Monday, March 27, 2017

Governor Cuomo and the Early Intervention State Fiscal Agent boondoggle

Another update in the ongoing saga of the failing New York State Early Intervention program:

The Governor's 2018 budget proposal adds new requirements on insurance companies and providers.  Under other circumstances, a provider or fiscal intermediary would simply operate within the available rules that exist in the private marketplace, but since the State has designated a fiscal agent that is unable to compete in the free market, the Governor is forced to rewrite insurance laws in order to facilitate payment.

 In FY 2016, nearly 85% of claims submitted by the Early Intervention State Fiscal Agent to private insurers were denied.  The idea of cost sharing with private insurance has been a failure because the State botched the implementation and has contracted with an incompetent fiscal agent.  The breakdown of payment of Early Intervention costs has been as follows:

Private insurance: 2%
Medicaid: 41%
NY State: 27%
Counties: 30%

This is AFTER the State invested millions of dollars into a private contract for a State Fiscal Agent.  Providers went out of business in this transition and services to families have been compromised because of the ineptitude of the process - and now new laws are being proposed in order to address the obvious failure.


The following new proposals are included in the Governor's budget:

1. Placing new requirements on service coordinators and providers to obtain insurance information and signed IFSPs from referring doctors (attesting to medical necessity).

2.  Requiring providers to exhaust appeals before unpaid balances hit County books.

3. New mandates for payment on insurance companies.

Having a requirement for a doctor to certify that an IFSP is medically necessary is unrealistic.  Additionally, not all early intervention services will fall within the strict guidelines of 'medical necessity' because the program is not only a 'medical program.'  This issue hits at the heart of what happens when States get into the habit of using Medicaid funds for non-Medicaid activities.

These kinds of reforms also become unwieldy and complicated simply because of the existence of the failed State Fiscal Agent.  So as an example, a provider must now exhaust appeals which seems reasonable - but if an insurer is denying payment because the fiscal agent has improper coding procedures or if they are billing under a non-participating provider - it only serves to slow payments to providers even more.

As I have advocated from the beginning of all this, releasing providers to compete directly in the private market and having them bill insurance companies directly would immediately solve all problems with participating provider denials and it would solve issues of odd local coding anachronisms.  The State could be free to negotiate whatever cost-sharing agreement with the insurers, probably through the creation of regional service level caps, at which point the balances would be billed or waterfalled to a centralized New York State reserve fund.  That would remove the Counties and the designated fiscal agent from the equation altogether, saving millions of dollars in program costs and in shifted Medicaid responsibility.

As it now stands, the NYS Senate rejects the Governor's proposals, the Assembly partially accepts them, and the Counties support the proposals but want even more protections in place so that these costs never hit their balance sheets.

What does that mean?  The proposal will be worked out in backroom deals in Albany, and the provider community and families will not have much voice in the process.  The system will continue to fail.

As I have indicated in the past, savvy providers will learn to participate in insurance networks privately (including Medicaid) and will learn to bypass this failed system by seeing families on a private basis.


Read more at these links - and contact your representatives if you want, but the real solution of eliminating the failed State Fiscal Agent and adopting a modified model of privatization as outlined above is not even on the table.

Read the FY 2018 Article VII Bill Health and Mental Hygiene (HMH): https://www.budget.ny.gov/pubs/executive/eBudget1718/fy18_budgetLegislation.html

Read the FY 2018 Memoranda in Support, Health and Mental Hygiene (HMH) Memo:  https://www.budget.ny.gov/pubs/executive/eBudget1718/fy18_budgetLegislation.html

Read the NYSAC Budget Comparison Fact Sheet on Early Intervention: http://www.nysac.org/nysbudget

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