Archive for April, 2009

NYS Medicaid Update, 2009-10 New York State Budget

Health Reform Highlights handed out today during AARP’s Aging Advocates Meeting

On April 3, 2009, the New York State Legislature approved the State Fiscal Year 2009-10 Health Budget. This Budget enacts landmark healthcare reforms advanced by Governor Paterson to enable eligible New Yorkers to get and keep public health insurance coverage and to ensure that Medicaid buys the right care, in the right setting, at the right price.

Last year’s Budget overhauled the Medicaid reimbursement system for hospital clinics and community clinics; this year’s Budget overhauls the reimbursement system for hospital inpatient services and nursing homes, and establishes a work group to review home care reimbursement. The Budget also reduces hospital inpatient rates and increases rates of payment for hospital clinics, community health centers, and practitioners, and incentivizes the adoption of “medical home” standards. Of particular importance in this economic downturn are significant changes in eligibility and enrollment rules that will allow more New Yorkers to sign up for public health insurance. Finally, this Budget includes major initiatives to strengthen Medicaid’s pharmacy operations.

This Special Edition of the Medicaid Update highlights the reform measures advanced in this year’s Budget. Additional information about the implementation of these provisions will be included in future issues of the Medicaid Update.

Read the complete Medical Update Special Edition.

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Governor should cut consultants, not government workers

By Kenneth Brynien
Public Employees Federation

The New York state budget needs cuts in wasteful spending. While fair taxation is an absolute necessity, consultants shouldn’t be exempt from elimination.

In a state that’s been struggling with a $16 billion deficit and a tax structure targeted to the middle class, the question isn’t whether state-funded consultants should be eliminated. It’s how many.

Allowing the wealthy to continue to escape fair taxation was absurd. New York will be helped by having imposed fairer taxes on the wealthiest New Yorkers for the next three years. This temporary fix will allow the state to continue to provide vital services to its citizens.

Unfortunately, this change and the other measures being taken by the governor and the Legislature still leave a $481 million gap the governor wants to close with state employee layoffs or pay and benefit cuts. However, in an operation where so much money is being wasted on contract consultants, elimination of these wasteful contracts is not just a possible alternative, it is a necessity.

The sad fact of the matter is the number of employees Gov. David Paterson is talking about laying off over two years may be close to the number of costly consultants he hires over that time. Unfortunately, the state’s hiring freeze has only been an excuse to waste more money by expanding the dependence on costly consultants as a way to continue to provide necessary services. So, instead of saving money, more is wasted.

The governor’s unwillingness to even discuss the numbers of consultants that should be eliminated has left the unions with little choice but to refuse to enter into any discussions about savings. Especially since the state spends about $3 billion annually on an estimated 22,000 consultants. That’s right: 22,000 consultants.

It is not clear how continuing to waste money on costly consultants who will be getting 4 percent or 5 percent increases in their contracts this year, while demanding that the state workers who are on average making at least one-third less than the consultants give up their 3 percent raise and five days pay, is a smart move for the governor or the taxpayers. Sometimes consultants make two to three times what a state employee would make doing the same job.

The position that consultants should not have to give up anything at all, at the same time the governor threatens state workers with layoffs and pay deferrals, is not tenable. Consultant contractors are not exempt from a deep recession. No job losses are desirable, but eliminating contract consultants to at least provide some of the cost reduction needed to offset the state revenue losses and, in the process, limit further demands on the already distressed taxpayers that foot the bills becomes necessary.

The state could save $730 million over three years just by replacing half of its private consultants with state employees.

Paterson’s reach extends only to the agencies of the executive branch. Contract consultants at the state universities, the Legislature, the courts and various public authorities are beyond the reach of the governor’s effort to reduce their numbers. The Legislature can, in some cases, cut the funding for contract consultants of those various offices and agencies, and the state budget office can lean on agency heads to save money.

New York has taken steps to make the tax system a little fairer. The taxpayers should get the most for the taxes they pay by taking the corporate profit out of public work and letting public servants do their jobs.

Kenneth Brynien is president of the New York State Public Employees Federation.

BALCONY SUCCESSFULLY DEFEATS $1 HEALTH CARE CLAIM SURCHARGE

The Business and Labor Coalition of New York, BALCONY, successfully opposed Governor Paterson’s plan to add a $1 processing fee to all health, pharmaceutical, dental, and vision claims over $20 submitted by third party administrators. “The claim by Albany is that such a fee would have added at least $63 million to state coffers,” said BALCONY labor chairman Alan Lubin. “But it would have also contributed to rising health care costs at a time when containing these costs is foremost on most policymakers’ minds. It also would have added yet another layer of bureaucracy, without guaranteeing better or more comprehensive service.”

The controversial Third Party Administrator Tax would have treated companies or municipalities that self-insure the same as those that use conventional insurance. Since many unions are self-insured, they foresaw that the costs of administering this surcharge, and the surcharge payments themselves, might well be passed along to them. Unions see this as a back-handed avenue to chip away already-established union benefits.

Albany Lobbyist Richard Winsten, of Meyer, Suozzi, English & Klein, who represents many labor/management and other self-insured union benefit funds, led the opposition to the Governor’s TPA tax plan, stating “Union members and self-insured funds would have been adversely impacted by the ill-conceived proposal which was rescinded by the governor and killed by the legislature.”

BALCONY has talked with its union members, who all oppose this surcharge and who also point out that such a tax penalizes employers who provide insurance while doing nothing to compel those employers who do not offer insurance to improve their offering. Typical of the union response was this statement from Anthony Potenza, the Executive Director of the New York Labor Health Care Alliance: “It was gratifying to see the defeat of the budget proposal to levy a $1 per claim tax on self-insured and self-funded health care plans. Our New York Labor Health Care Alliance with great support from the New York State AFL-CIO worked hard to defeat this onerous budget measure. We are extremely grateful to BALCONY and Director Lou Gordon for their early and critical support of our position in opposition to what would have been an unfair added cost to our union health benefit plans affecting each and every participant.”

Bill Hohlfeld of the Local 46 Labor Management Trust stated “We couldn’t be more pleased that this $1.00 surcharge has been defeated. While a dollar may seem like a small amount of money to some, it represented a real issue for us, and we are happy to have been party to the process that made this thing go away. Principles should be neither sacrificed nor ignored – at any price.”

Andy Johnson, Administrator for the Teamster Center Services Fund, added “It is encouraging to see that Albany has dropped the proposed $1 per claim surcharge. We all must do our part to balance the budget but it is foolish to try and derive income from driving up the health care costs of working families.”

“It was good that labor and management, through BALCONY, worked together to defeat some of these draconian taxes on health insurance claims for our members. We need to continue to work together to assure that health care for all is affordable and attainable,” concluded Art Wilcox of the New York State AFL-CIO.

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BALCONY HAILS NEW YORK STATE LEADERS’ EFFORT TO CLOSE HUGE BUDGET GAP: CONCERN OVER LAYOFFS OF 8700 STATE WORKERS

The Business and Labor Coalition of New York, BALCONY, gave its qualified support for the newly-enacted New York State 2009-2010 budget, one that includes a 1% hike in the tax rate on individual incomes over $200,000 and family/joint filers over $300,000, and a hike of slightly more than 2% on incomes over $500,000. These rate increases have been enacted for the next three years, meaning that they will expire around the time that the federal stimulus monies cease.

New York State expects this surcharge to bring in over $4 billion for the state’s coffers each year. Given the steady drift away from a progressive tax code during the mid- and late-1990s, adding two new brackets to the top of the state’s tax structure made a lot of sense. Also, since New York has lost 200,000 jobs already in this recession, the high-end income tax increase was vital in averting even more damaging state spending cuts that would have exacerbated the recession’s effects and deprived deserving New Yorkers of essential public services.

We are not out of the budget woods yet, however, BALCONY is concerned that working families will suffer further if the Paterson Administration lays off 8,700 state employees including members of CSEA and PEF.

Continue reading the BALCONY Budget Report:  Report

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Pension fund middlemen are banned by controller

by Kenneth Lovett

ALBANY – Faced with a mushrooming scandal, officials will bar firms from using well-connected middlemen to get business with the state pension fund, the Daily News has learned.

State Controller Thomas DiNapoli on Wednesday will announce a complete ban on the use of placement agents, lobbyists, consultants and other middlemen, a source close to DiNapoli said.

“No one can get paid to bring a deal to the fund,” the source said.

DiNapoli has the power to ban the practice unilaterally.

The controller signed the change in policy yesterday, the source said. DiNapoli will push for a law to make it permanent, the source said.

“He has been reforming the pension system since he took office [last year] in response to the ongoing investigations,” the source said.

DiNapoli has limited campaign contributions from those doing business with the fund and has implemented changes designed to provide more oversight and transparency when it comes to the fund. State and federal probers have been looking into how the $120 billion pension fund operated under DiNapoli’s predecessor, Alan Hevesi.

Top Hevesi consultant Hank Morris and pension deputy David Loglisci have been indicted on charges they steered billions in pension fund business to companies that agreed to pay kickbacks to them or political cronies. Former Liberal Party boss Ray Harding has also been charged.

Several companies, including the Carlyle Group and Quadrangle, whose former partner Steve Rattner is President Obama’s chief Treasury adviser on the auto industry bailout, are under investigation.

Meanwhile, the head of the Securities and Exchange Commission is considering barring financial firms from donating to elected officials who choose pension investors.

SEC Chairman Mary Schapiro told Bloomberg News she may resurrect a 1999 proposal that would have barred firms from managing state pension funds for two years if they’ve donated to elected officials involved in the deal.

The SEC never adopted the measure.

“One of the first things I asked the staff to do was just dust off” the proposal and “take a look at it,” said Schapiro, who has been chairwoman since January.

“Let’s see if it still makes sense or if there are things that we should do differently.”

Schapiro’s remarks came after The News reported state Attorney General Andrew Cuomo wants financial firms doing business with the pension fund to follow a “code of conduct.”

Cuomo wants to bar the use of middlemen and ban all gratuities. He also is pushing for more transparency measures and wants to require pension decisions to be overseen by a board rather than just the controller.