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I.
Making Health Insurance More Affordable
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II.
Holding Insurance Companies Accountable |
III. Protecting Local Hospitals and Clinics | IV. Keeping New York a Leader in Medical Education and Biomedical Research | V. Protecting Jobs for the Next Century | VI. Financing |
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The single greatest problem facing New York’s health care market is the growing number of uninsured. The changing economy of New York has created many jobs that provide no health insurance coverage. And, individual health care coverage is unaffordable for many New Yorkers. Small businesses pressed to cut costs to compete in the global economy are also dropping health care coverage as an employee benefit. Without health insurance many people fail to seek care when they should, and instead wait until a health problem becomes more serious before getting medical attention. People who lack health insurance don’t receive the continuity of care they need because they don’t have a primary care doctor to rely on. Hospitals and clinics are faced with an ever increasing number of patients who cannot pay their bills. They are forced to shift the costs of this charity care to patients with insurance, driving up health care costs for businesses and consumers. Important Facts • Statewide, 3.1 million people are uninsured, representing an increase of more than 40% over five years. • Uninsured adults are less likely than insured adults to have regular check-ups. As a result, they are far more likely to be hospitalized for conditions that could have been prevented. • The cost of purchasing insurance in the direct pay market has increased dramatically over the past three years. For example: Blue Shield of Northern New York was granted a 26% increase (affecting 420 members in the Albany area); MVP Health Plan, a 29% increase in 1997 and another 10% increase in 1999 (affecting 2,700 members in most upstate counties); CDPHP, a 10% increase; Health Now, a 29% increase; and, United Health Care of New York, a 25% increase (affecting downstate areas). The Assembly proposal would: A. Lower insurance costs for all insured New Yorkers by moving funding for certain programs from HCRA to the state budget. B. Create Family Health Plus to provide affordable health insurance coverage for over 300,000 adults. Eligibility: • Other Adults — eligible with household incomes at or below 120 percent of the FPL ($9,888 for single-person households). Cost Sharing: • Households with incomes between 160 and 200 percent of the FPL ($26,720 - $33,400 for a family of four): $9 per person per month. Benefits: C. Provide a $120 million subsidy for the direct pay market. Funding would come from both the tobacco settlement fund and HCRA funds. This subsidy is intended to provide a 10% rate cut for the approximately 110,000 people who have direct pay policies. D. Triple the funding for the Small Business Subsidy Program created by HCRA. A total of $18 million would be available to help eligible employers purchase small group health insurance policies for their full-time employees and dependents. E. Raise the pre-natal care assistance (PCAP) eligibility level from 185% of the FPL to 250% of the FPL. F. Subsidize COBRA coverage for workers who lose their jobs or change jobs.
A major problem for health care providers and for consumers is the failure of HMOs and other health insurers to pay bills promptly and fairly. When HMOs fail to pay, consumers get caught in a cross fire between their health care provider and their health insurer. In some cases, HMOs are refusing to pay for services that are clearly included in their policies. Again, consumers are left with the bill. The ultimate in HMO mismanagement is when a payor has insufficient funds to pay its bills. In New Jersey, a plan recently went bankrupt leaving health care providers with millions in unpaid bills. In New York, as a result of the recent financial failure of Wellcare, providers will be paid only 60% of their fees for services they provided. Important Facts • St. Charles Hospital on Long Island is laying off 60 employees as a result of payment problems involving HMOs and health insurers. • Citing late payments from HMOs, Episcopal Health Services on Long Island is instituting 10-day unpaid furloughs for all managerial and non-patient-care personnel. • Ellenville Hospital in Ulster County filed for Chapter 11 bankruptcy, largely due to Wellcare’s recent financial failure. The Assembly proposal would: A. Establish a guaranty fund for unpaid claims incurred by payors that become insolvent. B. Improve payment practices by: • Reducing deadline for payment to 30 days for properly submitted written claims and to 15 days for electronic claims in the correct amount. • Requiring payors to notify the policyholder and/or provider of determinations to deny payment including the reasons for the denial. • Requiring the Superintendent of Insurance to impose a periodic interim payment system on payors that withhold payments as a regular business practice. • Requiring the Superintendent of Insurance to impose maximum penalty, if payor willfully fails to pay interest on late payments. C. Health care decision-making by HMOs: • Require utilization review agents (“UR” agents) to have personnel available to handle requests during business hours and to have personnel available around-the-clock to handle requests relating to continuing a course of treatment and expedited appeals. • Require UR agents to furnish health care providers and enrollees with a written description of policies including UR standards. • Prohibit UR agents from requiring enrollees and providers to request pre-authorization more than 7 business days in advance of date of service. • Make pre-authorization binding unless there is a question regarding the enrollment of the patient or other insurance coverage. • Institute enhanced penalties for UR violations. D. Reinstitute dispute resolution for billing disputes involving inpatient hospital services. E. Mandate electronic billing. • Require superintendent and commissioner to issue regulations defining transactions which must be performed electronically and deadlines for implementation. This will keep bills from getting lost or misplaced and keep patients from being billed for services for which their insurers or HMOs are responsible. • Establish penalties for violation of electronic transmission mandate. Waive penalties for small payors. F. Encourage hospitals to bill promptly. Require hospitals to report to the Insurance Department or DOH annually regarding pending and paid claims. In recent years, the financial condition of New York State’s hospitals has become critical. Relentless cuts in Medicaid pushed by Governor Pataki over the last five years have hurt the same hospitals that are struggling to serve the growing number of uninsured. Federal Medicare cuts of $1.2 billion the last two years have further strained the bottom line of all New York hospitals, and have particularly hit rural hospitals that are struggling to make ends meet. Frequently, these rural hospitals are the only source of inpatient and emergency care for hundreds of miles. Currently, HCRA provides funds to cover bad debt and charity care for hospitals. HCRA was never intended to fund the full cost of bad debt and charity care. However, the level of unreimbursed hospital care is rising exponentially because while bad debt has risen, the collections of the pool have lagged almost $100 million behind expectations. Important Facts • New York hospitals’ operating and bottom line margins are the second worst in the nation. Other important performance indicators are no better: the hospitals’ ratio of long-term debt to capitalization, ability to repay debt, liquidity and ability to meet short-term obligations, and their overall financial health rank as the worst or second worst of all fifty states. • The Dormitory Authority of NYS (DASNY) recently reported that 1998 financial statements worsened at 65% of sampled DASNY hospital clients compared to 1997. • In a strongly worded letter to DASNY, the U.S. Department of Housing and Urban Development (HUD) says many of the state’s most financially troubled hospitals will go bankrupt or default on their loans unless the state does more to help them. HUD says the consequences of the state’s inaction “could include a tightening of FHA underwriting standards for New York as well as a potential downgrading of the DASNY (and perhaps the State’s) bond rating.” The Assembly proposal would: A. Increase Indigent Care Pool funding by $82 million for hospitals. All hospitals would receive some benefit from the increase. Additional funds would be targeted at safety net and rural hospitals. B. Increase the clinic indigent care pool funding by $34 million. The additional funds would be targeted at clinics with the lowest percentage of bad debt covered, HHC clinics and dental clinics. C. Allow the assessments that fund the bad debt pools to be adjusted to ensure that the funding levels in statute are actually collected. Biomedical research and medical education play an important role in the State’s economy and the quality of its health system. This sector employs more people statewide than colleges and universities, the securities industry, banks, publishers, and the legal services industry. In addition, the jobs available through biomedical research and medical education range from unskilled to highly skilled. And, due to its support for biomedical research and medical education, New York has been able to attract state-of-the-art medical treatment and technology and world class physicians. New York’s status as the national leader in biomedical research is slipping for 2 reasons: 1) increased financial pressure on academic medical centers (which are the backbone of biomedical research) due to Medicaid and Medicare cuts and growth in HMO penetration; and 2) increased competition from other states willing to provide the financial resources needed to lure the top researchers. Funding for Graduate Medical Education (GME) for academic medical centers and teaching hospitals is one of the vital underpinnings of New York State’s health research and medical education infrastructure. Important Facts • The academic medical infrastructure pumps about $21 billion annually into the State’s economy and directly supports 250,000 jobs. • When the spinoff effect is included, the biomedical research industry generates over $43 billion in economic activity within New York, including 459,000 jobs statewide, $1.85 billion in State tax revenue and at least $1 billion in local tax revenue. • New York’s share of National Institutes of Health (NIH) funds for biomedical research has dropped from first to third among the states, while the actual dollar amount of NIH grants has grown. The Assembly proposal would: A. Expand support for GME by increasing the funding to account for inflation. B. Create a new pool of $25 million per year to support biomedical research initiatives and to promote the recruitment and retention of top biomedical researchers. Failing to adequately support our state’s hospitals and clinics will not only jeopardize the quality of our health care, it will also end up in a loss of good paying jobs for many working families. Health care employment is a vital part of both downstate and upstate economies. In many communities, especially upstate, hospitals are one of the largest private sector employers. There are nearly 760,000 health service industry jobs in New York State, representing over 9 percent of all non-agricultural employment in the state. As the state’s health care providers continue to shift away from a predominantly inpatient hospital system to a service system that relies on the greater use of community based providers, clinics and outpatient departments, skilled health care employees are needed. Many workers who could be unemployed as their inpatient hospital jobs are no longer needed can be retrained to work in other settings. The existing HCRA system provides $75 million per year for worker retraining but only a small fraction of the funds from the first year have been spent despite the pressing need. An additional $25 million in retraining funds would be available, if the state reached 75% of its Medicaid managed care target. Because of the Pataki Administration’s botched implementation of the state’s Medicaid managed care program, however, the additional funds are unattainable. Important Facts • New York City’s public hospital system laid off more than 900 workers last year and as many as 1,000 more jobs are likely to be lost in the coming months. • Brookdale University Hospital and Medical Center in Brooklyn has asked doctors to take a 15% pay cut and trimmed staff. • Buffalo’s five Catholic hospitals have already eliminated 428 full-time jobs this year and will likely eliminate another 2,000 service positions later this year. The Assembly proposal would: A. Force the Department of Health to release worker retraining funds by putting specific dates in statute. B. Allow an additional $25 million for worker retraining if the state meets 25% of its Medicaid managed care target. Under the Health Care Reform Act, the primary mechanism for financing indigent care and public health initiatives is an 8.18% surcharge on hospital inpatient and outpatient services, comprehensive diagnostic and treatment centers, ambulatory surgery centers, and free-standing clinical laboratories. For contributions to the GME pool, third-party payors are encouraged to make payments on a per-covered-life basis (the “covered lives assessment”). Funds generated by the 8.18% surcharge help defray the cost of providing uncompensated care, support subsidized insurance options for low-income children and families, and a variety of other public health programs. However, selectively levying this surcharge on outpatient services provided in only some settings but not others (i.e., physicians’ offices) has provided payors with a direct financial incentive to shift the purchase of many outpatient services (i.e., radiology, various therapies) to non-surcharged service settings or, in lieu of such a shift, demand additional discounts equal to the amount of the surcharge. The Assembly proposal would: A. Eliminate the lab, outpatient and clinic surcharges. B. Raise the covered lives assessment to make up for the revenue lost by eliminating the provider surcharges. C. Move $284 million in HCRA-funded programs to the general fund, relieving pressure on businesses and insurers to pay for various public health initiatives by dropping coverage or increasing premiums. |
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