[NYAPRS Enews] Spitzer Tabs Bachrach as New Medicaid/Health Insurance Program Overseer, Baker for Health/Human Services Deputy Secretary

[Harvey Rosenthal]

Governor Eliot Spitzer and Lieutenant Governor David Paterson today
announced several key Executive Chamber appointments. 

 

Joe Baker will serve as the Assistant Deputy Secretary for Health and
Human Services. Mr. Baker previously served as Health Care Bureau Chief
in the Office of the New York State Attorney General. 

>From 1994 - 2001, Mr. Baker was Executive Vice President of the Medicare
Rights Center, which became one of the nation's leading Medicare
consumer organizations during his tenure. Previously, Mr. Baker was the
Associate Director of Legal Services for Gay Men's Health Crisis. He has
served as a member of the Standards Committee and the Consumer Advisory
Council of the National Committee for Quality Assurance and the Co-Chair
of the Consumer/Patient Rights Subcommittee of the Health Law Section of
the New York State Bar Association. Mr. Baker has also served as a
Consumer Representative of the National Association of Insurance
Commissioners. Mr. Baker received a B.A. and a J.D. from the University
of Virginia. 

 

Debra Bachrach will serve as Deputy Commissioner of the Office of Health
Insurance Programs (OHIP) as well as the State's Medicaid Director. OHIP
is a newly created office within the Department of Health, charged with
operating the State's public health insurance programs, which are
Medicaid, Family Health Plus, Child Health Plus and EPIC. 

>From 1992 until November 2006, Ms. Bachrach was a partner at the law
firm of Manatt, Phelps & Phillips where she served as Co-Chair of the
Not-For-Profit Practice group. Between 1987 and 1992, Ms. Bachrach
served as Vice President of External Affairs at St. Luke's-Roosevelt
Hospital Center. Before joining St. Luke's-Roosevelt, she served for
four years as Chief Assistant Attorney General in the office of New York
State Attorney General Robert Abrams. Previously, Ms. Bachrach had
served for three years as Chief of the Attorney General's Civil Rights
Bureau. She was also an Adjunct Assistant Professor of Law at the New
York University School of Law where she taught the Public Interest
Seminar. Ms. Bachrach received her B.S. from the University of
Pennsylvania in 1971, and her J.D. from NYU School of Law in 1974.

 

---------------

 

NYAPRS Note: Following is a summary NYAPRS distributed several weeks ago
of a recently released report by Bachrach and Karen Lipson that has will
likely be the blue print for Spitzer Administration policy.  See the
report in its entirety at

 
http://www.uhfnyc.org/usr_doc/Administration_of_Medicaid_in_New_York_Sta
te.pdf. 

 

Administration of Medicaid in New York State: 

Key Players and Their Roles 

(Excerpts by NYAPRS)

MEDICAID INSTITUTE AT UNITED HOSPITAL FUND

Deborah Bachrach, Esq.; Karen Lipson, Esq.; Kalpana Bhandarkar

MANATT HEALTH SOLUTIONS

NOVEMBER 2006

 

 

Administration over Medicaid Is Distributed Among Several State Agencies


in a Way that Hampers the Establishment of Priorities, Coordination, and
Oversight

"The administration of New York's Medicaid program rests primarily with
the State Department of Health (DOH), which is designated as "the single
state agency," responsible under federal law for supervising the
program. ...(This) has promoted the perception of Medicaid as a health
care rather than a poverty program, and has heightened the importance of
health care quality and access in the program.

(However)...while DOH is the single state agency, with legal
responsibility for federal compliance and spending, it controls only a
portion of the Medicaid program. More than a dozen State entities, 57
counties and the City of New York, and private contractors all play
roles in the administration of Medicaid. Substantial responsibility for
special populations, discrete programs, and functions such as program
development, client enrollment, and oversight is distributed among a
variety of State agencies, as well as local governments. Specifically,
the Office of Mental Retardation and Developmental Disabilities (OMRDD),
Office of Mental Health (OMH), and Office of Alcoholism and Substance
Abuse Services (OASAS) each administer sizeable programs funded
primarily with Medicaid dollars.

...The delegation of substantial administrative responsibility to
agencies with targeted missions and specialized expertise has
facilitated the development and funding of a broad array of programs for
traditionally underserved groups.. Further, the agencies' ability to
identify State and locally funded programs that can be matched with
federal Medicaid dollars has strengthened the delivery systems they
oversee and their position in negotiations with the Division of the
Budget and Governor's staff.

While the allocation of responsibilities within DOH and between DOH and
the DMH agencies has enhanced the development of specialized programs
for certain stakeholders, it also impedes the development of a
comprehensive approach to Medicaid. The distribution of authority among
the agencies and within different units of DOH makes the establishment
of program-wide priorities, coordination, and oversight difficult at
best. The State's Medicaid director, while charged with overseeing the
program in its entirety, does not have the organizational stature to
fulfill this role. 

...As a result, coordination, program-wide direction, and oversight have
fallen to the Division of the Budget (DOB) and the Governor's staff.
Both entities have been hampered in fulfilling this role by their
limited mandate and authority, limited resources, and distance from the
operational aspects of the programs funded by Medicaid. In DOB's case,
the ability to assume responsibility for program-wide priorities is
further limited by the fiscal lens through which it views the program.

Under the current administrative structure, no single entity or person
has both the authority and the mandate to establish program-wide
priorities; analyze Medicaid services, spending, and revenue across all
agencies; resolve differences among agencies; and determine whether the
program is maximizing the value of the State's health care dollars and
fulfilling its goals. 

....This impedes the development of policies to address the complex
needs of beneficiaries requiring multiple services supervised by
different agencies; it also complicates efforts to align licensure and
rate-setting policies with desired public health, access, and quality
goals. While the dispersal of responsibility and the specialized
expertise that it cultivates has strengthened the State's Medicaid
program in many respects, it has also created a program that operates
without an overarching set of principles and priorities to guide policy
development and implementation."

 

IMPLICATIONS OF THE ADMINISTRATIVE STRUCTURE

 

LICENSURE AND RATE-SETTING

"Administrative responsibility for licensing Medicaid providers and
establishing provider rates of payment rests with multiple entities at
different levels of government. As a general matter, rate-setting and
licensure policies are established within the silos that define the
Medicaid program. These policies are typically made without a
comprehensive assessment of the ripple effects they may cause in other
sectors or their implications for the program as a whole...

...This discussion is not intended to suggest that rates of payment and
licensure policies for all ambulatory care services should be the same,
nor that they should be established by a single agency, but rather that
these policies and their implications should be examined in a
comprehensive, system-wide fashion. 

(Ideally) Rate-setting and licensure could be used more effectively to
improve quality and access in the Medicaid program and to encourage
provider activities that advance important public health goals. These
functions could promote utilization in higher-quality or more
cost-effective settings. Instead, the administrative structure
supporting the State's licensure and rate-setting activities appears to
have had the opposite effect, with differentials in rates and licensure
activities driving utilization, quality, and costs in an apparently
arbitrary manner.

....This distribution of authority within DOH and between the
Legislature and DOH can have incongruous results, particularly in the
ambulatory care sector....." 

 

Differences in Clinic Rates Causes Shift to D&TC License

"Overall, D&TC rates tend to be higher than hospital outpatient clinic
rates, averaging $100 to $190 per visit, including capital costs, while
hospital clinic rates average $70 to $90 per visit, including capital
costs....  (This has caused) physicians.. (and) a growing number of
hospitals to convert their clinics into D&TCs, causing an increase in
Medicaid fee-for-service reimbursement generally without a meaningful
change in the service model."

 

Rates for Comparable Psychiatric Services Vary According to Setting

"...The separation of rate-setting authority between the DMH agencies
and DOH has had a pronounced impact on the ambulatory care services
available to Medicaid beneficiaries and the settings in which they may
be accessed...  A session with a psychiatrist could be reimbursed at $85
(i.e., $67.50 plus capital costs) in a New York City hospital outpatient
clinic, $130 in a D&TC, and $72 in a clinic licensed by OMH under
Article 31.66 While there are differences in the variety and intensity
of services offered under the respective licenses, and there may be
differences in the cost structure of the different types of facilities,
the bottom line is that similar services are reimbursed at different
rates depending on the provider's license, without a clear and
compelling programmatic or fiscal rationale."

 

Arbitrary Limits on OMH Clinic Rates Has Resulted New Mental Health
Clinics Licensed Under a Health Department 

That is Not Best Suited to Oversee Them

"..This disparate reimbursement for clinics with OMH licenses, combined
with restrictions on the establishment of new clinics under Article 31
of the Mental Hygiene Law, has driven providers increasingly to offer
mental health services under a DOH license rather than an OMH license.
In the early 1990s, in connection with a restructuring of OMH provider
rates, OMH and DOB imposed a "Medicaid neutrality" condition on the
licensure of new providers, to curb any further increase in Medicaid
spending under the OMH budget..... The DOH approval process, unlike the
OMH process, does not require a demonstration of Medicaid neutrality.
While OMH curbed its own growth in spending, DOH has seen its Medicaid
spending increase as a result of OMH's policy. Further, because
DOH-licensed clinics almost always have considerably higher
reimbursement rates than OMH clinics, the Medicaid neutrality policy may
have triggered higher Medicaid spending overall, rather than reining it
in. The Medicaid neutrality policy also has clinical implications,
resulting in an increase in the number of mental health services
providers regulated by DOH rather than OMH. According to DOH staff, the
provision of these services should be overseen by an agency with mental
health expertise."

 

PROGRAM DEVELOPMENT

"...Interagency collaboration has not been as fruitful, however, in
addressing issues that require more than one agency to actively and
jointly develop and institute policy changes."

 

"No Agency Or Individual Is Accountable For The Full Range Of Services 

Used By High-Cost Beneficiaries, The Associated Expenditures, And The
Health Outcomes That Result."

"Specifically, the State has been working for several years to address
the diverse needs of high-cost Medicaid beneficiaries, especially those
who receive care through multiple systems. Analysis of Medicaid data
reveals that 24 percent of New York's Medicaid beneficiaries are
generating 78 percent of the program's cost; many of that 24 percent are
recipients of long-term care provided by DOH-licensed entities and
clients of the AIDS Institute, OASAS, OMH, and/or OMRDD. 

Many of these clients tend to use services in a number of systems,
regulated by different agencies. A high-cost beneficiary might, for
example, have co-occurring mental illness, chemical dependency, and a
chronic physical condition, such as diabetes or HIV, and in any given
year might use services licensed and reimbursed by OMH and OASAS, as
well as by DOH (e.g., acute general hospital, emergency care, and
pharmaceuticals)...."  

 

Mandatory Medicaid Managed Care Policies Relating to Mental Health
Services are Contradictory

"Another example of the effect of distributing authority among several
agencies without effective coordination can be seen in the evolution of
the mandatory Medicaid managed care program. Until recently, all
seriously and persistently mentally ill (SPMI) beneficiaries have been
exempt from mandatory enrollment in Medicaid managed care plans. When
the Governor's office, in consultation with DOH, decided to expand
mandatory managed care enrollment to Supplemental Security Income (SSI)
beneficiaries with serious mental illness, decisions had to be made
about the scope of their benefit package. Under the voluntary managed
care program, behavioral health services were carved out of the benefit
package for enrollees receiving SSI. Through negotiations between DOH
and OMH, a decision was made to continue the carve-out for the SSI
population and maintain behavioral health services as fee-for-service
benefits. In addition, the agencies agreed to exempt SPMI beneficiaries
who are not receiving SSI from mandatory enrollment. One rationale
offered for the exemption was to avoid disruption of established
relationships with behavioral health providers.

However, if SPMI beneficiaries who are not receiving SSI voluntarily
enroll in managed care, they will access their behavioral health care
through their managed care plan's benefit package regardless of their
established relationships. The decision to require some, but not all,
SPMI beneficiaries to enroll in managed care plans, and to include
behavioral health services in the managed care benefit package for some
of these beneficiaries but not others, was, according to some of those
interviewed, a compromise between the two agencies."

 

"While DOH and the DMH agencies have a programmatic interest in
developing models that link the delivery of physical and behavioral
health services, none has the expertise or authority to do so
single-handedly. Similarly, the Governor's staff and DOB are motivated
to address these issues, but have not been able to develop or implement
a comprehensive solution.

...the allocation of responsibilities among several offices within DOH
and among several agencies and the Legislature has both encouraged
innovative program development and hindered the formulation of coherent
policies that take into account program-wide implications." 

 

Interagency State/Local Coordination Effort Underway

"In an effort to encourage interagency coordination on Medicaid issues,
legislation was enacted as part of the 2006-07 State budget that
requires quarterly meetings of the commissioners of all State agencies
primarily involved in the administration of Medicaid-funded programs,
and representatives of local social services districts. Through these
meetings, the agencies are directed to identify collective priorities
for the Medicaid program and ways to contain costs and improve the
quality of services. It is too soon to measure the impact of this
legislation."

 

CONCLUSIONS

"While DOH is the designated single state agency, and is accountable to
the federal government and the general public for the operation of the
Medicaid program, it has complete control over only a portion of the
program. For good reasons, administrative responsibilities have been
dispersed among agencies and within DOH. The allocation of significant
responsibility to the DMH agencies has enhanced the services and
strengthened the delivery systems available to discrete populations. But
it has also presented challenges for establishing and implementing
program-wide priorities, coordinating agency activities, and resolving
interagency disputes."

 

"An administrative structure that facilitates a more coherent and
integrated approach to the program and the needs of its beneficiaries
would improve individual health outcomes, the public health, the
financial stability of the State's delivery system, and the value
derived from New York's Medicaid dollars. The challenge is to develop
and implement a comprehensive vision for Medicaid in New York State
without stifling the creativity, advocacy, and expertise of the
specialized agencies."

 

 

 

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