State Faces Billions In Medicaid Deficit

Facing billions of dollars in shortfalls in its Medicaid program, New York state is looking to save millions.

The Empire Center for New York State Policy noted a 1% reduction in most Medicaid payments was announced on New Year’s Eve via the Dec. 31 edition of the New York State Register. The move will save the state about $52 million from January through April, which is the last quarter of the state fiscal year, and another $248 million in the 2020-21 state fiscal year.

“That’s about 3% of the amount Cuomo has said he intends to cut before the end of March,” Bill Hammond, Empire Center executive director, wrote in a Dec. 31 blog post on empirecenter.org.

The rate cut applies to the vast majority of Medicaid spending, including payments to hospitals, nursing homes, doctors, pharmacists, home-care providers and Medicaid managed-care plans.

New York has a $4 billion Medicaid deficit in its 2019-20 budget which state officials plan to close by cutting $1.8 billion in spending and pushing $2.2 billion into future fiscal years. The Medicaid gap is projected to increase to $6.1 billion in the 2020-21 budget.

The governor and state budget officials have blamed Medicaid overruns on the state’s minimum wage increase for health care providers, cuts in federal funding and increases in enrollment and costs for long-term care.


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