advisory committees for New York State during Medicaid Redesign and the implementation of the Affordable Care Act (ACA).  We have had an ongoing advisory role as a member of the Finger Lakes Regional Advisory Committee for the Health Benefit Exchange and the statewide Medicaid Managed Care Advisory Review Committee.  We have also worked directly with the New York State Department of Health, serving on workgroups for the Basic Health Program, Managed Long-Term Care Plan quality measures, and Managed Long-Term Care implementation.  We serve on the steering committee of the Coalition to Protect the Rights of New York’s Dually Eligible and co-facilitate HCFANY’s Public Programs Workgroup.  These experiences, along with our day to day work with low income New Yorkers and their advocates have helped to shape the perspective we provide today.

We would like to preface our testimony by recognizing the enormous efforts that went into getting the Marketplace up and running and acknowledging the remarkable accomplishment that DOH has accomplished in enrolling 330,000 New Yorkers into coverage via the Marketplace, despite considerable challenges.  We share the state’s commitment to implementing the ACA, establishing an efficient and effective health insurance exchange (the New York State of Health Marketplace), and expanding Medicaid eligibility.  During this time of massive transition, we are monitoring implementation carefully to help identify any issues that may arise that need to be addressed or improved.

This is also a time of huge transition for dually eligible long-term care recipients, as DOH plans to expand mandatory managed long term care (MLTC) to every county in New York State by year’s end, to add nursing home benefits to the MLTC and mainstream managed care benefit packages, and to start enrollment into the fully integrated dual advantage (FIDA) demonstration project.

We enthusiastically support the Executive Budget’s inclusion of legislation to establish a Basic Health Program as well as the dry appropriation for Consumer Health Advocates, and are grateful for other provisions which will strengthen protections for low income consumers.  At the same time, we do have concerns about specific proposals which will limit or reduce access protections for our low income clients.  Finally, there are areas not addressed at all in the budget legislation, where there is urgent need for legislative or administrative change to protect the due process rights of Medicaid consumers.

PROVISIONS WE SUPPORT

I.  Authorization for the Basic Health Program

We applaud Governor Cuomo for including a Basic Health Program (BHP) in his proposed budget. (See Part C of Article VII bill, sections 50-53, which amends Social Services Law (SSL) §367-a, adds new SSL §366 and §369-gg, and new State Finance Law §97-0000).  This ACA-authorized program will benefit working adults and families, while generating fiscal savings for our state.  As proposed, the BHP will cover adults with incomes between 133 and 200 percent of the Federal Poverty Level (FPL), as well as lawfully present immigrants up to 200 percent FPL.  We are pleased that the Governor chose to include two provisions that would streamline enrollment for those who qualify and ensure consistent health insurance coverage throughout the year:

a. Providing for continuous enrollment, so that qualifying individuals can enroll at any point in the year; and
b. Providing enrollees with continuous eligibility for a 12 month period, even if their income changes.  This second provision will ensure that more New Yorkers have continuous coverage by helping to prevent them from dropping in and out of coverage, if their income changes over the course of the year.  To fund the program, the State will receive 95% of the funds the federal government would have spent subsidizing these adults in the Marketplace.

Adults making just above the level to qualify for Medicaid have little or no disposable income with which to pay for health insurance.  Forty percent of low and moderate income New Yorkers have credit card debt, 26 percent have medical debt, and 32 percent report having no savings at all. [1]  The BHP would provide these New Yorkers with a more affordable health insurance option, with little or no premium and very low cost sharing.  For many, a Basic Health Program would mean the critical difference between obtaining coverage and going without insurance.  As proposed, the program would include a $20 monthly premium for individuals making between 150 and 200 percent of FPL.  Instead, we recommend a BHP program with no premium at any income level.  This will ensure that the program remains affordable for individuals at such marginal income levels and will likely result in higher enrollment.

BHP also makes economic sense for our State.  New York already spends $1 billion annually in state funds to cover lawfully present immigrants up to 138 percent of FPL under Medicaid.  The costs of covering these adults, along with other working adults between 133 and 138 percent of FPL and parents making between 139 to 150 percent of FPL who currently received subsidized coverage under the Family Health Plus Wrap, would be transferred into the BHP, which would operate with primarily federal funds. These savings to the state would occur without raising costs for consumers or cutting benefits. [2] 

II.  Support for Community Health Advocates

We strongly support the Executive State Operations Budget’s “dry appropriation” to the Community Health Advocates (CHA) program.  This appropriation allocates federal funds to a statewide network of groups that assist individuals and small businesses in New York so that they are able to effectively use health insurance coverage and access quality health care.  These services are critical.  The success of the New York State of Health Marketplace depends on the ability of individuals to not only enroll, but to be able to use their newly-acquired health coverage.

Indeed, the health care system is notoriously difficult to navigate.  Most consumers have difficulty grasping even basic terms associated with health insurance coverage such as premiums, co-insurance, and co-pays.  Understanding how to utilize health insurance coverage to access care, particularly when the insurer places restrictions on that care, is even more difficult.  Empire Justice Center strongly supports the state’s efforts to enroll individuals in health insurance through the Marketplace with an extensive network of Navigators and In-Person Assistors.

CHA is a critical component of the state’s efforts to support enrollment.  Since 2010, the CHA program has helped over 160,000 individuals find, keep and use health coverage, saving over $12 billion for consumers across the state.  CHA provides critical assistance to all New Yorkers, but pays special attention to the most vulnerable and underserved populations by assisting individuals with all forms of coverage, including public insurance products like Medicare and Medicaid, as well as private coverage available through the Marketplace.  The CHA program targets individuals facing difficulties once they have enrolled in health insurance, and consists of a statewide network of community based organizations offering services ranging from community outreach and education to appeals of service denials.  The network also supports a live-answer, toll-free hotline to answer consumers’ questions, administered by the Community Service Society of New York.  The statewide network further supports improving the health care system by analyzing issues in its statewide database and providing valuable feedback to policy makers.  More information on CHA can be found online at www.communityhealthadvocates.org.

Accordingly, we urge the Legislature to approve the $2.5 million dry appropriation to support Community Health Advocates.

III.  Adoption of Hospital-Based Presumptive Eligibility

The Executive Budget seeks to amend Social Services Law 364-I in order to allow qualified hospitals to conduct presumptive eligibility (PE) determinations for MAGI (Modified Adjusted Gross Income) populations, [3] in accordance with ACA standards.  PE permits hospitals to enroll patients and their families who are likely to be eligible in Medicaid for a temporary period using a very simple application process.

Empire Justice strongly supports this provision and urges the Legislature to adopt it.

IV.  MCCARP Expansion

Since its inception in 1996, the Medicaid Managed Care Consumer Advisory Review Panel (MCCARP) has played an important role in convening key stakeholders to monitor the performance of New York’s Medicaid managed care plans.   The panel’s charge includes:

  • Determining whether there is sufficient plan participation
  • Reviewing the enrollment phase-in schedule
  • Assessing marketing and enrollment strategies and the public education campaign
  • Evaluating the adequacy of provider capacity and monitoring access to plan practitioners
  • Examining cost implications of the inclusion or exclusion of certain Medicaid populations
  • Other issues as appropriate.

The Article VII language (Part C, section 39, proposed amendment to SSL §364-jj) expands existing MCCARP membership from 12 to 16 members by adding consumer representatives for individuals with behavioral health needs and consumer representatives for dually eligible individuals, as well as representatives of providers that serve both populations.

We applaud this proposal.  We urge that it be swiftly implemented if it is enacted, since behavioral carve-in is looming and mandatory MLTC enrollment is already happening.

V.  Adopting MAGI Equivalent Income Standards for the Non-MAGI Medicaid Population

The Medicaid Expansion under the federal Affordable Care Act does not affect the income levels or eligibility determination process for the non-MAGI population – primarily, those who qualify for Medicaid based “excess income” or “spend down.”  Currently, individuals who fit into both MAGI and non-MAGI categories have a complicated choice to make.  All MAGI individuals can apply through the Marketplace and receive real-time information about their eligibility for Medicaid, as well as estimates of subsidies for private health insurance products.  Determinations of non-MAGI eligibility, however, use a different budgeting methodology and different income standard, and are only available through local social services districts, not the Marketplace.  There is no way right now for the Marketplace to estimate a MAGI applicant’s spend down liability under non-MAGI budgeting.

The proposed budget will allow the Marketplace to provide an estimate of the person’s non-MAGI spend down liability at the same time the MAGI eligibility determination is made through an amendment to SSL §366 (1) (Article VII bill, Part C, section 56).  This change will significantly streamline the application process and help consumers make more educated decisions about whether to apply for non-MAGI coverage through the local district.

We encourage the legislature to support the Governor’s proposal to enable spend down determinations to be made through the Marketplace.

VI.  Elimination of the CHP Waiting Period

Currently, children in need of health insurance who are otherwise eligible for Child Health Plus (CHP) may only be enrolled in CHP if they have not been covered by a parent’s insurance policy within the past six months, unless they meet certain exceptions.  Many otherwise eligible children have thus been forced to go six months without coverage before enrolling in CHP.  The Article VII bill at sections 59 and 60 seeks to correct this deficiency and bring New York’s CHP program in line with the ACA by eliminating the section of the law requiring a six month waiting period, through an amendment to Public Health Law §2511.

We urge the legislature to approve the Governor’s proposal to eliminate the CHP waiting period.

VII.  Improved Out of Network Coverage and Health Care Provider Network Standards.

The state’s tremendous success in enrolling thousands of people through the Marketplace – many of whom are formerly uninsured low to moderate income New Yorkers new to health insurance altogether – also exposes these new enrollees to the confusing limitations associated with health plans, such as a limited network of providers and no coverage for out of network services.  The Executive Budget proposal includes important provisions that would require insurance plans to meet network adequacy standards and protect New Yorkers from surprise medical bills for out of network services they did not choose.  Key provisions of the proposed out of network legislation contained within the Transportation, Economic Development, and Environmental Conservation Article VII bill (TED Article VII, §U) would benefit thousands of New Yorkers by:

  • Holding consumers harmless for surprise bills from emergency room or out of network charges that were outside of their control, while setting a fair process for providers and insurers to negotiate coverage disputes directly;
  • Allowing consumers to go out of network when the plan’s provider network does not have a specialist who meets their medical needs; and
  • Requiring all products to meet a set of provider network adequacy standards, so fewer New Yorkers end up seeing out of network providers, whether planned or unplanned.

Often, consumers who make every effort to see in-network providers end up receiving out of network services.  In an emergency situation, a consumer may end up in an out of network hospital or be treated by an out of network provider with no time to make a different choice.  Empire Justice Center supports legislation that would protect more consumers from surprise bills and remove them from the middle of the negotiation process in the event of coverage disputes.  If the legislation is passed, the insurer and provider – who are in the best positions to negotiate questions of coverage – would negotiate fee arrangements themselves or through independent arbitration.

We also support provisions that would allow consumers to go out of network at the in-network cost when a plan does not have a qualified provider in-network.  People with serious health conditions often need to see doctors with very specialized expertise and experience.  When their plan does not include someone with the requisite experience, they may be forced to go outside of the plan’s network to receive medically necessary care.  New York State already offers protections to HMO enrollees.  The new legislation would extend these same protections to all “comprehensive policies that use a network of insurance plans” (TED Article VII, p. 126).  The legislation would further protect New Yorkers by requiring these policies to adhere to the network adequacy standards already required of HMOs, so that fewer New Yorkers would need to go out of network to meet their health care needs.

BUDGETARY AREAS OF CONCERN

I.  Curtailing Spousal/Parental Refusal

The Executive Budget proposal seeks to eliminate the longstanding right to utilize spousal refusal for community Medicaid eligibility where consumers are not seeking help paying for long-term care costs, and would also abolish the parental refusal provision which allows severely disabled children to access Medicaid.  Under the Governor’s proposal (Article VII bill, Part C, section 18 – amendment to SSL §366), “refusal” will only be allowed if a parent lives apart from a sick child, or a well spouse either lives apart from or divorces the spouse in need of Medicaid coverage.  Severely disabled children will lose access to Medicaid under this provision, and low income seniors or people with disabilities will lose the ability to access Medicaid for assistance with Medicare cost-sharing expenses.  While the ACA and the Marketplace now make access to affordable care more feasible for many, many of New York’s most vulnerable residents will be left without access to vital Medicaid services should the legislature adopt the Governor’s proposal to restrict the right of spousal or parental refusal.

The Governor’s budget proposal preserves only a limited application of spousal refusal:  for couples when one spouse receives Managed Long Term Care services.  But this is already mandated by the federal ACA, which requires states to expand “spousal impoverishment” protections to most married couples in the community, including those where one spouse receives home care or “waiver” services.  The proposed preservation of spousal refusal only for those enrolled in MLTC is an important part of these federally mandated spousal impoverishment protections, but it doesn’t go far enough to comply with the federal requirement or prevent harm to those who rely on it.

Situations continue to arise where spousal refusal is necessary to ensure that an individual has access to medical care.  Some of our clients’ stories illustrate the potential harms of eliminating the right to refusal.

A young woman severely disabled by Multiple Sclerosis qualified for Medicare in 1995.  She was covered under her spouse’s insurance policy and didn’t enroll in Medicare Part B at that time based on advice she got from the Social Security Administration.  In 2012 – seventeen years after first becoming eligible for Medicare – her spouse’s insurance company told her they would only cover her medical bills as secondary payer (20% share) since she was Medicare eligible.  She no longer had any primary coverage.  The Medicare Savings Program allowed her to enroll into Medicare Part B immediately, and avoid astronomical premium penalties, but she could only qualify for MSP through spousal refusal.  

A 56 year old cancer survivor on SSD needed to use spousal refusal to renew her Medicaid Buy In for Working People with Disabilities.  She was trying to leave her abusive spouse, but had no place to go in her rural upstate county – and yet his income prevented her from maintaining her Medicaid coverage.  Using spousal refusal, she was able to retain access to essential health services as well as her Part D Extra Help coverage for her expensive prescription drugs.  

Another SSD recipient with multiple chronic disabilities had coverage through her husband’s employer group health plan.  He eventually dropped her from the policy when it became unaffordable. She didn’t understand that she needed to sign up for Medicare Part B or Part D right away.  When she tried to enroll later on, she learned that she would be charged a high late enrollment penalty and gave up without enrolling.  By October 2013, she had stopped taking her prescription drugs because she couldn’t afford them and wasn’t going to her doctor regularly.  Her monthly Social Security check was only $830.  Her husband’s earnings went toward their mortgage, utilities, food, transportation and his health insurance premiums.  She was too young for EPIC.  Medicaid was not an option as her spend down would be extremely high.  We helped her enroll in the Medicare Savings Program, using spousal refusal.  With MSP, she enrolled in both Medicare Part B and Part D without any late enrollment penalty, and automatically receives Extra Help with Part D drug costs.

In other cases, children with severe disabilities risk losing access to needed Medicaid services when, for example, changes in parental income result in loss of SSI eligibility and the consequential loss of Medicaid coverage.  Parental refusal helps maintain their services while they are considered for Medicaid waiver programs that are not based on parental income.

Almost always, these individuals are in desperate straits when they contact us – they have no Part B coverage at all, can’t afford their drug co-pays, or they have significant disabilities and can’t access the medical care they or their children need.  Spousal or parental refusal affords these individuals a vital lifeline to retain access to necessary medical coverage and services.  We strongly oppose the Governor’s proposal to limit spousal and parental refusal and urge the legislature to reject it.

II.  Sweeping Change to Social Services Law Fair Hearing Provisions

The Article VII bill (section C, parts 21 and 22) would allow any and all fair hearings, now administered and held by the Office of Temporarily & Disability Assistance (OTDA), to be outsourced to and conducted by subcontracted staff, through amendments to SSL §20-c and §22.  There is no language in the Article VII memo to explain why the proposal is being made.

We understand that the intent may be to implement the Medicaid Redesign Team Fully Integrated Dual Advantage “FIDA” demonstration program recently approved by CMS.  However, if not clarified, the proposal would be far wider and could have sweeping implications for vulnerable Medicaid recipients and those relying on the fair hearing system for many other benefits.  Without understanding the rationale and how our clients might be affected, we have grave concerns about the proposal.

III.  Establishment of Financial Incentives that Favor Institutional Placement

In October 2013, the Governor issued the Report and Recommendations of the Olmstead Cabinet (Olmstead Plan) outlining proposals for integrating people with disabilities into the community to the fullest extent possible.  Under that Plan, the Governor is committed to reducing long-term nursing home placements by 10%, or roughly 10,000 individuals. [4]  We commend the recommendations of the Olmstead Plan and encourage the Executive to seek methods of realizing its goals of community integration.

Unfortunately, the Executive Budget proposal includes provisions that risk undermining the goals of the Olmstead Plan by creating financial incentives for nursing home providers that do not exist for any community based long term care provider.  Under the proposed budget, reimbursement rates for residential facilities will be set at the fee-for-service rate as determined by the Department of Health even as the nursing home benefit is included in the Medicaid Managed Care benefit package.  While some protections for providers are warranted to facilitate the transition from fee-for-service Medicaid to Medicaid Managed Care, they are usually limited to a specific period of time.  The Governor’s proposal includes no limits to the financial protection afforded residential providers.  No long-term care community providers are granted the same protection.  Ultimately, the Governor’s proposal risks creating a financial incentive for nursing home placement, contrary to the stated intent of the Olmstead Plan.

Empire Justice Center strongly opposes any financial incentives that favor institutional placement over community placement.

Similarly, we are concerned about the possible effects of the establishment of a base rate of pay for nursing home employees that is not balanced by similar wage protections for workers who provide comparable care in the community.  Comparable protections should be provided to individuals providing home care services in the community in order to avoid creating a wage imbalance that risks driving employees from community settings into institutional settings.  Such an imbalance risks creating a shortage of available home care workers in the community, thus undermining the Governor’s commitment to reducing nursing home placements and allowing individuals to return home with services provided in the community.

AREAS OF CONCERN NOT ADDRESSED IN BUDGET

I.  Stopping the Erosion of Due Process Rights in Medicaid Managed Care

Current regulations impose undue restrictions on the right to aid continuing pending the adjudication of an appeal through the fair hearing process.  For services subject to authorization periods, Medicaid managed care plans are not required to provide aid continuing for challenges to reductions or terminations in care after the end of the existing authorization period.  This is true only for Medicaid managed care plans, but not the state agency in the fee-for-service provision of Medicaid services.  In fee-for-service Medicaid, beneficiaries have a right to continue receiving services until an impartial adjudicator can evaluate the claim.  Aid continuing, as this protection is commonly known, thus ensures beneficiaries’ Constitutional right to due process.

The most vulnerable Medicaid beneficiaries are most adversely affected by this discrepancy.  Long-term care services such as home health aides, personal care and consumer directed personal assistance are now included in the Medicaid managed care benefit package.  These invaluable services allow individuals with chronic conditions and often severe disabilities to remain safely in their homes and in the community.  Because these services are also subject to strict authorization periods, the limitations on due process rights inevitably affect any proposed reduction in care.  Maintaining consistent services until the claim can be properly adjudicated through the fair hearing process is often the only protection that stands between an enrollee living in the community and an unwarranted placement in an institution.

Now that almost all Medicaid beneficiaries are required to receive services through a managed care plan, we urge the legislature to guarantee the retention of their rights to due process in the Medicaid program.  Fair hearing rights in Medicaid managed care should be aligned with fair hearing rights in fee-for-service Medicaid:  all beneficiaries are entitled to aid continuing until a fair hearing has been decided.

II.  Preserving Due Process Rights for the Most Vulnerable Medicaid Beneficiaries Enrolled in Managed Long-Term Care

Further, we urge the legislature to protect due process rights for vulnerable individuals enrolled in Medicaid Managed Long-Term Care (MLTC).  The final budget should include clarifications to ensure that enrollees facing terminations or reductions in care can access timely fair hearings and continue to receive services while appeals are pending.

Under current regulations, Medicaid beneficiaries enrolled in Managed Long-Term Care face limitations unique to the MLTC program.  Unlike even mainstream Medicaid Managed Care (MMC), MLTC enrollees faced with reductions or terminations of services are required to appeal these reductions first through the managed care plan before they may request a fair hearing through the state agency.  Because this requirement is unique to MLTC, many enrollees do not understand it and are unaware of the potential consequences.  If a member requests a fair hearing without appealing through the plan first, he or she will inevitably lose the fair hearing long past the deadline for appealing through the plan, ultimately losing their right to appeal altogether.

The MLTC population is arguably the most vulnerable in the entire Medicaid program.  In addition to other eligibility requirements, MLTC enrollees must need at least 120 days a year of home care services.  That means that those in MLTC all have chronic conditions requiring on-going services indefinitely.  Their vulnerability only increases the risks resulting from unwarranted terminations or reductions.  Further, as the result of Medicaid Redesign Team proposals adopted by the legislature, those eligible for MLTC in New York City and many upstate counties now must enroll in MLTC.  By the end of the year, every county in the state will have mandatory MLTC.  The restriction of members’ due process rights in the MLTC program will only compound difficulties associated with this rapid expansion of the program.

We urge the legislature to align the MLTC appeal processes with those in MMC and retain equal access to the state’s fair hearing process.  This especially vulnerable population should have the same right to request a fair hearing to challenge a denial as all other Medicaid beneficiaries.

End Notes:
 [1] Community Service Society of New York, The Unheard Third Survey, “Hardships and Personal Worries for Low-Income New Yorkers,” De¬cember 2010, available at http://www.cssny.org/userimages/downloads/ UnheardThird2010HardshipsandPersonalWorries.pdf.
 [2] In 2012, Community Service Society produced a full analysis of the benefits of establishing a BHP in New York: Community Service Society of New York, “Bridging the Gap:  Exploring the Basic Health Insurance Option for New York,” January 2012. Available at http://www.cssny.org/publications/entry/bridging-the-gapJune2011RevisedJanuary2012
 [3] MAGI is the amount used to determine eligibility for Marketplace coverage.   We also use the term “MAGI” to describe the categories of individuals who can receive Marketplace coverage; “non-MAGI” refers to individuals who are eligible for Medicaid coverage through their local department of social services.
 [4] Report and Recommendations of the Olmstead Cabinet, October 2013, available at http://www.governor.ny.gov/assets/documents/olmstead-cabinet-report101013.pdf.