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News of the Day ... In Perspective

11/11/2006

New York gets $1.5 billion grant to “restructure” Medicaid

New York has joined with the federal government in a partnership to reform and restructure the state’s Medicaid program. It will receive $1.5 billion over the next 5 years to “right size and restructure the delivery system” and to expand the use of information technology.

The $1.5 billion is not an additional Medicaid reimbursement; the state is required to generate $3 billion in savings ($1.5 billion federal) over 5 years. New York will have to refund the difference between the federal investment and the federal savings if the projected savings are not achieved.

At least $500 million will have to be generated through fraud-and-abuse recovery.

The grant will support the recommendations of the Hospital Closure Commission. As many of the facilities have significant debt, financial assistance will be needed to retire debt and retrain and relocate displaced employees. The money will also be used to expand Medicaid managed care (Weekly Update for New York State Physicians, vol. 6, no. 35, Medical Society for the State of New York).

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