February 1, 2012 Jason Helgerson, Medicaid Director John Ulberg, Medicaid CFO

 Includes 25 MRT Phase II recommendations. ◦ Remaining workgroup recommendations will be included in MRT waiver process.  No traditional cost containment items.  Budget is “cap neutral”  Provides two year appropriation and extends super powers.  Preserves 4% annual spending growth.  Proposes State takeover of local administration and county fiscal relief. 2

3 Annual % Growth -Medicaid (4.0%) -School Aid (4.0% - school year basis) -State Ops/Fringe Benefits (-0.4%) -Debt (4.7%) -All Other Local Assistance (2.7%)

State Funds$21.1$21.8$ DOH (Global Cap / 4% growth) Other State Agencies Federal Funds$24.5$24.2$26.1 Local Funds$8.6$8.0$8.5 All Funds$54.2$54.0$57.4 (dollars in billions) 4

Key Reforms

 Program Streamlining & State/Local Responsibilities  Managed Long Term Care Implementation and Waiver Redesign  Behavioral Health Reform  Health Disparities  Health Systems Redesign: Brooklyn  Basic Benefit Review  Workforce Flexibility and Change of Scope of Practice  Payment Reform and Quality Measurement  Affordable Housing  Medical Malpractice Reform 6

Workgroup Gross State Gross State Basic Benefit Review$-30.3$-15.2$-35.7$-17.9 Health Disparities$32.4$6.1$20.7$0.3 Payment Reform$100.0$50.0$100.0$50.0 Program Streamlining$25.0$4.5$40.0$8.0 Workforce Flexibility/Managed LTC$1.5$1.0$1.5$1.0 Spousal Refusal$-68.6$-34.3$-137.0$-68.5 Redirect Transition II Funds$-25.0$-12.5$-25.0$-12.5 Net MRT Phase II Recommendations$35.0$-0.4$-35.5$-39.6 (“-” denotes savings; dollars in millions)  Affordable Housing ($75 million in base) and Health Systems Redesign/Brooklyn (fiscal impact reflected in Payment Reform).  Net savings from phasing out growth in local Medicaid spending over three years is not included above. 7

 Expanding coverage of podiatry services for adult diabetics.  Providing breastfeeding support and tobacco cessation counseling.  Reducing payments for elective cesarean sections without medical indication.  Eliminating coverage for knee arthroscopy, back pain treatments, angioplasty, and growth hormones where there is no evidence of benefit. 8

 Expanding services to promote maternal and child health, hepatitis C care and treatment, harm reduction counseling and services, and language accessible prescriptions.  Providing reimbursement for interpretation services for patients with limited English and communication services for patients who are deaf and hard of hearing.  Implementing and expanding data collection to measure disparities. 9

 Essential Community Provider Network ◦ Provides short term funding to address facility closure, merger, integration or reconfiguration of services.  Vital Access Providers (VAP) ◦ Provides ongoing rate enhancements or other support during significant restructuring.  HEAL reserves of up to $450 million to ensure smooth transition of services within communities and to provide reinvestment capital. 10

 Establishes Exchange as public benefits corporation.  Nine member governing board.  Five regional advisory committees.  Thirteen policy studies. 11

TBD Requires State Legislation Application deadline: June 29, 2012 Establishment Level Two Applied December 30, 2011 to continue the planning process, consumer assistance activities, conduct policy studies and support Exchange IT ($48.5M) Establishment Level One (Dec) Awarded to the NYS Department of Health to continue the planning process and conduct policy studies ($10.7M) Establishment Level One (June) NY selected as one of 7 states to build information systems to operate the Health Insurance Exchange ($27.4M) Early Innovator Grant Awarded to NYS Insurance Department to begin the planning process ($1M) Planning Grant 12

 With Planning and Establishment Grant Funding and Technical Assistance from the Robert Wood Johnson Foundation, New York has a series of Exchange activities underway: ◦ Simulation Modeling ◦ Business Operations Work Plan ◦ Five-Year Exchange Budget and Self-Sustainability Analysis ◦ Exchange Policy Studies 13

14 Why is it the right time for the State to take over responsibility for county Medicaid program growth and administration? 1. Current 3% local Medicaid growth cap exceeds 2% Property Tax Cap. 2. MRT and Federal health care reforms require greater administrative centralization to achieve efficiency and effectiveness goals.

15

16 Fiscal YearRest of StateNew York CityTotal $ $18.1$43.1$ $55.3$131.8$ $109.2$260.4$ $163.2$389.0$ $217.1$517.7$ $271.1$646.3$ $325.0$774.9$1, $379.0$903.6$1, $432.9$1,032.2$1,465.1 *Monroe County provides tax intercepts in lieu of Medicaid Cap payments. Monroe historical cap payments are included for comparative purposes as a proxy for estimating local relief under this proposal. Phase Down Growth Starting in 2013, Effective April 1, 2013 (in millions)

17  Federal Health Care Reform requires single point of entry.  Enables fundamental rethinking/retooling of how Medicaid program is managed.  Results: Services delivered more uniformly, efficiently, and cost effectively.  State savings from capping administrative reimbursement at FY 2012 levels partially offsets State costs of takeover.

18 ($ in millions) State Share Cap Medicaid Admin at levels($23.0)($46.9)($71.7)($97.5) Expansion of Enrollment Center$14.5$29.0$36.0 State Staff$5.0$9.0$11.0 FTEs ,200 Subtotal – Medicaid Admin Takeover($3.5)($8.9)($24.7)($50.5) Limiting MA Cap Growth (Phase Down)--$61.1$187.0$369.6 Total – Financial Plan Impact($3.5)$52.2$162.3$319.1 Additional Admin Savings (Efficiency)($5.0)($21.5)($71.0)($130.5)

Work Ahead

 New York is poised to fundamentally transform its Medicaid program into a national model for cost-effective health care delivery.  New York is also well positioned to ensure that Medicaid reform also means more comprehensive health system reform.  The Medicaid Redesign Team has developed a multi-year action plan that if fully implemented will not only bend the state’s Medicaid cost curve but also improve health outcomes for more than 5 million New Yorkers.  To fully implement the MRT action plan, a ground-breaking new Medicaid 1115 waiver will probably be necessary.  Still a lot of work to be done: It is up to the state, stakeholders and the broader New York community to continue to work together to successfully implement this multi-year action plan. 20

 MRT Website:  Sign up for updates: istserv.htm  ‘Like’ the MRT on Facebook:  Follow the MRT on 21

 If you have questions from today’s presentation, please join us on Twitter, Friday, February 3, 8:30 – 9:30 AM for an opportunity to ask questions and have them answered in real time.  How to participate in the live Twitter chat: ◦ If you’re not already on Twitter, join at ◦ Follow the MRT on ◦ Login to Twitter between 8:30 and 9:30 AM on Friday ◦ Ask questions by including #NYMRT in your tweets, or ◦ Directly tweet us by in your tweet ◦ You don’t have to tweet – you can watch the conversation just by on Twitter – updates will show up in your news feed. 22