Pataki Announces $1.5 Billion Health Care Reform Initiative

New York Gov. George E. Pataki yesterday announced that the federal Centers for Medicare and Medicaid Services has approved New York State's waiver request which will provide up to $1.5 billion in federal funding to be invested in the state's health care reform initiatives designed to rightsize the acute care delivery system, restructure the delivery of long-term care services and foster the adoption of health information technology. The funding will assist the state in implementing many of the recommendations of the Governor's Health Care Reform Workgroup as well as the forthcoming recommendations of the Commission on Health Care Facilities in the 21st Century ("the Commission").

"I would like to thank Secretary Leavitt and his staff for working with us to ensure that New York's health care system -- already among the best in the world -- will become stronger, more modern and more efficient," Pataki said. "This agreement will build on important state initiatives like our $1 billion HEAL-NY initiative to provide New Yorkers with an improved health care system that is not only strengthened, but is sustainable for years and decades to come. Today's announcement shows how the state and federal governments can partner and work together to improve and strengthen health care, making this a win-win situation for both the state and the federal governments."

United States Department of Health and Human Services Secretary Michael Leavitt said, "I applaud Governor Pataki and the state of New York for facing the challenges to the Medicaid program and taking action that will improve care for beneficiaries while also sustaining Medicaid into the future."

Included in the program will be the expanded use of e-prescribing, increased use of electronic medical records and regional health information organizations and expansion of ambulatory and primary care services. In addition, the funding for this initiative will further build upon phase one of HEAL NY, which helped advance information technology initiatives aimed at the restructuring of the health care delivery system.

The FSHRP waiver makes the state eligible for 50 percent federal matching funds up to the annual threshold for programs that are not Medicaid programs and normally do not qualify for the federal match. Finalization of the new waiver agreement involved lengthy negotiation between various state agencies and CMS. Under the terms of the waiver, the state must generate Medicaid program savings and meet significant performance milestones, including:

• Increasing Medicaid fraud and abuse recoveries
• implementing the Commission's recommendations
• implementing a program to increase the number of currently employed but uninsured New York residents with private coverage
• implementing a single-point-of-entry for Medicaid recipients needing long-term care.

The waiver went into effect October 1, said the governor and will continue for five years. It will provide New York with up to $300 million annually to invest in rightsizing and restructuring reforms. Failure to meet the fraud and abuse recovery targets will result in penalties for the state and failure to reach other milestones will result in termination of the waiver.