Joint Legislative Public Hearing on 2018-2019 Executive Budget Proposal: Topic Health and Medicaid - Testimonies

February 16, 2018

PDF icon

Hearing event notice and video:



 2  -----------------------------------------------------


 4             In the Matter of the
            2018-2019 EXECUTIVE BUDGET
 6  -----------------------------------------------------

                             Hearing Room B
 8                           Legislative Office Building
                             Albany, New York
                             February 12, 2018
10                           10:04 a.m.

13           Senator Catharine M. Young
             Chair, Senate Finance Committee
             Assemblywoman Helene E. Weinstein
15           Chair, Assembly Ways & Means Committee

17           Senator Liz Krueger 
             Senate Finance Committee (RM)
             Assemblyman Robert Oaks
19           Assembly Ways & Means Committee (RM)
20           Senator Kemp Hannon
             Chair, Senate Committee on Health
             Assemblyman Richard N. Gottfried
22           Chair, Assembly Health Committee 
23           Senator David J. Valesky
             Vice Chair, Senate Committee on Health


 1   2018-2019 Executive Budget
     Health and Medicaid
 2   2-12-18
 3   PRESENT:  (Continued)
 4           Senator James L. Seward
             Chair, Senate Committee on Insurance
             Assemblyman Kevin A. Cahill
 6           Chair, Assembly Committee on Insurance
 7           Senator Diane Savino
             Vice Chair, Senate Finance Committee
             Senator Gustavo Rivera
             Assemblyman Andrew P. Raia
             Senator James Tedisco
             Assemblyman Phil Steck
             Assemblyman Andrew Garbarino
             Senator Elizabeth O'C. Little
             Assemblyman John McDonald
             Senator Martin J. Golden
             Assemblyman Edward P. Ra
             Senator Patricia A. Ritchie
             Assemblywoman Michaelle Solages
             Assemblyman Kevin M. Byrne
             Assemblywoman Rodneyse Bichotte
             Assemblywoman Patricia Fahy
             Senator James Sanders
             Assemblyman Walter T. Mosley 


 1   2018-2019 Executive Budget
     Health and Medicaid
 2   2-12-18
 3   PRESENT:  (Continued)
 4           Senator Roxanne Persaud
 5           Assemblyman James Skoufis
 6           Senator Timothy Kennedy
 7           Assemblyman Felix Ortiz
 8           Senator Susan Serino
 9           Assemblyman Thomas J. Abinanti
10           Senator Todd Kaminsky
11           Assemblywoman Jo Anne Simon
12           Senator Brad Hoylman
13           Assemblywoman Nily Rozic
14           Assemblywoman Aileen M. Gunther
15           Senator Marisol Alcantara
16           Assemblywoman Rebecca A. Seawright








 1  2018-2019 Executive Budget
    Health and Medicaid 
 2  2-12-18
 3                   LIST OF SPEAKERS
 4                                     STATEMENT  QUESTIONS
 5  Howard Zucker, M.D., J.D.
 6  NYS Department of Health               
 7  Jason Helgerson
    NYS Medicaid Director                   12       23
    Maria T. Vullo
 9  Superintendent
    NYS Department of Financial
10   Services                              276      285
11  Dennis Rosen 
    Medicaid Inspector General 
12  NYS Office of the Medicaid
     Inspector General                     378      383
    Bea Grause
14  President
    Healthcare Association of NYS          
15   of NYS (HANYS)                        402
16  Kenneth E. Raske
17  Greater New York Hospital Assoc.
18  Steven Safyer, M.D.
    President and CEO
19  Montefiore Health System               405      414
20  Helen Schaub
    VP, NYS Director of Policy
21   and Legislation 
    1199SEIU United Healthcare
22   Workers East                          431      



 1  2018-2019 Executive Budget
    Health and Medicaid 
 2  2-12-18
 3                   LIST OF SPEAKERS, Continued 
 4                                     STATEMENT  QUESTIONS
 5  Joanne Cunningham 
 6  Home Care Association of 
     New York State                        437
    Claudia J. Hammar
 8  President
    NYS Association of Health 
 9   Care Providers                       443      
10  Edward Scharfenberger
11  Diocese of Albany
12  Jenn Hyde
    Executive Director
13  Catholic Charities Tri-County
     Services                              449
    Stephen Hanse
15  President and CEO
    NYS Health Facilities Association
16  NYS Center for Assisted Living
17  Nancy Leveille
    Executive Director 
18  Foundation for Quality Care           459      469
19  Ami J. Schnauber
    VP, Advocacy & Public Policy 
20  LeadingAge New York                   471
21  Eric Linzer 
    President and CEO
22  Kathy Preston
    Vice President of 
23   Government Affairs
    NY Health Plan Association            476


 1  2018-2019 Executive Budget
    Health and Medicaid 
 2  2-12-18
 3                   LIST OF SPEAKERS, Continued 
 4                                     STATEMENT  QUESTIONS
 5  Rose Duhan
    President and CEO
 6  Community Heath Care 
     Association of NYS                    482      487
    Morris Auster
 8  Senior VP/Chief Leg. Counsel
    Medical Society of the 
 9   State of New York                     489
10  Jill Furillo, RN
    Executive Director
11  NYS Nurses Association                 496      501
12  Dr. Carol Smith
13  NYS Association of County
     Health Officials                      502      505
    Neal Kalish
15  Director
    United Ambulette Coalition             512
    John Tomassi
17  Executive Director 
    Upstate Transportation 
18   Association                           518
19  Roxanne Richardson 
20  Kathy Febraio
    Executive Director
21  Pharmacists Society of
     the State of New York                 521
    Michael Duteau
23  President
    Chain Pharmacy Association
24   of New York State                     527


 1  2018-2019 Executive Budget
    Health and Medicaid 
 2  2-12-18
 3                   LIST OF SPEAKERS, Continued 
 4                                     STATEMENT  QUESTIONS
 5  Bill Hammond
    Director of Health Policy
 6  Empire Center for Public Policy       533
 7  Cheryl Spulecki
 8  NYS Association of Nurse
 9      -and-
    Dr. Juan Quintana
10  Former President
    American Association of
11   Nurse Anesthetists                   538
12  Rose Berkun, M.D.
    Immediate Past President
13  Vilma Joseph, M.D.
14  New York State Society of 
     Anesthesiologists                    548
    Amy Kennedy
16  Executive Director
    Lauren Pollow
17  Director of Government Affairs 
    NYS Center for Assisted Living        553
    Lisa Newcomb
19  Executive Director 
    Empire State Association of
20   Assisted Living                      558





 1  2018-2019 Executive Budget
    Health and Medicaid 
 2  2-12-18
 3                   LIST OF SPEAKERS, Continued 
 4                                     STATEMENT  QUESTIONS
 5  Lauri Cole
    Executive Director
 6  NYS Council for Community
     Behavioral Healthcare
 7      -and-
    Andrea Smyth
 8  Executive Director
    NYS Coalition for Children's
 9   Behavioral Health                     563
10  Patrick Kwan
    Senior Director for Advocacy
11   & Communications
    Primary Care Development Corp.         570
    Bryan O'Malley
13  Executive Director
    Consumer Directed Personal
14   Assistance Association of NYS         574
15  Julie Hart 
    Director, Government Relations 
16  American Cancer Society 
     Cancer Action Network                 579
    James McGuirk, Ph.D. 
18  CEO
    Astor Services for Children
19   and Families                         586      590
20  Timothy Hathaway
    Executive Director
21  Prevent Child Abuse New York          592
22  Steven Sanders
    Executive Director
23  Agencies for Children's
     Therapy Services                     595      599


 1  2018-2019 Executive Budget
    Health and Medicaid 
 2  2-12-18
 3                   LIST OF SPEAKERS, Continued 
 4                                     STATEMENT  QUESTIONS
 5  Rebecca A. Novick 
    Director, Health Law Unit
 6  The Legal Aid Society                 602
 7  Charles King
    President and CEO
 8  Housing Works                         608

















 1                 CHAIRWOMAN YOUNG:  Good morning.  Good 

 2          morning.  Would everyone please take your 

 3          seats.

 4                 Good morning.  I'm Senator Catharine 

 5          Young, and I'm chair of the Senate Standing 

 6          Committee on Finance.  I'm very pleased to be 

 7          joined this morning by my colleague 

 8          Assemblywoman Helene Weinstein, who is chair 

 9          of Ways and Means.  

10                 And I'll begin by introducing some of 

11          the other legislators that are here today.  

12          We've got Senator Diane Savino, who is vice 

13          chair of the Finance Committee; Senator Liz 

14          Krueger, who is ranking member; Senator Kemp 

15          Hannon, who is chair of the Senate Standing 

16          Committee on Health.  Vice chair of Health is 

17          Senator David Valesky.  We've got Senator 

18          James Seward, chair of the Insurance 

19          Committee; Senator Rivera; Senator Sanders; 

20          Senator Tedisco; and Senator Little.

21                 Chairwoman?  

22                 CHAIRWOMAN WEINSTEIN:  I'm Helene 

23          Weinstein, chair of Ways and Means.  And 

24          joining us is Assemblyman Dick Gottfried, 


 1          chair of our Health Committee; Assemblyman 

 2          John McDonald; Assemblywoman Michaelle 

 3          Solages; Assemblywoman Rodneyse Bichotte; 

 4          Assemblyman Phil Steck; and Assemblyman 

 5          Walter Mosley.  

 6                 And Bob Oaks, our ranker on Ways and 

 7          Means, will introduce the Republican members 

 8          here.

 9                 ASSEMBLYMAN OAKS:  Yes.  We're joined 

10          by Andrew Raia, ranker on the Health 

11          Committee; Andrew Garbarino; and Kevin Byrne.

12                 CHAIRWOMAN YOUNG:  Thank you.  

13                 Pursuant to the State Constitution and 

14          Legislative Law, the fiscal committees of the 

15          State Legislature are authorized to hold 

16          hearings on the Executive Budget.  Today's 

17          hearing will be limited to a discussion of 

18          the Governor's proposed budget for the 

19          Department of Health and the Office of 

20          Medicaid Inspector General.  Following each 

21          presentation, there will be some time allowed 

22          for questions from the chairs of the fiscal 

23          committees and other legislators.

24                 First I'd like to welcome Dr. Howard 


 1          Zucker, commissioner of Health.  Following 

 2          the presentation by Dr. Zucker will be Dennis 

 3          Rosen, Medicaid inspector general, followed 

 4          by Maria Vullo, superintendent of the 

 5          Department of Financial Services.  

 6                 Testimony will be followed by a 

 7          question-and-answer period by members of the 

 8          Legislature.

 9                 So at this time we would like to begin 

10          with the testimony of Commissioner Zucker.  

11          Welcome.

12                 COMMISSIONER ZUCKER:  Good morning.  

13          Good morning, Chairpersons Young and 

14          Weinstein, Hannon and Gottfried, and members 

15          of the New York State Senate and Assembly.  

16          I'm here to present Governor Cuomo's 

17          2018-2019 Executive Budget as it relates to 

18          healthcare.  

19                 I am joined by Jason Helgerson, the 

20          State Medicaid Director.  

21                 You have a more comprehensive version 

22          of my testimony before you, but I will be 

23          delivering an abbreviated version this 

24          morning.


 1                 For four years I've had the distinct 

 2          honor of overseeing the Department of Health.  

 3          The over 5,000 employees of the department 

 4          are at the front line of every response to 

 5          protect the health, safety and well-being of 

 6          New York's residents.  In just the past 12 

 7          months, we have addressed Zika, Legionella, 

 8          harmful algae blooms, unregulated 

 9          contaminants in drinking water, outbreaks of 

10          hepatitis A, measles, mumps, and the list 

11          goes on.  

12                 A case in point of how the department 

13          responds to threats is the one we are facing 

14          right now:  the flu.  One hundred years ago, 

15          the influenza pandemic of 1918 killed tens of 

16          millions of people worldwide.  It was an 

17          unusual strain of virus and attacked young, 

18          otherwise healthy adults, and at that time we 

19          barely understood what caused the flu, much 

20          less how to prevent and treat it.

21                 Today we are much more knowledgeable 

22          about the flu.  Still, we are rightfully and 

23          understandably concerned about this year's 

24          flu season.  The number of confirmed cases 


 1          and hospitalizations are the highest since we 

 2          started tracking in 2004.  The flu response 

 3          we are engaging in highlights not just the 

 4          advances in science and public health that we 

 5          have achieved in the century since the 

 6          influenza pandemic, but also the expertise, 

 7          the planning, the leadership and coordination 

 8          that the department utilizes each time there 

 9          is a threat to the health and safety of New 

10          Yorkers.

11                 More New Yorkers than ever have access 

12          to high-quality, affordable health insurance:  

13          4.3 million people have enrolled in our New 

14          York State of Health.  The Medicaid program 

15          serves over 6 million members, and spending 

16          per person has declined by 5 percent since 

17          2011, without impacting eligibility or 

18          quality of care.

19                 New York now ranks among the top 10 

20          states in the nation for health.  New York 

21          has been designated the first age-friendly 

22          state in the nation by the AARP and the World 

23          Health Organization.  And in 2017, Governor 

24          Cuomo directed all agencies to include health 


 1          and healthy aging in their policymaking.

 2                 Yet despite all of this success, we 

 3          face an unprecedented assault from 

 4          Washington.  This includes attempts to repeal 

 5          the Affordable Care Act, putting healthcare 

 6          for millions of New Yorkers, and billions of 

 7          dollars in federal funds, at risk.  Cost 

 8          Sharing Reduction payments have been 

 9          withheld, and after a 114-day funding lapse, 

10          federal lawmakers finally reauthorized the 

11          Children's Health Insurance Program, CHIP, as 

12          part of the spending bill to reopen the 

13          government -- for the first time.  In the wee 

14          hours of the morning on Friday, to reopen the 

15          government the second time, funding for 

16          Community Health Centers, which has been on 

17          life support, was approved.  So I ask myself, 

18          when did the health and well-being of 

19          vulnerable New Yorkers become negotiable?  

20                     The Governor embraces the 

21          diversity of New York and promotes health 

22          equity.  It is visible in his directives to 

23          expand access to affordable quality 

24          healthcare and protect entitlements, marriage 


 1          equality, transgender rights, and Medicaid 

 2          coverage for DACA recipients.  And to that 

 3          end, in this year's Executive Budget we see a 

 4          mixture of innovative spending, savings, and 

 5          revenue-generating proposals.

 6                 The Executive Budget includes 

 7          $600 million in additional funding, 

 8          $750 million total, for the construction of a 

 9          new life sciences laboratory in the Capital 

10          District.  This positions New York to attract 

11          private investment and jobs to the Capital 

12          District with a modern, consolidated 

13          Wadsworth Center as the focal point, forming 

14          the basis for a revitalized and enhanced life 

15          science cluster.

16                 The Wadsworth Center is regarded as 

17          the finest state public health laboratory in 

18          the United States.  The core functions of 

19          Wadsworth include screening newborns for 47 

20          treatable conditions, performing testing to 

21          detect infectious disease agents and 

22          environmental toxins, and responding to 

23          emerging threats such as pandemic influenza.  

24                 I would note that Wadsworth has been 


 1          around since before the influenza pandemic of 

 2          1918.  And Wadsworth is a reference 

 3          laboratory, not a conventional clinical or 

 4          environmental laboratory.  We perform the 

 5          complex analyses that hospitals and 

 6          commercial laboratories cannot or will not 

 7          do.  

 8                 Research at Wadsworth has resulted in 

 9          over 100 patents in the past 25 years.  

10          Wadsworth is working with the Empire State 

11          Development Corporation to expand our 

12          partnership with private entities to develop 

13          products and services that benefit the health 

14          of New Yorkers.  Through such collaborations, 

15          Wadsworth would be well-positioned to be the 

16          lab that develops the much-needed universal 

17          flu vaccine.

18                 The dedicated staff at Wadsworth are 

19          frequently asked to meet new challenges.  In 

20          the past year, they have worked around the 

21          clock to test public water supplies affected 

22          by harmful algae blooms, to develop new 

23          methods for testing for PFCs.  And in recent 

24          years, the Wadsworth staff partnered on the 


 1          development of new blood tests to distinguish 

 2          the Zika virus from other closely related 

 3          viruses, screened samples for synthetic 

 4          cannabinoids, performed safety testing on all 

 5          New York medical marijuana products, and 

 6          stood ready to help Puerto Rico on newborn 

 7          screening after Hurricane Maria.

 8                 Later this week we will be honoring 

 9          Dr. Joachim Frank.  Dr. Frank received the 

10          2017 Nobel Prize in Chemistry for the work he 

11          performed at Wadsworth.  

12                 The department's commitment to all 

13          New Yorkers is unwavering.  The staff have 

14          been perfecting, improving and promoting the 

15          health, well-being, and productivity of 

16          New Yorkers since 1901, and one example is 

17          our current flu response.  These efforts 

18          involve staff from nearly all of the 

19          department's divisions, in collaboration with 

20          other agencies and local health departments, 

21          with healthcare facilities and providers.  

22          Staff actions include extensive flu 

23          surveillance, liaising with the CDC, 

24          providing technical assistance to local 


 1          health departments, ensuring adequate 

 2          supplies of vaccines and antiviral 

 3          medications, and of course prevention 

 4          education.  

 5                 The Executive Budget includes an 

 6          increase in the Department of Health's 

 7          workforce.  The increase is related to the 

 8          needs associated with the state takeover of 

 9          Medicaid administration and operational 

10          support for surveillance and certification 

11          activities.

12                 So when one looks at the bigger 

13          picture, we see that among the most 

14          vulnerable New Yorkers are children in their 

15          first years of life.  The First 1,000 Days of 

16          Life initiative will implement evidence-based 

17          recommendations to improve outcomes and 

18          opportunities for young children and their 

19          families.  And as a pediatrician who's spent 

20          time in regions of the world that have 

21          experienced conflict and natural disasters, 

22          I'm keenly aware of the impact that adverse 

23          experiences can have on a young child's life.

24                 Another science-based intervention to 


 1          protect children and improve their 

 2          opportunities and outcomes is our primary 

 3          prevention approach to lead poisoning.  

 4          Children under six years of age are more 

 5          likely to get lead poisoning than any other 

 6          age group.  And lead exposure during 

 7          pregnancy can impact the developing fetus.  

 8          The physical, the behavioral, the cognitive 

 9          impacts to a child from lead poisoning are 

10          irreversible.  I've seen it.

11                 The Governor's Executive Budget 

12          includes a proposal to require the 

13          identification of lead hazards as part of 

14          residential housing inspections.  This is 

15          based on a 2006 Rochester program that 

16          effectively reduced children's exposure to 

17          lead, resulting in fewer children with 

18          elevated blood lead levels.

19                 There are several proposals in the 

20          Governor's Executive Budget that seek to 

21          improve access to care closer to where people 

22          live.  The budget supports investments in 

23          Medicaid reimbursement for ambulance services 

24          and also supports rural emergency medical 


 1          services.  In the coming weeks, we will be 

 2          releasing public service announcements to 

 3          encourage more people to become EMTs, 

 4          emergency medical technicians.  

 5                 In addition, the regulatory 

 6          modernization initiative, or RMI, has 

 7          proposed expanded opportunities for EMS 

 8          personnel.  RMI was a stakeholder-engaged 

 9          effort to better align the department's 

10          regulations with health system 

11          transformation.  This proposal creates 

12          collaborations to allow EMS personnel to 

13          provide non-emergency services within their 

14          existing scope of practice.

15                 And also from the RMI is a proposal to 

16          expand Medicaid telemedicine services to 

17          anywhere the patient is located, including 

18          their home.  It will also expand the types of 

19          telehealth services covered.  This allows for 

20          greater access to remote patient monitoring 

21          and alternative healthcare delivery models.

22                 A $425 million capital investment for 

23          healthcare providers is included in this 

24          year's Executive Budget, and $60 million of 


 1          the $425 million will be directed towards 

 2          community-based providers.  This dovetails 

 3          with another proposal to expand access to 

 4          assisted living program slots in high-needs 

 5          areas.  A portion of these funds will also be 

 6          targeted for its information technology and 

 7          telehealth projects.

 8                 And we are proposing a savings through 

 9          consolidations, efficiencies and 

10          modernization of program administration and 

11          the reduction of duplication.  

12                 As we have said for months now, this 

13          budget year is an exceptionally challenging 

14          one.  In October 1918, "epidemic influenza" 

15          became a reportable disease in New York.  And 

16          as the commissioner at that time, Dr. Hermann 

17          Biggs, said:  "Efficient boards of health are 

18          as necessary to the security and well-being 

19          of the community as fire and police 

20          departments."

21                 As we consider the evolution of the 

22          science of medicine and of healthcare 

23          delivery over the last 100 years, I am 

24          immensely proud of the work of New York 


 1          State's Department of Health.  These 

 2          exceptionally talented people are looking out 

 3          for the health of all of us.  

 4                 Finally, as the health commissioner, 

 5          as a doctor, I would be remiss if I didn't 

 6          add this one final point, that I urge you all 

 7          to get your flu shot.  I hope you all did get 

 8          your flu shot.  And if not, please do so.  

 9          This is very important for the safety of you 

10          and the safety of everyone in the community.  

11                 And so I thank you very much, and I'll 

12          be happy to answer any questions. 

13                 CHAIRWOMAN YOUNG:  Thank you, 

14          Dr. Zucker.  

15                 Our first speaker will be Senator Kemp 

16          Hannon.

17                 SENATOR HANNON:  Good morning, Doctor.  

18          I'm glad you don't have to wear a mask here 

19          to testify because of the flu, but everybody 

20          in the hospitals I'm sure are doing it now.

21                 There's a number of great things that 

22          are happening.  You talk about New York being 

23          in the top 10.  And I saw the statistic, even 

24          though HANYS is promoting it all over the 


 1          place, but I thought the biggest part of that 

 2          statistic was where New York had been just 

 3          six years ago and how much it had moved from 

 4          lower double digits up to 10.  So there's -- 

 5          progress can be made.

 6                 But I find there's a need really to 

 7          focus on some bigger picture.  One, since you 

 8          mentioned Wadsworth and since you're honoring 

 9          a former professor there at Wadsworth who got 

10          the Nobel Prize later this week, I think it's 

11          real -- and I've had a chance, and many 

12          people in the Legislature have had a chance 

13          to go and tour Wadsworth.  And what we had 

14          taken for granted is useful to be reminded 

15          of.  

16                 But the biggest mystery is, after two 

17          years of discussing to upgrade and replace 

18          Wadsworth, is that this administration has 

19          yet to tell us where they propose to put it.  

20          And I think you can't move forward with the 

21          dynamic unless you're going to go through the 

22          whole -- and it's not an easy process.  We 

23          have location problems about everything, from 

24          tunnels to bridges to soccer stadiums and all 


 1          of that, throughout the state.

 2                 So I would think that something as 

 3          needed as Wadsworth, and a replacement and an 

 4          upgrade, they should come forward and say 

 5          where it ought to go and what ought to be 

 6          done about it.

 7                 COMMISSIONER ZUCKER:  So thank you for 

 8          those comments and the question.  We are 

 9          looking at -- we are looking at where in the 

10          Capital District the lab will be placed.  The 

11          important thing here is to make sure that 

12          when we build a new lab, that there's an 

13          opportunity for cross- fertilization of ideas 

14          among scientists, researchers, clinicians, 

15          and experts.  And so this is something in 

16          progress, and I hope to have an answer soon 

17          for you about that.

18                 SENATOR HANNON:  Well, you've proposed 

19          it in the budget, and the budget's going to 

20          be due soon and it's going to be adopted 

21          soon.  And after that, I don't see any 

22          dynamic.  So if you want to move it forward 

23          this year, I would think that locating it in 

24          the Capital District, which is not a small 


 1          amount of territory, is a good thing to 

 2          identify.

 3                 You brought into play the correct 

 4          comment about the transient nature of policy 

 5          in Washington.  But I think that since the 

 6          budget was proposed, there's been several 

 7          major changes that have happened from 

 8          Washington.  The DSH payments, the 

 9          Disproportionate Share payments, that's been 

10          established that it will not terminate soon, 

11          another few years, and that's hundreds of 

12          millions of dollars to New York hospitals.  

13          We have the Child Health Plan that's not only 

14          for a few years, I think it's for 10 years 

15          now, under two successive actions by 

16          Congress.  So all of that money is going to 

17          be forthcoming.  We have the primary care -- 

18          we have the Federally Qualified Health 

19          Clinics that received their monies.  We've 

20          actually, even though people had the rhetoric 

21          of ending Obamacare, they've not ended it.  

22          The amount of money that will come to the 

23          state's option for an Essential Health Plan 

24          will get more money.  


 1                 So that hundreds of millions of 

 2          dollars is now present in the fiscal future 

 3          that were not there when the budget was 

 4          presented, and yet the rhetoric hasn't 

 5          changed, the proposals haven't changed, I 

 6          haven't seen any solid things as to what's 

 7          going on, and we still have projections that 

 8          we have to have a windfall profit tax -- 

 9          which is not even originally going towards 

10          health -- and we have to take money from 

11          conversions, which we don't know where 

12          they're going, it's not towards health.

13                 So the whole picture, the broad 

14          strokes of the health budget, not so much in 

15          delivering health, but in financing health, 

16          really need to be changed so that an 

17          intelligent budget can be adopted.

18                 COMMISSIONER ZUCKER:  I think that we 

19          are pleased with the outcome of what has 

20          transpired.  We're not pleased with the 

21          process of what has happened in Washington, 

22          and there's just a lot of uncertainty there.  

23          And I hear what you mentioned about DSH, and 

24          we recognize that, and CHIP.  But again, we 


 1          are not pleased with the process of how this 

 2          moved forward.

 3                 SENATOR HANNON:  One of the problems I 

 4          have with the DSH is that it was originally 

 5          adopted when Obamacare was adopted, and it 

 6          was adopted because it said that the 

 7          hospitals would get more patients who would 

 8          be able to pay, and therefore they don't need 

 9          the disproportionate payment.  

10                 And in fact, we've had a long lead-up, 

11          and I don't know that hospitals have 

12          responded at all.  Moreover, I see that the 

13          state, because of the health exchange, the 

14          Obamacare -- the successful implementation of 

15          Obamacare in New York, has reduced our 

16          uninsured by half.  And yet we still, quote, 

17          need DSH?  The logic, to me, does not add up.  

18          Where -- we can't always just be giving more 

19          and more money.  

20                 You're sitting next to the person 

21          who's quarterbacked the DSRIP, the federal 

22          waiver, leading to changes in basic delivery 

23          of services.  But when are we going to start 

24          acknowledging things have changed?


 1                 COMMISSIONER ZUCKER:  Thank you.

 2                 SENATOR HANNON:  Yeah, you're not 

 3          going to answer.  

 4                 (Laughter.)

 5                 DIRECTOR HELGERSON:  Yeah, I guess I 

 6          just add, on the uncertainty part, I mean, 

 7          the president of the United States is going 

 8          to submit his budget today.  There are 

 9          already signals coming out that reductions in 

10          spending in -- sort of outside the Pentagon 

11          are going to be quite steep.  We'll have to 

12          wait and see what those reductions are.  

13          Clearly signals are that the Affordable Care 

14          Act remains in the sights, not only of the 

15          president but certainly of the leadership in 

16          the Congress.  And so I think that, you know, 

17          there's just tremendous uncertainty still out 

18          there today.

19                 On DSH, I hear your point relative to 

20          the issue about do -- for how long do 

21          hospitals need additional support above and 

22          beyond the payments they receive directly for 

23          services that they provide.  But I do think 

24          that the transition we're going through in 


 1          healthcare, not only because of DSRIP but 

 2          just even outside of DSRIP, is stressing 

 3          hospitals in that sector more than it's ever 

 4          been stressed before.  The margins in the 

 5          hospital sector in New York are as weak as 

 6          they are in any hospital sector in the 

 7          country.

 8                 And, you know, our hope all along with 

 9          DSRIP was a smooth transition where we reduce 

10          our reliance on hospitals, expand access to 

11          other services in the community and not have 

12          the major disruptions in care that 

13          potentially could occur from, you know, a 

14          closure or a series of closures of hospitals.

15                 And so -- but that said, you know, 

16          this is a big complex system that makes up a 

17          sixth of our economy, healthcare.  And 

18          transitioning from the old world to the new 

19          takes time.  And I think our point on DSH, 

20          certainly in our discussions previously with 

21          the Obama administration and more generally 

22          our advocacy is that, you know, the 

23          administration of the day had the opportunity 

24          to decide how they wanted to allocate those 


 1          DSH cuts.  And what we said is that you 

 2          should look at reducing the reduction in DSH 

 3          for states like New York that did everything 

 4          in their power to expand access, as opposed 

 5          to states like Texas who didn't.

 6                 SENATOR HANNON:  Let me go back to 

 7          what you're talking about DSRIP.  The 

 8          original grant of several billion dollars to 

 9          New York was the object to cut admissions to 

10          hospitals -- not readmissions, but admissions 

11          to hospitals by 25 percent.

12                 DIRECTOR HELGERSON:  Correct.

13                 SENATOR HANNON:  Obviously people 

14          would still be sick, so we moved them to a 

15          clinic or to outpatient.  

16                 What's been the progress getting 

17          there?  Because we're now just a little more 

18          than halfway through.  And if we don't meet 

19          the goal, I was told originally that we're 

20          going to have to pay the money back.

21                 DIRECTOR HELGERSON:  Right.  Great 

22          question, glad to have the opportunity.  

23                 Overall, we feel DSRIP has been a 

24          tremendous success so far.  The PPSs, the 


 1          Performing Provider Systems created under 

 2          this initiative, have earned 95 percent of 

 3          the possible funds.  And so I know as you 

 4          know well, this is a performance-based 

 5          program, so you have to perform in order to 

 6          get paid.  So far they are performing as 

 7          expected.  

 8                 Generally speaking, the reductions in 

 9          avoidable hospital use are on target for the 

10          25 percent reduction over the five years.  I 

11          think so far it's 13, 15 percent reduction in 

12          each of the major measures -- that's 

13          admissions, readmissions and emergency room 

14          visits.  And I want to emphasize too that 

15          DSRIP is about potentially preventable of 

16          those visits, not just overall.  

17                 But overall, we are seeing absolutely 

18          positive movement in the data to show that 

19          the initiative is working.  So overall we're 

20          very -- we're very pleased.

21                 Now, we are going into the performance 

22          phase where more of the funds are linked 

23          directly to outcomes for Medicaid members, 

24          and that's a heavier lift.  But what I can 


 1          say is just last week we were in Staten 

 2          Island, 650 people from all across the state 

 3          came together for our annual DSRIP symposium, 

 4          meeting, basically our conference.  We had 

 5          observers from five countries.  Multiple 

 6          states, multiple academic universities from 

 7          around the country and outside the United 

 8          States came to observe.  And it's really a 

 9          tremendous amount of wonderful things going 

10          on thanks to that initiative.

11                 SENATOR HANNON:  With all of that 

12          happening as a positive, I still find the 

13          problem with the diversion of monies from 

14          healthcare to be problematic.  You propose 

15          monies that would be going on a tax on 

16          opioids, and yet it's not used for further 

17          prevention of addiction or rehabilitation.  

18          You propose a conversion tax on what's a 

19          proposed takeover of Fidelis by Centene, and 

20          that money seems to go to the General Fund.  

21          And if it doesn't go to the General Fund 

22          directly, it goes to HCRA and then to the 

23          General Fund.

24                 I find all of these large amounts of 


 1          money not to be generating better health but 

 2          to be generating better fiscal policy for the 

 3          Budget Office, not for the Health Department.  

 4          Is there any conversation about changing 

 5          those things or meeting our points that these 

 6          are not good directed expenditures?

 7                 COMMISSIONER ZUCKER:  Well, I do think 

 8          that it does add up to improved health.  I 

 9          mean, the issue of the opioid tax is the 

10          money will go to help looking at how to 

11          prevent and to treat those who have been -- 

12          prevent those who are potentially exposed to 

13          this epidemic or end up a victim of this 

14          epidemic, and go to treat those who are 

15          actually unfortunately suffering from the 

16          challenges of opioid addiction.  

17                 And I do think that the monies that we 

18          are allocating for different projects are 

19          really targeting the improvement of and the 

20          well-being of those in New York.  I hear what 

21          your concerns are, but I do think that we 

22          take it very seriously and make sure that the 

23          money is directed to programs for the public 

24          health.


 1                 SENATOR HANNON:  One of the bigger 

 2          problem areas outside of the big-picture 

 3          hospitals is long-term care in this state.  

 4          And I find the policy initiatives of this 

 5          budget kind of gratifying, because things 

 6          have been done that I didn't like, before, 

 7          and yet still the change in direction is 

 8          puzzling.

 9                 What do I mean by that?  The movement 

10          has been to try to get everybody to the very 

11          last person in this state who is ill into 

12          some type of managed-care program.  So a few 

13          years ago it was said and it was adopted, 

14          everybody going into a nursing home would now 

15          be part of managed care.  And that was always 

16          problematic to me because they were already 

17          in a nursing home.  I didn't see how 

18          management of the care could be better unless 

19          somehow the nursing homes were deficient.  

20          But then again, if they were deficient, they 

21          should be written up.

22                 So this year I see that after six 

23          months of being in the nursing home, you're 

24          no longer on managed care.  And it's a 


 1          puzzling change of direction.  

 2                 It's the same puzzling change of 

 3          direction because I don't see the proposals 

 4          in regard to children's behavioral health 

 5          making any sense.  We had originally said 

 6          they should be part of a managed-care system.  

 7          That's drawn back into some type of 

 8          quasi-managed care right now.

 9                 We have people who are traumatic brain 

10          injured, we keep on passing -- Assemblyman 

11          Gottfried and myself keep on passing waivers 

12          for a year or two, because that's not a 

13          population that is appropriate.  

14                 So I -- and I don't find all of these 

15          directions where we're supposed to be 

16          allowing managed care to go off on its own 

17          and work, we're supposed to be allowing 

18          others areas to go off on their own and work, 

19          and yet the interference by the state keeps 

20          on hampering those types of directions.  And 

21          I don't see it working.

22                 DIRECTOR HELGERSON:  Sure.  So 

23          definitely I can answer that.

24                 So if you go back to the beginning of 


 1          Medicaid redesign, one of the core tenets was 

 2          this concept of care management for all.  And 

 3          so over the past several years we've been 

 4          moving populations and services into managed 

 5          care.  Back when we started this effort, one 

 6          of the hopes that we had was that we'd be 

 7          able to work to establish a strong 

 8          partnership with the federal government 

 9          relative to dually eligible individuals, 

10          individuals enrolled in both Medicaid and 

11          Medicare.  Most of the nursing home 

12          population, 80 percent of individuals in 

13          nursing homes, are dually eligible.  

14                 And that's important in the move to 

15          managed care for that population, is that if 

16          you do effective work in terms of care 

17          management in the nursing home, what you're 

18          in essence hoping for out of that effective 

19          care management is the opportunity to keep 

20          people out of the hospital, to avoid hospital 

21          services, whether that's trips to the 

22          emergency room, inpatient and such.  

23                 The challenge that we have is that 

24          despite a lot of effort, including a -- we're 


 1          one of multiple states that did a 

 2          demonstration -- we have not been able to 

 3          find a way to establish a good working 

 4          relationship with the federal government 

 5          relative to duals.  And that directly impacts 

 6          the value proposition of having individuals 

 7          in nursing homes who are in long-term 

 8          permanent stays in nursing homes, having them 

 9          enrolled in managed care.  

10                 The proposal that is included in this 

11          year's budget is if someone has been deemed 

12          to be in need of a permanent placement -- and 

13          just to be clear, a permanent placement is a 

14          discussion that goes on between the 

15          individual, their family, the nursing home, 

16          the local district, about whether or not this 

17          is really someone who's there for maybe a 

18          period of rehab, there's alternative options, 

19          but they're in a permanent stay.  And then 

20          they're -- once deemed in a permanent stay, 

21          they're in for another six months.  

22                 The idea then is we would disenroll 

23          them from managed long-term care because in 

24          essence we pay the nursing home to do those 


 1          basic care management --

 2                 SENATOR HANNON:  We knew that -- we 

 3          knew that before.  We had brought that point 

 4          before.  And I find the zigzagging of this 

 5          policy to be just problematic.  You have 

 6          another proposal in regard to limiting the 

 7          amount of LHCSAs that can be contracted with 

 8          by a managed long-term care.

 9                 The trouble is that the State Public 

10          Health Council keeps on approving new 

11          licenses for LHCSAs.  There's a deluge of 

12          them every meeting.  And yet now we want to 

13          cut back through the budget.

14                 This does not give me a sense of 

15          strong direction and policy.  And it really 

16          comes about because it's a case-by-case basis 

17          when it comes to long-term care.  We don't 

18          see it, we just know from the protests that 

19          come to our office that something is not 

20          going on correctly.

21                 DIRECTOR HELGERSON:  So just on -- 

22          just so I can finish the point on the nursing 

23          homes, that the rationale for the carve-out 

24          now is that there really isn't the 


 1          opportunity to capture shared savings, there 

 2          isn't the opportunity to do value-based 

 3          payment, because we haven't been able to 

 4          figure out with the federal government how to 

 5          effectively coordinate between the two 

 6          payers.

 7                 So in that sense, because we don't see 

 8          any change coming from the Trump 

 9          administration on this issue, that at this 

10          point it doesn't make sense for us to pay, in 

11          essence, the care management fee twice.

12                 As to the LHCSA proposal, it is true 

13          as the -- as we see the landscape within the 

14          Medicaid program, we see 1400 LHCSAs, most of 

15          whom are very small organizations, most of 

16          whom are for-profit entities, and we see that 

17          it's difficult for our managed-care 

18          organizations to manage these networks.  An 

19          individual plan, could be the largest plan, 

20          may have a hundred LHCSAs in their network.

21                 What we believe is necessary in order 

22          for better patient care, greater safety, is 

23          to have some consolidation in this sector.  

24          And we think at the end of the day the 


 1          proposal, which gives the department 

 2          discretion to work with plans to basically 

 3          help them consolidate their networks, will 

 4          lead to a safer, more cost-effective 

 5          long-term-care system in New York State.

 6                 SENATOR HANNON:  Commissioner, I -- 

 7          there's a lot of little things and big things 

 8          that I could bring up, but I want to address 

 9          little things, and not specific.  I find it 

10          dismaying that in the middle of the budget, 

11          $64 billion in spending, that we have to deal 

12          with minutiae of how to run long-term care, 

13          minutiae of licensure, of anesthesiology, 

14          items that are important in the long run for 

15          healthcare, but nowhere near big enough to 

16          be -- should be included in the budget.  

17                 And I simply think that all of those 

18          items, a number of others, should be excluded 

19          and dealt with otherwise.  They used to be 

20          things such as program bills that would come 

21          from departments, maybe even Governor's 

22          proposals.  We've seen none of those.  And 

23          virtually over the past few years they've 

24          dried up.  And that's where we ought to have 


 1          informed discussion, not in the middle of a 

 2          $64 billion budget.

 3                 Senator Young?  

 4                 CHAIRWOMAN YOUNG:  Thank you, Senator 

 5          Hannon.  

 6                 I'd like to point out that we've been 

 7          joined by Senator Patty Ritchie, Senator 

 8          Roxanne Persaud, Senator Tim Kennedy, and 

 9          Senator Susan Serino.

10                 Chairwoman.

11                 CHAIRWOMAN WEINSTEIN:  Thank you.  

12          We've been joined by our Insurance chair, 

13          Kevin Cahill, and also Assemblywoman Pat 

14          Fahy.  

15                 And to our Health chair, Dick 

16          Gottfried, for some questions.

17                 CHAIRWOMAN YOUNG:  And also, I'm 

18          sorry, Senator Martin Golden, in the 

19          audience.

20                 ASSEMBLYMAN GOTTFRIED:  Okay.  Good 

21          morning.  I have a couple of questions for 

22          Dr. Zucker and then a few for Mr. Helgerson.  

23                 But before I do, I just want to say 

24          I've jotted down and I might see if I can 


 1          have somebody embroider it, "When did the 

 2          health and well-being of New Yorkers become 

 3          negotiable?" I think that's a phrase we can 

 4          all use.

 5                 And you mentioned Hermann Biggs, and 

 6          it just reminds me of one of the things that 

 7          Dr. Biggs said, which is "Life expectancy is 

 8          purchasable."  Something else we all need to 

 9          keep in mind.

10                 So a question about Early 

11          Intervention.  For years the state has been 

12          trying to squeeze more than -- more than 

13          about $15 million a year out of insurance 

14          companies, with no success.  And 60 percent 

15          of non-government health coverage is 

16          delivered by employer self-insured plans that 

17          New York State cannot regulate.

18                 The Executive has proposed putting all 

19          sorts of obstacles in the path of EI 

20          providers as part of this effort to get blood 

21          from a stone.  Why not just tax health plans 

22          as a group $15 million, more or less, and 

23          tell them they're off the hook for covering 

24          EI services?  We'd get the same money and we 


 1          wouldn't have to torture EI providers and pay 

 2          millions to a fiscal agent.  

 3                 COMMISSIONER ZUCKER:  Thank you, 

 4          Assemblyman.  

 5                 Let me mention a little bit about the 

 6          EI program.  I've looked into this since last 

 7          year when we were talking about this, and a 

 8          little bit about the state fiscal agent.  And 

 9          what we found is that since 2013, the state 

10          fiscal agent has processed about $3 billion 

11          in provider claims, and 99 percent of those 

12          claims actually were fully adjudicated and 

13          paid relatively quickly.

14                 And there are some challenges.  The -- 

15          also, the state fiscal agent has been able to 

16          initiate reimbursements for the state's share 

17          of 49 percent through vouchers.  The 

18          statewide proportion of the claims submitted 

19          to the commercial insurers that are 

20          reimbursed has doubled.  It was originally 

21          10 percent, and now it's about 18 percent.  

22          It was a little less than 10 percent.

23                 The point you bring up is, you know, 

24          the question is how much does one charge the 


 1          insurance companies for something of this 

 2          nature.  And that is one issue that could be 

 3          raised.  But I do believe that the fiscal 

 4          agent has been doing what they've been 

 5          charged to do.  And granted, the amount of 

 6          reimbursement, it would be nice to see more 

 7          of a return from the amounts that we've seen, 

 8          18 percent.  But I think we're moving in the 

 9          right direction on this.

10                 ASSEMBLYMAN GOTTFRIED:  Is that 

11          18 percent of all claims were referred to 

12          insurance companies?  Or that 18 percent of 

13          the EI program is paid for with insurance 

14          dollars?

15                 COMMISSIONER ZUCKER:  I think it's the 

16          claims, but I will check.

17                 ASSEMBLYMAN GOTTFRIED:  Yeah.  Because 

18          I don't think there's been significant growth 

19          in how much blood we get from that stone, 

20          which to me is the number that matters.

21                 Second question.  Two years ago the 

22          Legislature accepted the Executive's demand 

23          to cut a broad range of public health 

24          programs by 10 percent.  Last year we 


 1          accepted the Executive's demand to cut them 

 2          another 20 percent.  Now the Executive is 

 3          demanding another 20 percent cut, although a 

 4          handful of the programs have been spared a 

 5          third round of cuts.

 6                 What is the justification for cutting 

 7          these programs yet again?

 8                 COMMISSIONER ZUCKER:  Well, I think 

 9          the issue here is that we're trying to make 

10          the system as efficient as possible.  And 

11          there are programs where, within the state, 

12          there's funding coming from different parts 

13          of the department, and we're trying to work 

14          to streamline that.  

15                 And I recognize that this was raised 

16          before, regarding consolidating some of these 

17          programs, but we do believe this will be in 

18          the best interests of not only the community 

19          and those who we serve, but obviously much 

20          more fiscally responsible.

21                 ASSEMBLYMAN GOTTFRIED:  Well, the 

22          question I asked isn't about the lumping 

23          together, although I assume we're going to 

24          reject the lumping part for a third time.  


 1          Why the 20 percent cut?  How is that -- I 

 2          mean, is there less need for the cancer 

 3          programs, is there less need for the other 

 4          30, 29 programs in the --

 5                 COMMISSIONER ZUCKER:  Well, it's not 

 6          that.  It's we've looked at the numbers to 

 7          figure out where -- how can we make this more 

 8          efficient and bucketing different areas.  And 

 9          as I was mentioning before, that there are 

10          certain programs or topics that we address 

11          that are being funded by different parts of 

12          our department, and that's how we came up 

13          with that number, looking at where we 

14          could -- if we consolidated some of these, it 

15          would probably be about 20 percent savings.  

16                 ASSEMBLYMAN GOTTFRIED:  Well, since 

17          you knew -- or since you know that we're 

18          going to reject the lumping, why after three 

19          years don't you just submit a budget that 

20          tells us which programs you think are 

21          overfunded and then we can respond?

22                 COMMISSIONER ZUCKER:  Well, it's not 

23          so much overfunding, it's funding that -- as 

24          I was saying, that we're funding it in 


 1          different areas and that we can probably pull 

 2          this together more efficiently.

 3                 ASSEMBLYMAN GOTTFRIED:  So if they're 

 4          not overfunded, they should get the same 

 5          level of funding?  

 6                 COMMISSIONER ZUCKER:  Well, there's 

 7          also other costs that go into this.  And I 

 8          guess the answer there is how do we become 

 9          more efficient on this.

10                 But I'd be happy to get back to you 

11          and to your team specifically about which 

12          areas and how much money that we see would be 

13          saved as we put different areas into the 

14          buckets.

15                 ASSEMBLYMAN GOTTFRIED:  Well, I think 

16          after -- now that we're on the third year of 

17          this, I think we'd welcome seeing that.

18                 I have a few questions for Jason 

19          Helgerson.  

20                 So Senator Hannon touched on the 

21          nursing home being moved out of MLTC 

22          question, and I want to approach that with a 

23          slightly different angle.  We know that many 

24          managed long-term-care plans really do not 


 1          like being saddled -- I would say all of 

 2          them, maybe, do not like being saddled with 

 3          high-need home-care patients, in part because 

 4          they don't get adequately reimbursed for -- 

 5          or they don't get extra reimbursement for 

 6          having high-need home-care enrollees.  

 7                 And my concern about the nursing home 

 8          provision is that you are telling MLTCs that 

 9          if they can move a high-need home-care 

10          patient to a nursing home -- and there are 

11          ways to make that happen, not entirely 

12          consistent with the will of the patient -- 

13          but if you can move them into a nursing home, 

14          in six months they'll be off your books.  And 

15          so that gives an MLTC an enormous incentive 

16          to unload their high-cost home-care patients 

17          into a nursing home, knowing that in a few 

18          months that person, who is now 

19          institutionalized instead of living in their 

20          home, will be off their books.  

21                 That seems to me not only cruel to 

22          people who want to remain in their homes, but 

23          contrary to what we have for many, many years 

24          in New York said is our policy of trying to 


 1          keep people in their homes.

 2                 DIRECTOR HELGERSON:  Well, I would say 

 3          that for many, many years the policy in 

 4          managed long-term care was that the nursing 

 5          home benefit was not part of the benefit 

 6          package.  So that the managed long-term-care 

 7          plan had the incentive, prior to the 

 8          carve-in, that if they had a high-needs 

 9          individual, they could simply get that 

10          individual off their books, as you put it, by 

11          encouraging that individual or helping that 

12          individual enroll in a nursing home.

13                 So I think that the move in moving the 

14          benefit into managed care, the nursing home 

15          benefit, addressed that core concern.

16                 What we're saying here is that this is 

17          an individual who they and their family have 

18          decided that the nursing home is a permanent 

19          placement, that it is the place that meets 

20          their needs on a go-forward basis from that 

21          point, and then six months after that.  So if 

22          there's a change that somebody has 

23          determined -- or that individual has changed 

24          their mind, that they'd like to move to the 


 1          community, we give that additional six-months 

 2          opportunity for that sort of change of heart.  

 3                 And we're also looking at the 

 4          possibility of reconfiguring the 

 5          managed-long-term-care quality pool to 

 6          actually create stronger incentives around 

 7          and rewards for relocations.  So individuals 

 8          who for whatever reason are in a nursing home 

 9          for a period of time, to incentivize the 

10          plans to relocate.

11                 But I still think that the policy is 

12          clearly superior to what it was prior to the 

13          carve-in.  But I do think what it does is 

14          that it ensures that we're only paying that 

15          care management fee once for individuals who 

16          are in essence electing to stay in the 

17          nursing home on a permanent basis.

18                 If an individual at any point decides 

19          that they want to relocate back into the 

20          community, they have the opportunity to 

21          re-enroll in a managed-long-term-care plan 

22          and then the state and the plan will work 

23          together to try to find a community placement 

24          for them.


 1                 ASSEMBLYMAN GOTTFRIED:  Well, of 

 2          course the problem is after they've been in a 

 3          nursing home for six months, more than likely 

 4          they have no home in the community to go back 

 5          to.  And when they were being shipped off to 

 6          the nursing home, it was probably likely that 

 7          they had little or no social supports in the 

 8          community to help them resist being shipped 

 9          off to a nursing home.

10                 And so while this situation may not be 

11          as bad as it was before the nursing home 

12          benefit was included in MLTC, you're taking a 

13          significant step back to those bad old days.

14                 DIRECTOR HELGERSON:  So I appreciate 

15          that.  I think the policy objective here is 

16          to institute a policy where if a person has 

17          chosen, in consultation with family, and 

18          healthcare professionals have chosen that 

19          ultimately that the nursing home is the 

20          appropriate place -- and obviously there are 

21          tens of thousands of people in New York State 

22          who are in nursing homes, many of them, the 

23          majority of them, appropriately so -- that in 

24          those cases where it's a long-term stay, that 


 1          we just are saying we don't want to pay for 

 2          the care management twice.  

 3                 But what we do want to do is give 

 4          maximum opportunity for relocation.  And -- 

 5          this is an important point -- if someone 

 6          decides at that point, at any point after 

 7          they've been in a nursing home that they want 

 8          to relocate, we are going to create the 

 9          option for them to enroll, at their 

10          discretion, in a managed-long-term-care plan 

11          and then have the opportunity to then work 

12          with that plan and the state to look at 

13          alternative settings outside the nursing home 

14          if that's what they so choose.

15                 ASSEMBLYMAN GOTTFRIED:  Yeah, except 

16          we've agreed that they don't have a home to 

17          go to.

18                 Let me ask you about the Traumatic 

19          Brain Injury program, because the department 

20          is still committed to forcing patients in the 

21          Traumatic Brain Injury Program into managed 

22          care.  The patients, their service providers 

23          and the managed care plans all agree that 

24          this is a bad idea.  The current program 


 1          meets DOH goals of care management and fiscal 

 2          efficiency.  

 3                 The only argument I've heard for the 

 4          change into managed care is that we must 

 5          adhere to the doctrine of managed care for 

 6          everything.  If the managed care doctrine 

 7          doesn't have to apply to nursing home care -- 

 8          or, by the way, to people who have a UAS 

 9          score of less than 9, whatever that means.  

10          So if that doctrine doesn't apply to those 

11          categories, why must it apply to the TBI 

12          program?

13                 DIRECTOR HELGERSON:  I think at the 

14          end of the day we've been working with a 

15          diverse group of stakeholders on that 

16          particular transition.  We know that it's a 

17          sensitive one and that there's concerns about 

18          the types of services and unique nature of 

19          the waiver programs going forward.  We still 

20          think, at the end of the day, it's best 

21          served as part of the service array within 

22          the managed-care context.  

23                 What we're interested in as we've 

24          migrated lots of services and populations 


 1          into managed care, we're always looking to 

 2          make sure that our policies are appropriate.  

 3          Not every single population in the program is 

 4          currently scheduled to move into managed 

 5          care, and it wasn't from the beginning.  We 

 6          said the vast majority of those services were 

 7          appropriate for managed care and populations 

 8          and services were appropriate for that, but I 

 9          think we always said as we moved forward we 

10          would look at the evidence, look at the 

11          experience and adjust accordingly.  That's 

12          why we're proposing the change in the case of 

13          the nursing home.

14                 Which as I say, if we had a better 

15          relationship with the federal government 

16          relative to collaboration on Medicare and 

17          Medicaid, at this point I think we'd be 

18          having a different conversation about the 

19          nursing home change, so -- but that is what 

20          it is.  

21                 But our hope is we can work with the 

22          stakeholders still on the TBI population and 

23          see if we can't find a pathway that, you 

24          know, works for all affected parties.


 1                 ASSEMBLYMAN GOTTFRIED:  So for several 

 2          years we've been asking about this.  For 

 3          several years the department has been saying 

 4          "We think it's best."  I assume, in all that 

 5          time, the department has thought through 

 6          several ways in which it is best to move TBI 

 7          patients into Medicaid managed care.

 8                 Could you in the next couple of days 

 9          write down in a little -- in more than four 

10          words why it's best and send that to me?

11                 DIRECTOR HELGERSON:  Absolutely.  

12          Happy to do so.

13                 ASSEMBLYMAN GOTTFRIED:  Okay.  Because 

14          I don't think we've heard more than, Well, 

15          it's best.

16                 The Executive proposes -- and Senator 

17          Hannon asked about this -- to require MLTCs 

18          to restrict their provider networks to no 

19          more than 10 LHCSAs.  Why is this a good 

20          idea?  If we want MLTCs to restrict their 

21          provider networks -- contrary to what we urge 

22          all other managed-care plans to do -- so if 

23          we want them to restrict their provider 

24          networks, which I don't accept, why can't we 


 1          trust MLTCs to do that on their own?

 2                 DIRECTOR HELGERSON:  Sure.  So MLTCs 

 3          have tried in the past to restrict their 

 4          networks.  The issue is is that given our 

 5          policies relative to the ability of 

 6          individuals to switch plans at any time, when 

 7          a plan attempts to restrict its network, the 

 8          provider affected by that restriction can 

 9          communicate to the member that this 

10          restriction is coming and then basically 

11          encourage the person to switch plans.  

12                 And that's always been an inherent 

13          threat that's out there that a provider has 

14          against a plan, is that if I'm excluded from 

15          your network, I will take my members with me.  

16          And that has made it very difficult for plans 

17          to do something which we think at the end of 

18          the day is in the best interests of the 

19          program, which is rationalizing the network.

20                 It's very difficult for a plan to 

21          chase after large numbers of small agencies 

22          who are providing some of the most important, 

23          most personal services that exist in the full 

24          Medicaid array.  We have concerns about the 


 1          health, safety and the quality of those 

 2          services as provided by these very small, 

 3          mostly for-profit entities, and we think 

 4          consolidation into a smaller number of 

 5          agencies will enhance patient safety, improve 

 6          quality, and support the overall efforts of 

 7          the program.  And given the way the program 

 8          is structured, it's very difficult for the 

 9          individual plans.

10                 I would also mention we have an 

11          interest in consolidation in the 

12          managed-long-term-care space as well.  

13          There's lots of different plans.  So we're 

14          interested in consolidation at the plan level 

15          as well.  But we think at the end of the day 

16          that consolidation will lead to, as I say, a 

17          safer, more effective system and program for 

18          the Medicaid population who relies on these 

19          services each and every day.

20                 ASSEMBLYMAN GOTTFRIED:  Okay.  I'll 

21          come back later with a couple more questions.

22                 CHAIRWOMAN WEINSTEIN:  Before we go to 

23          the Senate, we've been joined by Assemblyman 

24          James Skoufis.


 1                 CHAIRWOMAN YOUNG:  Thank you.  

 2                 I'd like to start with some questions 

 3          about the transportation-related Medicaid 

 4          proposals that the Governor included in the 

 5          budget.  And so the Executive proposes 

 6          legislative and administrative actions to 

 7          transition the facilitation of Medicaid 

 8          transportation away from the purview of 

 9          healthcare plans to a statewide 

10          transportation manager.  The Governor 

11          anticipates that this will result in savings, 

12          arguing that the manager is a more efficient 

13          means of facilitating the transportation.

14                 As you know, Mr. Helgerson, members of 

15          our Senate conference have expressed a lot of 

16          concerns over the years over this statewide 

17          Medicaid transportation system.  I think I've 

18          shared with you horror stories of people from 

19          Buffalo coming down, driving 50 miles to take 

20          somebody to a medical appointment, and then 

21          driving back to Buffalo.  I really can't see 

22          how that saves the state any money.  

23                 And on top of it, we've lost local 

24          control.  And locally, people know better how 


 1          to get people to appointments, especially in 

 2          rural areas, than a statewide manager.

 3                 So the Governor proposes a combined 

 4          $20 million in transportation-related savings 

 5          initiatives, three of which directly relate 

 6          to the transportation manager.  There's a 

 7          carve-out for -- from the Medicaid long-term 

 8          care for 6 million, adult day healthcare 

 9          carve-out for 7 million, and the elimination 

10          of rural transit assistance for 4 million.  

11                 Now, just to give you a flavor -- I'm 

12          not overblowing this at all.  I want to give 

13          you a flavor of what we deal with, for 

14          example, in my district.  This is an email 

15          sent to me by the director of one of my 

16          Offices for the Aging in my district.

17                 "February 8, 2018.  Dear Senator 

18          Young, our office has been trying to help a 

19          seriously ill elderly man on Medicaid arrange 

20          rides to his needed appointments.  

21          Unfortunately, MAS -- the statewide system -- 

22          has failed him many times, and he has been 

23          missing his life-saving appointments."  The 

24          full details of this issue are outlined in 


 1          the email which I'll read from in just a 

 2          moment.  

 3                 "I'm calling your attention to this 

 4          particular case, but it is by no means an 

 5          isolated incident.  Our volunteer coordinator 

 6          who arranges the volunteer transportation for 

 7          non-Medicaid clients is spending more and 

 8          more time trying to fix problems MAS has 

 9          created for our clients."

10                 So I think this is a very compelling 

11          story.  The patient is 75 years old, had 

12          heart surgery, and is required to go to the 

13          cardiologist at the hospital for life-saving 

14          transfusions of antibiotics because he has a 

15          blood infection.  

16                 So on February 1st, his ride did show 

17          up and he received his treatment.  On 

18          February 2nd, he was getting reoccurring 

19          calls saying that a driver was coming, and 

20          the driver showed up at 7 p.m. for a 2 p.m. 

21          appointment.  The driver from the Yellow Cab 

22          service told this client that he was doing 

23          him a favor and wanted extra money for it.  

24                 The driver took the patient to the 


 1          hospital to get the antibiotic treatment, and 

 2          when they arrived at the hospital, the driver 

 3          requested gas money from the patient.  After 

 4          the treatment was completed, the driver took 

 5          the patient home, and at his residence the 

 6          driver told the patient that he wasn't going 

 7          to let him out of the cab until he got money.  

 8          The patient told him that he would kick his 

 9          window out if he didn't let him out of the 

10          cab, so the driver finally let him out.  

11                 On February 3rd, February 4th, 

12          February 5th, no driver showed up for the 

13          transport to the daily treatment for his 

14          blood infection.  On February 6th, the 

15          patient called the Office for the Aging and 

16          spoke with a volunteer coordinator because he 

17          needed a ride and he was very frustrated.  

18                 There are a lot of descriptions here 

19          about waiting on hold to MAS for very long 

20          periods of time, the person on the other end 

21          of the phone being very rude when they tried 

22          to get to the bottom of it.

23                 And I think that this is just a prime 

24          example of why the statewide transportation 


 1          system is not working.  Could you please 

 2          address that?

 3                 DIRECTOR HELGERSON:  So obviously it's 

 4          a program now that serves millions of 

 5          individuals.  I'm not familiar with the case 

 6          you describe.  It certainly sounds like a 

 7          horrific set of circumstances.  Happy to look 

 8          into it.  

 9                 We take any complaints, issues raised 

10          about the performance of either the 

11          transportation manager or by the individual 

12          transportation provider.  So it sounds like 

13          part of the issue there was the cab company 

14          in particular.  We will be more -- happy to 

15          look into those.

16                 Overall, we feel like overall 

17          transportation, the number of rides being 

18          provided, is up, yet we're saving somewhere 

19          in the range of I think about $90 million a 

20          year compared to what our transportation 

21          costs were prior to the implementation of the 

22          manager.  So we think they're very 

23          cost-effective.  But -- so as a result, as I 

24          say, happy to look into the circumstance, but 


 1          overall we feel that the transportation 

 2          manager has been a very successful program.

 3                 CHAIRWOMAN YOUNG:  Well -- 

 4                 COMMISSIONER ZUCKER:  Senator?

 5                 CHAIRWOMAN YOUNG:  Yes.

 6                 COMMISSIONER ZUCKER:  I just want to 

 7          add something on this, because this is -- 

 8          this goes back to the bigger picture.  I feel 

 9          for -- I really feel for this person.  And 

10          upstate New York is challenging, and even in 

11          the city it's challenging.  And for those who 

12          are elderly, it's really tough.

13                 But I think it also touches upon some 

14          of the other things we're doing in the 

15          department.  The regulatory modernization 

16          initiative is to look -- and I know you've 

17          been very interested in the issue of 

18          telehealth.  And perhaps there are ways, as 

19          we move forward with our RMI, to get our 

20          regulatory program in line with how clinical 

21          care is being provided that individuals like 

22          this gentleman, who clearly was struggling 

23          with the system, would be able to get some of 

24          that care perhaps without even having to take 


 1          that ride.

 2                 And that's something which is really 

 3          important.  Because believe me, as a child of 

 4          parents who are elderly, asking them to go to 

 5          the doctor and picking them up, and 

 6          particularly in the winter, and then bringing 

 7          them back is a big ask, and the risk of them 

 8          getting sick is also great as well.  So I 

 9          hear what you're saying.

10                 CHAIRWOMAN YOUNG:  Well, I appreciate 

11          what you're saying too.  But even though you 

12          serve millions of people, it's still no 

13          excuse for these types of instances.  And 

14          Senator Krueger just turned to me and said, 

15          "We should ask the legislators in the room if 

16          you've had problems with the statewide 

17          transportation system, raise your hands."  

18                 Because this is not just limited to my 

19          district.  And under the old district with 

20          the local control, something like this never 

21          would have happened.

22                 So I think the point is you are 

23          serving millions of people every day, and 

24          it's not working because it's just too large.  


 1          We are not a one-size-fits-all state.  As you 

 2          look at Cattaraugus County versus the Bronx 

 3          or Saratoga County, they're -- all different 

 4          areas of the state are very different.  They 

 5          have different needs, different populations.  

 6                 And so what I'd like to know is, what 

 7          do you foresee will happen to the role of 

 8          public transportation providers if this 

 9          $4 million in supplemental funding is taken 

10          away?  I mean, for me, this is going in the 

11          wrong direction.  We already obviously have a 

12          problem, and it's not being addressed 

13          satisfactorily, and now there's a cut to the 

14          program.

15                 DIRECTOR HELGERSON:  Sure.  So that -- 

16          just to give a little history about that 

17          $4 million.  So that $4 million was in 

18          essence supplemental.  It's not a Medicaid 

19          payment, it's not for Medicaid-related 

20          services.

21                 One of the issues that when we created 

22          the transportation manager we found was that 

23          counties were in essence billing Medicaid 

24          inappropriately, and that Medicaid was paying 


 1          a far higher share of local transportation 

 2          costs than it should have under any scenario.  

 3                 So as a result, as part of the 

 4          transition away from that financing system to 

 5          a statewide system where we were billing 

 6          particularly the federal government 

 7          appropriately, that we in essence provided 

 8          the funding to those targeted counties.  And 

 9          so the budget proposal -- we always saw those 

10          as a temporary transition.  It's now 

11          continued on for a few years.  But at the end 

12          of the day, the proposal is is -- the 

13          assumption is is that those local 

14          transportation non-Medicaid services should 

15          be paid for through ways other than through 

16          the Medicaid program.

17                 CHAIRWOMAN YOUNG:  Thank you.  I do 

18          think we have a serious problem here in 

19          New York, and we have to reevaluate the 

20          entire system.  And our recommendation -- at 

21          least mine would be go back to local control.  

22          Local people now how to run local networks.  

23          And when you have this mammoth statewide 

24          network, these type of horror stories are 


 1          happening.

 2                 I'd like to ask about the Medicaid 

 3          global cap.  And so in the Governor's budget 

 4          it projects the Department of Health state 

 5          Medicaid spending to be $20.6 billion, which 

 6          is an increase of $1.2 billion, or 

 7          6.3 percent, over fiscal year 2018.  Which 

 8          actually exceeds the global cap.

 9                 Of the total $1.2 billion growth in 

10          Department of Health Medicaid, $630 million 

11          is attributable to spending increases that 

12          are excluded in statute from the global cap 

13          calculation.  And these include state 

14          takeover of local growth, minimum wage and 

15          Medicaid administration.  And so I had a few 

16          questions on that.  

17                 First of all, do you believe the 

18          global cap is truly working as first designed 

19          if non-DOH Medicaid expenses are allowed to 

20          be shifted into the global cap just to 

21          achieve the financial plan relief?

22                 DIRECTOR HELGERSON:  I think the 

23          global cap has been a tremendous success for 

24          New York.  It has provided much greater 


 1          transparency.  It has made it very clear to 

 2          the Health Department that we have a 

 3          fiduciary responsibility to manage the 

 4          program.  We manage it very aggressively, and 

 5          I think that has been a boon to New York 

 6          taxpayers as a result.

 7                 Per-recipient spending in the Medicaid 

 8          program is now less than it was in 2003.  And 

 9          I would say you'd be hard-pressed to look 

10          nationally for programs that have performed 

11          as well as we have in terms of reducing 

12          per-recipient spending.

13                 When we started Medicaid redesign in 

14          2011, I think there were about 4.6 million 

15          people on the Medicaid program.  There are 

16          now 6.6 million people on the Medicaid 

17          program.  And so we've been able to live 

18          within very modest growth linked to the 

19          medical portion of CPI throughout that growth 

20          period.  And the only way you make that work 

21          is reducing your per-recipient spending.  And 

22          I think that the global cap has been 

23          extremely helpful in that regard.

24                 I think also the two-year 


 1          appropriation structure has given us some 

 2          certainty and allowed us to plan for the 

 3          longer term.  And I think that that has also 

 4          benefited taxpayers and Medicaid recipients 

 5          in a significant fashion.

 6                 As to the transfers out of the global 

 7          cap to the General Fund each year, we've made 

 8          contributions to the General Fund in varying 

 9          amounts.  I think that one of the great 

10          global cap success stories was when the state 

11          faced the largest disallowance from the 

12          federal government in the history of the 

13          Medicaid program, which associated with the  

14          change in a 20-plus-year-old funding policy 

15          for services for people in the OPWDD system, 

16          that the global cap was basically able to 

17          find savings sufficient to make up for the 

18          vast majority of those -- that loss of 

19          federal revenue.  It was a loss on a 

20          go-forward basis of a billion dollars, and 

21          basically we were able to do that without 

22          taking a single benefit away from a single 

23          New Yorker.  

24                 And I think that it's -- the 


 1          discipline, the structure created by the 

 2          global cap has really been, as I say, good 

 3          for New York Medicaid recipients but also 

 4          good for taxpayers.

 5                 CHAIRWOMAN YOUNG:  So thank you for 

 6          that answer.  And you just went into a long 

 7          answer about why you think it's working.  But 

 8          if that's the case, then why put non-DOH 

 9          Medicaid expenses into a mechanism that is 

10          designed to limit only DOH Medicaid spending?  

11                 And also, if it's working as designed, 

12          why did the Executive Budget offload a 

13          Medicaid program, the Value-Based Payment 

14          Quality Incentive Program, into the Essential 

15          Plan, which seemed to be done just to make 

16          room under the cap for the non-DOH Medicaid 

17          expenses?  Could you specifically answer 

18          those questions?

19                 DIRECTOR HELGERSON:  Sure.  

20                 So in the case of the VBP QIP program, 

21          the Value-Based Payment Quality Improvement 

22          Program, which is designed to support our 

23          struggling hospitals move into value-based 

24          arrangements and restructure themselves so 


 1          that they can sustain their operations and 

 2          sustain access to healthcare in their 

 3          communities, that program is, under this 

 4          budget, proposed to shift to the Essential 

 5          Plan.  

 6                 I think what's important to point out 

 7          about the Essential Plan is the Essential 

 8          Plan in essence backs up into the global 

 9          spending cap.  It generated tremendous 

10          savings for the global cap when we 

11          implemented the Essential Plan.  But what 

12          we're always looking at is finding ways to 

13          reduce reliance on state funds, increased 

14          reliance on federal funds, and that's in 

15          essence why we did that shift.  

16                 As I say, I think it's a smart, 

17          practical, efficient use of funds.  The plans 

18          that participate in the Essential Plan are 

19          exactly the same plans that participate in 

20          the Medicaid program.  So from a hospital 

21          standpoint, from a plan standpoint, it's 

22          going to be a pretty seamless transition.  

23                 And as I say, it's a way for us to 

24          deal with cost growth in the program without 


 1          having to go to taxpayers for higher taxes or 

 2          to cut the benefits to the program 

 3          recipients.  

 4                 CHAIRWOMAN YOUNG:  So you brought up a 

 5          former case with OPWDD just a moment ago.  

 6          How do you justify the machination of using 

 7          federal funds in the Essential Plan to pay 

 8          for Medicaid programs which may set the state 

 9          up for another investigation related to 

10          improper use of federal dollars and actually 

11          an eventual clawback?

12                 DIRECTOR HELGERSON:  Actually, there 

13          is no threat, in our view, at all from this 

14          shift whatsoever.  We've communicated it, I 

15          think, to your staff as well that actually 

16          this shift -- these programs were approved 

17          under Medicaid.  There's no reason why they 

18          can't operate under the Essential Plan.  In 

19          fact the level of federal scrutiny under the 

20          Medicaid managed-care rates is even higher 

21          than it is under the Essential Plan rates.  

22          So these rates, these programs have been 

23          approved by the federal government under 

24          Medicaid.  We don't see any reason whatsoever 


 1          why they wouldn't and can't exist under the 

 2          Essential Plan.

 3                 CHAIRWOMAN YOUNG:  Thank you.  I have 

 4          more questions, but I'll give it over to the 

 5          Assembly.

 6                 CHAIRWOMAN WEINSTEIN:  Now we go to 

 7          Kevin Cahill, our Insurance chair.

 8                 ASSEMBLYMAN CAHILL:  Thank you, Madam 

 9          Chairs.  

10                 Dr. Zucker and Mr. Helgerson, thank 

11          you for coming today.  And I -- you know, we 

12          oftentimes forget that the two parts of the 

13          budget that really make up the bulk of it is 

14          healthcare and education.  And my colleagues 

15          just commented to me off the mike that it's 

16          interesting, we never hear anybody in 

17          education talking about reducing the cost of 

18          education.  Per student, yeah.  We're content 

19          with the idea of improving education for 

20          every student.  But we seem to have many 

21          times gotten away from the quality aspects 

22          when we come -- when it starts to come to 

23          budgets when it comes to healthcare.

24                 I want to start with Early 


 1          Intervention.  In the exchange with Chairman 

 2          Gottfried, Dr. Zucker, you indicated that you 

 3          believe that the fiscal agent is doing what 

 4          they were intended to do, what we expected 

 5          them to do.  So I have very specific 

 6          questions about what the fiscal agent has 

 7          done.  

 8                 How much have we paid them since last 

 9          year when we had this discussion, and how 

10          much have we paid them overall?  I'll ask you 

11          all the questions, then you can just respond.  

12          How much more are insurance companies paying 

13          as a percentage before we had the fiscal 

14          agent to now, and how much more as a matter 

15          of dollars since before to now?  And how much 

16          faster and easier are providers getting paid 

17          compared to before and now?

18                 So those are the general questions 

19          that I have on the fiscal agent.  They're 

20          very similar to the same questions that I 

21          asked last year.  And then I just have this 

22          other very technical question, is do we have 

23          a contract with the fiscal agent in effect 

24          today?  I know we did for several years, and 


 1          we were committed to paying them several 

 2          millions of dollars.  There was some portion 

 3          of the contract that was outcome-based.  So 

 4          the questions are, how are they doing their 

 5          job specifically to answer those questions, 

 6          and whether we are acting under a contract.

 7                 COMMISSIONER ZUCKER:  So on the 

 8          specific amounts, I will have to get back to 

 9          you on the specific amounts that we have.  

10                 From July 20, 2013, to December 2017 

11          was a total $88.5 million in billed in the 

12          Medicaid sweep, and $65.4 million, or about 

13          74 percent, was paid in that window of time.  

14          And I have -- there are more details; I can 

15          get that for you on the exact amounts on 

16          that.

17                 In the most recent six-month period, 

18          95 percent of the provider claims were fully 

19          paid within two months.  But I have to find 

20          the exact number for you on that.

21                 ASSEMBLYMAN CAHILL:  So it's been 

22          proposed that we increase the fines on the 

23          insurance companies for whatever 

24          administrative shortfalls they have in the EI 


 1          program.  Is there any evidence that they're 

 2          not meeting their administrative 

 3          responsibilities under the program, that 

 4          there's a need to create greater 

 5          disincentives to not comply?

 6                 COMMISSIONER ZUCKER:  Well, I think 

 7          the thing here is that we're trying to -- 

 8          part of this is obviously insurance 

 9          companies.  I believe the fiscal agent has 

10          been doing what we charged them to do.  The 

11          issue here is I'd like to see more of the 

12          insurance companies step up a little bit more 

13          to the plate on this issue.

14                 ASSEMBLYMAN CAHILL:  But what the 

15          fiscal agent was charged with doing was 

16          increasing the percentage of claims that were 

17          going to be paid by insurance companies and 

18          easing the processing of claims.  And every 

19          report I get is that we are the same or a 

20          little lower in terms of the percentage of 

21          claims, and that it is more difficult -- in 

22          fact it is consuming one-third of the time of 

23          providers to pay these claims.

24                 So I'm very interested in hearing how 


 1          your assessment is that they're doing the job 

 2          we told them to do when every indicator that 

 3          I have from when this was first proposed is 

 4          that we're not.  But I'll wait so you can 

 5          send me something on that.

 6                 Healthcare generally.  Should we have 

 7          an individual mandate at the state level, 

 8          since the federal individual mandate seems to 

 9          be going by the wayside?

10                 COMMISSIONER ZUCKER:  So are you 

11          asking on just a -- I'm unclear with what 

12          your question is.

13                 ASSEMBLYMAN CAHILL:  Well, the federal 

14          government -- the Congress recently, as part 

15          of the tax reform, curtailed the individual 

16          mandate; that is, that required every 

17          individual to have insurance or pay a tax 

18          fine, essentially.  

19                 And my question is, should New York 

20          State supplant -- should New York State, as 

21          some states have chosen to do, have an 

22          individual mandate requiring every New Yorker 

23          to have insurance?  

24                 COMMISSIONER ZUCKER:  Well, I think 


 1          that what we do have is that what we are 

 2          working on is decreasing the number of people 

 3          who are uninsured.  And at this point in time 

 4          we've gone down from what was at one point 

 5          10 million down to 4.7 million with our New 

 6          York State of Health.  And so between that, 

 7          between the Medicaid program with the 

 8          6 million individuals covered, I think that 

 9          we've done a successful job in getting people 

10          covered.

11                 Obviously there was a challenge with 

12          the ACA, but -- and the federal government, I 

13          should say.  But we have made a significant 

14          progress, particularly with the State of 

15          Health, with the exchange.  And even in this 

16          past year we've had hundreds of thousands of 

17          additional people added.

18                 ASSEMBLYMAN CAHILL:  So are you 

19          anticipating any change in that response when 

20          the individual mandate goes away?

21                 COMMISSIONER ZUCKER:  When the 

22          individual --

23                 ASSEMBLYMAN CAHILL:  When the federal 

24          individual mandate goes away.


 1                 COMMISSIONER ZUCKER:  I think that 

 2          we'll continue to be able to move forward and 

 3          get as many, if not all, New Yorkers covered.

 4                 ASSEMBLYMAN CAHILL:  Okay, thank you.  

 5                 I'd like to move to the Governor's 

 6          proposed health tax of 14 percent.  Are you 

 7          at all concerned from a public health 

 8          perspective about the impact on consumers 

 9          where -- you know, whether benefits will be 

10          curtailed or whether premiums will be 

11          increased?  And also the pressure that will 

12          bring to providers.  Will insurance companies 

13          looking to make up that money then go back 

14          and seek reductions in what they're paying 

15          providers who are already strapped?  Are you 

16          perceiving any issues with that in terms of 

17          the Governor's 14 percent health tax?  

18                 COMMISSIONER ZUCKER:  So the 

19          14 percent tax is going on the insurance 

20          company.  If we look at this, actually the 

21          insurance companies are getting money back 

22          from the government.  And so that 14 percent 

23          that we are taxing is not money that will end 

24          up being passed on -- I hope that doesn't get 


 1          passed on, because that's additional money 

 2          that the insurance company has gotten from 

 3          the federal government.  And we feel that 

 4          that money, the tax to us, will help improve 

 5          healthcare to the people of New York.  

 6                 And so it's not like there's an 

 7          additional charge to the insurance companies 

 8          where they have to somehow recoup it.  

 9          They've gotten money from the federal 

10          government.

11                 ASSEMBLYMAN CAHILL:  So because they, 

12          like every other corporation, will see a 

13          reduction in their taxes from 35 percent to 

14          21 percent or whatever the numbers are, it's 

15          perceived that this would be a wash for the 

16          insurance companies and that they wouldn't 

17          pass it on?

18                 COMMISSIONER ZUCKER:  Well, we would 

19          not want them to pass it on.

20                 ASSEMBLYMAN CAHILL:  Well, we don't 

21          want them to, but the question is will they.

22                 COMMISSIONER ZUCKER:  Well, we'll sit 

23          down and talk to the insurance companies.  

24          And I'm sure this is a question for other 


 1          parts of the administration also --

 2                 ASSEMBLYMAN CAHILL:  So I want to talk 

 3          about the Governor's 2 percent opiate tax.  

 4          And this is a slightly different question.

 5                 The problem we have in my community 

 6          and the communities in -- many of the 

 7          non-urban communities is that people that 

 8          have an opiate problem self-transition to 

 9          illegal drugs.  They transition to heroin 

10          because it is already less expensive than 

11          prescription opiates.  The Governor's 

12          proposal would increase the cost of 

13          prescription opiates.  Are you at all 

14          concerned that we're going to be driving more 

15          people to heroin because legal opiates will 

16          become more expensive?

17                 COMMISSIONER ZUCKER:  So I think a 

18          couple of things about this tax.  Number one, 

19          we are working with the communities, 

20          particularly other -- well, let me start by 

21          first saying that we believe that the way 

22          this is designed is at a high level, so the 

23          tax would not end up being passed down to the 

24          consumer.


 1                 But I think there's a bigger issue 

 2          here.  When you look at this issue of opioid 

 3          addiction -- and unfortunately, as a doctor, 

 4          I have seen this.  I have seen colleagues who 

 5          have been -- unfortunately who have died as a 

 6          result of opioid addiction.  I personally 

 7          actually years ago tried to resuscitate one 

 8          of my own colleagues in the hospital who was 

 9          addicted to opioids.  

10                 And the pharmaceutical companies -- 

11          and I also do see, when they're used the 

12          proper way, particularly fentanyl, it is 

13          helpful for those -- I'm an 

14          anesthesiologist -- helpful for patients.

15                 But that being said, this has become a 

16          major problem in the country and we have lost 

17          thousands of people in New York State.  I 

18          hear the stories, I'm sure all of you in the 

19          Legislature have heard the stories.  And we 

20          feel that this tax, the money that will come 

21          from that tax will help prevention, it will 

22          help in treatment programs.  And the 

23          pharmaceutical companies, even they 

24          themselves have said, if you read about it, 


 1          that they did not provide -- they weren't so 

 2          transparent on the potential addictive 

 3          qualities of particularly Oxycontin and 

 4          others.

 5                 So I think that it behooves us as a 

 6          state to do what we can to solve this 

 7          problem.  And the Governor is committed to 

 8          this, and he's been all over the state 

 9          talking about it.

10                 ASSEMBLYMAN CAHILL:  I'll leave the 

11          rest of my questions to my colleague 

12          Mr. McDonald, who's indicated that he has 

13          questions on that score.  And on a similar 

14          note, I will defer to my colleague Senator 

15          Serino to talk to you about Lyme disease.  

16          That's also on my agenda.  

17                 I want to close, and with 23 seconds 

18          left, just ask you a little bit more about 

19          Wadsworth.  If you were to get the 

20          $600 million in this year's budget for 

21          Wadsworth, how long would it be before we 

22          would see a modern state-of-the-art 

23          laboratory back in New York State that would 

24          be competitive on a national scale, as it was 


 1          before?

 2                 COMMISSIONER ZUCKER:  So I think two 

 3          things.  One is the competitive nature of 

 4          Wadsworth on a national scale, they're second 

 5          to none from the science standpoint and from 

 6          what they provide.  And I will tell you that 

 7          the CDC has turned to us, New York State, 

 8          when we had the Zika issue, and other issues 

 9          as well in the past four years, at least 

10          during my tenure, saying that:  You have 

11          Wadsworth, and you're able to provide the 

12          services that the rest of the country doesn't 

13          have the opportunity to have.  So that's on 

14          the clinical front.  

15                 From the standpoint of the actual 

16          physical plant, we will move forward as 

17          quickly as possible to develop a lab.  

18          There's so many components to the Wadsworth 

19          state lab and what needs to be done to make 

20          sure that this ends up being a 

21          state-of-the-art lab that provides for 

22          public-private partnerships and is innovative 

23          and will move forward for the next century to 

24          come.  Wadsworth celebrated its -- over a 


 1          hundred years, as I mentioned, a little while 

 2          back.

 3                 So I can't give you an answer exactly 

 4          how soon, but I will tell you it will be 

 5          quick, because that's what my goal is and the 

 6          Governor's goal is as well.

 7                 ASSEMBLYMAN CAHILL:  Thanks, 

 8          Dr. Zucker, Mr. Helgerson.

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.  

10                 CHAIRWOMAN YOUNG:  Thank you.  Senator 

11          Valesky.

12                 SENATOR VALESKY:  Thank you, Madam 

13          Chair.  

14                 Commissioner, Mr. Helgerson, thank you 

15          for being here today and thank you for the 

16          fine work your department does.

17                 I just wanted to touch on one general 

18          area, following up on Senator Hannon's 

19          comments earlier.  It appears that as we 

20          speak this morning, over at the Capitol the 

21          budget director is presenting some of the 

22          Governor's thoughts in regard to 30-day 

23          amendments, which I believe are due to the 

24          Legislature later this week.


 1                 One of the items -- and I'm reading 

 2          from one of the reporters covering the 

 3          activity over at the Capitol -- legislation 

 4          will be introduced or sent to the Legislature 

 5          by the Governor to create two charitable 

 6          contribution funds to accept donations to 

 7          fund healthcare and education programs.

 8                 Can you tell this panel what 

 9          healthcare programs the Governor is proposing 

10          to be funded through this new charitable 

11          contribution fund that's being, I guess, 

12          unveiled this morning?

13                 DIRECTOR HELGERSON:  Sure.  I think it 

14          would probably be best to direct those 

15          questions to Budget Director Mujica.  But I 

16          would say that the Governor has been pretty 

17          clear about his concerns about the 

18          implications of the federal tax changes.  And 

19          I know the Governor and the budget director 

20          and the Department of Tax & Finance have been 

21          working around the clock looking at any and 

22          all opportunities.  

23                 Healthcare and education are the two 

24          biggest things that state government does, so 


 1          I don't think we should be surprised, as they 

 2          are rolling out the Governor's proposals on 

 3          this important topic of how do we raise the 

 4          revenues necessary to support state 

 5          government with the least tax burden on our 

 6          taxpayers, that healthcare and education be 

 7          part of that conversation.  But as to the 

 8          specifics, I think you really should direct 

 9          those to Mr. Mujica.

10                 SENATOR VALESKY:  Thank you.  

11                 Senator Hannon detailed a number of 

12          the changes that just came about late last 

13          week from the federal government in regard to 

14          DSH and the Child Health Program and several 

15          others.  My understanding is that that may in 

16          fact result in an approximately $4 billion 

17          positive impact to the State of New York that 

18          was unknown at the time this budget was 

19          submitted to the Legislature.  

20                 So my question is -- the shortfall 

21          fund that is also part of that budget, I 

22          believe, would raise about a billion dollars.  

23          I guess the question would be, where is the 

24          continued need for a shortfall fund if in 


 1          fact the actions taken in Washington late 

 2          last week would seem to make that shortfall 

 3          fund unnecessary?

 4                 DIRECTOR HELGERSON:  Yeah, I would say 

 5          basically, I think, what I kind of said 

 6          earlier, which is that at the end of the day 

 7          there's still a tremendous uncertainty.  I 

 8          mean, the president's budget coming out today 

 9          clearly signaled as recent as last night that 

10          there's going to be significant cuts in 

11          spending, discretionary spending outside of 

12          the military.  We have to wait and see what 

13          those are, see how that federal budget 

14          process works its way through.

15                 I don't think we should remotely think 

16          for a second that we are out of the woods 

17          relative to what Washington has in store for 

18          us.  There are still majorities in both 

19          houses of Congress and the president who have 

20          stated that they support a move not only to 

21          repeal the Affordable Care Act but institute 

22          block grants in Medicaid, which our estimates 

23          show that at full implementation the loss of 

24          federal monies to the State of New York are 


 1          in the range of about $10 billion per year.

 2                 So those threats remain and are real.  

 3          We certainly are pleased with what's happened 

 4          relative to the Affordable Care Act debate, 

 5          and we're happy that the most recent two-year 

 6          agreement gives us a little bit more 

 7          certainty on things like CHIP, which we 

 8          didn't think should be remotely debated in 

 9          this country anymore, but was.  But I still 

10          think there's enough out there on the horizon 

11          that creates risk that justifies the 

12          Governor's construct.  But obviously as we 

13          enter into our negotiations with the 

14          Legislature on the budget, I mean those will 

15          clearly be issues that we'll discuss.

16                 SENATOR VALESKY:  One other issue I 

17          just want to touch on.

18                 I and I know many of my colleagues on 

19          this panel who represent rural hospitals are 

20          often concerned with their financial 

21          viability.  There was legislation that was 

22          approved unanimously or near unanimously in 

23          both houses of the Legislature last session.  

24          I believe the Governor vetoed that bill to 


 1          address the issue of safety net hospitals and 

 2          the definition of safety net hospitals, sole 

 3          community providers as well as critical 

 4          access hospitals being included in that 

 5          definition.

 6                 Can you identify as to whether this 

 7          budget addresses the issue as well as the 

 8          Governor's concerns that he raised in that 

 9          veto message?  And are we going to correct 

10          this definition once and for all as part of 

11          this budget?

12                 DIRECTOR HELGERSON:  Sure.  I think 

13          the Governor's budget, which you mentioned 

14          earlier the uncertainty about DSH, which was 

15          very sort of front and center in his mind as 

16          he prepared the budget, you know, and his 

17          desire to create this fund, in essence, to 

18          support any potential shortfalls -- in the 

19          face of that, I think the idea about 

20          increased funding to targeted sets of 

21          hospitals I think is a little difficult to 

22          think and propose, particularly as we didn't 

23          know exactly how the cuts would come and what 

24          form they would take and who would be 


 1          impacted.

 2                 But obviously we fully anticipate as 

 3          we engage with the Legislature as part of the 

 4          budget process, I'm sure this issue will come 

 5          up, and we look forward to that engagement, 

 6          particularly -- hopefully as more of the 

 7          uncertainty that still hangs over us gets 

 8          resolved, then I think we can look 

 9          proactively at addressing some of the 

10          challenged sectors of our healthcare economy.

11                 COMMISSIONER ZUCKER:  And we have 

12          given capital grants across the state to many 

13          of the hospitals and many of the hospitals 

14          that have been challenged, particularly as -- 

15          some that you're aware of.

16                 SENATOR VALESKY:  And I hear what 

17          you're both saying.  I think regardless of 

18          the uncertainty from Washington, there 

19          remains this issue, a statutory definition 

20          issue that we have tried to address in 

21          previous years as part of budgets, the 

22          Legislature clearly addressed in legislation 

23          late last session, again, that was vetoed.  

24                 So I might just suggest that 


 1          regardless of uncertainty from Washington, 

 2          there's a basic issue of fairness here that 

 3          continues to be an outstanding issue that 

 4          needs to be addressed.

 5                 Thank you both.

 6                 CHAIRWOMAN YOUNG:  Thank you.

 7                 CHAIRWOMAN WEINSTEIN:  Assemblywoman 

 8          Rodneyse Bichotte.

 9                 ASSEMBLYWOMAN BICHOTTE:  Thank you, 

10          Madam Chair.

11                 Thank you, Dr. Zucker, for being here.  

12          And I just want to thank you for all the work 

13          that you've been doing and also being a very 

14          responsive commissioner.

15                 I have a lot of questions, but I will 

16          defer some of my questions to my colleague 

17          from Brooklyn on the issues of Downstate.

18                 For now, I wanted to talk a little bit 

19          about my concern around the provisions 

20          allowing independent practice of nurses 

21          administering anesthesia without any 

22          supervision.  And as I read it, the proposal 

23          will create a two-tier care system in my 

24          community where the quality of anesthesia 


 1          care will be determined by a patient's 

 2          insurance and other economic considerations.

 3                 Now, you're an anesthesiologist, and I 

 4          would not think that you would be pushing 

 5          this type of practice.  Shouldn't patients, 

 6          regardless of types of insurance coverage or 

 7          income, be provided the highest standard of 

 8          anesthesia services by physicians that we 

 9          have in the current state health code?  

10                 Also, let me just read this.  In the 

11          provision that you have, it says that nurse 

12          anesthesia must be provided in collaboration 

13          with a qualified licensed physician.  Listen 

14          to the key word:  In collaboration.  And that 

15          would mean the administration of anesthesia, 

16          anesthesia-related care to patients, 

17          pre-anesthesia evaluation and preparation, 

18          anesthesia induction, maintenance and 

19          emergence, post-anesthesia care, 

20          peri-anesthesia nursing, and clinical support 

21          functions and pain management.

22                 I mean, I would think that you would 

23          want the person performing the anesthesia to 

24          have sufficient scientific clinical expertise 


 1          around that issue, as it's a very, very, very 

 2          specialized area.

 3                 And please don't get me wrong; I am in 

 4          full support of nurses getting more training 

 5          and adding more functions to their workload, 

 6          but under the supervision of a licensed 

 7          physician for particular areas.

 8                 I also want to make note that in the 

 9          definition of "collaborative," it means 

10          that -- it shall mean that the certified 

11          registered nurse anesthetist shall 

12          communicate with a person by telephone or 

13          through written electronic means, with a 

14          licensed physician qualified to determine the 

15          need of the service.

16                 So to me, what does that mean?  I 

17          mean, if I'm on the hospital table and I'm 

18          about to be operated on, does that mean that 

19          the CRNAs make a phone call or text a 

20          physician and they collaborate on the service 

21          right before I go into an operation?  

22                 So I do have a concern.  And let me 

23          tell you, I'm going to just share a story of 

24          personal experience.  I was pregnant a year 


 1          and a half ago when I was 43, and at 

 2          5.5 months I was at risk of losing my child, 

 3          which I eventually did.  And when I went to 

 4          Columbia Presbyterian, which was a hospital  

 5          that completely neglected me and sent me on 

 6          my way, a community hospital in my 

 7          neighborhood, Wyckoff, picked me up and 

 8          treated me right.  

 9                 And I will tell you, right there and 

10          then when I was experiencing excruciating 

11          pain, I thought I was going to die.  I told 

12          my family "I'm going to die," because that's 

13          how I felt.  And at that point I was looking 

14          for someone to help ease the pain, someone to 

15          help ease the pain, and the anesthesiologist 

16          was there.

17                 Also at that experience I understood 

18          the real importance of safe staffing, because 

19          the nurses there really saved my life, and 

20          there wasn't enough of them.

21                 So with all -- you know, taking this 

22          into respect, I think we really need to 

23          revisit what you and the Governor are 

24          proposing in terms of having not so much 


 1          trained nurses to perform the duties of the 

 2          anesthesiologist without the supervision.  

 3          We've got to think about that.

 4                 We've also got to think about opioid 

 5          treatment as far as, again, trained 

 6          unsupervised members of the healthcare are 

 7          providing prescriptions, especially when 

 8          doctors themselves are not trying to be 

 9          involved in that area.  It's an epidemic, 

10          it's a crisis.  And that issue when it comes 

11          to opioid therapy, especially for chronic 

12          treatment, that typically is deferred to a 

13          pain specialist.

14                 So we've got to look at all of this.  

15          And you being an anesthesiologist, I would 

16          have hoped that you saw the importance of 

17          quality care, how this can create a two-tier 

18          system, patients' rights, training, adequate 

19          training, the scourge of the opioid epidemic, 

20          and safety.  

21                 We want our patients to be safe.  As 

22          my chairman had mentioned, of the Health 

23          Committee, the patient's care is not 

24          purchasable.  It's not negotiable.  It's a 


 1          human right.  Thank you.

 2                 COMMISSIONER ZUCKER:  Thank you.  

 3          Thank you for your comments.  

 4                 The issue of chronic pain, I think -- 

 5          yes, as an anesthesiologist I recognize the 

 6          challenges here.  There are individuals who 

 7          come in who truly have chronic pain.  They 

 8          have a condition that may be causing the 

 9          chronic pain, or they may have had an 

10          operation and then as a result of that, they 

11          have a lot of chronic pain.  And I do 

12          recognize there are specialists and 

13          subspecialists within anesthesiology who 

14          focus on this.  

15                 We in the department work closely with 

16          those in these specialties, and I have met 

17          with and spoken with anesthesiologists about 

18          this.  When you mention the opioid crisis -- 

19          and as I was saying before, one of the 

20          challenges we're facing is that we've gone 

21          from a situation where the use of some of 

22          these opioids in a therapeutic setting has 

23          now -- particularly the fentanyl, and that's 

24          the real issue here in a lot of ways.  And I 


 1          will bring back some of these fentanyl 

 2          analogs that the Governor has gone after in a 

 3          second.

 4                 But the use of fentanyl has been 

 5          something which has its benefits in the 

 6          operating room and in the other healthcare 

 7          settings, but it's now on the street and it's 

 8          something which is obviously causing many 

 9          deaths.  We work with our anesthesiology 

10          colleagues on how to make sure that those who 

11          have chronic pain can be managed 

12          appropriately.  And I work with my anesthesia 

13          colleagues to talk to them about how can we 

14          address this opioid crisis given their 

15          expertise as well.  

16                 In December I presented at the PGA to 

17          the New York State Society of 

18          Anesthesiologists specifically about this, 

19          and I turned to my colleagues and asked, Help 

20          us as the department to move forward and 

21          provide us with some ideas of what you think 

22          we could do both as a government body but 

23          also what they can do as clinicians to 

24          resolve this problem.


 1                 So I'm happy to work with you and to 

 2          work with those that are in the clinical 

 3          setting to try to solve that problem.

 4                 ASSEMBLYWOMAN BICHOTTE:  So you do 

 5          agree that CRNAs should be supervised.

 6                 COMMISSIONER ZUCKER:  So on that 

 7          issue -- that was the second part.  On the 

 8          first issue, so I've worked closely with many 

 9          CRNAs in my career, in many hospitals both in 

10          New York and elsewhere.  The proposal is to 

11          have them be able to practice within their 

12          scope of practice.

13                 But the proposal says that a qualified 

14          physician has to provide the oversight in any 

15          of these Article 28 facilities.  And as a 

16          physician who has worked with CRNAs, that is 

17          one of the things they need, to have some -- 

18          there will be oversight by a physician.  And 

19          that's what it's written as.

20                 CHAIRWOMAN WEINSTEIN:  Thank you.  

21          Thank you, Dr. Zucker.

22                 Senate?  

23                 CHAIRWOMAN YOUNG:  Our next speaker is 

24          Senator Gustavo Rivera.


 1                 SENATOR RIVERA:  Thank you, Madam 

 2          Chairwoman.  

 3                 Good morning, folks.  There's a couple 

 4          of issues that I want to talk about.  You 

 5          just, in the end of that question, we started 

 6          talking about the opioid crisis, so I want to 

 7          go back through it.  I am thankful that in 

 8          many instances the Governor has shown, 

 9          through his actions as far as policy, that he 

10          considers the opioid crisis to be a public 

11          health crisis and not a criminal justice one.  

12          I'm very glad that that is the case, and 

13          certainly many of my colleagues have come 

14          around to that.  I am thankful that is the 

15          case.  

16                 But talking specifically about what is 

17          or is not in the budget, briefly, two things.  

18          First of all, as far as Naloxone is 

19          concerned, and the distribution of Naloxone 

20          that has happened to direct responders, what 

21          is currently in the budget?  It seems to me 

22          that particularly what's -- as far as the 

23          funding that's in the AIDS Institute has been 

24          flat for the last couple of years.  And I 


 1          know it's a tough budget year.  But 

 2          considering that this is the crisis that 

 3          we're talking about, I wonder if you'd speak 

 4          briefly about that, and there's another 

 5          issue.  But first, funding for Naloxone and 

 6          providing it for first responders.

 7                 COMMISSIONER ZUCKER:  So with the 

 8          Naloxone, we've had -- 60,000 people have 

 9          been trained about overdose -- on overdose 

10          responding.  And last year we had about 9,000 

11          reversals.  This has moved forward.  We are 

12          also working with those who have been 

13          incarcerated, when they come out, to train 

14          them about overdose prevention and offer them 

15          Naloxone kits as well.  

16                 So we are -- and so that's just two 

17          parts of it.  We have worked with not only 

18          first responders but with so many other 

19          individuals to make them aware of this.  I 

20          think a lot of this is an issue of education.  

21          The more educated the public is about 

22          Naloxone and just about overdose in general 

23          and about addiction, the better it will be.  

24                 I think that -- as I mentioned before, 


 1          unfortunately I have seen those who have 

 2          overdosed and have treated them, and I think 

 3          that the faster someone -- the more that 

 4          someone understands and faster they respond, 

 5          the better it will be for those.  

 6                 SENATOR RIVERA:  We agree.  I just 

 7          wanted to point out that again, I was 

 8          referring to the funding and the fact that it 

 9          remained flat for the last couple of years.  

10          So I would suggest -- certainly the 30-day 

11          amendments have already been presented.  I 

12          have not seen them.  But I would suggest that 

13          that be addressed and that we get a little 

14          bit more funding in that regard.

15                 I wanted to ask quickly, because I 

16          only have a few minutes -- I have a couple of 

17          more issues, but on this, on the opioid 

18          crisis, there was a -- just a bill that was 

19          introduced just a week ago that dealt with 

20          safe injection spaces in the State of 

21          New York.  And I know that there's a report 

22          that the City of New York Department of 

23          Health is putting together regarding that 

24          issue.  There's many of us that support us 


 1          going in this direction.  

 2                 Is there a position that the 

 3          Department of Health has related to safe 

 4          injection spaces?  Or are you looking into 

 5          it?

 6                 COMMISSIONER ZUCKER:  So I am aware of 

 7          what San Francisco and -- what San Francisco 

 8          has done about safe injection facilities and 

 9          also what Philadelphia has put forth or 

10          proposed.  And so we're looking at that.  

11          We're looking at the pros and cons to that 

12          issue.  And I'm happy to get back to you, but 

13          I'm keeping an eye on that topic.

14                 SENATOR RIVERA:  Please do.  There's 

15          many of us that think it is a direction that 

16          we need to move in as far as policy if we 

17          continue to view addiction again as a public 

18          health issue and think about it as a -- how 

19          can we provide -- if we believe in harm 

20          reduction and we should expand programs in 

21          harm reduction, this is the next step.  So I 

22          would suggest that that is something you look 

23          into.  

24                 I have a few more issues -- I might 


 1          have a second round.  But I did want to ask 

 2          about lead testing.  You talked about it 

 3          briefly in your presentation.

 4                 There is a lady by the name of Tiesha 

 5          Jones who is the president of the Tenants 

 6          Association of Bailey Houses, a NYCHA 

 7          development in my district.  She actually was 

 8          the lead plaintiff in a lawsuit that was 

 9          against NYCHA, and she won lawsuit.  It was 

10          regarding elevated lead levels in her 

11          daughter Dakota's blood.  Her daughter's name 

12          is Dakota.  And she actually won that lawsuit 

13          a couple of weeks ago.  But I wanted for you 

14          to tell us specifically, since that lawsuit 

15          was about improper testing and misinformation 

16          that was given to her by NYCHA, how would the 

17          proposal that the Governor is putting forward 

18          here make sure that elevated blood levels 

19          like those that were found in Dakota's blood, 

20          how would this proposal help to make sure 

21          that does not happen to any other child?  

22                 COMMISSIONER ZUCKER:  So we have a 

23          very strong lead program in the state, and we 

24          track all cases.  And if there is a child 


 1          whose lead level is elevated, we do go in 

 2          there to look, to look at this.  

 3                 I'd have to look a little closer, 

 4          maybe after I can look into this particular 

 5          case of Tiesha Jones and get a little bit 

 6          more details and then get back to you.

 7                 SENATOR RIVERA:  And I certainly think 

 8          that would be important.  This is something 

 9          obviously that we have been talking about in 

10          the last couple of weeks, in the last couple 

11          of years, for some people.  It is essential 

12          that we get it right.  And if there is a way 

13          that this proposal could actually impact 

14          kids' lives in a positive way, I want to make 

15          sure that's the case.  

16                 I will come back for a second round, 

17          but thank you for the moment.

18                 SENATOR KRUEGER:  Thank you.  

19                 Assembly?  

20                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

21          Andrew Raia.

22                 ASSEMBLYMAN RAIA:  Thank you.  I have 

23          a hodgepodge of questions from all over the 

24          map, so I'll try and do the speed round like 


 1          we did last year.  

 2                 First, with respect to the Medicaid 

 3          drug spending cap, the Governor is proposing 

 4          to extend that.  What type of growth are we 

 5          predicting with that?  I think it's 15 

 6          percent.

 7                 DIRECTOR HELGERSON:  So I don't think 

 8          we've yet projected out what the actual 

 9          growth rate is.  We're still I think working 

10          on finalizing what the managed care rates are 

11          going to be for next year, so we don't have 

12          yet a full projection.  But the cap on drug 

13          spend is being proposed to continue for 

14          another year.  

15                 I would say overall the initiative has 

16          been very successful.  So far the 

17          manufacturers have responded well.  As we 

18          mentioned, the goal here was to avoid sort of 

19          open conflict and give manufacturers an 

20          opportunity to sharpen their pencils and 

21          submit rebate agreements that would bring 

22          down the net net price, and to a great extent 

23          that's exactly what manufacturers have done.  

24          We haven't had to actually refer a single 


 1          drug to the Drug Utilization Review Board for 

 2          their consideration.  

 3                 So we think that the signal effect has 

 4          worked, and we think that we're going to be 

 5          able to get through this fiscal year 

 6          achieving the savings that was estimated 

 7          without having to take a more formalized 

 8          action.

 9                 ASSEMBLYMAN RAIA:  All right.  Because 

10          I mean all the studies I'm seeing are in the 

11          neighborhood of 5.5, 3.8 percent, nowhere 

12          near 15 percent.  So if that's the case, then 

13          so be it.

14                 Nursing homes.  When was the last time 

15          they got a bump in the trend factor?

16                 DIRECTOR HELGERSON:  Well, many -- 

17          trend factor, we haven't really done trend 

18          factors in a long year time for any type of 

19          provider.  We I think eliminated them pretty 

20          much back in 2011.  

21                 However, in the case of nursing homes, 

22          thanks to the universal settlement, virtually 

23          all nursing homes in the state got an 

24          increase in their reimbursement.  It was I 


 1          think a huge win for the state because if you 

 2          remember, we -- back in 2010-2011 the nursing 

 3          home industry was on the verge of total 

 4          catastrophe because of a change in 

 5          reimbursement that hadn't been implemented 

 6          that was going to create tremendous winners 

 7          and losers.  It was called rebasing at the 

 8          time.  And so we were able to weather that 

 9          storm, implement a new financing system and, 

10          as a result of the universal settlement, were 

11          able to provide pretty much every nursing 

12          home in the state with some kind of increase.  

13                 So overall we think that nursing homes 

14          haven't had -- at least as far as, you know, 

15          compared to other providers in the program, 

16          have had a pretty good couple of years.

17                 ASSEMBLYMAN RAIA:  So they're not 

18          operating at a $61 a day -- let's see, 

19          Medicaid cost overall increasing -- they have 

20          a shortfall of $61 a day under Medicaid, 

21          don't they?

22                 DIRECTOR HELGERSON:  I'm not sure 

23          where that calculation comes in.  But I can 

24          tell you that the consolidation in the market 


 1          and the fact that nursing homes are being 

 2          purchased pretty rapidly whenever they come 

 3          to the market I think is an indication that 

 4          people feel that the nursing home industry in 

 5          New York remains a robust business to be 

 6          involved in.

 7                 ASSEMBLYMAN RAIA:  Well, that's not 

 8          what I'm hearing.  Can you please explain the 

 9          logic behind the 2 percent penalty attached 

10          to the nursing home quality initiative?  It's 

11          my understanding that the lower 2 percent 

12          already are paying into the quality pool and 

13          not receiving funds back.  It seems to me, 

14          you know, the fact that we're increasing 

15          money, you know, for safe hospitals and I 

16          would imagine most of the places where you 

17          would see this issue happening might be in 

18          underserved communities.  So it almost seems 

19          like you're penalizing them for trying to do 

20          the right thing.

21                 DIRECTOR HELGERSON:  Well, actually 

22          we're penalizing them for doing the wrong 

23          thing, which is being really poor quality.

24                 ASSEMBLYMAN RAIA:  I understand.  But 


 1          you've got to give them the means to try and 

 2          lift them up, not penalize them.

 3                 DIRECTOR HELGERSON:  I think what this 

 4          is a good example -- I appreciate the 

 5          question.  I think this is a good example of 

 6          us trying to put our money where our mouth 

 7          is.  In a sense it's saying we're going to 

 8          use our payment policies to create incentives 

 9          to improve quality, in this case for some of 

10          the most complex patients and complex 

11          individuals, most challenged individuals in 

12          our state.

13                 And in this case the only way you get 

14          one of these penalties is if you get two 

15          consecutive years where you perform in the 

16          lowest quartile in the state or you went from 

17          having, in the fourth, the second-lowest into 

18          the lowest quartile in the second year.  So 

19          you either have to be amongst the worst or 

20          moving into the worst categories.  

21                 And so I think this is going to create 

22          a strong incentive.  It's a modest penalty 

23          overall, but we think it creates a financial 

24          incentive to improve quality and get out of 


 1          that bottom tier, which is ultimately in the 

 2          best interests of the tens of thousands of 

 3          people who are in nursing homes all across 

 4          our state.

 5                 ASSEMBLYMAN RAIA:  All right.  I 

 6          didn't get halfway there, but I guess we'll 

 7          circle back.  Thank you.

 8                 CHAIRWOMAN WEINSTEIN:  Senate?  

 9                 SENATOR KRUEGER:  Thank you.  

10                 Senator Sanders.

11                 SENATOR SANDERS:  Thank you, Madam 

12          Chair.  

13                 Good to see you, Commissioner.  Good 

14          to see you up here.  When last we saw, you 

15          were down touring my district.  It was very 

16          heartening to my hard-pressed hospital down 

17          there to see you and to see your commitment 

18          to the community.  

19                 I will return to my colleague's point.  

20          He pointed out the question of lead, and I 

21          want to return to that.  It's a major 

22          problem, along with mold and lack of heat and 

23          hot water in my district.  

24                 Are you aware of what's going on down 


 1          in New York City, sir?

 2                 COMMISSIONER ZUCKER:  Yes.  Like you, 

 3          I have been following this very closely, and 

 4          I am very concerned.  As a physician, as a 

 5          parent, as a New Yorker, the situation there 

 6          is worrisome, particularly for the health of 

 7          children, the well-being of children there.

 8                 SENATOR SANDERS:  Well, we -- just 

 9          about everyone, I'm sure everyone is 

10          concerned on that too, sir.  And I -- I have 

11          a lot of NYCHA buildings in my district.  In 

12          fact, I was literally born in one of them.  

13          So I'm very concerned about what's going on.  

14          And we've had problems for a long time.  

15          Mold -- we live by the water, so mold is a 

16          problem and a very serious one.  

17                 What can the state do, what can you 

18          do, sir, about this problem that's in NYCHA?  

19          We need to have some type of resolution to 

20          the issue of mold, lead, heating problems 

21          there.  

22                 COMMISSIONER ZUCKER:  So the state, as 

23          you know, has a long history of stepping up 

24          and stepping in when there are issues, 


 1          whether it's Legionella or Zika or other 

 2          issues.  Or even, for example, those 

 3          challenges with some of the local health 

 4          departments when we've had some outbreaks.  

 5                 And so we've been looking at this very 

 6          closely on this issue, and looking at what 

 7          our authority is.

 8                 SENATOR SANDERS:  Well, I'm going to 

 9          -- I want to go a step further, since I have 

10          so many areas in my district.  And all 

11          politics is local.  Can you do random 

12          sampling in my district to see what the 

13          problem is?

14                 COMMISSIONER ZUCKER:  Well, we would 

15          need to look -- determine the scope of 

16          investigation and where specifically the 

17          Department of Health could be of assistance, 

18          yes.

19                 SENATOR SANDERS:  Well, sir, our need 

20          is so dire that I'm forced to be impolite.  

21          I'm going to have to say, what can you do 

22          today?  What are you willing to do today to 

23          see what we can do about the problems that 

24          we're having?  


 1                 COMMISSIONER ZUCKER:  So, Senator, so 

 2          if you're asking whether the State Department 

 3          of Health can go in and investigate this, 

 4          yes, we will do that.  And we will sit down 

 5          with you and with your team as soon as 

 6          possible and move forward and look at the 

 7          scope of this problem.  

 8                 SENATOR SANDERS:  Let me ask very 

 9          directly, this is exactly what I need in my 

10          district.  I need your team to come to my 

11          district to investigate and to see -- and my 

12          district, of course, is just a microcosm of 

13          everything.  But all politics is local, let 

14          it begin with me.

15                 COMMISSIONER ZUCKER:  Well, I had an 

16          opportunity to be out in your district, as 

17          you know.  And yes, the state will come in 

18          and investigate this.

19                 SENATOR SANDERS:  Well, I look forward 

20          to that.  And I will -- I will go a step 

21          further, I'm going to follow it up and I'll 

22          send you a letter inviting you, requesting 

23          and inviting you to come to the district.

24                 COMMISSIONER ZUCKER:  We welcome that 


 1          letter.  We'd like to look at the situation 

 2          and we'd like to sit down with your team 

 3          and -- to look at the whole scope of the 

 4          problem.

 5                 SENATOR SANDERS:  Then I've done 

 6          everything I need to do here, Madam Chair.

 7                 CHAIRWOMAN YOUNG:  Thank you.  

 8                 CHAIRWOMAN WEINSTEIN:  Thank you.  

 9                 Assemblyman John McDonald.

10                 ASSEMBLYMAN MCDONALD:  Thank you, 

11          Madam Chair.  

12                 And good morning, Dr. Zucker and 

13          Mr. Helgerson.  

14                 You know, a lot to like, a lot to 

15          question in a budget of this size.  I do want 

16          to just mention the First 1,000 Days on 

17          Medicaid I think is a great program, really 

18          provides some additional supports and 

19          measurements, which is important.  

20                 And of course the Capital Region 

21          delegation is excited about the new 

22          Wadsworth.  And then not only when, as Member 

23          Cahill was saying, but some of us are very 

24          interested, of course, of where as well.  


 1                 So that being said, I want to just 

 2          focus my remarks primarily on the opioid tax.  

 3          As you know, I buy opioids legally, just to 

 4          be clear.  

 5                 (Laughter.)

 6                 ASSEMBLYMAN McDONALD:  Who is the -- I 

 7          guess the question is, who is really going to 

 8          be the intended payer of the tax?  Because 

 9          when I read the language -- and I've talked 

10          to DOH, I talked to DFS.  I'm not really 

11          clear who is supposed to be paying that tax.

12                 COMMISSIONER ZUCKER:  The 

13          pharmaceutical companies would be paying that 

14          tax.  

15                 ASSEMBLYMAN MCDONALD:  Because when 

16          you read the language of the bill, depending 

17          on how people buy their opioids legally, it 

18          could be a couple of different people.  I 

19          think the pharmacy community, the chains, the 

20          independents, have expressed their concern 

21          they they're going to be paying the tax, 

22          which technically means the consumer or the 

23          health plan's going to be paying that tax.  I 

24          was told it was supposed to be the 


 1          pharmaceutical manufacturers.  I can tell you 

 2          who I buy opioids -- I buy them from a 

 3          wholesaler in Connecticut.  So technically, I 

 4          might be paying the tax, the pharmacy buying 

 5          from the wholesaler out of state.  

 6                 So I think it's a little bit unclear 

 7          and I think, you know, it needs it to be 

 8          clarified one way or the other who is going 

 9          to be paying the tax.

10                 COMMISSIONER ZUCKER:  So the way we 

11          put this forward is to make sure it's at the 

12          highest level, that this would not be -- that 

13          the tax would be at the companies, it would 

14          not be passed down to the consumer.  As I 

15          hear what you're saying, it's -- they are the 

16          ones who have been involved in, as mentioned 

17          before, contributing to this situation, and 

18          they need to be held accountable to it.

19                 ASSEMBLYMAN McDONALD:  The question I 

20          had had brought to me was in regards to 

21          buprenorphine, which as you know is a part of 

22          Suboxone.  Is buprenorphine going to be 

23          taxed?  Because it can be used for -- some 

24          people have questions whether it's intended 


 1          for buprenorphine to be included.

 2                 COMMISSIONER ZUCKER:  I didn't catch 

 3          that, sorry.

 4                 ASSEMBLYMAN McDONALD:  Buprenorphine, 

 5          a component of Suboxone, is that going to be 

 6          taxed?  

 7                 COMMISSIONER ZUCKER:  I have to check 

 8          on that.  I'm not sure if that would be 

 9          taxed.

10                 ASSEMBLYMAN McDONALD:  That would be 

11          something we should have clarified.  Because 

12          as you know, Suboxone is playing a leading 

13          role in treatment, and we want to be mindful 

14          of that.  

15                 I know when the opioid tax came out, a 

16          lot of our partners in treatment and recovery 

17          were excited, saying, you know, it's about 

18          time, we need to generate revenue for greater 

19          treatment and recovery supports.  And Year 

20          One, I think $127 million is expected to be 

21          collected.  How much of that is going to go 

22          towards treatment and recovery?  

23                 COMMISSIONER ZUCKER:  I'll check on 

24          what percentage that will be.


 1                 ASSEMBLYMAN McDONALD:  Okay.  All 

 2          right.  And the other question I had is -- 

 3          because as you know we have that very tight 

 4          relationship with the federal government, 

 5          some days not so tight.  But is this tax 

 6          going to be -- are we going to be penalized 

 7          by the federal government if we add this tax?  

 8          Because we're really going into a very 

 9          specific class of drugs and adding a tax.  Do 

10          we run any risk of decreased cost sharing or 

11          reimbursement from the federal government?  

12                 COMMISSIONER ZUCKER:  No.

13                 ASSEMBLYMAN McDONALD:  Okay.  I'll 

14          mention briefly -- I know Member Gottfried 

15          jumped in the MLTC.  I just want to express 

16          just a thought.  One of the concerns I have 

17          with this one-time or one-time annual 

18          enrollment in an MLTC program, I'm a little 

19          bit concerned about that because not every 

20          plan works out for individuals.  I don't 

21          think they should be jumping month to month.  

22          But I would hope that we go back and review 

23          that, because I see many patients who are 

24          auto-enrolled in the program, had no idea, 


 1          and are not happy.  And I think we need to be 

 2          mindful of that in the whole process.

 3                 And the other thing I want to mention, 

 4          and this is really from an upstater and a 

 5          former mayor's perspective.  I don't disagree 

 6          with the idea of the lead inspections as part 

 7          of the residential occupancy permit program.  

 8          I know obviously the colleagues in New York 

 9          have expressed a lot of concerns.  

10                 Is the problem as prevalent, for 

11          example, in Albany County, in regards to lead 

12          going undetected in some of these residences?

13                 COMMISSIONER ZUCKER:  Are you 

14          asking -- I'm still unclear.  You're asking 

15          whether the problem with the lead --

16                 ASSEMBLYMAN McDONALD:  Do we have a 

17          high percentage of households with lead in 

18          Albany County or Rensselaer County that is 

19          requiring this to be an upstate initiative as 

20          well?  The inspections by local governments.

21                 COMMISSIONER ZUCKER:  Right.  So we 

22          work with the local governments on this, to 

23          inspect.  And all the communities, both -- 

24          any time there's any child who's got an 


 1          elevated lead level, we will go in there.

 2                 ASSEMBLYMAN McDONALD:  It's always 

 3          been done at the county health department.  

 4          I'm just wondering why it's extending into 

 5          the actual cities, towns and villages with 

 6          their code departments.  That's the only 

 7          reason why I'm asking in this particular 

 8          instance.  

 9                 You know, I used to have a code 

10          department when I was mayor, and it's hard to 

11          find good people to be able to deal with all 

12          the inspection categories.  Is this really 

13          going to be successful, is my question.  

14                 COMMISSIONER ZUCKER:  I'll get back to 

15          you.  I'm not sure what the --

16                 ASSEMBLYMAN McDONALD:  Yeah.  Okay, 

17          that's it.  Thank you.  

18                 CHAIRWOMAN YOUNG:  Thank you.  

19                 Our next speaker is Senator James 

20          Seward, who is chair of the Senate Standing 

21          Committee on Insurance.  And if you could put 

22          10 minutes on the clock.  I don't know if 

23          he'll need it, but as chair, that's what he 

24          would get.


 1                 SENATOR SEWARD:   Thank you, Senator 

 2          Young.

 3                 Commissioner Zucker and Director 

 4          Helgerson, I just -- I had a few questions 

 5          regarding ambulance service and the Medicaid 

 6          reimbursement for ambulance services.

 7                 I'm sure you would agree with me when 

 8          I say that we've come a long way in terms of 

 9          what care is actually provided a patient 

10          while they're in the ambulance.  It's more 

11          than just transportation, there is 

12          significant care that is rendered in the 

13          ambulance.  And I think the ambulance 

14          services have really emerged as a very, very 

15          important part of this continuum of care of a 

16          patient.

17                 And I know a year ago when we were 

18          here, we were asking you where is the DOH 

19          report in terms of Medicaid reimbursement for 

20          ambulance service providers.  I note that the 

21          proposed budget eliminates the supplemental 

22          Medicaid payments to ambulance providers.  

23          And at the same time, we did ultimately last 

24          year get the DOH report, and it very clearly 


 1          stated that Medicaid rates are inadequate in 

 2          terms of ambulance providers.  

 3                 Why does the budget propose the 

 4          elimination of the supplemental Medicaid 

 5          rates for ambulance providers at the same 

 6          time when we acknowledge -- everyone 

 7          acknowledges that the current reimbursements 

 8          are well below actual costs.  I've heard 

 9          estimates of a hundred dollars per Medicaid 

10          patient per ride.

11                 DIRECTOR HELGERSON:  So thank you for 

12          that question.

13                 So the budget really does two things 

14          relative to ambulance reimbursement.  It does 

15          eliminate those supplemental payments.  The 

16          reason for it is that we feel at the end of 

17          the day that they're not equitably 

18          distributed.  But those funds are then, in 

19          the second effort, actually reinvested back 

20          into ambulance services, and in fact more 

21          than just the savings associated with 

22          eliminating those specific payments, but we 

23          actually implement two years' worth of the 

24          five-year projected phase-in of higher 


 1          reimbursements overall to ambulances.  

 2                 So the report that you reference 

 3          suggested a need to increase reimbursement 

 4          rates to ambulances and eventually phase 

 5          those in over a five-year period.  We're 

 6          proposing in this budget to implement two 

 7          years' worth of those rate increases.  And at 

 8          the end of the day, this -- the supplemental 

 9          payments really -- the way they're currently 

10          distributed is not equitable.  And so it's -- 

11          that was the rationale for it.

12                 But overall, this budget increases 

13          reimbursement to ambulances.

14                 SENATOR SEWARD:  As a follow-up 

15          question, do we have a firm commitment from 

16          you in terms of the full implementation?  You 

17          talk about five years, but there's only two 

18          years in this budget.  How can we be 

19          comfortable that we will see a full five-year 

20          implementation of these adjusted rates?

21                 DIRECTOR HELGERSON:  That is our plan, 

22          to fully implement the proposal that was 

23          developed.  And that's what we're going in 

24          under the assumption that we're going to do.


 1                 SENATOR SEWARD:  Mm-hmm.  I think some 

 2          of us may need more than just an assumption.  

 3          And we can deal with that in terms of budget 

 4          language, but I think it's critically 

 5          important that we do have that type of -- 

 6          have it on paper that that is where we're 

 7          heading in terms of full implementation of 

 8          the appropriate adjustments in the Medicaid 

 9          rates.  

10                 A couple of other follow-ups here on 

11          this very issue.  I know there's a number of 

12          other moving parts when it comes to Medicaid 

13          transportation that's in the budget, and 

14          there are some projected savings based on 

15          those moving parts, based on what the 

16          proposed budget indicates at this point.

17                 Is the increase in ambulance provider 

18          rates, is that contingent on the other 

19          savings in Medicaid transportation that are 

20          outlined in the Governor's budget, or is this 

21          an issue that we can deal with independent of 

22          some of these other transportation issues?

23                 DIRECTOR HELGERSON:  They're actually 

24          all wrapped into and part of the overall 


 1          budget proposal.  So the Governor's budget 

 2          assumes a and proposes a global cap-neutral 

 3          budget proposal, with many proposals within 

 4          it.  So this is one of those proposals, the 

 5          increased reimbursement rate.  

 6                 We presented it as part of an omnibus 

 7          transportation package, but you can certainly 

 8          separate those out.  But obviously we'll see 

 9          how the budget negotiations go in terms of 

10          the global cap and its amount.  Based on past 

11          experience, if the three parties agree that 

12          the global cap becomes the target for 

13          Medicaid overall, then I think our challenge 

14          will be to find a way to, you know, basically 

15          lead to a final budget that's adopted that 

16          fulfills that requirement.  

17                 But, you know, you can certainly 

18          separate those proposals out and look at them 

19          independently.  

20                 SENATOR SEWARD:  Yeah, I would look to 

21          deal with this issue independent of whatever 

22          may happen on some of these other aspects of 

23          the issue.  That's how important I think 

24          actually ambulance service is, you know, to 


 1          the -- as I mentioned earlier, the overall 

 2          continuum of care, patients that require 

 3          ambulance transportation.

 4                 My final question relates to the 

 5          methodology of setting the rates for the 

 6          ambulance providers.  I know, you know, 

 7          Medicare, for example, has done an exhaustive 

 8          study in terms of ambulance costs, and there 

 9          is a Medicare rate.  I mean, why doesn't the 

10          New York State Medicare office subscribe to 

11          the same reimbursement rate as Medicare, who 

12          have done an exhaustive study there?  

13                 And also, when the department is 

14          determining the rates in terms of your 

15          study -- I mean, did you meet face-to-face or 

16          will you meet face-to-face with ambulance 

17          providers to learn firsthand in terms of what 

18          confronts them in terms of carrying out their 

19          duties?  Did you review the Medicare cost 

20          studies?  They're quite exhaustive, I 

21          understand.  And did you reach out to 

22          ambulance organizations as part of this whole 

23          rate-setting process?  

24                 Because we have a very diverse state.  


 1          Obviously, there are high costs in the city.  

 2          We also upstate, in an area that I represent, 

 3          we have -- you know, the sparsity and the 

 4          distances and so on present other challenges.

 5                 So I'm hoping that you will be able to 

 6          tell us that you have factored all of this in 

 7          in terms of setting an appropriate rate for 

 8          ambulance providers.

 9                 DIRECTOR HELGERSON:  Sure.  The study 

10          that came out of the past budget negotiation 

11          that directed the department to launch this 

12          study, we engaged the ambulance industry of 

13          New York State in that study.  In fact, we 

14          did a survey.  And in fact, one of the 

15          reasons why our report was slow to get to you 

16          was because the ambulance providers were 

17          unwilling initially to submit the information 

18          we needed in order to do some of the 

19          cost-based analysis because they were worried 

20          about the proprietary nature of the 

21          information we were requesting.

22                 I think we were able to eventually 

23          figure out a method for them to submit that 

24          information to us.  And so -- because most of 


 1          the ambulance operators are for-profit 

 2          entities, so I think that's what their 

 3          concern was.  But we eventually were able to 

 4          overcome that hurdle, and so we feel that the 

 5          information that we received from them was 

 6          very comprehensive.

 7                 As to the issue you raise about the 

 8          Medicare rates of reimbursement, if the 

 9          New York State Medicaid program paid all of 

10          its providers rates equivalent to Medicare, 

11          we would pretty much bankrupt the state.  No 

12          state Medicaid program in the country 

13          reimburses providers at the same rates of 

14          reimbursement that Medicare does, Medicare's 

15          reimbursement fee schedules.  And there's 

16          only a few exceptions to that rule, where we 

17          are paying the equivalent.  Some of our 

18          managed care organizations pay a primary care 

19          providers equivalent to Medicare.  Our 

20          hospitals do not receive Medicare-level 

21          reimbursement.  And that's the case in any of 

22          the states you would find.  

23                 So I think that while you can always 

24          look to Medicare's methodology, the actual 


 1          rates of reimbursement are usually 

 2          prohibitive in terms of trying to meet that 

 3          standard.  

 4                 But I can say definitively that we've 

 5          done an exhaustive study.  We've worked 

 6          directly with the impacted stakeholders.  And 

 7          so we feel that that study and this five-year 

 8          path -- actually now four-year path, if you 

 9          implement two years' worth of it -- is going 

10          to lead to an appropriate reimbursement 

11          system for New York State.

12                 SENATOR SEWARD:  Well, thank you for 

13          your responses.  

14                 Thank you, Senator Young.

15                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

16          Andrew Garbarino.

17                 ASSEMBLYMAN GARBARINO:  Thank you.  

18                 I want to follow up on a question that 

19          was asked about the certified registered 

20          nurse anesthetists.  There's an estimated 

21          $5 million in savings, but it's my 

22          understanding that both the Medicare and 

23          Medicaid reimbursement for nurse anesthetists 

24          and anesthesiologists is the same.  So where 


 1          is the $5 million in savings coming from?

 2                 DIRECTOR HELGERSON:  Yes, so we 

 3          anticipate actually that there would be a 

 4          lower rate of reimbursement to nurse 

 5          anesthetists.  I can't remember how much less 

 6          it is, but that's in essence what drives it.  

 7                 We would adjust the managed-care rates 

 8          to assume that they would have some shift 

 9          away from anesthesiologists to the nurse 

10          anesthetists for the provision of those 

11          services, in obviously clinically appropriate 

12          ways, but that there is a lower rate of 

13          reimbursement for nurse anesthetist-type 

14          services assumed in the fiscal -- as I said, 

15          the actual differential I can't remember off 

16          the top of my head. 

17                 ASSEMBLYMAN GARBARINO:  Currently I 

18          believe it's the same, but you're planning on 

19          the med -- the team or whoever is just going 

20          to change the reimbursement?

21                 DIRECTOR HELGERSON:  Yeah, I mean 

22          that -- off the top of my head, I know we are 

23          assuming it.  I'm not sure whether or not we 

24          actually have to enact it or not or whether 


 1          or not there are general already differences 

 2          in the rate structure, particularly the rate 

 3          structure paid by the managed-care 

 4          organizations.

 5                 ASSEMBLYMAN GARBARINO:  Okay.  I'm 

 6          going to switch over now to the conversion of 

 7          insurance companies.  There's $700 million a 

 8          year over the next four years, so total of 

 9          $3 billion.  Five hundred goes to the 

10          financial plan, I believe, and -- or is under 

11          the spend of the financial plan, and 250 goes 

12          into this shortfall fund.  What happens -- or 

13          are there any companies that are currently 

14          converting from non-for-profit to for-profit 

15          insurance companies?  

16                 COMMISSIONER ZUCKER:  I'm not sure 

17          exactly whether there are or not.

18                 ASSEMBLYMAN GARBARINO:  So I don't 

19          understand, where's the -- I don't 

20          understand, where's -- where's this estimate 

21          of money coming in, coming from?

22                 DIRECTOR HELGERSON:  So right now the 

23          department is currently reviewing a sale of 

24          one not-for-profit health plan to a 


 1          for-profit entity.  That would be potentially 

 2          impacted by this proposal.  So yes, there is 

 3          one.

 4                 ASSEMBLYMAN GARBARINO:  So -- but what 

 5          happens if -- I think you're talking, you 

 6          know, about Centene's buying Fidelis.

 7                 COMMISSIONER ZUCKER:  Fidelis 

 8          Institute, yes.

 9                 ASSEMBLYMAN GARBARINO:  What happens 

10          if now because of this new -- you know, 

11          they're expecting to take $750 million in 

12          revenue from just this one conversion every 

13          year for the next four years.  What happens 

14          now if the deal falls through because of 

15          this?  

16                 COMMISSIONER ZUCKER:  Well, we're 

17          looking at that right now.  That's in the 

18          process of negotiations.  So we'll be able to 

19          talk a little bit more about this once we see 

20          what happens in that.  And I don't want to go 

21          into the details of the process because it's, 

22          you know, under review.

23                 ASSEMBLYMAN GARBARINO:  Okay.  So 

24          let's just say it doesn't go through -- I 


 1          know, we don't have to talk about it.  The 

 2          $500 million for the General Fund, is that -- 

 3          how are we going to make that up if this 

 4          doesn't --

 5                 DIRECTOR HELGERSON:  I think that's 

 6          really a question for Robert Mujica, because 

 7          it's a financial plan impact --

 8                 (Laughter.)

 9                 DIRECTOR HELGERSON:  -- not a Medicaid 

10          global spending cap impact.  

11                 ASSEMBLYMAN GARBARINO:  Okay.  And 

12          this shortfall fund, I just believe it's 

13          being funded by this and the 14 percent tax.  

14          It's based on, I guess, whether or not the 

15          federal government doesn't pay us as much as 

16          we want or we need.  So is this money only 

17          going to be used if there is a shortfall from 

18          payments from the federal government?  Or is 

19          it just we get to use it no matter what, even 

20          if there's no shortfall?  

21                 COMMISSIONER ZUCKER:  Well, right now 

22          we believe the 14 percent -- you're talking 

23          about the 14 percent, right?

24                 DIRECTOR HELGERSON:  He said the fund.


 1                 ASSEMBLYMAN GARBARINO:  The 14 percent 

 2          and the $250 million from the conversion.  

 3          What will it be used for?

 4                 DIRECTOR HELGERSON:  I mean, I think 

 5          the Governor's intent is that those monies 

 6          are available in case there's a shortfall.  

 7          Now, those monies would be potentially 

 8          available, you know, for use for other 

 9          purposes other than -- you know, assuming the 

10          budget is proposed.  

11                 But I think the Governor's view on 

12          that was that it made sense to earmark some 

13          funds, given all the uncertainty in 

14          Washington.  I think it's the fiscally 

15          responsible thing to do, and monitor it.  

16                 But obviously if funds are 

17          appropriated for that purpose and they're 

18          sitting there and if at some point we have 

19          crystal clarity in terms of what Washington's 

20          intentions are and we have a hundred percent 

21          confidence that there are no risks at that 

22          point, then potentially those funds could be 

23          appropriated for another purpose.

24                 ASSEMBLYMAN GARBARINO:  All right, so 


 1          there's no -- right now we're doing it in 

 2          anticipation of a shortfall, but there's no 

 3          limitation that it be spent if there isn't -- 

 4          I mean, that it's given back or -- if there 

 5          is no shortfall.

 6                 DIRECTOR HELGERSON:  Yeah, I think 

 7          that's really at the discretion of the budget 

 8          director, is how I think it's structured.

 9                 ASSEMBLYMAN GARBARINO:  Okay.  Thank 

10          you very much.

11                 CHAIRWOMAN YOUNG:  Thank you.

12                 Senator Ritchie.

13                 SENATOR RITCHIE:  Good morning.

14                 COMMISSIONER ZUCKER:  Good morning.

15                 SENATOR RITCHIE:  I represent a 

16          predominantly rural area in the North Country 

17          and Central New York.  My questions center 

18          around the fact that we are now approaching 

19          what seems to be a critical level with regard 

20          to a shortage of healthcare professionals.  

21          So I'm wondering whether the department has a 

22          plan in place or resources in the budget to 

23          actually address the level of shortage when 

24          it comes to nursing and doctors in the area.


 1                 COMMISSIONER ZUCKER:  So I think this 

 2          goes to the issue of workforce.  And we are 

 3          looking at this from different fronts.  One 

 4          is we're looking at it from our -- the SHIP 

 5          program, and we have a workforce subgroup to 

 6          look at how do we get health professionals up 

 7          into the rural areas.  There are many 

 8          different factors involved in that, and 

 9          that's what they're working on.  That's one 

10          part.

11                 Another part is the issue of who else 

12          can provide some of these services.  We do 

13          have a discussion, as you probably see in the 

14          budget, about EMTs and paramedicine, others 

15          working within their scope of practice.  So 

16          could an EMT, and we believe so, an EMT 

17          provide some of the service besides bringing 

18          someone from a home to a hospital and to do 

19          some of those services that could be provided 

20          in that area.

21                 We are also looking at the issues of 

22          telemedicine, can someone -- as Senator Young 

23          has been very interested in -- can we get 

24          some of those services that would normally be 


 1          done in a hospital or actually sent to or 

 2          taken to a hospital, particularly in a rural 

 3          area, provided through telemedicine.  So it's 

 4          another area.

 5                 Can we ask pharmacists to work within 

 6          their scope of practice and to provide some 

 7          of the services -- the Governor for this past 

 8          flu season issued an executive order about 

 9          having pharmacists be able to give 

10          immunizations to 2-to-18-year-olds.  And so 

11          we are looking at what other things we could 

12          do to make sure that someone doesn't have to 

13          run a distance to get care.  We are also 

14          looking at what other things that nurse 

15          practitioners can provide.  

16                 And then it goes back to the issue of 

17          how do you get more health workers into the 

18          rural areas of the state.  I recognize this 

19          is a challenge.  And having traveled around 

20          the state, I recognize that sometimes people 

21          have to go a long distance for care, and it's 

22          a challenge not just for the patient but also 

23          for those who are caregivers and particularly 

24          those who will have to take a day off from 


 1          work to do that.

 2                 DIRECTOR HELGERSON:  Can I add one 

 3          more thing too, just on the Performing 

 4          Provider Systems in DSRIP have already spent 

 5          $241 million on investing in workforce 

 6          issues.  They were all developed to develop 

 7          comprehensive workforce plans.  

 8                 Understanding full well exactly what 

 9          you're saying, I think some of the 

10          North Country, in particular, PPSs have some 

11          great success stories of where they've made 

12          targeted interventions, where they've, say, 

13          hired a dentist into a county that hadn't had 

14          any dentists for four or five years.  But 

15          there's a -- we certainly provide you with 

16          the information.  There's still more money to 

17          be invested by those organizations.  So 

18          that's another potential funding source for 

19          the kind of investments that we agree with 

20          you are 100 percent necessary in order to 

21          ensure that all New Yorkers have access to 

22          the services they need.

23                 SENATOR RITCHIE:  So recently we've 

24          been working with one of the local colleges 


 1          who actually has a nursing program, and one 

 2          of the obstacles is actually getting 

 3          instructors.  So I'm just wondering if DOH 

 4          could work with SUNY in order to see if we 

 5          could address the issue about getting 

 6          instructors to local colleges to help with 

 7          the nursing program.

 8                 COMMISSIONER ZUCKER:  Sure, that's 

 9          something we can definitely do, and we'll 

10          work with the universities on that.

11                 SENATOR RITCHIE:  And one of the other 

12          questions is a follow-up on the nursing home 

13          question.  I was actually a little surprised 

14          at your response that in other locations 

15          nursing homes that are closing, someone else 

16          is looking to move into that spot.  That's 

17          not what's happening in my area.  On a 

18          regular basis I'm having conversations with 

19          those who either have recently closed a 

20          nursing home program down or are teetering on 

21          the edge of potentially doing that.

22                 So in rural areas, again, do you have 

23          any plans on how to address the nursing home 

24          crisis?


 1                 DIRECTOR HELGERSON:  Sure.  So in 

 2          terms of nursing homes -- well, first off, in 

 3          terms of nursing homes there are a number of 

 4          programs that have been created over recent 

 5          years designed to support particularly 

 6          financially fragile nursing homes.  So we've 

 7          got Vital Access Provider as a program, for 

 8          instance, that's helped some of the rural 

 9          nursing homes survive and hopefully convert 

10          into models that are going to ensure 

11          long-term sustainability or eventually 

12          potentially merge into a larger chain, which 

13          may support them in continuing operation in 

14          that community.

15                 The one other element to the budget 

16          that is included is a major expansion of ALP, 

17          so Assisted Living Programs.  That's another 

18          exciting opportunity, investment both of 

19          operational funds as well as capital, I think 

20          it's $30 million of capital funds being 

21          allocated to expand ALP.  

22                 Specifically of those ALP beds, 

23          there's a specific focus on the counties, 

24          particularly rural counties that do not have 


 1          ALP services today.  So that's another 

 2          potential.  Because at the end of the day 

 3          what we want are people who have 

 4          long-term-care needs to have a variety of 

 5          different options for them.  And I think that 

 6          individuals who -- don't always have to go to 

 7          the nursing home.  There are opportunities 

 8          outside of the nursing home.  You know, 

 9          whether that's home care services or assisted 

10          living, that we want to try to grow.

11                 SENATOR RITCHIE:  I know you've 

12          discussed telemedicine, and it's something 

13          that has been very helpful in my district.  

14          But this year proposed again is a 20 percent 

15          cut to the Rural Health Network Development 

16          grants, and it's something that the Fort Drum 

17          Regional Health Organization utilizes in 

18          order to integrate the community healthcare 

19          system with Fort Drum, along with a big part 

20          of it being telemedicine.  

21                 So we're just wondering, because of 

22          the cut that's proposed, how do you propose 

23          these organizations address that cut?

24                 COMMISSIONER ZUCKER:  Well, again, 


 1          we're looking to try to figure out a way that 

 2          some of the other programs that we have 

 3          within the department could be able to 

 4          provide some of the services that are -- that 

 5          some feel are being cut.

 6                 I don't think that -- I don't think 

 7          that in the long run that patients will be -- 

 8          there will be a compromise to the patients, 

 9          because we are looking at making sure that 

10          other parts of the department will cover any 

11          of the cuts in some of these areas.

12                 This is -- as I said in the testimony, 

13          this is a tough budget season, but we -- our 

14          primary focus is the people of New York, 

15          whether it's upstate or downstate.  And what 

16          I mentioned before a little bit about what we 

17          can do in the rural community, we are pushing 

18          forward on.  

19                 And there are many other aspects of 

20          the department, some of the other programs 

21          that we're doing, that also tie into this.  

22          And although it's not directly related, it's 

23          indirectly related.  We have the SHIN-NY, 

24          which is our information network, and a lot 


 1          of information is provided.  And so if 

 2          somebody ends up in a rural area and they 

 3          have to go to a hospital closer to them, but 

 4          they usually go to a facility or a hospital 

 5          further away, the ability for this to 

 6          interact and to connect will provide the 

 7          services that they need, or at least the 

 8          information to the doctor or the nurse 

 9          who's there so that the services they need 

10          can be given to them.  And that will help.

11                 SENATOR RITCHIE:  And just in closing, 

12          we have some real issues in my area with 

13          regards to access, because it's so rural.  So 

14          I would just like to reinforce Senator 

15          Valesky's comment on the safety net program.  

16          I know your department has provided resources 

17          that has helped the hospitals over the last 

18          year and a half, but some of them are still 

19          teetering on the edge.  And when you're a 

20          community in the middle of the Snow Belt and 

21          that's the only hospital you have, even 

22          though you may not be financially in a great 

23          place, it's still important to make sure that 

24          the healthcare system is still open to those 


 1          who live there.

 2                 COMMISSIONER ZUCKER:  We absolutely 

 3          recognize that.  And having had the 

 4          opportunity, as I said, to go to some of the 

 5          hospitals and recognize that the services -- 

 6          those are the services for that community.  

 7          And we have, as I mentioned before, capital 

 8          grants to support improving the facilities 

 9          that are there.  So I hear you, I completely 

10          hear you.

11                 SENATOR RITCHIE:  Thank you.

12                 CHAIRWOMAN WEINSTEIN:  Before we move 

13          on to the next speaker, we were 

14          joined actually a while ago by Assemblyman 

15          Felix Ortiz and Assemblyman Tom Abinanti.  

16                 And now to Assemblywoman Solages.

17                 ASSEMBLYWOMAN SOLAGES:  Good 

18          afternoon.  First I just want to circle back 

19          with the statewide Medicaid transportation 

20          systems.  I really think that's the wrong way 

21          to go.  If you look at the local model that 

22          we have in Nassau County, Senior Ride, they 

23          have trained, certified professionals who 

24          pick up the patients.  Every day they're the 


 1          same person that picks up the same patient.  

 2          They have video cameras on their cars.  This 

 3          MAS doesn't have video cameras.  They don't 

 4          have trained professionals.  You know, it's a 

 5          different driver for every pickup.

 6                 And so, you know, I think if we have a 

 7          good product, we should be supporting that 

 8          model.  And I think that going to a statewide 

 9          system is something I don't agree with.  I 

10          think it's going to cause more headaches than 

11          it's going to help.

12                 So I want to go to speak about 

13          actually our littlest New Yorkers.  And I 

14          want to talk about the First 1,000 Days 

15          initiative that New York State is now doing.  

16          It's very exciting that we're focusing on 

17          providing safe, stable and supportive 

18          initiatives for our toddlers and our infants 

19          and for our mothers too.  

20                 And so I just want to first ask the 

21          question, how are we integrating home 

22          visiting services with that model?

23                 DIRECTOR HELGERSON:  Sure.  So thank 

24          you very much.  We are very proud of the 


 1          First 1,000 Days.  I note that it was 

 2          cochaired by Nancy Zimpher, the former SUNY 

 3          chancellor, who was still SUNY chancellor 

 4          when she took on the role, and MaryEllen 

 5          Elia, who's obviously the commissioner of the 

 6          State Education Department.  So led by people 

 7          from outside of healthcare to demonstrate 

 8          this was really meant to be a cross-sector 

 9          collaboration.  

10                 So there are 10 proposals, one of 

11          which is to expand access to home visiting.  

12          And obviously there's budgetary constraints, 

13          but there are funds available, both this year 

14          and proposed for the next year, to begin to 

15          grow that program out statewide, because we 

16          think it is one of the most cost-effective 

17          ways to improve things like school-readiness.  

18          If we can work with high-risk expectant moms 

19          and then right after children are born and 

20          those families, we think it's a very 

21          cost-effective strategy and we want to grow 

22          it over time.

23                 ASSEMBLYWOMAN SOLAGES:  One thing, 

24          though, last December I saw there were 


 1          10 points, and there was a major missing 

 2          component, and that was breast-feeding.  It 

 3          didn't really discuss promoting 

 4          breast-feeding or promoting exclusively 

 5          breast-feeding for the first six months.  It 

 6          talked nothing about making sure that mothers 

 7          were provided with donor breast milk if they 

 8          couldn't breast-feed.  And so can you 

 9          elaborate on why that point was missing?

10                 DIRECTOR HELGERSON:  So lots of 

11          proposals were brought forward, and we sort 

12          of forced prioritization to try to focus in 

13          on 10, mostly because what we wanted to do is 

14          to try to have this diverse group of people, 

15          the diverse set of stakeholders coalesce 

16          around at least an initial set of 10 things 

17          that we would work on.  In no way, shape or 

18          form was that meant to say there aren't other 

19          things that we should prioritize and work on.  

20          But this was the initial 10.  

21                 So I can't remember off the top of my 

22          head where that proposal was, but it doesn't 

23          mean that as we move forward, as we get 

24          beyond these 10, that we can't and shouldn't, 


 1          you know, look at other ideas, including what 

 2          you mentioned is a really important priority, 

 3          which is to promote, you know, in terms of 

 4          breast milk and making sure that that's 

 5          promoted in every way, shape or form.

 6                 ASSEMBLYWOMAN SOLAGES:  We know breast 

 7          milk is a superfood, so we want to promote 

 8          mothers to breast-feed.

 9                 So what were your departments doing to 

10          promote breast-feeding among first-time 

11          mothers or in general to parents?  

12                 COMMISSIONER ZUCKER:  I couldn't hear 

13          what you asked.

14                 ASSEMBLYWOMAN SOLAGES:  So what are 

15          your departments doing to promote 

16          breast-feeding, especially for first-time 

17          mothers?

18                 COMMISSIONER ZUCKER:  Sure.  We have a 

19          very active program, working with the 

20          community, working with local health 

21          departments, getting the message out this is 

22          one of the commitments of our prevention -- 

23          part of our prevention program.  We are 

24          moving forward with getting hospitals to be 


 1          focused primarily on breast-feeding.  This is 

 2          done across the state as well.

 3                 And I think that the message is 

 4          clear -- obviously the benefits, but I think 

 5          the message is clear of the commitment on the 

 6          part of the department.

 7                 ASSEMBLYWOMAN SOLAGES:  Okay.  And I 

 8          know that there was a proposal in the 

 9          Executive Budget regarding maternal 

10          mortality.  Could you elaborate more on that?

11                 COMMISSIONER ZUCKER:  So the Governor 

12          is committed to the issue of addressing this 

13          issue of maternal mortality.  We have 

14          actually a meeting about this in two days 

15          from now in the city.  

16                 And this is part of his bigger agenda 

17          regarding women's health and, as you know, 

18          his commitment to women's health from several 

19          years ago, even with breast cancer and some 

20          of the great strides we've made in that area.  

21          And we are moving forward to address the fact 

22          that New York is not as high as we want us to 

23          be in having the lowest amount of -- or no 

24          maternal mortality, I should really say.


 1                 So we're going to find that, we're 

 2          going to figure out what the problems are, 

 3          we're going to address it, we're going to 

 4          tackle it, and we're going to solve it.  And 

 5          New York will address whatever problems -- 

 6          not only just maternal mortality, but also 

 7          maternal morbidity.  We will look at those 

 8          issues as well.  We are going to track the 

 9          numbers and try to figure out how to solve 

10          them.

11                 ASSEMBLYWOMAN SOLAGES:  Because, you 

12          know, every day we're losing mothers.  And, 

13          you know, a study is great, but we need to 

14          move on proposals like making every hospital 

15          in New York State a baby-friendly hospital 

16          and pushing forth an initiative such as that.

17                 COMMISSIONER ZUCKER:  Right.  We're 

18          moving on that.

19                 SENATOR KRUEGER:  Thank you.

20                 Senator Diane Savino.

21                 SENATOR SAVINO:  Thank you, Senator 

22          Krueger.

23                 Good afternoon, Commissioner.  Good to 

24          see you, as always.


 1                 I'm not going do ask you the same 

 2          questions as everyone else has asked, but I 

 3          would like to just get on the record that I 

 4          also have serious concerns about the changes 

 5          to managed long-term care and the direction 

 6          that we seem to be going.  It's a program 

 7          that seems to have been working for a lot of 

 8          people, and I have questions about it.  You 

 9          don't have to respond now; I just want to 

10          make sure you understand I also share the 

11          concerns that have been raised.

12                 I also share the concerns that have 

13          been raised about the global cap and the 

14          effect it's having on our healthcare delivery 

15          system.  As you know, on Staten Island we 

16          only have two hospitals and we always say one 

17          of them is on life support.  And so this cap 

18          on Medicaid reimbursements that's been in 

19          place for more than eight years now is having 

20          a direct effect on the service delivery and 

21          on the workforce as well.

22                 I want to turn, though, to something 

23          that you and I have worked on for several 

24          years now -- it seems like yesterday -- but 


 1          the medical marijuana program.  

 2                 First I want to thank you for the 

 3          changes that you have helped shepherd 

 4          through.  The program, as you know, is now up 

 5          to 43,000 patients and 10 licenses, and 

 6          hopefully we'll get more dispensaries across 

 7          the state.  But one of the things that as the 

 8          state grapples with the opioid abuse crisis, 

 9          Assemblyman O'Donnell and myself have 

10          introduced legislation to add addiction 

11          disorder as a qualifying condition under the 

12          medical marijuana program.  Because as you 

13          know, many people who are in recovery for 

14          addiction, opioid addiction, are using 

15          medical therapy -- Suboxone, Vivitrol, and 

16          methadone.  

17                 So we're proposing to add medical 

18          marijuana as one more of those proposals.  

19          You don't have to answer now, but I would 

20          like you to take a look at that and consider 

21          it.  I believe we need all the tools we can 

22          possibly have in our toolbox to help grapple 

23          with this crisis.

24                 The other issue marijuana-related in 


 1          the budget, the Governor has proposed a study 

 2          to examine I guess the safety -- I'm assuming 

 3          it's the safety of an adult-use marijuana 

 4          program, because I can't understand why it's 

 5          under your purview.  So maybe you can talk a 

 6          bit about this commission that he's --

 7                 COMMISSIONER ZUCKER:  Sure.  So the 

 8          Governor has asked in the budget proposal to 

 9          have us do a study looking at regulated 

10          marijuana.

11                 The issue is not just health, it's 

12          issues of transportation, because there are 

13          neighboring states, it's justice issues -- 

14          there are many different factors.  But the 

15          ask is that we do a review of this, look at 

16          what other states are doing, try to gather 

17          the facts and to make a decision on a -- on 

18          this decision about a regulated marijuana 

19          program.

20                 So we will do that.  We will pull it 

21          together, and we will get all the information 

22          we need and do this very thoroughly and 

23          provide the Governor with what we've found.

24                 SENATOR SAVINO:  I'm glad to hear 


 1          that.  Because, you know, I've shared with 

 2          the Governor that this is an issue that's 

 3          going to be of concern to our medical 

 4          program.  We're going to have marijuana to 

 5          the left of us, to the right of us, to the 

 6          north of us, to the south of us.  

 7                 And remember, in our legislation a 

 8          patient in New York State, if they go outside 

 9          of the legal regulated market, are committing 

10          a felony under Public Health Law as well as 

11          under the penal code.  So it's even more 

12          important that we study this as quickly as 

13          possible, because as you know, the cost of 

14          the medication in New York State is 

15          particularly high for patients.  And if they 

16          can get access to a legal regulated product 

17          in another state, they may be more likely to 

18          do that.  But they jeopardize their freedom.  

19                 So I just want to leave it at that.  

20          It's very important.

21                 And with the limited time I have left, 

22          I want to turn to an issue that is not 

23          related to marijuana for a change.  Last 

24          year, the Governor's office required a cost 


 1          study be done in 2017 about the ambulance 

 2          reimbursement rates.  So the study -- from 

 3          what I understand, the study showed that the 

 4          base rate for non-emergency transport is 

 5          $250, yet the state is only reimbursing them 

 6          at $155.  So if you all determined that the 

 7          cost is 250, why are we only reimbursing 

 8          them, you know, almost 50 percent less of 

 9          what it costs to transport patients?  

10                 I know others have addressed the issue 

11          of patient transportation, but I'm just 

12          baffled as to how, if we've determined this 

13          is the cost, why are we only paying them just 

14          about half of what it costs?

15                 DIRECTOR HELGERSON:  So I think the 

16          point of it was that we propose basically to 

17          phase in, over a period of five years, a new 

18          rate structure that more closely aligns 

19          Medicaid reimbursement with cost.

20                 But I would say that, generally 

21          speaking, Medicaid in other sectors doesn't 

22          always fully reimburse costs, at least as 

23          some define it, in the healthcare sector.  I 

24          think we could probably point to other areas 


 1          of concern in terms of overall rates of 

 2          reimbursement.

 3                 But I think that what we're proposing 

 4          is a good step in the right direction, this 

 5          two-year phase-in, the first two years of a 

 6          five year phase-in.  But that's what this 

 7          study suggested was the right way forward.  

 8          We worked with stakeholders to complete the 

 9          study.  And so we think that within about 

10          four years we'll have raised reimbursement 

11          rates to those higher standards.

12                 SENATOR SAVINO:  Just one final point 

13          on that, though.  Over the same period of 

14          time, the State of New York is going to be 

15          imposing a higher minimum wage on every one 

16          of these employers.  Many of these transport 

17          staff are paid a little bit more than the 

18          minimum wage, some of them just the minimum 

19          wage.  So their costs are going to continue 

20          to go up, the cost of fuel is going to go up, 

21          the cost of insurance is going to go up, the 

22          cost of just maintaining these vehicles will 

23          go up, but we're going to be depressing their 

24          wages across the board.  


 1                 I think there's something wrong with 

 2          that math.  I'm not a budget genius, but even 

 3          I can figure out it's going to be very 

 4          difficult to find people to transport 

 5          patients if we continue to cut their 

 6          reimbursement rate and then at the same time 

 7          saddling them with higher costs.

 8                 DIRECTOR HELGERSON:  Sure.  I would 

 9          only say is on the minimum wage piece, there 

10          actually is a separate pool of funding to 

11          provide providers with higher reimbursement 

12          tied specifically to the implementation of 

13          minimum wage.  So that particular issue is 

14          addressed elsewhere.

15                 SENATOR SAVINO:  Thank you.  My time 

16          is up.

17                 CHAIRWOMAN WEINSTEIN:  Thank you.  

18                 Assemblyman Raia -- Ray -- Ra.  It's 

19          been a long day.

20                 (Laughter.)

21                 ASSEMBLYMAN RA:  Cousins from the old 

22          country.

23                 ASSEMBLYMAN RAIA:  That's right.

24                 (Laughter.)


 1                 ASSEMBLYMAN RA:  Good afternoon.  

 2                 I just wanted to go back to the opioid 

 3          surcharge about just -- I mean, we know as 

 4          we've looked through this that a number of 

 5          states have talked about or tried to enact 

 6          something like this, and obviously it's a 

 7          complex situation and there are so many 

 8          different ways through the distribution 

 9          chain.

10                 What would happen in the situation of 

11          a patient receiving mail-order drugs?  

12          Where -- at what point in the process would 

13          that surcharge be paid?

14                 COMMISSIONER ZUCKER:  So again, it 

15          would go back to the company, the charge 

16          would go back to the company.  We will work 

17          out the details of exactly how this will move 

18          forward.

19                 I know everyone's, you know, concerned 

20          about the charge, but I think that we need to 

21          look at the bigger picture here also about 

22          how many people have died as a result of this 

23          opioid epidemic.  And in New York State, the 

24          stories are really quite worrisome.  We've 


 1          had 3,000 deaths in 2016 and 2017.  I'm sure, 

 2          unfortunately, there may be more.  And we 

 3          need to tackle it.  And I do think that the 

 4          charge for this will -- the monies generated 

 5          from that charge will go to the efforts to 

 6          take on this problem.

 7                 DIRECTOR HELGERSON:  And if I could 

 8          just add, too, the good news is the 

 9          Department of Health is not responsible for 

10          administering the tax --

11                 (Laughter.)

12                 DIRECTOR HELGERSON:  -- so I think any 

13          questions regarding how the tax would be 

14          administered are probably best directed to 

15          the Department of Tax & Finance.

16                 ASSEMBLYMAN RA:  Which is why I won't 

17          ask you to comment on that -- I agree with 

18          you 100 percent, this is obviously a major 

19          problem, something all of us are experiencing 

20          in our districts.  And perhaps a lot more of 

21          a percentage of this proposed surcharge 

22          should be going into actually addressing the 

23          problem, where a lot of us know that a very 

24          small amount of it is proposed to do so.  But 


 1          I'm not going to ask you to comment on that.

 2                 I wanted to move on to just a 

 3          different issue that we've dealt with a few 

 4          times in the past, and I know it was in the 

 5          budget last year -- I think last year it was 

 6          called limited service, this year we're 

 7          calling it retail practice, these clinics -- 

 8          and in particular one of the concerns that, 

 9          you know, we've always heard, but 

10          particularly at a time when we know there's a 

11          major pharmacy chain that has pushed for this 

12          that's already in the PBM space and is 

13          talking about a merger or an acquisition of a 

14          healthcare insurer.

15                 So my concern is, you know, what is 

16          the benefit that we see from -- you know, 

17          these types of entities are definitely part 

18          of the future of medicine delivery.  There's 

19          these clinics for immediate care in many of 

20          our communities, but currently they're 

21          subject to being owned by some type of 

22          doctor.  What is the proposed or purported 

23          benefit of allowing corporate ownership of 

24          these clinics?


 1                 COMMISSIONER ZUCKER:  So these retail 

 2          practices -- I think we -- again, looking at 

 3          the big picture here on this, is there's a 

 4          lot of healthcare transformations, we know.  

 5          How care is being provided is way different 

 6          today than it was five years ago, 10 years 

 7          ago, and surely 20 years ago.  And I'm 

 8          looking at this wearing two different hats.  

 9          One is the hat of being in this role, and one 

10          is the hat of somebody who provided care to 

11          patients.

12                 From the hat -- this hat, as working 

13          in government, we need to figure out how to 

14          get access to care to more individuals and 

15          necessary care or emergency care that may be 

16          available.  If we have retail practices that 

17          could provide some of this care, particularly 

18          some emergency, look at something, check 

19          someone's blood pressure, check their 

20          glucose, let's say a diabetic or something, 

21          then that will be in the best interests of 

22          the whole healthcare system, rather than 

23          having someone run to an emergency room.

24                 Looking at it from the standpoint of a 


 1          clinician, many doctors have told me that 

 2          their office is filled with patients and they 

 3          don't have enough time actually to see those 

 4          patients because their waiting room is just 

 5          filled and they're ending up spending five, 

 6          10, 15 minutes, get them in, get them out.  

 7          That is not in the best interests of good 

 8          patient care.  

 9                 If you could provide with these retail 

10          practices a way for some of this care to be 

11          offset from the doctor's office, there will 

12          be additional time available for that health 

13          professional to be able to sit down and have 

14          the longer conversation, discuss other things 

15          with the patient, and not feel that they're 

16          rushed in and rushed out.  

17                 So this is all the bigger picture of 

18          the transformation of care.  So part of it is 

19          the emergency room, taking patients away from 

20          just running to an emergency room, and part 

21          of it is also making people's practices a 

22          little bit easier for them to provide more 

23          care to patients.

24                 ASSEMBLYMAN RA:  Thank you.


 1                 CHAIRWOMAN WEINSTEIN:  Thank you.  

 2                 SENATOR KRUEGER:  Thank you.

 3                 Hi, it's actually my turn.  And I have 

 4          so many questions and such a short amount of 

 5          time.  So I might actually sort of run 

 6          through the questions and you see how much 

 7          time you have to answer --

 8                 DIRECTOR HELGERSON:  (Laughing.)

 9                 SENATOR KRUEGER:  No, I'm serious.  

10                 -- and then take notes and know I want 

11          to hear back from you on the things you 

12          didn't think you could answer.

13                 COMMISSIONER ZUCKER:  Okay.

14                 SENATOR KRUEGER:  Okay, so we talked 

15          about CHIP before and the fact that we did 

16          get the federal money to keep it going, thank 

17          God.  So a question:  Why does the budget 

18          still have language that would allow you to 

19          change rates or freeze enrollment or make 

20          other programmatic changes, since it doesn't 

21          appear that you need that language anymore?  

22                 That's a note.

23                 Next, we talked about concerns -- 

24          excuse me, too many pieces of paper -- also 


 1          about the Essential Plan and the fact -- and 

 2          some things that are in the budget but maybe 

 3          we don't need because maybe the feds won't do 

 4          it, but it does appear that the 

 5          administration in Washington has cut the 

 6          cost-sharing reduction money and that that's 

 7          a significant amount of the funding we spend 

 8          for the Essential Health Plan, which impacts, 

 9          I think, 700,000 people in New York State.

10                 So I'm very concerned about how we 

11          make sure that we are continuing the 

12          Essential Health Plan and would also like to 

13          know are you planning, again, reducing the 

14          payments, reducing eligibility, changing 

15          something else about the program, since it 

16          does appear -- my notes show that we lose up 

17          to a billion dollars from the federal 

18          government for that program, so I'm curious 

19          how we're going to fill in the gaps.

20                 A number of people talked about the 

21          concerns for primary care, and you talked 

22          about rural care shortages.  If we're so 

23          focused on expanding primary care and 

24          pediatric care, why are we reducing Medicaid 


 1          funding for these programs, particularly for 

 2          pediatricians and other patient-centered 

 3          primary care programs?  It doesn't seem like 

 4          it's the time to reduce Medicaid formula 

 5          payments for exactly the kind of healthcare 

 6          we're talking about having a very real need 

 7          and goal to expand.  

 8                 See, he takes notes very fast.  Nice 

 9          seeing that.  Thank you.

10                 SENATOR HANNON:  There's no ink.

11                 SENATOR KRUEGER:  No ink?  Stop that.  

12          Yes, there's ink.  There's ink, right?  Tell 

13          me there's ink.

14                 DIRECTOR HELGERSON:  Yes, there is.  I 

15          promise.

16                 SENATOR KRUEGER:  Thank you.  

17                 We had a series of questions around 

18          the Governor's First 1,000 Days of Life 

19          program.  And I'm a big supporter of 

20          expanding these programs.  But I'm very 

21          disturbed that when you look in the budget, 

22          he's actually cutting 20 percent of the funds 

23          out of maternal and child healthcare 

24          programs, even though there's all this new 


 1          commitment.  

 2                 And specifically, he talked a bit 

 3          about the importance of expanding healthcare 

 4          for maternal depression, an issue that I have 

 5          worked on for quite a few years now.  So I'm 

 6          curious how the Governor is going to 

 7          implement his expanded programs for maternal 

 8          depression, matching providers with mental 

 9          health specialists once a woman has been 

10          diagnosed, when we're actually cutting the 

11          funds that are available -- you know, in the 

12          pot of money that you cover maternal 

13          depression and maternal mortality, you're 

14          cutting the funds.  And it seems to me to be 

15          pretty counterproductive.

16                 Then -- oh, good, I'm just running 

17          along.  So there's a real concern that's been 

18          raised, there's a lot of issues in MLTC rates 

19          that were raised.  But one that I don't think 

20          I heard yet was the concern that for the most 

21          acute patients, there's already been a 

22          serious question about rate adequacy and that 

23          you're going to be changing the scoring in 

24          some way that makes it even harder for people 


 1          to be found eligible for care on the acuity 

 2          score, is the term, that I was told that 

 3          there would be an increase in acuity score 

 4          required to get access to home care services.  

 5                 So if we're already hearing that 

 6          people who have the most severe need are 

 7          actually not always able to get the care they 

 8          need, wouldn't increasing the acuity score be 

 9          an added problem as opposed to some kind of 

10          solution for us at this time?  

11                 And in my 43 seconds that's left, I 

12          raised with Dr. Zucker the other day, so I'm 

13          just raising it again so he can follow up 

14          with me, concern around the decision to go 

15          sole-source for Alzheimer's and dementia care 

16          services in the state, including continuing a 

17          contract to an out-of-state hotline which 

18          doesn't actually provide direct services to 

19          people in New York, and some people are not 

20          clear that if you're a national hotline, you 

21          even know where you might find the right 

22          place to refer people to throughout the 62 

23          counties of New York.  

24                 And I have used my five minutes.  So 


 1          you want them to get back to me later?  How 

 2          do you want to handle this?

 3                 CHAIRWOMAN WEINSTEIN:  How about a 

 4          short speed round?

 5                 DIRECTOR HELGERSON:  Speed round.  On 

 6          CHIP, language was put in there because of 

 7          the potential loss of federal funds.  

 8          Certainly something to be reexplored since 

 9          that threat is no longer there.

10                 CSR in the Essential Plan.  Big impact 

11          on New York State.  The 25 percent of the 

12          funding that goes into a program that serves 

13          over 700,000 New Yorkers was a big thing we 

14          had to solve for in this budget.  The good 

15          news is that the budget as proposed doesn't 

16          take away healthcare from anybody, doesn't 

17          increase anyone's cost sharing.  We're able 

18          to basically find sufficient savings overall 

19          in the program so that there is -- there's no 

20          impact on New Yorkers because of the Trump 

21          administration's decision to end CSRs.

22                 That said, the Attorney General is 

23          launching, as has -- along with the State of 

24          Minnesota, launched litigation on that 


 1          particular issue.

 2                 PCMH funding cap, it's a budgetary 

 3          initiative, very fast-growing program.  

 4          Significant funding went into those primary 

 5          care practices to achieve a PCMH level from 

 6          the DSRIP program, so we felt that it was a 

 7          cap that was reasonable and appropriate, but 

 8          understand the concern about it.  But still 

 9          we're going to spend north of $100 million in 

10          supplemental payments to practices that meet 

11          those national standards.  

12                 The last one I have before I turn it 

13          over to Dr. Zucker is MLTC, the change in the 

14          eligibility from 5 to 9.  Actually the 

15          reasoning for that is to focus the program on 

16          individuals who have the most needs.  It's a 

17          very high touch, very expensive care 

18          management program.  And so the idea is that 

19          the individuals with acuity scores below 9 

20          will be able to access services in 

21          fee-for-service.  We already have many people 

22          that receive short-term home and 

23          community-based services through fee-for- 

24          service, so it just slightly increases the 


 1          number of people that would be getting it 

 2          through that door, fee for service, as 

 3          opposed to through managed long-term care.  

 4                 I can't remember off the top of my 

 5          head the number of individuals affected, but 

 6          it's relatively small and we grandfather in 

 7          anyone who currently is in the program.  

 8                 COMMISSIONER ZUCKER:  Regarding the 

 9          Alzheimer's issue, that contract actually is 

10          with the New York State Alzheimer's 

11          Coalition, which is based in New York.  It's 

12          actually headquartered here in Albany.  So 

13          the contract won't leave New York State, it 

14          stays within the state on that issue.  

15                 And on the other issue regarding the 

16          20 percent cut, this is where we look at 

17          other -- we're working with the Office of 

18          Mental Health, and Dr. Sullivan and I have 

19          looked at how can we address some of these 

20          issues.  It ties more into the whole issue of 

21          advanced primary care where we look at 

22          providing primary care and behavioral health 

23          together.  And I think there's a way by doing 

24          that to not end up -- that 20 percent cut 


 1          won't be impacted as much.  

 2                 SENATOR KRUEGER:  We don't necessarily 

 3          agree on all those answers, but thank you for 

 4          giving it a good shot.

 5                 CHAIRWOMAN YOUNG:  Thank you.  

 6                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

 7          Kevin Byrne.

 8                 ASSEMBLYMAN BYRNE:  Thank you.  And 

 9          thank you for your patience throughout this 

10          hearing.  

11                 I just want to follow up on some 

12          things I think Mr. Gottfried may have asked 

13          about earlier.

14                 I know New York State has historically 

15          supported various smoking cessation programs, 

16          including tobacco quit lines and things of 

17          that nature.  And I know the Legislature and 

18          the Governor -- I think, in my opinion -- has 

19          acted responsibly this past session in 

20          strengthening the Clean Indoor Air Act and 

21          protecting our children in schools with 

22          restricting e-cigarettes on school grounds 

23          through different policy measures.

24                 That said, I want to ask about where 


 1          the funding is for those smoking cessation 

 2          programs now.  Specifically, I think 

 3          Mr. Gottfried may have asked about -- it's a 

 4          little bit different, but the New York State 

 5          asthma program, as well as reduced funding.  

 6                 And I know this is something that is 

 7          important to the children in New York State.  

 8          I believe over 400,000 children suffer with 

 9          asthma in the school system right now.  So if 

10          you could speak to that.  

11                 And I'm going to try to just run 

12          through this as well, for the sake of our 

13          time.  And I note -- so on a completely 

14          separate topic, you've already spoken about 

15          the opioid tax surcharge several times.  My 

16          specific question is that I know, from my 

17          understanding, several other states have 

18          tried to implement other sorts of programs as 

19          well on opioids, so I want to know what 

20          differentiates this from that.  

21                 And if you can't answer it and defer, 

22          I understand, but specifically, how is this 

23          going to -- you know, a lot of us are 

24          concerned on how this surcharge could go to 


 1          the consumer.  I'm concerned about folks who 

 2          receive palliative care specifically in 

 3          hospice.  I have received multiple inquiries 

 4          from providers of hospice treatment, folks 

 5          who are in need of palliative care.  It's not 

 6          something that we want to be penalizing them 

 7          with added costs.  So if there are any 

 8          assurances you could provide to make sure 

 9          that that tax burden won't be shifted onto 

10          them, I would appreciate that.  

11                 If you could speak to the smoking 

12          cessation program and the funding for that as 

13          well as hospice treatments.

14                 COMMISSIONER ZUCKER:  So we are -- 

15          regarding this tax, I understand what your 

16          concern is about hospice care and making sure 

17          that it doesn't end up being a burden placed 

18          upon them.  We -- we will -- be assured that 

19          that will not be something which will be 

20          compromised.  We always look at the issues of 

21          hospice care.  

22                 And this goes about back to the issue 

23          of whether it's chronic care or whether it's 

24          those who are in end-of-life care and making 


 1          sure that we provide the necessary services.

 2                 So again, the tax is -- the opioid tax 

 3          is high level and making sure that this 

 4          doesn't get filtered down to the end-user on 

 5          that.  

 6                 And regarding smoking and other -- we 

 7          have an aggressive program in this state 

 8          regarding smoking.  We have dropped the 

 9          percentage of kids who are in high school 

10          smoking basically in half, and even further.  

11          One of the concerns we do have is this issue 

12          of e-cigarettes which is now surfacing and 

13          it's bringing kids -- those numbers have 

14          risen in the last two years from five to 

15          10 percent in high school.  I'll check that 

16          number for sure, but I believe that's right.  

17          And we will continue to be very aggressive on 

18          the issue of smoking.  New York State has 

19          been a leader in the nation on this, and we 

20          have been praised for that by the CDC and 

21          other agencies about how aggressive we have 

22          been on that.

23                 ASSEMBLYMAN BYRNE:  I'm sorry, can you 

24          speak to any -- is there any change in levels 


 1          of funding for this year from prior years in 

 2          regards to supporting those types of 

 3          programs?  

 4                 First of all, I think there is credit 

 5          definitely due for the work that New York 

 6          State had done, but also across the country.  

 7          I think I read a report just a couple of 

 8          months ago that the CDC said that for the 

 9          first time, there's actually been a little 

10          bit of a drop in e-cigarette use among 

11          teenagers.  But I'm not sure what those 

12          numbers are in New York State, and they're 

13          still very high.  Just because there was a 

14          drop does not mean that they're acceptable.  

15                 But if there's anything -- is there 

16          any changes in the level of funding to 

17          support tobacco quit lines or anything like 

18          that?

19                 COMMISSIONER ZUCKER:  Well, I can get 

20          you the numbers on the percentages for the 

21          funding on this and get back to you on the 

22          exact numbers.  

23                 But like I said before, this is one of 

24          our hallmark programs, smoking cessation, in 


 1          the state, and so we're not going to let 

 2          anything happen to back pedal on that issue.

 3                 ASSEMBLYMAN BYRNE:  Thank you, 

 4          Mr. Commissioner.  

 5                 CHAIRWOMAN YOUNG:  Thank you.  We've 

 6          been joined by Senator Marisol Alcantara.  

 7                 And our next speaker is Senator Sue 

 8          Serino.

 9                 SENATOR SERINO:  Thank you, Senator 

10          Young.  

11                 And I'd also like to say thank you to 

12          Assemblyman Cahill for allowing me to ask my 

13          questions on Lyme and tick-borne diseases 

14          first.  Thank you.

15                 Thank you very much, Commissioner and 

16          Director, for being here today.  As you know, 

17          I chair the Senate's Task Force on Lyme and 

18          Tick-Borne Diseases.  

19                 And Senator Hannon and I were very 

20          encouraged by your participation in our 

21          recent public hearing that we held on the 

22          topic.  At that time you had announced that 

23          you had a statewide action plan to address 

24          the issue, something that we can all agree 


 1          needs to remain a priority, but you made it 

 2          clear that your office recognizes the 

 3          seriousness of the epidemic the state is 

 4          currently facing.  

 5                 And while I was encouraged to hear 

 6          that the Governor included some small 

 7          Lyme-related initiatives in his State of the 

 8          State address, I was incredibly disappointed 

 9          to see that there wasn't specific funding 

10          dedicated to research, education or 

11          prevention for Lyme and tick-borne diseases 

12          in the Governor's budget proposal.  Could you 

13          speak to that, please?  

14                 COMMISSIONER ZUCKER:  Sure.  The 

15          Governor is extremely committed to this issue 

16          of tick-borne diseases, whether it is Lyme 

17          disease or anaplasmosis, Ehrlichiosis, 

18          babesiosis and all the others that we're 

19          concerned with.  

20                 We've had a very aggressive program on 

21          this front.  We are working with other 

22          departments across the state, we're working 

23          with Parks and Recreation, we're working with 

24          DEC, we're working with the community, we're 


 1          working with hunters and making sure that 

 2          they're aware of the risks of ticks.  

 3                 Our lab is looking at issues of 

 4          public-private partnerships -- more on that 

 5          in the future, but we are tackling that issue 

 6          as well.  And we are looking at what are some 

 7          of the new novel approaches we can have for 

 8          treating the issues of not just Lyme disease, 

 9          but other tick-borne diseases.  I've had 

10          actually meetings with the community on this, 

11          commissioner's grand rounds on these issues, 

12          and we'll move forward on this as well.

13                 SENATOR SERINO:  And I appreciate 

14          that.  But there isn't a dedicated line for 

15          funding, and that's what I'm concerned with.  

16                 You know, like Senator Young said 

17          earlier, we have constituents in our district 

18          that we have to answer to.  I have people 

19          that come into office that can't walk, don't 

20          have a memory, can't work anymore.  And I 

21          don't know if I had spoken to you about this 

22          before, but I had a brother that was not 

23          diagnosed with Lyme disease for eight years.  

24          He committed suicide seven years ago.  And 


 1          the more I learn about Lyme and tick-borne 

 2          diseases, the more it makes me wonder what 

 3          role that had to play.  

 4                 And, you know, every year we do our 

 5          budgets and we have the good and the bad, the 

 6          things we like and the things that we don't 

 7          like.  Last year, for example, we put 

 8          $200 million into lighting up bridges.  How 

 9          do you think the people that have Lyme and 

10          tick-borne diseases feel about that?  They're 

11          going to say it's ridiculous.  Or that's 

12          probably not the right word that they would 

13          choose.  But how do we explain that to them?  

14                 So I'm very concerned about having 

15          funding.  And I appreciate the private-public 

16          partnerships too.  As you know, the first two 

17          years I was here we put $600,000 in the 

18          budget and then $400,000 last year, which is 

19          pitiful.  But the year before we had the 

20          Cohen Foundation donate $5 million to the 

21          Cary Institute in order to do Lyme and 

22          tick-borne research with the Cary Institute 

23          for The Tick Project.  So that was very 

24          encouraging.


 1                 COMMISSIONER ZUCKER:  And I understand 

 2          you're bringing up more the issue of chronic 

 3          Lyme disease and those who have this for 

 4          obviously years, and what we can do for them.  

 5          And we will look at that as well.

 6                 SENATOR SERINO:  And that brings me 

 7          back to the testing.  Because I hear so often 

 8          that our test is not accurate.  So if there's 

 9          something that we could do, whether it's a 

10          public-private partnership to do more 

11          research, I think that's incredibly important 

12          as well.

13                 And also recently, in fact it was July 

14          of 2016, a bill that I sponsored with 

15          Assemblywoman Didi Barrett was signed into 

16          law that would require the Department of 

17          Health to work with the State Education 

18          Department to develop age-appropriate 

19          materials for schools to use if they wanted 

20          to teach students about how to protect 

21          themselves against Lyme.  And I know you and 

22          I have had this conversation before, because 

23          I go to the classrooms.  I was just in a 

24          middle school the other day, and a third of 


 1          the class -- we don't even have a half of the 

 2          class raising their hands that they know 

 3          about Lyme and tick-borne disease.  So it's 

 4          so important that we have that material.  

 5                 But I was just wondering if we could 

 6          get a status on it and when the schools can 

 7          expect to receive those materials.

 8                 COMMISSIONER ZUCKER:  So I will get 

 9          information about the timing on this, and I 

10          promise you that I'll sit down with SED and 

11          figure out how we can move forward and make 

12          sure the education component of this is met.

13                 SENATOR SERINO:   Yes.  And I was very 

14          encouraged when we spoke about it that you 

15          saw the importance of that too.  

16                 I was also very encouraged to learn 

17          that you are including Lyme and tick-borne 

18          diseases in your grand rounds this spring.  

19          And you and I have already spoken about this, 

20          but I do want to encourage you once again to 

21          be inclusive in the specialties that you are 

22          including in this work.  As you know, I have 

23          heard from countless advocates who were 

24          incredibly disappointed to learn that ILADS 


 1          won't be represented.  And while I understand 

 2          that there's a debate surrounding this issue, 

 3          the fact there is a debate tells me there's  

 4          no clear consensus.  And until there is, 

 5          these events should be inclusive, and I would 

 6          appreciate your consideration on that matter.

 7                 And I'm out of time.  Oh, you know 

 8          what, can I just ask you two more statuses on 

 9          Lyme and tick-borne disease in New York this 

10          year, particularly given the warm winter that 

11          we've been having, if you have a number.  And 

12          the other question is to the status of the 

13          cases of Powassan in upstate New York and if 

14          they test positive in the later survey 

15          results.

16                 COMMISSIONER ZUCKER:  And we did have 

17          a handful of cases of Powassan, and we are 

18          tracking that.  And it varies from year to 

19          year, and we recognize that this year was a 

20          more serious year.  

21                 But again, it goes back to are there 

22          other -- as you just mentioned, about other 

23          tests, faster tests.  And that's where we 

24          work with our not only partners outside of 


 1          government but obviously our lab and the 

 2          experts that we have there.

 3                 SENATOR SERINO:  Okay.  Thank you, 

 4          Commissioner.

 5                 CHAIRWOMAN WEINSTEIN:  Thank you.  

 6                 We've been joined in the Assembly by 

 7          Assemblywoman Jo Anne Simon.  

 8                 And now to Assemblyman Abinanti. 

 9                 ASSEMBLYMAN ABINANTI:  Thank you, 

10          Madam Chair.  

11                 Thank you, gentlemen, for joining us 

12          this morning.  

13                 First of all, let me start with 

14          something I agree with you on.  I think the 

15          suggestion of the opioid tax is a very good 

16          one, and I would like to see you double it.  

17          I believe that that would be a reasonable 

18          charge which would give you more money to do 

19          the things that you have to do to deal with 

20          this issue.

21                 Early Intervention.  We've had lots of 

22          conversations about this over the years.  And 

23          I know you've already had some conversations 

24          with some of my colleagues this morning on 


 1          it.  I just want to chime in and say from 

 2          anecdotal evidence, I'm hearing there are 

 3          waiting lists down in my part of the state, 

 4          down in Westchester County and New York City.  

 5          I'm hearing that there's a shortage of 

 6          providers, which is the result of the changes 

 7          that we've made over the last few years, and 

 8          I'm very concerned about that.

 9                 One of the things I wanted to ask 

10          specifically, though, was are the rates in 

11          each county determined by some type of a cost 

12          of living adjustment?

13                 COMMISSIONER ZUCKER:  I will find out 

14          about whether it's based on the cost of 

15          living.

16                 ASSEMBLYMAN ABINANTI:  I haven't been 

17          able to get an answer to that.  Some staff 

18          have tried to look into it and whatever.  

19                 But I am told that the cost-of-living 

20          adjustment for Westchester is, like in many 

21          other situations, a Hudson Valley rate as 

22          opposed to a downstate rate.  And if you 

23          recall when we did the minimum wage, we 

24          included Westchester with Long Island, as 


 1          opposed to with the rest of the state.  I'd 

 2          like you to look into that.  

 3                 That might ease a little bit of the 

 4          burden if we could have a special rate for 

 5          Westchester similar to Long Island and 

 6          New York City rather than the rest of the 

 7          state, because we have such a high cost of 

 8          living.  And there is a great difficulty in 

 9          getting providers in Westchester County for 

10          Early Intervention.

11                 Secondly, again a local issue, I've 

12          heard some complaints from some advocates 

13          about clean water.  They are saying that 

14          they're finding that in the Hudson River and 

15          on Long Island Sound, that there are high 

16          levels of contamination from leaking in 

17          sewage treatment plants.  And they 

18          specifically asked me to ask you, can you 

19          improve your partnership with DEC to see if 

20          we can deal with these much more quickly.  I 

21          mean, for example, there's one on Long Island 

22          Sound apparently that has been going on for a 

23          while.  And I don't know if you're familiar 

24          with that one.


 1                 COMMISSIONER ZUCKER:  Well, I will 

 2          tell you, Assemblyman, I am extremely proud 

 3          of what the department has done, what the 

 4          state, the entire state has done on the issue 

 5          of water.  Working closely with Commissioner 

 6          Seggos -- we chair, both, the Drinking Water 

 7          Quality Council -- but we have worked on so 

 8          many areas in this state, both in the areas 

 9          you have mentioned but also in other parts of 

10          the state, to look at contaminants, whether 

11          it's contaminants in drinking water -- we've 

12          worked on putting the appropriate types of 

13          filtration systems in place, we've worked 

14          with the counties, the county commissioners, 

15          county executives, the mayors of communities 

16          to address this issue.

17                 In addition, you know, regarding the 

18          Hudson River, Commissioner Seggos and I have 

19          spoken a lot about that, about any 

20          contaminants in the river.  It would probably 

21          be better to ask him some of the specifics 

22          about what DEC is doing on that.

23                 ASSEMBLYMAN ABINANTI:  I will.

24                 COMMISSIONER ZUCKER:  But this -- 


 1          we've had, on the Drinking Water Quality 

 2          Council, we've had two meetings, we have 

 3          another one coming up in two weeks from 

 4          today.  We are looking at some of the issues 

 5          of contaminants, whether it's PFOA, PFOS, 

 6          1,4-dioxane.  And the Governor had charged us 

 7          with this a while back, and we have pushed 

 8          aggressively on this issue for the State of 

 9          New York.

10                 ASSEMBLYMAN ABINANTI:  Thank you.

11                 Now, you also discuss Medicaid 

12          coordinators.  Do you need a Medicaid 

13          coordinator to access services from Medicaid?  

14          Because I'm understanding in Westchester 

15          County, to access OPWDD services -- which I 

16          guess we talk about tomorrow -- you need to 

17          have a Medicaid coordinator, and there are 

18          none available.

19                 The few that we have have a full slate 

20          of people, and there are no Medicaid 

21          coordinators.  And now we're going off into 

22          this new system, and I know of Medicaid 

23          coordinators, because I've spoken to some, 

24          who are going to be dropping out because they 


 1          like providing service, they don't want to be 

 2          just a coordinator.

 3                 DIRECTOR HELGERSON:  So I think we're 

 4          talking specifically about OPWDD and its 

 5          conversion to managed care or at least health 

 6          homes and then eventually managed care.  I 

 7          would suggest directing that question to 

 8          Commissioner Delaney tomorrow.  I think she's 

 9          going to be talking directly to that change.  

10          But I think overall -- I mean, we're 

11          supporting them as an agency in that effort.  

12          But I think she's probably the best one to 

13          answer that.

14                 ASSEMBLYMAN ABINANTI:  I just want to 

15          express the concern to you, because I know 

16          it's something that you're dealing with.  And 

17          like I said, there's a shortage and I think 

18          there's a waiting list for them, so that's a 

19          lot of people who aren't getting services.

20                 As a last question, what are we doing 

21          as a state to increase the number of medical 

22          professionals who have a specialty that deals 

23          with people with special needs?  I know we 

24          discussed this last time.  I'm out of time, 


 1          but I'll just wrap this up.  I've met with 

 2          the psychiatrists in Westchester County.  

 3          There are very few that take Medicaid, if any 

 4          at all.  There are very few that even deal 

 5          with children who have special needs.  And I 

 6          know in the rural areas it's even more 

 7          difficult.  

 8                 What are we doing to meet the need of 

 9          people with special needs for all types of 

10          medical services?  There are very few doctors 

11          that actually understand people with special 

12          needs and are able to take care of them.  

13          I've heard story after story where people 

14          with special needs go in to a dentist who 

15          claims to know what to do and then they have 

16          no idea how to deal with a child with special 

17          needs if the child acts a little differently 

18          than the normal child and all of a sudden 

19          they say, "I'm sorry, I can't treat the 

20          child."  And the few dentists in Westchester 

21          that take kids with special needs don't take 

22          Medicaid.  

23                 So we have a real crisis for people 

24          with special needs trying to access all types 


 1          of medical care, from psychiatric to dental 

 2          to just normal doctors.

 3                 COMMISSIONER ZUCKER:  So I hear you, 

 4          and I understand that this is a concern.  We 

 5          will work with the community to try to figure 

 6          out -- well, two parts.  One is how we can 

 7          get them to either accept more patients, who 

 8          are specifically the ones that you're 

 9          referring to, and also to work with the 

10          community of not just the doctors and the 

11          nurses but other health professionals that 

12          could probably provide some of those 

13          services.

14                 ASSEMBLYMAN ABINANTI:  The only thing 

15          I could suggest, if I may, and that is let us 

16          take a look at the Medicare rates rather than 

17          the Medicaid rates.  And maybe if we can make 

18          our Medicaid rates closer to the Medicare 

19          rates, we might get more doctors doing this.

20                 Thank you.

21                 CHAIRWOMAN WEINSTEIN:  Thank you.  

22                 CHAIRWOMAN YOUNG:  Thank you.  

23                 Senator Kaminsky.

24                 SENATOR KAMINSKY:  Thank you.  


 1                 Good afternoon, Commissioner.

 2                 Long Islanders remain concerned over 

 3          1,4-dioxane.  There was some, as you know, 

 4          expose about a year back about it, and the 

 5          state jumped on it with an initiative where 

 6          you partnered with DEC.  

 7                 Can you please update us in terms of 

 8          where we are with setting a level for that, 

 9          as well as the treatment to remove it once a 

10          level is set?

11                 COMMISSIONER ZUCKER:  Sure.  Thank 

12          you.  And it was a pleasure to be out in the 

13          county.

14                 Let me tell you what we are doing.  

15          We're doing a lot on this issue.  One is -- 

16          there's two parts, there's one setting the 

17          level and there's another area regarding the 

18          filtration system.  So we're working with 

19          Suffolk County to move forward with the AOP, 

20          the Advanced Oxidation Process, oxidated 

21          phosphoral relation process, to actually 

22          remove the 1,4-dioxane, which is important, 

23          obviously, as you're well aware about the 

24          plume in that area.


 1                 Regarding setting a level, the 

 2          Governor charged us with the Drinking Water 

 3          Quality Council and to have meetings to 

 4          address this.  And as I mentioned before, we 

 5          are meeting on February 26th to get more data 

 6          about this and we're moving forward on 

 7          getting MCL levels set.  And once I have more 

 8          information exactly, I'll be able to provide 

 9          that for you.

10                 But we are aggressively moving forward 

11          on this issue.

12                 SENATOR KAMINSKY:  Okay.  And do you 

13          believe it will be set in this calendar year?

14                 COMMISSIONER ZUCKER:  I hate to commit 

15          to a time or a date.  But this is February, 

16          so we've got 10 months.

17                 SENATOR KAMINSKY:  Okay.  A number of 

18          advocates have told me they heard that the 

19          EPA is moving ahead with setting a limit, 

20          after not doing so for a long time.  Are you 

21          hearing anything about that?  

22                 COMMISSIONER ZUCKER:  I haven't.  

23          Though I am skeptical with this -- with what 

24          goes in Washington about where we are on this 


 1          now.

 2                 On other issues, I had asked the CDC a 

 3          year ago -- a year ago today or this week -- 

 4          to set a level, and they didn't.  And that's 

 5          why we ended up saying we will do this.  So I 

 6          am not going to wait for the federal 

 7          government to do anything on levels of this 

 8          nature or for many other issues that we have 

 9          addressed, and we will just move forward, as 

10          the State of New York, aggressively to 

11          address this.

12                 SENATOR KAMINSKY:  Thank you.  

13                 Do you have confidence that a 

14          filtration system that is cost-effective 

15          enough to be used across the state is 

16          something that will be forthcoming?  

17                 COMMISSIONER ZUCKER:  So the AOP 

18          system we believe -- well, we know is 

19          effective on 1,4-dioxane.  And the priorities 

20          here is the people of your county and, for 

21          that matter, the people of the entire state.  

22          And we have worked to address this, whether 

23          it's 1,4-dioxane or PFOA or PFOS, and the 

24          appropriate filtration systems are being put 


 1          into place.  

 2                 And we're also working to test people.  

 3          In your area, we actually did also some 

 4          monitoring as well, not just put the 

 5          filtration system in, but monitoring of --

 6                 SENATOR KAMINSKY:  In certain 

 7          brownfield sites and other places, is that 

 8          the monitoring you're talking about, from 

 9          wells in certain brownfield sites or other 

10          places?  Or you're just -- where are you 

11          finding that data?  

12                 COMMISSIONER ZUCKER:  Well, our team, 

13          we have experts to look specifically at the 

14          plume -- and this is working with DEC -- to 

15          find out exactly where it is.  We do 

16          monitoring, and I've got some superstar 

17          experts in the department, particularly in 

18          the water quality part of the department, who 

19          will exactly identify what needs to be done 

20          on this issue.  And we will -- we will tackle 

21          it, and that's a commitment.

22                 SENATOR KAMINSKY:  Okay, thank you.  

23                 Just one last quick thing.  I'm from 

24          Long Beach, a barrier island that used to 


 1          have a hospital and no longer does.  And FEMA 

 2          gave funds to a hospital a little while away, 

 3          South Nassau, that's supposed to be spending 

 4          money on Long Beach.  We've worked incredibly 

 5          well with Dan Sheppard and his team from your 

 6          department, and I would just ask that you 

 7          continue to make sure that Long Beach 

 8          receives the funding and medical attention it 

 9          deserves, so that doctors come back and so 

10          that the residents are adequately taken care 

11          of, so that Long Beach is not forgotten as we 

12          move forward in the process.

13                 COMMISSIONER ZUCKER:  Sure.  Dan and I 

14          spoke about this specific issue recently, and 

15          we are -- we will make sure of that.

16                 SENATOR KAMINSKY:  Okay, really 

17          appreciate that.  Thank you.

18                 CHAIRWOMAN YOUNG:  Thank you.  

19                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

20          Oaks.

21                 ASSEMBLYMAN OAKS:  Yes, Commissioner.  

22          While we've been here today, the Governor has 

23          announced some of his 30-day amendments.  And 

24          in that there was the proposal to permanently 


 1          authorize pharmacists to do vaccines with 

 2          children and enable pharmacies to participate 

 3          in the Vaccines for Children program.

 4                 My question is, do you know if there's 

 5          any money being allocated to train the 

 6          pharmacists in doing that?

 7                 COMMISSIONER ZUCKER:  So I will look 

 8          into how much -- what resources are 

 9          available.

10                 Obviously this is to expand on the 

11          executive order that the Governor put forth 

12          about having pharmacists immunize those from 

13          two to 18 years of age for flu.  And clearly 

14          this is a bad flu season this year.  This is 

15          something which will be extremely beneficial.  

16                 I'll look into exactly how much of the 

17          resources there will be.

18                 ASSEMBLYMAN OAKS:  So part of that 

19          would be what are we spending, I guess this 

20          year, and then --

21                 COMMISSIONER ZUCKER:  Going forward.

22                 ASSEMBLYMAN OAKS:  -- for the proposal 

23          going forward.  And would it be DOH or SED 

24          doing that, do you know?  


 1                 COMMISSIONER ZUCKER:  DOH is -- would 

 2          be involved in this.  

 3                 I will say that one of the things that 

 4          we are working hard to do is -- and I raised 

 5          earlier -- is the need to expand the way care 

 6          is provided to those in a community, and who 

 7          else can provide it.  And I think here's a 

 8          good example regarding pharmacists to be able 

 9          to practice within their -- you know, within 

10          their scope of practice be able to do things 

11          and to be able to provide immunizations.  

12                 If one asked somebody who they see 

13          more frequently, I bet you they would tell 

14          you they see their pharmacist more frequently 

15          than they see their doctor.  Because when you 

16          walk in there every 30 days or every 60 

17          days -- if you have any prescription, you 

18          need to go back in there.  So I think that it 

19          behooves us to work with pharmacists in so 

20          many ways because they may be the person who 

21          can identify a problem with a patient and 

22          also provide immunizations and other 

23          services.

24                 ASSEMBLYMAN OAKS:  Moving on to 


 1          another issue, last year the commissioner of 

 2          the State Office for the Aging testified that 

 3          the New York Connects program is now being 

 4          funded under the global cap.  And just, 

 5          again, with the federal landscape and 

 6          whatever, can we be certain that it's going 

 7          to be funded all right without a specific 

 8          appropriation?

 9                 DIRECTOR HELGERSON:  Correct.  There 

10          are no cuts, there are no changes --

11                 COMMISSIONER ZUCKER:  No cuts.

12                 DIRECTOR HELGERSON:  -- that funding 

13          levels will continue as is, as necessary to 

14          meet the needs of the program.

15                 ASSEMBLYMAN OAKS:  I appreciate both 

16          of your answers.  Thank you.

17                 CHAIRWOMAN WEINSTEIN:  Thank you.  

18                 SENATOR KRUEGER:  Senator Tim Kennedy.

19                 SENATOR KENNEDY:  Thank you, 

20          Commissioner.  

21                 I'm very pleased to hear about the 

22          Governor's Article VII language regarding the 

23          lead paint exposure.  And there's areas that 

24          require local code enforcement to follow up 


 1          with inspections.  There are nine zip codes 

 2          in the City of Buffalo specifically where 

 3          there are identified areas of high risk.  And 

 4          so I'm curious to know, with this Article VII 

 5          language, what the Department of Health will 

 6          do with local code enforcement to ensure 

 7          proper follow-up when dealing with buildings 

 8          that are chipping paint.

 9                 COMMISSIONER ZUCKER:  Right.  Well, so 

10          the Governor is committed to making sure that 

11          when someone buys a new home or -- I'm sure 

12          you're familiar with it, buys a new home 

13          or -- that they need to make sure that they 

14          test it for lead and to be sure that -- and 

15          many other real estate transactions in that 

16          nature.  We -- if they're elevated, obviously 

17          we will make sure that this is corrected or 

18          push to get it corrected.

19                 I'm not sure, are you concerned that 

20          there won't be enough resources?  I'm not 

21          sure what you're --

22                 SENATOR KENNEDY:  Yeah, does the 

23          Governor's budget propose any additional 

24          funds for enforcement with that Article VII 


 1          language?  

 2                 COMMISSIONER ZUCKER:  I'll look and 

 3          see what we have in the Article VII language 

 4          on that.

 5                 SENATOR KENNEDY:  I think it would be 

 6          essential, especially given the circumstances 

 7          with the high-risk zip codes that have 

 8          already been identified.  And I think it 

 9          would help statewide.  

10                 But I really appreciate the efforts 

11          and the focus on it.  As you mentioned during 

12          your testimony, individuals that are 

13          suffering from lead poisoning are so 

14          debilitated that we have an obligation to get 

15          out in front of this issue.

16                 COMMISSIONER ZUCKER:  I agree.  And I 

17          will tell you, back in the days when I was an 

18          intern, a resident -- this was not in the 

19          State of New York, but this was in Baltimore.  

20          And there are many children that I actually 

21          gave chelation therapy to, and they came 

22          in -- and it's a similar situation where lead 

23          paint or lead dust -- and it was very 

24          disheartening to see the cognitive effects on 


 1          children who are exposed to lead, and we need 

 2          to get on top of it.  And we will.

 3                 SENATOR KENNEDY:  Well, I applaud your 

 4          efforts.  

 5                 I want to switch to Western New York 

 6          and the lack of primary care physicians that 

 7          are available, and quite frankly the concern 

 8          that I have, and it's shared in the medical 

 9          community, of a withering accessibility 

10          because of the physician shortage or shortage 

11          to come.  Statewide, it's 114 primary care 

12          physicians per 100,000.  Out in Western 

13          New York, the number is 90 or even below 90.  

14          Which again is a bad trajectory, and 

15          especially when we're talking about equitable 

16          resources for our communities.

17                 Do you recognize this shortage?  Is it 

18          a crisis at this point?  And what can we do 

19          to attract more physicians, especially in 

20          areas of upstate New York that need them?

21                 COMMISSIONER ZUCKER:  I absolutely 

22          recognize this.  It is something we're very 

23          concerned about.  I have a team working on 

24          this to try to figure out how do you get 


 1          health professionals -- whether it's 

 2          physicians, nurses, pharmacists, as we were 

 3          just talking about -- into an area.

 4                 So what are some of the incentives 

 5          that we could put into place to do this?  And 

 6          this is where we're looking across the board.  

 7          Sometimes this is not necessarily the things 

 8          that you naturally think about.  There must 

 9          be some creative solutions, whether it deals 

10          with real estate, whether it deals with 

11          schools, whether it deals with communities, 

12          whether it deals with training.  You know, 

13          Buffalo has a medical center there, a medical 

14          school there.  How do you get doctors to stay 

15          in the area who are coming out of there?  

16                 Another thing that we've spoken about 

17          over the course of the past year is there are 

18          many graduating medical students and 

19          residents who also want to run off to other 

20          parts of the world and provide care.  

21                 And I say that some of the challenges 

22          that you see in other parts, having traveled 

23          the world to different areas, it's an issue 

24          of rural health.  That's what it is.  It's an 


 1          issue of not having one doctor or one person 

 2          over a large area.  You could do that right 

 3          here in New York, you can go to certain 

 4          areas.  

 5                 So how do we keep them right here in 

 6          the state and not, say, run across the world?  

 7                 SENATOR KENNEDY:  So there's a doctor 

 8          that I had met with a couple of weeks ago, 

 9          part of a group that I've been meeting with 

10          on issues like this, who told me that his 

11          caseload is 10,000 patients.  And that is not 

12          a rarity, especially in upstate areas, in 

13          rural areas, but it's not confined just to 

14          the rural areas of upstate New York.  There 

15          are true needs that are, to me, going unmet 

16          because of this shortage.  

17                 And it seems like there's a bit of a 

18          tsunami coming, a wave coming, where there's 

19          going to be many doctors that are retiring.  

20          And I think at this particular point, we're 

21          not prepared to address it.  I think we have 

22          to address it.  

23                 To your point, and I appreciate the 

24          fact that you have a team that's looking into 


 1          it, I think we have to prioritize this.  

 2          There are a number of ways, whether it's 

 3          scholarship-based, to keep them in the state.

 4                 COMMISSIONER ZUCKER:  Right.  So we -- 

 5          there's two parts to that.  One is what do we 

 6          do with the students.  

 7                 So I just met with one of the deans of 

 8          one of the medical schools here in the state 

 9          a couple of weeks ago, and we were talking 

10          about this exact issue about how do you keep 

11          people -- what are the incentives, whether, 

12          again, it's tuition, issues of tuition 

13          reimbursement, other ways to bring them into 

14          the medical school and to say this is 

15          something we'd like to be sure that you're 

16          committed to.  That's one part.  

17                 And then the other part is when you 

18          say about a doctor who has 10,000 patients, 

19          it goes back to some of the other things we 

20          spoke about, which is who else can provide 

21          some of the care.  So when we were talking 

22          about retail practices or about pharmacists 

23          doing things, or nurse practitioners, this is 

24          part of the reason, to try to sort of offset 


 1          the unbelievable demand that's being put upon 

 2          some of the doctors.  That doesn't solve the 

 3          problem of what you're saying about 

 4          increasing the number of physicians in the 

 5          state.  

 6                 We're working on it from both ends.  

 7          One is patient care, how do you make sure 

 8          that patients get -- don't end up with a 

 9          five-minute visit.  And then the other issue 

10          is about how do you get more doctors into the 

11          area.  So I am absolutely pushing this issue, 

12          and we're trying to figure out how to solve 

13          it.

14                 SENATOR KENNEDY:  So I look forward to 

15          working with you on that, and I would commit 

16          to working with your team to address this in 

17          upstate.  

18                 That being said -- and I'll close on 

19          this -- the New York State 30 program, 

20          obviously driven by the federal government 

21          and the ability for doctors to work with 

22          visas in this country, but in each state we 

23          are given 30.  In New York State, with a 

24          population of 20 million people, 30 more 


 1          doctors is a drop in the bucket.  So we need 

 2          more.  

 3                 But I'm concerned that those 30 aren't 

 4          making their way out to Western New York and 

 5          upstate.  And so I'd like a commitment to 

 6          getting a more equitable distribution of 

 7          where these doctors are actually located as 

 8          part of the New York State 30 program.  

 9                 COMMISSIONER ZUCKER:  And we're 

10          working with these program doctors across 

11          New York, and I hear what you're saying, make 

12          sure there's more equity.  

13                 One other thing I just will add that I 

14          have done, is I actually spoke to my fellow 

15          commissioners around the country, because 

16          upstate New York is as rural as some other 

17          parts of the United States.  And so I asked 

18          them, what do you do to get doctors into 

19          other areas?  So we had a little discussion 

20          about that also, to try to apply some of the 

21          things that are being done in other parts of 

22          America to right here in New York to try to 

23          solve this problem.

24                 SENATOR KENNEDY:  Great.  And again, 


 1          driven out of what's happening in Washington 

 2          with the immigration issue, I know that this 

 3          has to be a part of that.

 4                 COMMISSIONER ZUCKER:  Yes.

 5                 SENATOR KENNEDY:  However, given what 

 6          we are allowed to deal with with the 30, I 

 7          would definitely like to work on that with 

 8          you as well.

 9                 COMMISSIONER ZUCKER:  We surely will.  

10          And I promise you I will push that.

11                 SENATOR KENNEDY:  Thank you.  

12                 CHAIRWOMAN WEINSTEIN:  Thank you, 

13          Commissioner.

14                 I have a few questions.  A topic that 

15          hasn't been raised here is the proposal to 

16          reduce the spousal resource allowance as 

17          relates to, well, spousal and parental 

18          impoverishment issues.  I was very pleased -- 

19          more than 20 years ago, I was there for the 

20          announcement when New York State adopted the 

21          spousal impoverishment level at $74,000, a 

22          level we haven't changed for inflation.  

23                 So now the Governor's proposal would 

24          reduce that to the bare minimum, reduce that 


 1          amount to the bare minimum of 24,180.  And 

 2          I'm very concerned about this issue, which is 

 3          truly an older women's issue.  So I was 

 4          wondering what impact would eliminating 

 5          spousal refusal have on spouses that continue 

 6          to reside in the community, also families of 

 7          a severely ill child, and how many 

 8          individuals would be affected by these 

 9          proposals?

10                 DIRECTOR HELGERSON:  Certainly.  

11          Appreciate the opportunity to answer this 

12          question.

13                 So the challenge I think we have today 

14          and I think we are going to have as a state 

15          over the next multiple years -- decade, 

16          perhaps -- is the growing cost of long-term 

17          care. Many of us have predicted that a 

18          demographic wave was going to hit states and 

19          state Medicaid programs as a result of the 

20          aging of the baby boom generation and the 

21          increased demands that that very large 

22          generation and its aging would affect the 

23          long-term care system.

24                 We are beginning to see now evidence 


 1          in New York State Medicaid of that wave 

 2          actually coming to our shores.  And it's now 

 3          the number-one driver of costs in New York 

 4          State Medicaid, is the growing number of 

 5          individuals who are coming to the program in 

 6          need of these services.

 7                 We the state, through a contractor, 

 8          assess the eligibility, the needs of these 

 9          individuals -- do they really rise to a level 

10          of need that they need to be enrolled in 

11          programs like managed long-term care, and we 

12          have a high degree of confidence that they do 

13          need, because we control that process.  

14                 But what we're -- and that's why you 

15          see in our budget proposal a series of things 

16          designed to potentially stem the growth in 

17          costs in that sector, whether that's 

18          directing our high-touch care management 

19          programs towards the individuals who need it 

20          the most, whether that's our nursing home 

21          proposal designed to make sure we don't pay 

22          for care management twice for someone who's 

23          in a permanent nursing home setting, or the 

24          proposal you flagged, which is designed in 


 1          essence to try to keep as much private money 

 2          in the system as we can.  

 3                 I think we're just going to be facing 

 4          this issue going forward.  New York does 

 5          not -- and I think we should be proud of the 

 6          fact -- have other limits on growth in the 

 7          program that other states do.  Very common 

 8          policy that you'd find in almost any state in 

 9          the country outside of New York is a cap on 

10          the number of slots for home- and 

11          community-based services.  We do not have 

12          those caps.  Services like personal care are 

13          an entitlement -- if you need it, you can get 

14          it.  

15                 That means that we are more 

16          susceptible to this wave coming to our shore 

17          than other states are.  But I can tell you it 

18          is now a major driver of costs, not just here 

19          but in other states.  But the proposals that 

20          are made are in essence designed to try to 

21          keep as much private money in the system as 

22          possible so we can really focus the Medicaid 

23          dollars on the populations who need it most.

24                 CHAIRWOMAN WEINSTEIN:  As you know, 


 1          before we established the community resource 

 2          levels, the advice we would give a couple 

 3          facing -- with one spouse, so often the 

 4          husband, facing high need for whether nursing 

 5          home care or care at home, was -- the only 

 6          solution the state offered was get a divorce.  

 7          And then the sick person could qualify, and 

 8          the well spouse -- again, so often the 

 9          woman -- would be able to retain enough 

10          income to be able to stay in the community.  

11          And I hope we're not heading in that 

12          direction again, because the system has 

13          worked well in the past.

14                 To just follow up a little bit of what 

15          Senator Savino said about home -- was talking 

16          about home healthcare workers, one of the 

17          issues that I find in my community, and it's 

18          an issue that I've heard about, is clients 

19          who are eligible for additional hours but not 

20          being able to -- and have been approved for a 

21          certain number of hours, not being able to 

22          get the hours that they are eligible for and 

23          in need of because of healthcare worker 

24          shortages.  


 1                 And I was wondering if there's 

 2          anything in this budget that starts to 

 3          address that issue.

 4                 DIRECTOR HELGERSON:  So what is true 

 5          is that with the growth of managed long-term 

 6          care and the move statewide, through the 

 7          Medicaid program, at least, we're providing 

 8          more home- and community-based services than 

 9          ever before.  So there's been a rapid growth 

10          in that.  

11                 And that has just put stresses on the 

12          workforce, particularly in rural areas where 

13          we simply -- in the past, in many of these 

14          communities, the only option was a nursing 

15          home.  Now we've created doors to home- and 

16          community-based services.  

17                 But I do think this gets back to this 

18          whole issue too of this demographic wave that 

19          is now beginning to affect us.  It's putting 

20          stress on the system overall.  I think one of 

21          the things -- and that's why you see the ALP 

22          proposal in the Governor's budget, is we do 

23          need to think about creative ways to expand 

24          the continuum of services, to think about 


 1          what we can do to provide services in 

 2          cost-effective ways.  I think it's going to 

 3          be one of -- this whole question around 

 4          long-term care, how do we finance it, how do 

 5          we provide it, I think honestly is going to 

 6          be the -- it's going to dominate the debate 

 7          in Medicaid for the next 10 years.  At least 

 8          that would be my humble prediction, because I 

 9          just think that it's going to be a 

10          challenging issue and each year it's going to 

11          become more challenging.  

12                 I think that increasing the wages, the 

13          minimum wage, helps.  We have dollars set 

14          aside, some waiver funds, to provide 

15          additional training opportunities for 

16          individuals.  

17                 But that said, I think it's just going 

18          to be one of those things we're just going to 

19          have to grapple with going forward.

20                 CHAIRWOMAN WEINSTEIN:  Thank you.  

21                 And Dr. Zucker, an issue that -- a 

22          concern that we've spoken about that is 

23          shared by not only my colleagues from 

24          Brooklyn, but others around the state, is the 


 1          Governor's proposal to change the $78 million 

 2          of operating funds for the SUNY hospitals to 

 3          capital.  

 4                 Particularly I'm concerned about 

 5          the -- what I understand is over a 

 6          $30 million impact to Downstate.  That's just 

 7          with the change from operating to capital; 

 8          that doesn't even start to address the 

 9          ongoing issues with Downstate and the need 

10          for additional operating resources because of 

11          their patient base.

12                 COMMISSIONER ZUCKER:  We are looking 

13          at all of the State University systems, the 

14          medical systems that we are responsible for 

15          to be sure that there are resources both for 

16          operating as well as obviously the capital.  

17                 I think that -- we are working closely 

18          with -- I know Downstate has raised this 

19          issue, and we are working closely with them 

20          to be sure that what their needs are that 

21          they have are being met, both from capital as 

22          well as clearly the operating aspect.

23                 CHAIRWOMAN WEINSTEIN:  Well, anything 

24          that the Brooklyn delegation can do to help, 


 1          within reason, we are there, because we're 

 2          very concerned about the situation.

 3                 COMMISSIONER ZUCKER:  I will be going 

 4          down to talk to Downstate at some point in 

 5          the near future to address these concerns and 

 6          other concerns that they have.

 7                 CHAIRWOMAN WEINSTEIN:  Thank you.

 8                 CHAIRWOMAN YOUNG:  Thank you.

 9                 A lot of good discussion today, and I 

10          want to thank you for that.  But there are 

11          some follow-up questions that I have.  The 

12          first has to do with the Fidelis conversion 

13          from nonprofit to for-profit with turning it 

14          into Centene.  So that deal, if it's made, 

15          would have to be approved by the Attorney 

16          General, the Commissioner of Health, and also 

17          DFS.  And one of the questions I have -- have 

18          you gotten any assurances from Centene that 

19          the same geographical area will be covered 

20          that is currently covered by Fidelis, in 

21          order to ensure network adequacy?

22                 COMMISSIONER ZUCKER:  So our 

23          department and DFS are looking closely at the 

24          sale and the assets to see where it's going 


 1          to make sure that the patients are taken care 

 2          of and also look at the providers and who's 

 3          going to provide -- who's going to be -- 

 4          where that's going to be distributed across 

 5          the area.

 6                 DIRECTOR HELGERSON:  Could I just add 

 7          to that.  Whether it's Fidelis or whether 

 8          it's Centene or it's some other plan, they 

 9          have to meet the same contract requirements 

10          for Medicaid in the Essential Plan.  And so 

11          regardless of who operates it, those contract 

12          requirements do not change.

13                 CHAIRWOMAN YOUNG:  Thank you.

14                 So what you're saying is that if a 

15          rural area already is covered, you are 

16          assuring us that that area will still be 

17          covered under the new contract?

18                 DIRECTOR HELGERSON:  The only option 

19          any plan has is to expand or retract its 

20          overall network, meaning you have to exit or 

21          enter a new county.  But there's a whole 

22          process by which a plan would have to go 

23          about that.  

24                 But in terms of where they're 


 1          accessing and the network adequacy standards 

 2          that we hold plans accountable to, all plans, 

 3          regardless of who the owner of the plan is, 

 4          those requirements are standard across all 

 5          managed care organizations that participate 

 6          in the Medicaid program.

 7                 CHAIRWOMAN YOUNG:  For how long would 

 8          that assurance be in place?

 9                 DIRECTOR HELGERSON:  Those contract 

10          requirements are permanent features of the 

11          contracts that those plans sign.  So there is 

12          no time limit on them.

13                 CHAIRWOMAN YOUNG:  Okay, thank you.

14                 Now I want to switch gears just a 

15          little bit.  You've seen that there's a lot 

16          of interest from the legislators regarding 

17          the lead paint issue, the lead issue in 

18          general.  As we know, Mayor de Blasio came in 

19          under Local Governments and had to testify 

20          about the New York City Housing Authority and 

21          the scandal that exists there.  

22                 So you've given some answers, but I 

23          really would like to get into specifics.  And 

24          if you could give us some specific 


 1          information, that would be very, very 

 2          helpful.  

 3                 How many municipalities are designated 

 4          as high risk?

 5                 COMMISSIONER ZUCKER:  So with regards 

 6          to this, what we're going to do is, as 

 7          Senator Sanders asked me whether we will 

 8          investigate this, we will investigate this 

 9          issue.  And I have to sit down and determine 

10          the scope of this entire problem.  And as I 

11          promised him I will do, we will look at that 

12          and we will look at all the issues -- not 

13          just lead, but we'll look at issues of mold 

14          and other problems.  But I have to find out 

15          what the numbers are.

16                 CHAIRWOMAN YOUNG:  Thank you.  

17                 And would New York City, in your 

18          opinion, be subject to this if this provision 

19          becomes law?

20                 COMMISSIONER ZUCKER:  Well, we're 

21          going to go in -- it's -- as I understand 

22          from the Senator, it's the issue of NYCHA, 

23          and we will investigate that and find out 

24          what's happening.


 1                 CHAIRWOMAN YOUNG:  But I think that 

 2          the -- it's NYCHA and I agree with that 

 3          wholeheartedly, but are there -- there must 

 4          be other municipalities around the state that 

 5          would have to be included with that 

 6          information.  

 7                 COMMISSIONER ZUCKER:  Right.  So we 

 8          will look -- I understand what your question 

 9          is about other counties.  We will look and 

10          see -- when I sit down and look at this, I 

11          will look at the scope and try to get a sense 

12          of where else in the state there's a problem.  

13                 CHAIRWOMAN YOUNG:  So obviously this 

14          is a big issue.  But as you look at that, 

15          could you also let the Legislature know, do 

16          you anticipate a fiscal impact on any 

17          municipality that may have a lead paint 

18          problem?  Because obviously this could get to 

19          be quite expensive if there has to be 

20          abatement.

21                 COMMISSIONER ZUCKER:  Well, let me -- 

22          I'll get back to you on that.

23                 CHAIRWOMAN YOUNG:  If you could 

24          include all that, that would be helpful.


 1                 Also just on the lead issue, we also 

 2          have issues in our water systems, as you 

 3          know.  And the New York Clean Water 

 4          Infrastructure Act of 2017 implemented the 

 5          lead service line replacement program, which 

 6          awarded $20 million to municipalities to 

 7          replace water lines in order to reduce the 

 8          risk of the amount of lead in drinking water.  

 9                 And so the Department of Health was, 

10          under statute, required to equitably 

11          distribute funds among regions of the state.  

12          Within each region, they were to give 

13          priority to municipalities that have a high 

14          percentage of elevated childhood blood lead 

15          levels based on the most recent data.

16                 So were there municipalities that met 

17          the eligibility threshold but did not receive 

18          any awards?

19                 COMMISSIONER ZUCKER:  I'm not clear 

20          exactly what you're asking me on this.

21                 CHAIRWOMAN YOUNG:  So $20 million was 

22          in last year's budget for -- actually, it was 

23          in 2017.  Yeah, it was the 2017 budget.  It 

24          was supposed to be distributed regionally, 


 1          equitably, and there were several awards that 

 2          went out.

 3                 My question is, though, is the problem 

 4          bigger than the awards that went out?  And 

 5          how many municipalities do we have in the 

 6          state where they may have the same issue, may 

 7          be facing the high childhood blood lead 

 8          levels, and yet they didn't get an award?

 9                 COMMISSIONER ZUCKER:  So two parts.  

10          One is that we obviously go in and look -- if 

11          there's any concern with a child with an 

12          elevated lead level, we will go in there.  

13          Obviously there's also a program to look at 

14          the lead pipes that are going into 

15          facilities.

16                 Regarding specific municipalities, I 

17          will find out for you what are the numbers in 

18          these municipalities and what are the costs 

19          that have been provided to those 

20          municipalities.

21                 CHAIRWOMAN YOUNG:  Thank you for that, 

22          Commissioner.  You know, I have this list 

23          here, it's 12 pages single-spaced.  To my 

24          understanding, these are municipalities, 


 1          localities that have lead problems that it 

 2          just hasn't been addressed.  There's some in 

 3          my district, but they're all over the state.  

 4                 I think we need a plan, quite frankly, 

 5          to deal with this.  Because obviously the 

 6          implications of having childhood lead 

 7          poisoning are enormous, not only because of 

 8          the impact on lives, but obviously there's a 

 9          cost to the system too.  And we want to make 

10          sure that every child is protected from this, 

11          and every person, frankly.

12                 So if we could get some more 

13          information on that, that would be very 

14          helpful.

15                 Finally, I just want to ask -- and we 

16          touched on it a little bit, but with the 

17          opioid and heroin crisis, DOH actually 

18          publishes the incidence of newborns being 

19          born addicted to opioids.  Unfortunately, as 

20          you look at those statistics, they're 

21          staggering, number one.  

22                 And number two, for example, 

23          Chautauqua County, in my district, has very, 

24          very high rates.  And I was wondering if 


 1          there's anything included under the 

 2          Governor's budget proposal to deal 

 3          specifically with newborns who have this 

 4          problem.

 5                 COMMISSIONER ZUCKER:  So we are 

 6          looking at the opioid issue across the board, 

 7          not just those who are adults.  But we're 

 8          working on issues of education and how to 

 9          communicate with both health professionals 

10          and also the public in general about the 

11          dangers of opioid addiction.  

12                 The -- I can't give you an exact 

13          number of how much money is being put towards 

14          that, but I can promise you that we are 

15          trying to make sure that this education is 

16          out there both to the community.

17                 CHAIRWOMAN YOUNG:  Thank you.  But you 

18          know, my understanding, and I've talked to 

19          health professionals, newborns that are born 

20          addicted oftentimes do not present any kind 

21          of -- anything that would indicate to a 

22          physician that the baby has a problem and it 

23          is addicted.  Is that correct?

24                 COMMISSIONER ZUCKER:  So I will tell 


 1          you, as a pediatrician, I've seen 

 2          unfortunately a lot of children who were born 

 3          to addicted moms, and they literally do go 

 4          through a withdrawal process right there in 

 5          that nursery, and unfortunately many times in 

 6          the intensive care unit.  And this is -- it's 

 7          just -- it's actually heartbreaking to watch 

 8          a little day-old, two-day-old, three-day-old, 

 9          four-day-old baby go through this.

10                 So the key here is, one, getting the 

11          mom treated and addressing this issue early 

12          on, even before her pregnancy, and then to 

13          get them into a health system to make sure 

14          that this child is cared for immediately at 

15          the time of birth.  

16                 There are a lot of other issues that 

17          come along with a mom who is addicted to 

18          drugs -- prematurity and all the other 

19          issues, whether it's cognitive issues or 

20          other problems that occur.  And I think that 

21          is important on the part of the Health 

22          Department to tackle this.

23                 CHAIRWOMAN YOUNG:  Do all babies 

24          present the symptoms immediately, or 


 1          sometimes is there a delay?  

 2                 COMMISSIONER ZUCKER:  Well, usually 

 3          they present relatively early on.  Again, it 

 4          depends on how severe the mom's addiction is.  

 5          So if she's significantly addicted to drugs, 

 6          the kid is going to go through withdrawal, 

 7          and perhaps a little bit delayed.  But if 

 8          you're talking about delayed by months or 

 9          longer --

10                 CHAIRWOMAN YOUNG:  No, I'm talking 

11          about like, say -- for example, could the 

12          baby potentially go home and the doctor not 

13          be aware that the baby is addicted, and then 

14          the baby goes through withdrawal at home?  

15                 COMMISSIONER ZUCKER:  So that brings 

16          up a very good point.  Because if you have a 

17          mother who is addicted and you don't know 

18          that, and you have the child in the hospital 

19          and say it's a vaginal delivery and she goes 

20          home in 24, 48 hours, yes, they can end up 

21          presenting with a problem and be rushed back 

22          to the hospital.  

23                 And then here's where your issue is, 

24          that what if they don't have a health system 


 1          that they are part of, or a healthcare 

 2          provider that cares for their child, then 

 3          they're left at home.

 4                 So I think that that brings up the 

 5          issue of what else we can do to make sure 

 6          this information -- that child is cared for.  

 7          One is to get the information from the mother 

 8          up-front about whether there's any issue of 

 9          addiction.  And number two, to figure out 

10          very early on if there's a problem, as best 

11          as one can pick it up.  Usually it's 

12          relatively early.  But again, we send kids 

13          home relatively quickly, so it could be that 

14          this withdrawal will occur at home.

15                 CHAIRWOMAN YOUNG:  Right.  Which could 

16          be very dangerous to the infant, number one.

17                 COMMISSIONER ZUCKER:  Sure.

18                 CHAIRWOMAN YOUNG:  And number two, 

19          it's a very bad combination to have an 

20          addicted mother with a screaming baby going 

21          through withdrawal.

22                 COMMISSIONER ZUCKER:  Right.  So then 

23          again, this goes back to education, not just 

24          education to the mom but also education to 


 1          those in the community.  Because maybe 

 2          someone will be able to say to the mom, I'm 

 3          concerned about your baby.

 4                 CHAIRWOMAN YOUNG:  Now, we test, 

 5          Dr. Zucker, for more than 40 things, I 

 6          believe, at birth.

 7                 COMMISSIONER ZUCKER:  Forty-seven.  

 8                 CHAIRWOMAN YOUNG:  Forty-seven.  

 9          Should we test for opioids at birth?

10                 COMMISSIONER ZUCKER:  So I guess what 

11          we do is the tests that we do are sort of for 

12          things like PQU, maple syrup urine disease, 

13          different types of tests.  And these are 

14          blood tests.  And usually a lot of the 

15          opioids are urine tests.  So it brings up a 

16          different issue about what to do.  

17                 That would be a big -- let me think a 

18          little bit more about what the best way to 

19          approach this is to make sure these babies 

20          are not at risk.

21                 CHAIRWOMAN YOUNG:  Thank you.

22                 CHAIRWOMAN WEINSTEIN:  Thank you.

23                 Assemblyman Gottfried.

24                 ASSEMBLYMAN GOTTFRIED:  Yes.  So 


 1          before I ask a couple more questions of Jason 

 2          Helgerson, Dr. Zucker, I just wanted to go 

 3          back to the earlier question about the CRNA 

 4          legislation, and not so much ask a question 

 5          as if I may presume to sort of expand on your 

 6          response, which is that what the legislation 

 7          in the budget is aimed at doing is codifying 

 8          the terms under which CRNAs have been 

 9          practicing in New York, I think very 

10          successfully, for decades.  And I think the 

11          language that's in the budget bill is a major 

12          step in that direction and a very welcome 

13          one, from my viewpoint.

14                 Question, Jason.  You know, last year 

15          the Executive agreed to work to create a 

16          system of MLTC payment to provide a higher 

17          rate of payment to plans for patients that 

18          require a higher degree of care.  This is 

19          especially important in home care.  You know, 

20          the goal is to reduce the incentive for MLTCs 

21          to avoid serving those patients and to reduce 

22          the financial penalty on them if they do 

23          serve them.

24                 And so my question is:  It's a year 


 1          later, how is that effort coming?

 2                 DIRECTOR HELGERSON:  Sure.  So we have 

 3          submitted to CMS white papers for their 

 4          consideration.  So it's definitely still a 

 5          work in progress.  But we remain committed to 

 6          seeing if we can get federal approval.  

 7                 There was an issue, and I think we 

 8          raised this up-front, that CMS initially had 

 9          said no to efforts that, for instance, have a 

10          separate rate cell for nursing home care or 

11          they've raised concerns about separate funds 

12          or separate rate cells specifically for 

13          quote, unquote, high-cost individuals, 

14          unquote.  

15                 But we are back and forth with them on 

16          the issue, so it's still a work in progress, 

17          but still remains a priority for us to try to 

18          get done.

19                 ASSEMBLYMAN GOTTFRIED:  Thank you.

20                 And you talked about this a little 

21          earlier.  You know, we've talked several 

22          times at these hearings and elsewhere about 

23          the question of managed care plans 

24          negotiating their own drug prices versus 


 1          having the department take that role back.  

 2          Which the department did, you know, before 

 3          2012.  

 4                 And in the past you've talked about 

 5          how managed-care plans are better able to 

 6          negotiate prices because they use large PBMs.  

 7          I think we've been seeing and widely 

 8          recognizing in the last couple of years that 

 9          there are a lot of problems with PBMs.

10                 In the discussion of the Medicaid drug 

11          cap, you said that the mere threat, really, 

12          of the department coming in to negotiate drug 

13          prices has convinced a lot of drug companies 

14          to lower their prices.  And it seems to me 

15          that if, you know, essentially having just 

16          you glare at them without having to, you 

17          know, draw your gun gets us lower prices, it 

18          seems to me that we ought to be able to get a 

19          lot better deals if instead of putting 

20          negotiations for drug prices in the hands of 

21          very problematic PBMs, it was back in the 

22          hands of the department.

23                 DIRECTOR HELGERSON:  What I would say 

24          is that the additional rebate agreements that 


 1          we've been able to reach, first off, they 

 2          build off of the agreements already reached 

 3          by the PBMs through our health plan partners.  

 4          So we're basically looking for supplemental 

 5          rebates on top of the base agreements that 

 6          have already been reached.  So the fact that 

 7          they have that negotiating power is helpful.  

 8          And I think we're looking to, you know, just 

 9          build upon that.

10                 The second piece in that, I think that 

11          what the legislation gave us that was really 

12          the most powerful tool in the toolkit here to 

13          get compliance was disclosure.  

14                 If you remember, in the agreement that 

15          was reached between the three parties was 

16          that this would be a highly targeted 

17          initiative that would target a subset of 

18          drugs and a subset of manufacturers -- 

19          basically, the drugs that were really driving 

20          costs above the cap -- and if the 

21          manufacturer wasn't willing to come forward 

22          with a lower price, one of the big tools 

23          would be that the department could basically 

24          require a much greater level of disclosure 


 1          from the manufacturer relative to their 

 2          pricing behaviors and things like that.

 3                 I think -- this is just my own 

 4          perception of how this went -- was I think 

 5          that threat was very powerful.

 6                 Now, the question is could you really 

 7          apply that threat across all drugs, all 

 8          manufacturers.  There's thousands and 

 9          thousands of medications.  We don't have the 

10          resources to apply that kind of rigor to it, 

11          and probably that kind of threat wouldn't be 

12          appropriate outside of these specific drugs 

13          that were driving us to higher levels of 

14          spending than we could afford.

15                 So I think at the end of the day it -- 

16          I think it's a powerful new set of tools.  I 

17          think overall it's giving the department, in 

18          collaboration with the plans and PBMs, the 

19          right mix of tools to be able to effectively 

20          manage drug prices.  

21                 The last thing I would say on drug 

22          prices, the biggest challenge we now have is 

23          just a lack of certainty about what is in the 

24          pipeline of new drugs.  And I think that -- 


 1          well, I mentioned managed long-term care as 

 2          the major driver at the moment.  We do fear 

 3          the prices coming down the line for some of 

 4          the new gene therapies, for instance, or some 

 5          of the new drugs, they're highly specialized, 

 6          they target a very small number of 

 7          individuals.  But our experience even with 

 8          just two that we've grappled with in gene 

 9          therapy is they're half a million dollars per 

10          patient per treatment.  

11                 It does not take a large number of 

12          those to come in.  And there isn't a lot of 

13          transparency into that.  It's gotten us to 

14          the point now that we're actually looking 

15          overseas to potential partnerships with NICE, 

16          in the United Kingdom, for better information 

17          about what's in that pipeline.  Because that 

18          is, I think, one of the things that really 

19          has us concerned in the future is these 

20          highly, highly specialized drugs and where 

21          they are and how much they're going to cost.

22                 ASSEMBLYMAN GOTTFRIED:  My last 

23          question is the Executive Budget proposes to 

24          raise the cap on the number of visits for 


 1          physical therapy from 20 to 40, which to me 

 2          is a welcome step in the right direction.  

 3          But in the same provision it takes the 

 4          20-visit caps for occupational therapy and 

 5          speech therapy, which are now 20 of each, and 

 6          says you can -- that you can have 20 of the 

 7          two taken together.  So if you need 11 

 8          occupational therapy visits and 11 speech 

 9          therapy visits, you're out of luck.

10                 In a state where we have a 

11          constitutional mandate to base the Medicaid 

12          program on a standard of need, what is the 

13          justification for linking your entitlement to 

14          OT visits or speech therapy visits to whether 

15          you've used the other one?

16                 DIRECTOR HELGERSON:  Sure.  So we've 

17          had a cap -- I think the cap on those types 

18          of services dates back to the very first MRT 

19          set of recommendations.  

20                 I mean, the purpose of this proposal 

21          is actually to give greater flexibility, so 

22          I'm happy to go back and look at the statute.  

23          But that clearly was the intent.  And if you 

24          see that there's actually an investment on 


 1          the global cap scorecard for this item, that 

 2          we actually expect to spend more money 

 3          because we expect there to be more therapy 

 4          services provided.  

 5                 But I'll take another look at the 

 6          statute to see if there's some reason, 

 7          something that's inconsistent with that 

 8          objective.

 9                 ASSEMBLYMAN GOTTFRIED:  Well, if the 

10          intent is that you've got 20 of this kind, 20 

11          of that kind, if you want to switch from one 

12          kind to another, you can do that.  The way to 

13          do that would be to say you've got up to 40 

14          visits of OT or speech therapy, not 20.  So 

15          if that's the intent, whoever drafted the 

16          language has done the opposite.

17                 DIRECTOR HELGERSON:  We will take a 

18          look at that and get back to you.

19                 ASSEMBLYMAN GOTTFRIED:  Okay, thank 

20          you.

21                 SENATOR HANNON:  Senator David 

22          Valesky.

23                 SENATOR VALESKY:  Thank you, Senator 

24          Hannon.


 1                 A quick question, Commissioner.  I 

 2          believe it was Senator Young who brought up 

 3          the issue of drinking water, the public 

 4          drinking water supply.  As you know, I 

 5          represent the City of Syracuse, which 

 6          receives its drinking water from Skaneateles 

 7          Lake.  Last summer it had a significant issue 

 8          in regard to the algal bloom.  

 9                 I know the Governor has proposed I 

10          think it's $65 million to develop an action 

11          plan to attack that issue at I think 12 

12          different lakes across upstate New York.  Is 

13          your department involved in that effort?  Is 

14          that only a DEC effort?  If in fact you are 

15          involved, in what way?  And what is the --

16                 COMMISSIONER ZUCKER:  I believe we 

17          are.  I will get that.

18                 SENATOR VALESKY:  If you -- okay.  I'd 

19          appreciate hearing.  Okay, thank you.

20                 CHAIRWOMAN WEINSTEIN:  To Assemblyman 

21          Phil Steck for a quick question also. 

22                 ASSEMBLYMAN STECK:  Does the 

23          legislation on CRNAs just reflect how they 

24          have been practicing to date, or does it give 


 1          them a new ability to practice independently 

 2          of physicians?  And if the latter, what is 

 3          the reason for giving them more independence 

 4          of physicians?

 5                 COMMISSIONER ZUCKER:  So it allows 

 6          them to practice within -- well, it allows 

 7          them to work within their scope of practice.  

 8          And for Article 28 facilities, there should 

 9          be physician supervision, which is what's 

10          written in there.

11                 ASSEMBLYMAN STECK:  Did you -- I 

12          missed the last part.

13                 COMMISSIONER ZUCKER:  So it says a 

14          qualified physician would have to provide 

15          oversight of the anesthesia services in an 

16          Article 28 facility or in any office-based 

17          settings.

18                 ASSEMBLYMAN STECK:  Okay, thank you.

19                 SENATOR HANNON:  Senator Rivera.

20                 SENATOR RIVERA:  Thank you, Senator 

21          Hannon.

22                 So I had to slip out really quickly, 

23          so you might have been asked about these two 

24          things, but there's two things that I have 


 1          not heard anything about and I wanted to ask 

 2          you.  

 3                 First of all, enhanced rental 

 4          assistance.  If I'm not mistaken, in this 

 5          current budget there is enhanced rental 

 6          assistance for about 3700 folks outside of 

 7          New York City.  I wanted to see from either 

 8          of you, probably from Helgerson, about how 

 9          much you think this is saving us.  This is 

10          obviously a strategy that you agree with, I 

11          hope.  And for the record, what do you think 

12          it does as far as saving us money for these 

13          types of HIV patients?

14                 DIRECTOR HELGERSON:  Okay, so -- I 

15          gotcha.  So we're talking about AIDS/HIV 

16          patients and the rental cap.

17                 SENATOR RIVERA:  That is correct.

18                 DIRECTOR HELGERSON:  So the Governor's 

19          proposal, I think it was in last year's 

20          budget, basically expanded the rent cap in 

21          New York City, with funding from the state 

22          and the municipality.  We think at the end of 

23          the day individuals having access to 

24          housing -- we're big fans of housing access 


 1          and housing, in our view, is healthcare.  And 

 2          so we're open to any and all ideas for how we 

 3          can achieve it.  

 4                 I think the concern is is that while 

 5          we had a willing partner in the city willing 

 6          to put up money, I think the concern was 

 7          would upstate counties or municipalities be 

 8          willing to put up funds to cover historically 

 9          what is the local share.

10                 I think we've certainly heard, and 

11          we're open to, the argument around could we 

12          book some savings within Medicaid from that 

13          housing.  The one thing about the AIDS/HIV 

14          population that can be a little challenging 

15          is just that in order to -- active treatment 

16          means active use of antiretrovirals, which 

17          are fairly expensive.  And while we've been 

18          successful in negotiating some volume-based 

19          discounts, there's still pretty significant 

20          expense there, so that cuts into what 

21          otherwise would be savings from the 

22          initiative.

23                 But I think we remain very open to 

24          ideas about what we can do to expand rental 


 1          assistance for that population, particularly 

 2          in light of the effort to end the AIDS 

 3          epidemic.

 4                 SENATOR RIVERA:  Gotcha.  And last but 

 5          not least, hep C.  As you just were talking 

 6          about ending the AIDS epidemic, I'm certainly 

 7          thankful for the Governor and for your work, 

 8          both of you and your agencies, on dealing 

 9          with this, trying to make sure that by 2020 

10          we are done with new HIV infections.  And we 

11          certainly lengthen the lives of those folks 

12          who are HIV-positive.  

13                 But obviously there are -- as I'm sure 

14          that you're aware, if we're talking about 

15          hepatitis C, there is a rise in this across 

16          the state.  And it is a curable disease.  I 

17          understand that it is expensive.  But I 

18          wanted to just ask, so it's on the record, 

19          what are some of the things that the state is 

20          doing?  I didn't see much in this budget 

21          related to education around hep C.  But if 

22          you could talk a little bit about what 

23          generally the state is doing to address this 

24          concern going forward, and particularly with 


 1          folks that are already carrying the disease 

 2          and can be cured.  So I wanted to be on the 

 3          record with that.

 4                 COMMISSIONER ZUCKER:  So there's two 

 5          parts to that.  One is the issue of what 

 6          we're doing.  We are actually quite 

 7          aggressive on the issue of education about 

 8          prevention of hepatitis C.  We're working 

 9          with the community, and this is -- we've had 

10          several meetings on this issue as well.  

11                 I think one of the other challenges is 

12          what you just mentioned about treatment, 

13          because there is a treatment for it, which 

14          goes back to the issue that Jason brought up 

15          before, the cost.  That was one of those 

16          treatments that is quite costly.  It's a 

17          challenge for Medicaid on this.  But you can 

18          address -- Jason will address exactly what 

19          we're doing to cover that.

20                 DIRECTOR HELGERSON:  Right.  I think 

21          that one of the things we've been trying to 

22          do in Medicaid, and it was a little bit of a 

23          challenge with the treatment for hepatitis C, 

24          was to keep up with the science relative to 


 1          coverage policies.  But we've got very open 

 2          access now.  

 3                 The good news is that we now have 

 4          multiple drugs.  One of the reasons why it 

 5          was so expensive up-front was we had one 

 6          manufacturer with one drug, and they had an 

 7          ability and they used that ability to drive 

 8          an, in our view, outrageously high price.  

 9          The market now is beginning to become more 

10          like a market with multiple manufacturers.  

11          That hasn't completely played itself out yet, 

12          in the sense that -- but we do anticipate 

13          that at some point, probably this summer, 

14          prices will begin to stabilize and hopefully 

15          we'll see the full benefit of those lower 

16          prices.

17                 It was an extremely expensive 

18          development for the Medicaid program.  It 

19          literally affected the fiscal position of 

20          multiple of our managed-care plans, put some 

21          of them at risk of becoming insolvent, even.  

22          Now a lot of those pressures have, as the 

23          prices have come down, mitigated.  

24                 But that said, one of the things we 


 1          are open to is a conversation about -- we 

 2          already have statutory authority to look at 

 3          volume-based discounts.  And so one of the 

 4          things we're going to do is, once the prices 

 5          have stabilized, is to look at possibly 

 6          utilizing that statutory language to see if 

 7          we can't get ourselves an even lower price, 

 8          which makes it even easier for us to actively 

 9          promote the treatment.

10                 SENATOR RIVERA:  I certainly hope that 

11          you do, considering that it is a curable 

12          disease.  And obviously it costs us a lot 

13          more to make sure that -- if we don't cure 

14          these folks.

15                 DIRECTOR HELGERSON:  Correct.

16                 SENATOR RIVERA:  Thank you so much.

17                 CHAIRWOMAN WEINSTEIN:  Thank you.  

18                 Assemblyman Cahill.

19                 ASSEMBLYMAN CAHILL:  Gentlemen, first 

20          of all, thank you.  I think it's four hours 

21          right now for you.  That's pretty good.

22                 Two quick things; I'll try to make 

23          them very, very brief -- one maybe not even 

24          for the purposes of a response at this time, 


 1          maybe you can send me something.

 2                 Dr. Zucker, you've testified that the 

 3          minute clinics will free up primary care 

 4          doctors so that they can spend more time with 

 5          their patients.  My recollection from talking 

 6          to folks in the medical profession, it's 

 7          not -- the doctor shortage is not about how 

 8          much time they spend with patients, it's 

 9          about who's willing to become a primary care 

10          doctor, because the economics don't work.  

11                 How does taking another 5, 10, 

12          $15 million out of the primary care economy 

13          help them to do a better job and for us to 

14          attract more doctors to this community?  In 

15          fact, it would seem to me that it would have 

16          the opposite effect.  So you can send me that 

17          response when you send me the stuff on EI.

18                 The next one was on the American Lung 

19          Association's rating of New York State, which 

20          differs somewhat from yours.  They certainly 

21          did give us an A for smoke-free workplaces.  

22          We got an A for that.  We got a B for taxes.  

23          We're second-best in the country, I guess 

24          after Connecticut.  We got a C for 


 1          programming, and we got a D for regulation.

 2                 This is a budget hearing, and it's 

 3          about funding.  Unfortunately, they gave us 

 4          an F for funding.  Has anything changed since 

 5          January 29th when they issued that report 

 6          that would give you a different assessment 

 7          than their assessment of how the programs are 

 8          working out in New York State?  

 9                 COMMISSIONER ZUCKER:  Well, I will get 

10          back to you on those issues.  

11                 With regards to the regulation, this 

12          is part of what we're trying to do with our 

13          regulatory reform issues, to try to get this 

14          to move forward to not end up with a D on any 

15          kind of issues of regulation.

16                 ASSEMBLYMAN CAHILL:  Is the department 

17          going to propose a 21-year-old smoking age as 

18          a program bill?

19                 COMMISSIONER ZUCKER:  We are looking 

20          at that.  We are looking at that.

21                 ASSEMBLYMAN CAHILL:  Thank you, 

22          Doctor.

23                 CHAIRWOMAN WEINSTEIN:  Thank you.  

24                 SENATOR HANNON:  Senator Krueger.


 1                 SENATOR KRUEGER:  Thank you.  Just a 

 2          few quick follow-ups.  

 3                 Nobody has asked you yet about funding 

 4          for stem cell research.  There were 

 5          commitments made by the state back in 2017.  

 6          Then we learned that the money wasn't being 

 7          released because of concerns about future 

 8          uncertainty in Washington.  Are we ever going 

 9          to give the $6.5 million that we already 

10          committed to the groups?  And can we expect 

11          any future funding for stem cell research?  

12                 COMMISSIONER ZUCKER:  There was money 

13          that was released, there was money that went 

14          out to the stem cell research for what was 

15          being provided to a certain point.  The issue 

16          was going forward from that point after that.

17                 SENATOR KRUEGER:  But you approved 

18          money going forward.

19                 COMMISSIONER ZUCKER:  Right.  Right.  

20          Right.  And so we are looking -- I recognize 

21          the issues of stem cell research and I have 

22          spoken to many of these stem cell research 

23          scientists about this.  This is one of the -- 

24          it goes back to the issue I brought up before 


 1          about a tough budget season, about 

 2          priorities.  It's not that stem cells isn't a 

 3          priority.  We're trying to figure out how to 

 4          make this move forward.  

 5                 But we did provide funds to the stem 

 6          cell research to a certain point, and we will 

 7          examine it from that point forward.

 8                 SENATOR KRUEGER:  So you're not giving 

 9          me an answer now whether the '18-'19 budget 

10          includes that 6.5 million that was in the 

11          '17-'18 budget that you awarded but never 

12          released?

13                 COMMISSIONER ZUCKER:  I think that we 

14          were moving forward towards that, and I will 

15          get you an answer about that.  

16                 SENATOR KRUEGER:  And I'm sorry, I'm 

17          taking the lead of my colleague here that my 

18          numbers may be wrong, that there was a lot 

19          more than 6.5 that didn't go out?

20                 COMMISSIONER ZUCKER:  That money has 

21          gone out, the money from '17-'18.  And the 

22          additional money has gone out.  And what 

23          happens going forward, I will find out for 

24          you where we go with that.


 1                 SENATOR KRUEGER:  Okay, thank you.

 2                 And this is more of a -- I guess it's 

 3          a Jason question, sort of more of a global 

 4          question.  

 5                 So the answer to many, many questions 

 6          today has been, well, we started something 

 7          and it was successful, so the costs went up, 

 8          so now we have to rein the costs in.  

 9                 Well, didn't we think that if it was 

10          going to be a successful program, i.e., 

11          expanding access to primary care physicians, 

12          that you would see increased costs?  Because 

13          we thought that was a good thing to direct 

14          people into primary care and would hopefully 

15          decrease costs down the line in more 

16          expensive care.  

17                 And then we heard that we've seen 

18          expansion in costs for dealing with the 

19          long-term elderly.  Well, because the 

20          demographics, as you said, is we're a growing 

21          population of long-term elderly, and we now 

22          see people having a 35-year life span from 

23          the date we first call them elderly.

24                 So it just doesn't seem to me that the 


 1          right punch line each year can be for us to 

 2          say more people need these services so we're 

 3          just cutting back on how much we give 

 4          everyone.  It seems like I need a better 

 5          answer for going forward.

 6                 DIRECTOR HELGERSON:  Well, in terms of 

 7          long-term care, it's growing at about the 

 8          tune of almost like a billion dollars a year.  

 9          So -- and we've looked at this a number of 

10          ways.  

11                 One of the concerns was the people who 

12          are enrolling, are they really disabled 

13          enough to justify this level of service, 

14          meaning are they really eligible for the 

15          programs, how are they coming to the 

16          programs.  There's a number of proposals 

17          designed to make sure that individuals aren't 

18          being inappropriately referred or that 

19          there's inappropriate advertising or 

20          different things out there.  

21                 But we think that the vast majority of 

22          the growth we are now seeing is this 

23          demographic wave.  And as I say, many of us 

24          have predicted but weren't exactly sure when 


 1          it would come.  And New York many, many years 

 2          ago made a decision to make an entitlement 

 3          level of service, home- and community-based 

 4          services.  And so as a result, that makes us 

 5          especially susceptible to this rapid growth.  

 6                 And I think what we're saying is that, 

 7          you know, this is not going to be a problem 

 8          that's a one-year phenomenon, it's going to 

 9          be something we're going to have to grapple 

10          with.  And I think the best overall response 

11          is to figure out how we can provide home- and 

12          community-based or, more generally, long-term 

13          care services as cost-effectively as 

14          possible.  

15                 And I think that's where we need to 

16          think about expanding the continuum of 

17          services.  We need to think about -- back to 

18          Dr. Zucker's point about telehealth and 

19          teletherapy, can we find ways to support 

20          people in the home that doesn't require an 

21          aide in the home as many hours as 

22          historically has been the case.  I just think 

23          we're going to be stretched, not only 

24          financially, the state, not only -- you know, 


 1          there's the cost within the global cap, 

 2          there's the cost that's associated with 

 3          implementing the $15 minimum wage.  All those 

 4          things add up to a tremendous level of 

 5          increased investment that are going into 

 6          these sectors in this budget, previous 

 7          budget, and then the future budgets.  

 8                 So I just think it's going to be a 

 9          global challenge that we're going to have to 

10          grapple with, where we're going to have to 

11          really think creatively about how do we meet 

12          the needs of people in the most 

13          cost-effective setting possible, how are we 

14          going to be able to leverage family supports, 

15          how are we going to be able to keep as much 

16          private money in the system.  Many of the 

17          things we tried in the past, like 

18          long-term-care insurance, have not been as 

19          effective as we would have liked.  It is a 

20          challenge that we're going to grapple with.

21                 I'll give you an example of the kind 

22          of creative thinking we may need to do.  The 

23          oldest society on the planet is Japan, and 

24          they have felt the full impacts of an aged 


 1          population and a much smaller group, a 

 2          demographic to support those elders in their 

 3          communities.  And they have come up with some 

 4          pretty creative solutions, one of which is 

 5          that they actually -- families actually pay 

 6          postmen and -women to check in on loved ones 

 7          as part of their route.  They're trained by 

 8          the government to look for signs of dementia 

 9          or other decline, to identify potential 

10          causes of falls and other types of issues.  

11          But they're leveraging that workforce to look 

12          out for elders in communities where there 

13          aren't just physically enough people in those 

14          communities to look after those people.

15                 So I think there's other models across 

16          the world that we're going to have to look 

17          at, because the pressure that we're now 

18          seeing is not going to go away any time soon.

19                 COMMISSIONER ZUCKER:  Senator, also on 

20          this, we have a team working on this issue 

21          about looking at technologies.  It is 

22          possible that a simple technology that could 

23          be out there that could keep people at home 

24          is -- will be able to be created or invented.  


 1          And we have a team looking at this as a HeroX 

 2          project that we're doing.  We have a group 

 3          looking at all the issues of long-term care.  

 4          We have a manual that we're putting out about 

 5          home care for family members who are 

 6          providing home care.  

 7                 And I think that the solutions are 

 8          going to be a lot more creative than the 

 9          standard ones that we usually come up with.

10                 SENATOR KRUEGER:  So no disrespect to 

11          Japan, but I read that New York Times story 

12          about what's happening for seniors in Japan, 

13          and they're all dying by themselves in empty 

14          buildings.  So I'm not really sure -- and the 

15          neighbors have a deal where you raise the 

16          curtains to confirm that your neighbor is 

17          alive.  And if you don't, you call someone to 

18          go get the body.  

19                 So I'm not sure I really want us to 

20          look at that model as our future for seniors 

21          in the State of New York.  So read the Times 

22          story before you go down that road too far.

23                 Thank you.

24                 CHAIRWOMAN WEINSTEIN:  Assemblyman 


 1          Raia.

 2                 ASSEMBLYMAN RAIA:  Thank you very 

 3          much.  

 4                 Speed round.  Okay, a couple of things 

 5          on hospitals.  I see the emergency room 

 6          proposal is back, the potentially preventable 

 7          emergency room visits.  I thought we rejected 

 8          that for a two-year period last year.  Guess 

 9          not?

10                 DIRECTOR HELGERSON:  So what we're 

11          proposing is a -- it's actually a different 

12          proposal, which is just a reduction that 

13          links to the PPV rates.  And I think it 

14          applies to the managed care organizations, 

15          with a target.  I think it's a little bit 

16          different than the previous year's proposal, 

17          but still getting back to the point where 

18          what we're trying to do is to try to create 

19          incentives within the delivery system to 

20          reduce avoidable hospital use.  

21                 And overall, we've seen those results.  

22          We think there's more that could be done.  

23          But we're just trying to align our payment 

24          policies with the goals of the DSRIP program.


 1                 ASSEMBLYMAN RAIA:  But how do you 

 2          force a hospital to tell somebody not to show 

 3          up in the emergency room?

 4                 DIRECTOR HELGERSON:  I think there's a 

 5          lot that hospitals can do, and we've got some 

 6          very tangible examples of it being done, 

 7          where the hospital, in collaboration with 

 8          others in the community, can really do a 

 9          deep-dive analysis to understand why patients 

10          are there.  Many reasons they're there is 

11          because of needs that are outside of the 

12          healthcare space, they have a social 

13          determinative health need.  

14                 But the problem is is that right now 

15          that within the fee-for-service system the 

16          hospital has no financial incentive to 

17          explore ways, in partnership with other 

18          providers, to meet those core needs.  And so 

19          the people cycle through the emergency room 

20          month after month, getting more and more 

21          services, when there are other things that 

22          can be done to redirect them to better points 

23          of care.  And we've had some tremendous 

24          results already in communities all across the 


 1          state.

 2                 COMMISSIONER ZUCKER:  I think also on 

 3          that is they end up in the emergency room 

 4          because they don't know where else to go.  

 5          And if there are more ambulatory care 

 6          services available and more clinics 

 7          available -- and that's where we're working 

 8          as we do some of the transformation.  We have 

 9          the whole Vital Brooklyn project, which you 

10          may be aware of, we're looking at that.  And 

11          we're looking at it across the state as well.  

12          And then people will not show up in the ER 

13          because there will be another place for the 

14          urgent care that they need.

15                 ASSEMBLYMAN RAIA:  Okay.  Just a quick 

16          comment.  Expansion of telemedicine, good.  

17          But it would be nice if you could make it 

18          uniform amongst all the different state 

19          agencies that use it, OASAS -- you know what 

20          I'm getting at.

21                 DIRECTOR HELGERSON:  Yup.

22                 ASSEMBLYMAN RAIA:  Very quickly, what 

23          are the Medicaid managed and network adequacy 

24          standards?  And then what are the access 


 1          standards for pharmacies?

 2                 DIRECTOR HELGERSON:  So each class of 

 3          providers has a specific set of requirements 

 4          that are in the contract, basically that 

 5          managed care organizations must meet in order 

 6          to have what's deemed an adequate network.  

 7          If they do not have an adequate network, 

 8          they're not allowed to enroll people in a 

 9          particular county.  So there's specific 

10          standards, and I'd be happy to get to you 

11          what those standards are by provider type.

12                 ASSEMBLYMAN RAIA:  That would be 

13          great.

14                 On the plan benefit side, I'm a little 

15          concerned that we're looking at reducing 

16          nonprofit plan reserves to minimum levels.  

17          How are you going to force them to do that?  

18          Operate at a loss or --

19                 DIRECTOR HELGERSON:  Right.  So happy 

20          to have an opportunity to answer that 

21          question.

22                 So the concern that we have is is 

23          that, particularly in the case of plans for 

24          whom a disproportionate share of their 


 1          business is Medicaid, where the government in 

 2          essence is the funder, if especially in 

 3          difficult budgetary times they're sitting on 

 4          excess reserves, our question is why.  Are we 

 5          in essence paying rates or have we 

 6          historically paid rates to them that are 

 7          higher than appropriate?  

 8                 And so the concern is -- and we've 

 9          raised this issue with plans in the past, and 

10          this just gives us a little bit clearer 

11          direction in terms of our ability to 

12          potentially, on a prospective basis, bring 

13          down the reimbursement rates to basically 

14          capture back some of that excess reserve.  

15          We've heard some concerns from plans that 

16          perhaps that they may have some of those 

17          monies that they could use for good 

18          purposes -- investments they could make to 

19          improve patient care -- so we'd be more than 

20          willing to listen to those proposals.  

21                 But it's just -- the question is do 

22          you want taxpayer money sitting on the 

23          sideline in some insurance company's bank 

24          account when we're facing other tough 


 1          budgetary decisions.

 2                 ASSEMBLYMAN RAIA:  All right.  And 

 3          along that same line, then, as far as 

 4          taxpayer money, the 14 percent tax on the 

 5          plan earnings, it's my understanding that 

 6          particularly upstate you have a lot of 

 7          not-for-profit plans that work with 

 8          for-profit plans.  And then it's my 

 9          understanding as well in our Medicaid we have 

10          for-profit plans that help distribute --

11                 DIRECTOR HELGERSON:  Yup.

12                 ASSEMBLYMAN RAIA:  So how do you 

13          square that circle?

14                 DIRECTOR HELGERSON:  So what I would 

15          say is thanks to the largesses of the United 

16          States Congress, the for-profit health 

17          insurance industry in the United States is 

18          going to see a significant improvement in 

19          their financial position.  It's very clear 

20          that their tax rate burden --

21                 ASSEMBLYMAN RAIA:  But shouldn't we 

22          use that to lower rates instead of taxing 

23          them?

24                 DIRECTOR HELGERSON:  Well, so what 


 1          we're saying is that in difficult budgetary 

 2          times, an industry that's seeing a windfall, 

 3          basically, improvement in its financial 

 4          position, those dollars are going to exit the 

 5          State of New York and go back to Minnetonka 

 6          or the other communities that are the home to 

 7          these for-profit insurers outside of the 

 8          State of New York.  

 9                 Our hope with this proposal is to 

10          capture some of those funds.  And as you 

11          know, the proposal in essence is to stick 

12          those funds into this reserve account, which 

13          in essence will then help support us 

14          preventing really negative things happening 

15          to Medicaid members or other New Yorkers as a 

16          result of other actions the federal 

17          government may take.

18                 So I think it's a fair proposal to 

19          fund, you know, efforts to, you know, make 

20          sure that we don't have really bad unintended 

21          consequences from other federal actions.

22                 ASSEMBLYMAN RAIA:  All right, thanks.  

23          I have a few others, but I'll send them to 

24          you in writing.  I appreciate your time 


 1          today.

 2                 SENATOR HANNON:  Senator Serino.

 3                 SENATOR SERINO:  Thank you, Chairman.

 4                 Thank you again, Commissioner.  

 5                 As you know, I chair the Aging 

 6          Committee and I have an elder abuse hotline 

 7          bill that was put in that was vetoed this 

 8          last year.  And I understand that you're the 

 9          Commissioner of Health and a lot of these 

10          conversations are with SOFA or OCFS, but this 

11          is something that impacts the health, 

12          physical, mental and financial health of 

13          seniors -- and, as you are aware, can impact 

14          the life expectancy of a person who has been 

15          a victim.  And it is the most underreported 

16          crime in the country.

17                 And I know I had discrepancies on the 

18          dollar amount, too.  I was told $5 million 

19          and then when I got the call to say that my 

20          bill was going to be vetoed, it was up to 

21          $14 million.  

22                 But I just feel like -- as most of us 

23          do, I think, today as our conversation has 

24          been with our seniors -- you know, they've 


 1          lived their lives here.  And then what did we 

 2          do?  It's like a slap in the face.  We 

 3          don't -- they're the most vulnerable.  We 

 4          don't do things to help them.  And I always 

 5          go back to my district, because I say I'm the 

 6          voice.  I feel like Albany lives in a bubble, 

 7          and I'm asking you to be the voice for our 

 8          seniors.  And for our, as I spoke about 

 9          earlier, our Lyme patients as well.

10                 COMMISSIONER ZUCKER:  I promise to be 

11          a voice of the seniors.  And I've worked very 

12          hard in the department to address this issue, 

13          not just the issue you brought up about elder 

14          abuse, but just across the board, all the 

15          issues of seniors.  And this is where we're 

16          talking about -- whether it's the Alzheimer's 

17          issue, whether it's how to keep people at 

18          home, home aides, whether it's issues of 

19          seniors not having to run across the state or 

20          run, you know, many miles to a health 

21          provider.  

22                 One of the other things that we are 

23          looking at is just about seniors who end up 

24          in emergency rooms and how do you provide 


 1          care for seniors in ERs so that they -- 

 2          that's a challenging environment, 

 3          particularly for one who is elderly, may have 

 4          some cognitive issues, and they're sitting 

 5          there in an environment which is extremely 

 6          stimulating, and it may not be the best 

 7          environment for them.  How do you make 

 8          emergency rooms more user-friendly for those 

 9          who are elderly?  How do you make hospitals 

10          more user-friendly for those who are elderly?  

11                 And we're addressing this, and I've 

12          spoken to both the Greater New York Hospital 

13          Association and others about this and some of 

14          the things that we could do for them.  And I 

15          do have a meeting soon about some of these 

16          issues about emergency rooms as well.

17                 SENATOR SERINO:  It's all scary.  And 

18          Senator Krueger, your comments about what's 

19          going on in Japan, oh, my God, that is -- 

20          it's horrible.  

21                 And I feel like our seniors really, 

22          here, feel like they're disenfranchised.  And 

23          I know that it's kind of like a fragmented 

24          system, because we have APSs and OCFS, SOFA 


 1          is responsible for senior issues, and DOH is 

 2          in charge of reporting in long-term-care 

 3          facilities.  So I'm just asking that maybe we 

 4          can all work together --

 5                 COMMISSIONER ZUCKER:  Sure.  So the 

 6          Governor has asked us to look at health 

 7          across all policies, and we are.  And this 

 8          applies not just to those who are younger but 

 9          also to seniors.  The state has become the -- 

10          as I mentioned in my testimony, the first 

11          age-friendly state.  There are certain 

12          criteria in the World Health Organization and 

13          others that give us that designation.  

14                 And we will move forward to make sure 

15          that New York is at the forefront of taking 

16          care of those who are elderly.  And I think 

17          that there are many other opportunities of 

18          things we could do, both working -- not just 

19          with the senior population, but also 

20          partnering with younger generations, so maybe 

21          having a generation who are in college or 

22          graduate school work with those who are 

23          seniors to be able to help them in those 

24          years.


 1                 SENATOR SERINO:  Okay.  Thank you, 

 2          Commissioner.

 3                 CHAIRWOMAN WEINSTEIN:  Assemblywoman 

 4          Bichotte.

 5                 ASSEMBLYWOMAN BICHOTTE:  Yes, 

 6          Commissioner, I just wanted to clarify, going 

 7          back to the CRNA definition of oversight, do 

 8          you agree that oversight is very different 

 9          from supervision?  

10                 COMMISSIONER ZUCKER:  Well, there is a 

11          physician's supervision that Article 28 

12          facilities have to have.  

13                 I think that -- you know, this issue 

14          with CRNAs, let me sort of take this from the 

15          standpoint of one who has practiced, as I was 

16          saying before, anesthesiology.  The most 

17          important thing is the safety of the 

18          patients.  And I would trust that the 

19          hospitals or any health system that is 

20          providing care will make sure that is the 

21          most important thing that they do.  And if 

22          there needs to be appropriate triage of which 

23          patients will be cared for by whom, I would 

24          hope that that is what they would do.  


 1                 I know from my experience that, like I 

 2          said, there are excellent CRNAs.  I've worked 

 3          with them, and I recognize what they can do 

 4          and what they can provide.  I also recognize 

 5          clearly what anesthesiologists bring to the 

 6          table and other physicians bring to the 

 7          table.

 8                 ASSEMBLYWOMAN BICHOTTE:  Okay.  So 

 9          with that said, again, because patient care 

10          is of the utmost importance, you know, if we 

11          leave it up to hospitals, hospitals can make 

12          decisions of finding ways to cut costs and 

13          also compromising especially communities of 

14          color having access to real quality care.

15                 And when we talk about saving money, 

16          it really -- it's not really saving money.  I 

17          mean, it's liability and risk that we have to 

18          take into place.

19                 And, you know, with you, I certainly 

20          support and actually honor the work that 

21          CRNAs do.  But just generally speaking, with 

22          certain specialties, we need to be very 

23          careful.

24                 COMMISSIONER ZUCKER:  I understand.


 1                 ASSEMBLYWOMAN BICHOTTE:  We have to be 

 2          very careful.  So not all institutions will 

 3          require this supervision, and that's why we 

 4          should continue to codify with the state that 

 5          certain specialties need supervision, need 

 6          licensed supervision, and that's what we're 

 7          making sure.  

 8                 So, you know, we haven't seen the word 

 9          "supervise," we've seen "collaborative," 

10          which -- we don't want any fighting going on 

11          during the operating room or anything like 

12          that.  We want to make sure that the 

13          patient's safety is at the forefront.  So 

14          thank you for that.  

15                 And secondly, I just wanted to just 

16          make a comment about safe staffing.  Every 

17          year in the Assembly we pass the legislation.  

18          We want to make sure that healthcare 

19          workers -- in particular nurses, but all 

20          healthcare workers, for that matter -- the 

21          healthcare-worker-to-patient ratio needs to 

22          be adequate.  

23                 So even though it wasn't mentioned in 

24          the Executive Budget, I want to put it out 


 1          there that we're going to continue to fight 

 2          and we're going to push to make sure that 

 3          patients get adequate care and there are 

 4          sufficient healthcare workers that can attend 

 5          to their needs.  

 6                 COMMISSIONER ZUCKER:  I hear you.  

 7                 CHAIRWOMAN WEINSTEIN:  Senator Hannon.

 8                 SENATOR HANNON:  You'll be happy to 

 9          know I think I'm the last one for questions.  

10          But appreciate your patience.  One of the 

11          these days we're going to get --

12                 DIRECTOR HELGERSON:  There's something 

13          wrong with the mic.

14                 COMMISSIONER ZUCKER:  The microphone's 

15          off, I think.

16                 SENATOR HANNON:  -- microphones that 

17          work.  It's on.  The light's on.  And 

18          unfortunately, the commissioner can hear me.

19                 I basically have a series of just 

20          comments, a couple of things.  One comment, I 

21          want to go on record about VBP QIP.  I simply 

22          disagree with the process.  I don't think it 

23          has long-term sustainability.  And I think at 

24          some point the feds are going to throw the 


 1          red flag on you.  Let it be there.

 2                 Transportation.  I think from the 

 3          number of people who have made comments today 

 4          by the Senate, that is a continuing concern.  

 5          And by the way, the comments were made by 

 6          upstaters; I know it's a comment that will go 

 7          for the city or for the island.

 8                 And if we talk about social 

 9          determinants of health, transportation is as 

10          much a social determinant as anything else.  

11                 And if we can give housing as part of 

12          the Brooklyn program as a social determinant 

13          and take the money for the housing from 

14          non-health department, then I can't see why 

15          we can't focus on this.  I know there was a 

16          need for a statewide master control of it, 

17          but still the complaints show that there's a 

18          lot of problems in between.

19                 I congratulate you on the introduction 

20          of a new acronym, the RMI.  I didn't realize 

21          that the Regulatory Modernization Initiative 

22          had become an acronym.  I hope we don't lose 

23          the force of it, because some of the things 

24          they're doing are excellent and overdue.


 1                 The -- oh, a very small point, the 

 2          UAS, Uniform Assessment System, was put in to 

 3          be a care tool.  And unfortunately, it's been 

 4          captured by Mr. Helgerson's Medicaid budget 

 5          keepers as a fiscal tool.  And I think we'll 

 6          lose sight of what we needed it for.  It was 

 7          a good reform for care and a measurement of 

 8          care.  And to make it just a fiscal tool I 

 9          think means it's going to be subject to the 

10          susceptibility of humans to game it, and that 

11          I think is a real big problem.

12                 Bigger picture, you've several times 

13          made mention of "we wish Mujica were here."  

14          I'm sure after these lengthy interrogations, 

15          he'll never come.  But think of where the 

16          bigger picture is for healthcare we're going, 

17          and it's the bigger numbers.  

18                 The 2 percent opioid tax -- now, 

19          presume you can get over the hurdle because 

20          we're still looking to what happens in the 

21          money for the pharmaceutical drug cap from 

22          last year, because that hasn't shown up -- 

23          but where that money goes and how it's used.  

24                 The 14 percent that's supposed to be 


 1          taken from the windfall for the insurance 

 2          companies, where that goes and how it's going 

 3          to be used.  

 4                 The $500 million or whatever, 

 5          $250 million this year, from Centene for 

 6          Fidelis, where is it going, what's going to 

 7          be used?  

 8                 You made mention, Mr. Helgerson, of a 

 9          contribution to the General Fund from the 

10          global cap.  Where is that going, and how is 

11          it going to be used?  

12                 And then simply the VBP QIP, which I 

13          mentioned before, that's going to fund part 

14          of the Essential Plan.  But why?  Because 

15          some parts of the Essential Plan are getting 

16          a boost from the increase in the premiums 

17          from the federal government.

18                 So these big-picture things need to be 

19          addressed.  And I don't see how you can move 

20          forward with all of the rest of the health 

21          budget unless you resolve this.  What's going 

22          to be done with this money?  What's it going 

23          to be used for?  What's the accountability 

24          for it, and how do we explain this to the 


 1          residents of New York State?  

 2                 And so at the end I think your 

 3          comment, Mr. Helgerson, the aging population 

 4          is fine, but you have no idea what the 

 5          intense bureaucracy of the Health Department 

 6          does when it puts rules and regulations to 

 7          implement all of this long-term care.  

 8                 We daily hear squawks from everybody 

 9          who's trying to do care -- whether it's a 

10          union, whether it's a provider -- how they 

11          have to meet those rules and regulations.  I 

12          think we are being counterproductive on where 

13          we go.

14                 And then finally, two things, 

15          Commissioner.  You made just brief mention of 

16          the Brooklyn, a huge positive initiative in 

17          this administration with just a focus of 

18          different powers of the budget and state 

19          powers to create healthcare providers.  I 

20          think it's something that should be really 

21          part of your initial testimony.  

22                 And then lastly, you had mentioned 

23          once a thing called candida --

24                 COMMISSIONER ZUCKER:  Yes.  C. Auris, 


 1          yes.

 2                 SENATOR HANNON:  -- a new bug that's 

 3          going to be in all the hospitals.  I read 

 4          this morning it went from 16 cases in the 

 5          United States, in 12 months it's gone to 200, 

 6          and there's no drug or cure for it.  

 7                 So you thought your administration has 

 8          been through lots of different -- Ebola and 

 9          Zika and all that.  You're the one who's 

10          already been on the case and given lectures 

11          about candida.  So congratulations.  Have a 

12          good 12 months.

13                 COMMISSIONER ZUCKER:  Thank you.  See 

14          you in 12 months.

15                 (Laughter.)

16                 SENATOR HANNON:  Thank you very much 

17          for your patience.  Appreciate it.

18                 COMMISSIONER ZUCKER:  Thank you.

19                 CHAIRWOMAN WEINSTEIN:  Thank you.  

20          Hopefully we didn't keep you too long. 

21                 (Laughter.)

22                 CHAIRWOMAN WEINSTEIN:  So we -- yes, 

23          that's it.  And I know there's some follow-up 

24          questions that members are looking forward to 


 1          receiving answers to.  Thank you.

 2                 Next we're going to hear from the 

 3          New York State Department of Financial 

 4          Services, Maria T. Vullo, superintendent.

 5                 (Discussion off the record.)

 6                 CHAIRWOMAN WEINSTEIN:  As soon as the 

 7          room clears, we'll be able to start.

 8                 Can the people who are leaving please 

 9          leave quietly?  Or others take your seats 

10          after having stretched your legs.  

11                 Superintendent?  

12                 SUPERINTENDENT VULLO:  Thank you.

13                 Good afternoon, Chairpersons Young and 

14          Weinstein, Vice Chair Savino, Chairpersons 

15          Hannon, Gottfried, Seward and Cahill, ranking 

16          members, and all distinguished members of the 

17          State Senate and Assembly.  Thank you for 

18          inviting me to testify before you today.  

19                 I've submitted a written testimony but 

20          will just briefly summarize that testimony.  

21          And I'm happy to provide an update and answer 

22          your questions regarding my agency, the 

23          Department of Financial Services' efforts to 

24          strengthen New York's healthcare market and 


 1          preserve New Yorkers' access to vital 

 2          healthcare coverage.

 3                 Over this past year, at a time when 

 4          our right to vital healthcare coverage has 

 5          been under attack in Washington, my team and 

 6          I have spent a substantial amount of time 

 7          focusing on ensuring the continued strength 

 8          of New York's commercial health insurance 

 9          market, which DFS regulates.  While ensuring 

10          the integrity of the market, we have also 

11          addressed many consumer protections in 

12          healthcare, including the opioid epidemic, 

13          women's reproductive rights, early 

14          intervention for infants and toddlers with 

15          disabilities, and HIV prevention.  

16                 New York has been steadfast in 

17          vigorously supporting the Affordable Care Act 

18          as it continues to make more affordable, 

19          quality health insurance coverage available 

20          to New Yorkers.  Due to our efforts, 

21          New York's healthcare market continues to 

22          remain robust, with 14 issuers offering 

23          individual coverage, 20 issuers offering 

24          small group coverage, and consumers in every 


 1          county having a choice of coverage.  The 

 2          New York State of Health also maintained a 

 3          longer enrollment period through January 31, 

 4          2018, despite the much shorter federal 

 5          enrollment period, and that paid off.  More 

 6          New Yorkers enrolled in plans than ever 

 7          before this year.  

 8                 Yet we are very concerned that 

 9          healthcare costs for the most vulnerable 

10          New Yorkers may rise due to the continued 

11          actions of the federal government, including 

12          the continued failure to fund the Cost 

13          Sharing Reduction subsidies.  I submitted a 

14          declaration in support of the New York 

15          Attorney General's lawsuit seeking to compel 

16          payment of those subsidies, and we continue 

17          to advocate for their payment.  

18                 In addition, in light of the federal 

19          government's efforts to roll back access to 

20          quality affordable healthcare, I traveled 

21          across the state to moderate healthcare 

22          panels and educate the public about the 

23          dangers of the efforts on the federal level.  

24          Such efforts continue, as the federal 


 1          government has indicated that it may seek to 

 2          further destabilize state healthcare markets 

 3          by seeking to expand the definition of 

 4          "association health plans" and allow sales 

 5          across state lines, two efforts that would 

 6          permit the cherry-picking of risk and a race 

 7          to the bottom in consumer protections, 

 8          further causing increased rates and reduced 

 9          healthcare coverage.  

10                 Last year DFS promulgated new 

11          emergency regulations providing that 

12          regardless of any federal changes, health 

13          insurance providers in New York would not 

14          discriminate against persons with preexisting 

15          conditions or based on age or gender, in 

16          addition to safeguarding the l0 categories of 

17          essential health benefits.  

18                 We also protected women's healthcare 

19          by issuing a regulation and guidance 

20          requiring that insurance companies provide 

21          coverage for contraceptive drugs and devices 

22          and follow-up care at no cost-sharing, 

23          including the dispensing of a 12-month supply 

24          of contraceptives.  This session, the 


 1          Governor will advance a program bill, the 

 2          Comprehensive Contraceptive Coverage Act, to 

 3          codify access to contraception, including 

 4          emergency contraception.  These are important 

 5          protections for women's health.  

 6                 In addition, DFS promulgated a 

 7          regulation to ensure that health insurers 

 8          cover medically necessary abortions, without 

 9          cost-sharing.  We also issued guidance to 

10          ensure coverage for infertility treatment 

11          regardless of an individual’s sexual 

12          orientation, marital status or gender 

13          identity, and coverage of 3D mammograms, 

14          which was ultimately codified in recent 

15          legislation signed by the Governor.  And as 

16          part of the New York State Council on Women 

17          and Girls, DFS will conduct a study regarding 

18          appropriate insurance coverage for in vitro 

19          fertilization and fertility preservation.  

20                 As you know, New York's 

21          best-in-the-nation Paid Family Leave program 

22          was launched last month.  As New York's 

23          insurance regulator, DFS is proud to have 

24          worked with our colleagues at other state 


 1          agencies to provide the framework to ensure 

 2          the successful implementation of this 

 3          program, which is a disability insurance 

 4          program that provides important protections 

 5          to New York workers and families.  

 6                 Looking forward, DFS is proud to 

 7          support the Governor's Executive Budget 

 8          initiatives.  I will discuss two budget 

 9          items. 

10                 First, as you know, the recent federal 

11          tax bill reduced the federal corporate tax 

12          rate from 35 percent to 21 percent.  As 

13          health insurance rates were set within the 

14          context of a higher tax regime, we believe 

15          that the unexpected gain received by 

16          for-profit insurers writing health insurance 

17          coverage in New York should be captured by 

18          the state to fund healthcare programs that 

19          are being drastically reduced by the federal 

20          government.  

21                 The Governor is proposing a tax law 

22          amendment that will impose a 14 percent fee 

23          on for-profit insurers on net underwriting 

24          gain from health insurance products, so that 


 1          those funds can be reinvested in vital 

 2          healthcare services for New Yorkers.  

 3                 Second, in an effort to protect and 

 4          support some of our most vulnerable 

 5          New Yorkers, we must safeguard the services 

 6          provided young children through the Early 

 7          Intervention Program.  DFS has already taken 

 8          action to ensure that insurers cover Early 

 9          Intervention services for infants and 

10          toddlers with disabilities, reminding 

11          insurers that they must provide a 

12          municipality or its designees and service 

13          coordinators with information on health 

14          insurance benefits for children participating 

15          in the Early Intervention Program upon 

16          receipt of a request for such information. 

17          This information is essential to enable 

18          municipalities to administer the program 

19          cost-effectively so that covered children 

20          have full access to services.  

21                 The Governor's Budget also proposes to 

22          increase penalties to support DFS's efforts 

23          to ensure that, first, insurers pay claims 

24          for all covered Early Intervention services; 


 1          and second, insurers do not deny claims 

 2          because neither the provider nor the insured 

 3          will challenge denials given the guaranteed 

 4          coverage provided through the state's 

 5          program.  

 6                 Even beyond the Early Intervention 

 7          Program, we firmly believe that the willful 

 8          failure to pay claims and the willful making 

 9          of false statements to DFS are the two most 

10          destructive violations of the insurance law 

11          that an insurer or agent can commit, 

12          warranting appropriate fines.  

13                 DFS is also honored to support 

14          additional State of the State initiatives of 

15          the Governor, including strengthening 

16          New York's external appeals program and 

17          improving the transparency of healthcare 

18          costs.  New York has one of the most robust 

19          external appeals programs to assist 

20          New Yorkers who are wrongfully denied 

21          healthcare coverage.  We receive more than 

22          10,000 external appeals each year.  

23                 Under this new initiative, DFS will 

24          create a new searchable database of external 


 1          appeal decisions, with personal information 

 2          redacted, so that consumers, providers and 

 3          insurers can easily access external appeal 

 4          decisions.  

 5                 We are also working to promote greater 

 6          price transparency in the healthcare market.  

 7          We are assessing requirements that health 

 8          plans provide their members with additional 

 9          information, such as cost-estimator tools and 

10          quality ratings about healthcare providers in 

11          their network, so that consumers can make 

12          more intelligent decisions regarding their 

13          choice of provider.  

14                 DFS, in partnership with the 

15          Department of Health, will also provide 

16          specific recommendations to simplify medical 

17          bills so that consumers can more readily 

18          understand them.  

19                 Lastly, DFS is supporting the 

20          Governor's efforts to reduce the costs of 

21          local governments.  The Governor has directed 

22          DFS to publish guidance and provide technical 

23          assistance to local governments in order to 

24          ease the process of creating health 


 1          consortia.  We have already been working with 

 2          a number of municipalities, including Otsego, 

 3          Saratoga and Suffolk counties.  And we just 

 4          approved a new muni co-op in Rochester that 

 5          started last month.  

 6                 My team at DFS is working hard every 

 7          day to build on our successes and make 

 8          New York's financial services industries work 

 9          even better for both industry and consumers.   

10          Thank you for the opportunity to outline some 

11          of the work that DFS is doing and our role in 

12          the Governor's 2018-2019 priorities relating 

13          to healthcare.  I look forward to your 

14          questions.

15                 SENATOR HANNON:  Senator Seward.

16                 SENATOR SEWARD:  Thank you.

17                 And thank you to you, Superintendent 

18          Vullo, for being here today to testify.

19                 I know that you share my belief that 

20          it's both important and possible to strike 

21          that right balance between protecting 

22          consumers as well as enhancing the financial 

23          services industry of our state, which is so 

24          critical to our state in terms of its impact 


 1          in a positive way on our economy and also, of 

 2          course, providing much needed services to the 

 3          people of the State of New York.

 4                 I wanted to zero in on Section 16 of 

 5          Part O -- you know, the increased fines 

 6          portion.  Back in 2011, the fines for 

 7          insurers were increased, you know, from $500 

 8          up to the current $1,000 level.  And of 

 9          course it strikes me that the department has 

10          plenty of other hammers to use to beat back 

11          bad actions on the part of insurers of our 

12          state.

13                 So my question is, why does DFS seek 

14          to increase the fines by a thousand percent, 

15          up to $10,000?  Is the fine increase intended 

16          as a revenue raiser for the state?  And also, 

17          what are the estimated -- if this proposal 

18          were to be included in the budget, what would 

19          be the estimated projected revenues from this 

20          action?

21                 SUPERINTENDENT VULLO:  Thank you for 

22          that question, Senator Seward.  And I do 

23          agree with you on striking an appropriate 

24          balance between promoting industry growth and 


 1          protecting consumers, and I think that 

 2          balance is certainly something that is 

 3          doable.

 4                 With respect to the fine provision, 

 5          the fine provision addresses two issues.  One 

 6          is the willful failure to pay claims, and the 

 7          second is the submission of a false statement 

 8          to the Department of Financial Services.  

 9                 If someone submits a false statement, 

10          say a false financial statement, under 

11          current law I can fine them $1,000 because 

12          it's $1,000 per violation, and that's one 

13          violation.  That doesn't deter bad actors as 

14          we need to deter bad actors from doing that.  

15          So this is not an effort to increase fines 

16          overall for any type of activities, but for 

17          the willful failure to pay claims, which I 

18          think is something that, you know -- and 

19          talking about the health issues, that's 

20          something that I think is a deterrent -- and 

21          secondly, the willful submission of false 

22          statements.

23                 So it doesn't cover, you know, other 

24          things where we might be able to levy fines.  


 1          So that's why the proposal is in here.  We 

 2          talk about it in the context of Early 

 3          Intervention, the Early Intervention 

 4          programs, but we do seek it more broadly than 

 5          that.  But that's the idea.  

 6                 I have not estimated it, nor is the 

 7          proposal there for purposes of revenue 

 8          generation, although of course it would.  But 

 9          I actually prefer the deterrent impact of 

10          fines so that we don't have false statements, 

11          for example, or the failure to pay claims.

12                 SENATOR SEWARD:  Well, I would agree 

13          that failure to pay claims and making false 

14          statement or submitting false information to 

15          the department are serious offenses.  Could 

16          you describe what other -- other than 

17          imposing a fine, what other actions under 

18          those circumstances you have at your disposal 

19          as a department, against those that either do 

20          not pay claims or make false statements?

21                 SUPERINTENDENT VULLO:  I can put a 

22          company in liquidation or rehabilitation if 

23          the management of the company is not acting 

24          appropriately.  That is a last resort that 


 1          often hurts the policyholders and -- not in 

 2          the healthcare area, but in other areas -- 

 3          impacts the guaranty fund, so it's not an 

 4          option that we prefer.  

 5                 We have seen circumstances of 

 6          recalcitrant management.  These are not -- 

 7          these are the rare situations.  This is not 

 8          the overall situation.  And we've had 

 9          circumstances of the willful failure to pay 

10          claims and, you know, we do have certain 

11          remedies that we can -- but imposing fines is 

12          something that might get someone to act.  

13                 And I don't think that putting a 

14          company in rehabilitation is the -- I mean, I 

15          will say we had proposed an administrative 

16          supervision bill last year.  I would still 

17          urge that bill, because I think that would 

18          give us additional powers for, you know, 

19          companies and in particular company 

20          management that's not doing the right thing 

21          for the solvency of the company or for the 

22          consumers and the policyholders of the 

23          company.  And that's the genesis of these 

24          proposals.


 1                 SENATOR SEWARD:  Why were these 

 2          provisions included in the Early Intervention 

 3          part of the health budget?  I mean, these 

 4          apply to all forms of insurance, am I correct 

 5          in saying that?

 6                 SUPERINTENDENT VULLO:  I can't speak 

 7          to why they were put in a particular part of 

 8          the budget.  I don't put it together.

 9                 SENATOR SEWARD:  Okay.  Understood.  

10                 What is the breakdown of fine revenue?  

11          I know you can't -- you said you can't 

12          project what the future would be.  But  in 

13          terms of the past -- let's say the past 

14          couple of years, as an example -- can you 

15          provide us data, either today or in the near 

16          future, in terms of what revenues have been 

17          collected by DFS from fines, based on the 

18          various sectors of insurance, whether it be 

19          P&C, health, life, and so on?

20                 SUPERINTENDENT VULLO:  I don't have 

21          that information in my head, but we can 

22          certainly provide it, you know, on the 

23          insurance side, if that's what you're asking.

24                 SENATOR SEWARD:  Right.  Yeah, I would 


 1          like that.

 2                 SUPERINTENDENT VULLO:  The fines on 

 3          the banking side are much larger than they 

 4          are on the insurance side.

 5                 SENATOR SEWARD:  Shifting gears on 

 6          another -- a couple of other issues.  You 

 7          know, as part of New York State's effort to 

 8          get ready for the Affordable Care Act back in 

 9          the '13-'14 state budget, we amended our law 

10          here in terms of the definition of a small 

11          group, from -- we went from 51 up to 100, to 

12          conform with the ACA.  

13                 And of course in 2015, I believe, the 

14          Congress -- and then President Obama signed 

15          it into law -- they passed it and the 

16          president signed it into law, giving states 

17          flexibility in terms of defining the small 

18          group as having -- back down to the 1 to 50.  

19          Since that time, nearly every state has moved 

20          forward and gone back to the 1 to 50 in terms 

21          of definition of small group.

22                 We here in New York have been 

23          grandfathering those in the 

24          51-to-100-employee category, grandfathering 


 1          them in so that they can continue to have 

 2          self-insurance with a stop-loss provision and 

 3          coverage, as long as they had that in effect 

 4          by June 1 of 2015, back when we did the 

 5          legislation.

 6                 Now, also in that 2015 law, we 

 7          required DFS to contract with an independent 

 8          entity to study the effect of the sale of 

 9          stop-loss -- you know, the catastrophic and 

10          reinsurance coverage on the small group 

11          market.  Now, this report is due to the 

12          Legislature on or before March 1, 2018.  This 

13          report is due within a month.  And can you 

14          give us a status report?  Will we be 

15          receiving this report by March 1?  And can 

16          you share any details of what we might expect 

17          to see in that report?

18                 SUPERINTENDENT VULLO:  Senator, that 

19          report is in process and it has not yet 

20          reached my desk for review or to talk with 

21          the team about it.  But, you know, certainly 

22          I'm aware that the report is being prepared.  

23          And I think it's better not for me to 

24          foreshadow something that hasn't yet reached 


 1          my desk in terms of recommendations from the 

 2          staff.

 3                 I would say, though, that on the small 

 4          group 50 versus 100 question, I firmly 

 5          believe that it's better to keep it at 100 

 6          because that protects the risk pool, to have 

 7          more people in it, than to reduce the size of 

 8          the group.

 9                 But in terms of, you know, stop-loss 

10          insurance and the grandfathering, those are 

11          obviously issues that were determined several 

12          years ago, and we're looking at those in 

13          terms of really our overall concern about, 

14          you know, the markets and maintaining at 

15          least a good balance of healthy and unhealthy 

16          comprehensive healthcare, and keeping 

17          premiums as low as we can.  So those are the 

18          general subjects.  

19                 But in terms of recommendations, we 

20          haven't gotten to that point yet.

21                 SENATOR SEWARD:  Do you think we'll 

22          receive that by March 1?

23                 SUPERINTENDENT VULLO:  I certainly 

24          like to keep deadlines.


 1                 SENATOR SEWARD:  Okay.  Well, because 

 2          we do need to make, you know, some policy 

 3          decisions, you know, in statute going 

 4          forward.

 5                 SUPERINTENDENT VULLO:  I've noted it.  

 6          Thank you.

 7                 SENATOR SEWARD:  And you indicated 

 8          your personal preference to keep small group 

 9          at a hundred employees versus, you know, the 

10          1 to 50.  Did I just hear you say that?

11                 SUPERINTENDENT VULLO:  Well, I 

12          wouldn't call it a personal preference.  I 

13          think the data certainly shows that, you 

14          know, larger groups would have more of a 

15          balance of healthy versus unhealthy 

16          individuals.  And the more people that you 

17          keep in a particular market, the more likely 

18          you are to have a better risk pool.

19                 So if you were to remove those 

20          employers who are, you know, 51 to 100 out of 

21          the small-group market, you're reducing the 

22          overall number of people in that market, and 

23          that creates an issue for the risk pool.  

24          Which would, you know, create issues with 


 1          respect to healthcare costs and premiums.  

 2                 And I think that's just -- I think 

 3          that's factually undisputed in terms of the 

 4          smaller the risk pool.  You see that in the 

 5          large-group markets.  So the large employers 

 6          in the large-group market have a much better 

 7          risk pool than in the small-group market.  

 8          So -- and of course they also use a different 

 9          kind of a rating.  They use experience rating 

10          versus -- most of them -- versus community 

11          rating.  And community rating is what we as a 

12          state have control over.

13                 So again, if you removed those 

14          employers from the small-group market, it 

15          would be potentially removing them from rate 

16          review, and I don't think that that's a good 

17          idea to maintain as low as possible premiums 

18          that we can for New Yorkers.

19                 SENATOR SEWARD:  Yeah, just -- not to 

20          belabor the point, just a couple of reactions 

21          to your statement.  

22                 Just about every other state in the 

23          union has gone back down to the 50 under the 

24          federal flexibility that had been provided to 


 1          the states.  I'm not sure what's different in 

 2          those other states versus New York, but 

 3          they're able to do it.

 4                 Plus I wish I had brought the stack of 

 5          letters from not-for-profit employers, school 

 6          districts, libraries, as well as others, of 

 7          entities in that 51-to-100 that had been 

 8          grandfathered to continue stop-loss and the 

 9          flexibility that all that provides, letters 

10          that would say that's the only way they can 

11          afford to provide coverage, you know, for 

12          their employees.

13                 SUPERINTENDENT VULLO:  I'm very 

14          familiar with the issue of the nonprofits.  

15          And in fact we're looking at that issue 

16          statewide as to whether -- and it's one of 

17          the Governor's initiatives -- as to whether 

18          to make available the state plan, New York 

19          SHIP, to nonprofits.  That's something that 

20          is undergoing.

21                 In terms of other states, I don't have 

22          here the list of states that have whatever 

23          particular small group, but I will say -- and 

24          we're not the only state in this position.  


 1          But I will say that we have more companies in 

 2          our market than most other states do, and our 

 3          premium increases, while they were not as low 

 4          as I would like them to be, were lower than 

 5          what many other states did.  And there are a 

 6          lot of other states that have much more 

 7          troubled and destabilized markets than 

 8          New York.  So I think, you know, New York 

 9          should be commended for all of the work that 

10          it's done since the Affordable Care Act to 

11          have as good of a market as possible.

12                 SENATOR SEWARD:  And I'm over my time, 

13          but I had one more question.

14                 SUPERINTENDENT VULLO:  Sure.  Of 

15          course.

16                 SENATOR SEWARD:  And I'll try to keep 

17          my question short.

18                 This has to do -- although this is a 

19          big issue.  You know, as you cited in your 

20          testimony under the federal government 

21          changes under their Tax Cuts and Jobs Act of 

22          2017, which does provide a corporate tax cut 

23          to the for-profit health insurers right here 

24          in New York, approximately a 14 percent 


 1          reduction.

 2                 SUPERINTENDENT VULLO:  Mm-hmm.

 3                 SENATOR SEWARD:  The question is -- 

 4          some have called this a windfall.  The 

 5          question is, what is the appropriate use of 

 6          these funds?  Obviously the Governor's 

 7          proposal calls for substituting a state tax 

 8          for the reduction in the federal tax.

 9                 Absent the Governor's proposal, this 

10          increased revenue stream on the part of these 

11          health insurers, with prior approval, limits 

12          on profits, the medical loss ratio 

13          provisions, the rebates that are required, 

14          all of those things -- absent the Governor's 

15          proposal on taxing this, shouldn't that 

16          windfall go back to premium payers?

17                 SUPERINTENDENT VULLO:  So we believe 

18          that this 14 percent of a tax cut was 

19          something that was, you know, unaccounted 

20          for, unexpected, and is a windfall.  In 

21          New York we obviously have vulnerable 

22          populations in need of healthcare, and we 

23          have budget issues with respect to those 

24          vulnerable populations and healthcare, along 


 1          the federal government cuts of vital 

 2          healthcare services.

 3                 So given that this 14 percent was 

 4          unaccounted-for, we think that what's 

 5          appropriate is for that money to go into a 

 6          fund -- that is in the HCRA fund, that's how 

 7          the statute works -- in order to address the 

 8          federal budget cuts and our healthcare needs 

 9          in New York.

10                 With respect to the second part of 

11          your question, Senator, it's actually very 

12          unclear how to address the reduction of the 

13          federal tax corporate rate in the MLR ratio.  

14          Because if you included that in, you know, 

15          the ratio, that could, in years, because 

16          they're paying taxes, it would actually 

17          increase the administrative expenses, and 

18          that would cause the increase of rates.

19                 So it's not a given that you could 

20          just take that, because this is the 

21          corporate-level tax.  When we look at rate 

22          review, we look at business units.  So we 

23          look at the individual rates and you look at 

24          it as a business rate, you look at the small 


 1          group and you look at that as a business 

 2          unit.  It's not the corporate income tax of 

 3          the company that's usually the holding 

 4          company at the top.  So we actually don't 

 5          include a consideration of federal income tax 

 6          in rate review, because if we did, that would 

 7          only increase the administrative expenses, 

 8          which are 18 percent, and therefore put 

 9          pressure on the MLR and cause us to increase 

10          rates in years where there's taxes that are 

11          paid to the federal government.

12                 So actually I think the way that this 

13          bill is proposed is the best way to capture 

14          it and to get the money to the vulnerable 

15          New Yorkers that need it in our state budget.  

16          If that helps.

17                 SENATOR SEWARD:  I have a number of 

18          other questions, but I'm going to defer.

19                 CHAIRWOMAN WEINSTEIN:  Thank you.  

20                 Assemblyman Cahill, chair of the 

21          Assembly Insurance Committee.

22                 ASSEMBLYMAN CAHILL:  Thank you, Madam 

23          Chair.  

24                 And thank you, Superintendent, for 


 1          being here today.  

 2                 I'm going to change the order of the 

 3          questions that I had based on a few things 

 4          that you said in response to my colleague and 

 5          my good friend Jim Seward.  I'm going to 

 6          start with the question about the large group 

 7          and the small group.  

 8                 I don't have an exact quote of what 

 9          you said, but words to the effect of data 

10          certainly shows that larger groups would have 

11          a balance of healthy and unhealthy people in 

12          that group, and keeping them out of the other 

13          groups would have a negative effect on those 

14          other groups.  Is that a fair summation of 

15          what you just said?

16                 SUPERINTENDENT VULLO:  What I'm 

17          saying, Assemblyman, is that when you look at 

18          the risk pool, the more people that you have 

19          in the pool, the more likely you are to 

20          balance the risk and lower premiums.  I mean, 

21          that's the concept of insurance, right?  So 

22          the larger the pool of people --

23                 ASSEMBLYMAN CAHILL:  So that's a 

24          different answer than you gave before.  


 1          You're saying the general concept is that, 

 2          not the data.  Because that's what caught my 

 3          ear, the data.  And my concern about that is 

 4          that's exactly what we asked you and others 

 5          to study, and you indicated to Senator Seward 

 6          that that study has not come across your 

 7          desk, yet you're citing to the data.

 8                 So I'm a little confused.  Do you have 

 9          the data or don't you have the data on that?

10                 SUPERINTENDENT VULLO:  There's 

11          national data on this issue.  I can't cite to 

12          you the data here specifically.  But one of 

13          the -- you know, the Congressional Budget 

14          Office, when it was looking at changes to the 

15          Affordable Care Act, relies heavily on this 

16          type of analysis, where the whole concept of 

17          the ACA is to expand the risk pool to bring 

18          down premiums.

19                 When you look at the data with respect 

20          to association health plans, those health 

21          plans pull groups out of a risk pool into 

22          their own risk pool, and that results in the 

23          increase of premiums, ordinarily, in that 

24          smaller pool.  


 1                 When you look at the individual 

 2          market, before the Affordable Care Act, our 

 3          individual market in New York was very, very 

 4          small and premiums were very high.  We now 

 5          have about 300,000 people.  It's improved the 

 6          risk pool.  It's just the more people that 

 7          you have in the pool --

 8                 ASSEMBLYMAN CAHILL:  Let me clear --

 9                 SUPERINTENDENT VULLO:  -- and there's 

10          data that points to that --

11                 ASSEMBLYMAN CAHILL:  If I can 

12          interrupt you for a minute.  I understand the 

13          concept.  But you specifically cited to data, 

14          and that's specifically what our statute last 

15          year, as part of the budget, said that had to 

16          be done to -- the study that will be 

17          completed by March 1st, so that we can make a 

18          decision before these individual plans have 

19          to decide whether they have to reconfigure 

20          how they offer healthcare.

21                 And if you're saying these are the 

22          concepts, that's a very different statement 

23          than "This is what the data shows."  Because 

24          we've asked you to look at the data, you've 


 1          testified the data is not available.  And if 

 2          you're relying on the concepts, great, I 

 3          support your idea there.  But I just was 

 4          asking about whether the data is actually 

 5          available that you testified to.

 6                 SUPERINTENDENT VULLO:  As I said, 

 7          Assemblyman, we will be doing the report.  

 8          There is data available.  I don't have the 

 9          specific cite and verse of the data.  But 

10          national data demonstrates the importance of 

11          large risk pools to bring down premiums in 

12          many, many different areas.  And in fact it's 

13          the fundamental premise of the Affordable 

14          Care Act.

15                 ASSEMBLYMAN CAHILL:  So moving on to 

16          the health tax that the Governor has 

17          proposed, the 14 percent tax on healthcare, 

18          why has healthcare been singled out as an 

19          industry, and health insurance in particular 

20          been singled out as an industry, when the 

21          corporate tax breaks that were handed out in 

22          Washington applied to all industries?

23                 SUPERINTENDENT VULLO:  I can only 

24          speak to the particular proposal that's in 


 1          the budget.  And given that we have drastic 

 2          cuts that have already happened and that are 

 3          being anticipated from the federal government 

 4          in healthcare, that this 14 percent windfall 

 5          should go to the fund, the HCRA fund, in 

 6          order to help fund those services.

 7                 I think that that's really what the 

 8          proposition is.  Whether or not the 

 9          Legislature and the Executive wish to expand 

10          that more broadly, I think that's up to you.  

11          But I can only speak to the particular 

12          proposal, and the reasoning behind that 

13          specifically tied to what's happened with the 

14          federal government reductions in healthcare 

15          funding, as well as the fact that the 

16          companies, as they set their rates, did not 

17          account for this windfall that they're now 

18          receiving.

19                 ASSEMBLYMAN CAHILL:  You indicated 

20          that the profit of the parent corporation 

21          does not enter into the determination of the 

22          rate that a company is allowed to charge for 

23          their health insurance.  Is there anything 

24          else that's being done by DFS to assure that 


 1          none of this tax gets passed through to the 

 2          consumer?

 3                 SUPERINTENDENT VULLO:  Assemblyman, 

 4          what I said was that income taxes are not 

 5          taken into account in our rate review, and 

 6          that income taxes are paid by the corporate 

 7          entity, not on a division basis.  A lot of 

 8          these companies have consolidated tax 

 9          returns.  

10                 But we have our proposal in this 

11          budget.  We believe that that's an 

12          appropriate way to be able to have funding 

13          for the most vulnerable New Yorkers in the 

14          HCRA funding program.  And, you know, if that 

15          doesn't pass, then we'll look at other 

16          options if there are any options available.

17                 ASSEMBLYMAN CAHILL:  Okay.  So I 

18          didn't hear an answer to the question, but 

19          I'll move on anyway.

20                 Long-term-care insurance has kind of 

21          collapsed nationwide, and it's no different 

22          here in New York.  There's been a huge 

23          problem with long-term-care insurance.  What 

24          is the department doing to try to rectify 


 1          that at this point in time?

 2                 SUPERINTENDENT VULLO:  So long-term 

 3          care is obviously a national problem.  You 

 4          know, 20-some-odd years ago the assumptions 

 5          that were made by the insurance companies 

 6          writing this were not accurate, at least they 

 7          turned out not to be when it came to lapse 

 8          rates.  And of course the long low interest 

 9          rates had a great impact.  It's a nationwide 

10          problem.  We're actually in better shape in 

11          New York than we are -- than some of the 

12          other states are, or nationally, because we 

13          have a lot of New York-only companies that 

14          we've regulated and maintained better 

15          reserves than some of the other companies 

16          nationally have.

17                 We look at these applications and 

18          these requests for rate increases very, very 

19          carefully.  We don't like to grant rate 

20          increases, but there have been a number of 

21          occasions where we've had to because 

22          actuarially there just was a need for it 

23          because otherwise either that book of 

24          business or the company would be insolvent 


 1          without the rate increases.

 2                 What we've done to protect consumers 

 3          as best as possible is, particularly when 

 4          there are significant rate increases, we've 

 5          required the companies to offer landing 

 6          spots, meaning an alternative.  So if you 

 7          don't want to pay the rate increase you could 

 8          take some kind of a reduction in benefits.  

 9          Sometimes that's just sort of percentage on 

10          the inflation of the healthcare costs.

11                 The other thing that we've done is 

12          we've encouraged long-term-care riders on 

13          insurance policies.  And actually last 

14          legislative session there was a bill that was 

15          passed and signed by the Governor that fixed 

16          the Insurance Law to encourage more of the 

17          long-term-care riders to life insurance 

18          policies.  

19                 That's something going forward, 

20          because long-term care as an industry is -- 

21          the healthcare costs of it are just very high 

22          given life expectancies and improvements in 

23          medicine over the past 20-some-odd years.  

24          It's obviously a difficult problem, and these 


 1          are not easy decisions.  

 2                 And I'll tell you, I don't like to 

 3          grant those increases, but they're 

 4          actuarially justified when we grant them 

 5          because we need to protect the solvency of 

 6          either that book of business or the company.

 7                 ASSEMBLYMAN CAHILL:  Another failure 

 8          is the Health Republic co-op.  I won't ask 

 9          you to answer that now, but if you could 

10          provide us with a status report on what your 

11          agency is doing to address the many loose 

12          ends that were left when Health Republic went 

13          out of business.

14                 But I do want to go to the next one, 

15          which is more forward-looking, and that's the 

16          Paid Family Leave risk adjustment mechanism.  

17          And if you could explain what the department 

18          has done on the Paid Family leave risk 

19          adjustment mechanism to assure that it too 

20          doesn't collapse like long-term-care 

21          insurance and like Health Republic did.

22                 SUPERINTENDENT VULLO:  Would you like 

23          me to address Health Republic?  Because I'm 

24          happy to give you --


 1                 ASSEMBLYMAN CAHILL:  No, no, I'm 

 2          asking -- I said maybe you can do that in 

 3          writing afterwards.  I'm asking about Paid 

 4          Family Leave risk adjustment.

 5                 SUPERINTENDENT VULLO:  Okay.  So the 

 6          Paid Family Leave risk adjustment doesn't 

 7          have anything to do with Health Republic or 

 8          long-term care --

 9                 ASSEMBLYMAN CAHILL:  No.  No.

10                 SUPERINTENDENT VULLO:  So Paid Family 

11          Leave is --

12                 ASSEMBLYMAN CAHILL:  Actually, that's 

13          exactly right.  I'd like it not to, which is 

14          why I'm asking the question.

15                 We've had failures in both of those -- 

16          that one industry, and we had failure with 

17          that one company.  They didn't in Vermont, 

18          where the regulator prevented them from ever 

19          entering into the state.  So I'm trying to 

20          make sure that we don't have a problem with 

21          Paid Family Leave, as families start to rely 

22          upon it and premiums are determined and risk 

23          adjustments are being made.  So I'm asking 

24          you about what steps have been taken to 


 1          ensure that the risk adjustment mechanism is 

 2          appropriate, and what steps are taken to be 

 3          able to modify it should there be an early 

 4          warning that there's a problem.

 5                 SUPERINTENDENT VULLO:  The risk 

 6          adjustment mechanism in Paid family Leave is 

 7          intended to balance, to the extent that 

 8          certain insurers -- this is a disability 

 9          insurance program -- to the extent that 

10          certain insurers wind up having greater 

11          claims than others.  

12                 So in the regulation that we issued 

13          with respect to Paid Family Leave, we 

14          included a risk adjustment mechanism.  That 

15          mechanism would come into play after the 

16          year.  So Paid Family Leave just started 

17          January 1 of this year.  The rate has been 

18          set.  It's an employee contribution.  It's 

19          .126 percent of wages, up to a maximum of the 

20          average weekly wage across the state.  And we 

21          did that rate setting, which I came out with 

22          in the summer of 2017, based upon actuarial 

23          analysis and based upon experience in some 

24          other states that have paid family leave.  


 1                 Obviously it's the first year of the 

 2          program, and we would hope and expect that 

 3          the amount that we set is appropriate.  But 

 4          if it's not because there's an imbalance that 

 5          some carriers happen to have greater claims 

 6          than others, that's why risk adjustment was 

 7          there.

 8                 I will say that we have 26 carriers 

 9          that are writing Paid Family Leave.  We had 

10          an extensive outreach with the carriers in 

11          coming up with our rate setting.  We hired an 

12          outside firm to look at the data on that to 

13          arrive at the amount, because we didn't want 

14          to charge more than we had to, since these 

15          are employee payroll deductions.  But, you 

16          know, we did our very best with all of that 

17          input that we received.  But yes, we included 

18          a risk adjustment to try to balance it out.

19                 And remember that these are -- Paid 

20          Family Leave is part of a disability 

21          insurance policy, so the carriers that are 

22          writing Paid Family Leave are disability 

23          carriers.  I also have the ability in the 

24          setting of disability rates to adjust to the 


 1          extent that we have some issue with perhaps 

 2          not having or underestimating the amount of 

 3          claims for Paid Family Leave. 

 4                 But we used the data that we had, and 

 5          I think set a system so that certainly the 

 6          payments have to be made by the carriers.

 7                 ASSEMBLYMAN CAHILL:  I've run out of 

 8          time, but I'll come back on the second round.

 9                 I do want to point out that if it's 

10          being considered a disabilities policy, it 

11          probably is going to come under the 

12          Governor's 14 percent health tax.  And we can 

13          talk about whether that has been factored 

14          into the rate.  

15                 But I'll give back the time to the 

16          Senate.

17                 SENATOR HANNON:  Senator Savino.

18                 SENATOR SAVINO:  Thank you, Senator 

19          Hannon.

20                 Good afternoon, Superintendent.

21                 SUPERINTENDENT VULLO:  Hi, there.

22                 SENATOR SAVINO:  I want to focus on 

23          two issues, one of which you mentioned in 

24          your testimony.  


 1                 As you know, you and I have had 

 2          several conversations about the lack of 

 3          insurance coverage for in vitro fertilization 

 4          and cryopreservation, so I was happy to hear 

 5          the Governor include it in his women and 

 6          children's proposal.  But I'm a little 

 7          confused, because in your testimony you said 

 8          a study, that DFS will be conducting a study 

 9          regarding appropriate insurance coverage for 

10          IVF and fertility preservation.

11                 So that's a little different than 

12          moving forward with the issue.  So what are 

13          we studying?  Because as we know, if you work 

14          for the state -- if you work for my office, 

15          work for your office, work for the Governor's 

16          office, all of our employees are entitled to 

17          coverage for IVF and cryopreservation.  So 

18          how do we -- what are we studying to see to 

19          it that we can expand it to everybody?

20                 SUPERINTENDENT VULLO:  We're looking 

21          at a number of different things.  And 

22          certainly the data from the state program is 

23          data that we've already obtained.  We're 

24          looking at it because the populations could 


 1          be different, so we're looking at the -- to 

 2          figure out what the cost of this would be.  

 3                 And there's a number of other states 

 4          that actually cover in vitro fertilization as 

 5          well as the fertility preservation -- 

 6          although that's less of a cost, we think, 

 7          than the IVF.  We want to look at the various 

 8          different ways of covering it.  Is the state 

 9          plan the best way?  

10                 And there is an underlying question of 

11          what we would do and whether it would trigger 

12          a state fiscal under the Affordable Care Act, 

13          because we want to avoid that, and that's an 

14          issue that the federal government could come 

15          at us and say that it has to be paid.  I 

16          certainly want to avoid that.

17                 So rather than us rush with the 

18          legislation, we decided to do this.  And 

19          we've already started this process and 

20          gathered the data.  And then we want to come 

21          up, you know, there's a number of different 

22          ways of providing the coverage.  You know, 

23          interestingly, the way the Empire Plan does 

24          it is it makes it -- there's a cap.  The 


 1          Affordable Care Act, in the commercial 

 2          market, doesn't actually allow you to do 

 3          that, so you'd have to do it a different way.

 4                 And then there's questions of do you 

 5          need to have different procedures done prior 

 6          to IVF, or can you just go straight to IVF.  

 7          Do we want to do any kind of age limitations 

 8          or issues in that.  So I really want to -- 

 9          you know, so we're going to look at all of 

10          those issues.  Be happy to have, you know, 

11          conversations and input from everyone on 

12          that.  But that's the idea.

13                 And fertility preservation is 

14          different and probably, from our preliminary 

15          information, you know, it's a less costly 

16          option.  And of course if we do this in the 

17          commercial health market, it could raise 

18          rates.  But we want to actually look at what 

19          that would be, because people would say it's 

20          very high.  I'm not sure it's as high as what 

21          people say, so I -- and that's part of the 

22          analysis as well.

23                 SENATOR SAVINO:  Do you have a sense 

24          of what the time frame for this study is, and 


 1          the report back?  If you don't know the 

 2          answer, that's fine, but --

 3                 SUPERINTENDENT VULLO:  Yeah, I don't 

 4          know.  I mean, we're actively working on it.  

 5          I want to make sure that we get the data.  I 

 6          mean, we were able to get some data, but I 

 7          wasn't able to get data from some of the 

 8          other states just yet in terms of their 

 9          programs and their legislation.  And so 

10          that's what we're waiting on.

11                 SENATOR SAVINO:  We can follow up on 

12          that.

13                 SUPERINTENDENT VULLO:  Sure.

14                 SENATOR SAVINO:  I want to shift to, 

15          because I don't have that much time -- I may 

16          have to come back again.

17                 As you know, we've worked very hard 

18          and your office has been a great help to us 

19          with developing a plan to deal with abandoned 

20          and zombie properties.  And as you know, in 

21          2016 a statewide database was created to 

22          track vacant and abandoned properties across 

23          the state.

24                 Can you give me a sense on the 


 1          progress of the development of the database?  

 2          Like have localities been cooperative, or 

 3          banks meeting their duty to update the 

 4          database?  Have any fines or penalties been 

 5          issued?  And, you know, are we seeing other 

 6          tools that we need to utilize to really crack 

 7          down on this problem?

 8                 SUPERINTENDENT VULLO:  Sure.  We've -- 

 9          we have about -- certainly at least 50,000 

10          properties in our registry of these zombie 

11          properties.  We have developed a robust 

12          program for inspections and enforcement.  

13                 We spent three or four months 

14          traveling the state.  We had meetings in 

15          every region across the state with the local 

16          officials in that region that were very well 

17          attended, because the statute very, you know, 

18          wisely provides a partnership with the local 

19          officials, who also have enforcement 

20          authority under the statute.  

21                 So we've actually engaged with a 

22          number of local officials who are actually 

23          using that enforcement authority.  And should 

24          they actually receive fines, they can bring 


 1          it into their local budgets, it doesn't go to 

 2          the state.  So we actually did these programs 

 3          to educate local officials across the state 

 4          on the law and created those partnerships.  

 5                 We have imposed fines ourselves of -- 

 6          where there's maintenance lapses, where the 

 7          banks or the servicers have not complied, and 

 8          we have issued a number of fines and 

 9          collected a number of fines.

10                 We've developed a program where we 

11          have inspectors doing spot checks across the 

12          state, and we actually did some of those 

13          recently.  And we are now gathering data 

14          because that could result in more fines as 

15          well to the extent -- and we've been public, 

16          you know, as much as we can about this, 

17          because we need to get the banks and the 

18          servicers to comply with the law.  And they 

19          should all know that we're out there doing 

20          spot checks so that they comply with the law, 

21          because of the risk to the communities of 

22          these properties not being well taken care 

23          of.

24                 Of course there's a whole issue of 


 1          getting them in the hands of other -- of new 

 2          homeowners, which we'd love to see.  But that 

 3          requires, you know, contributions from the 

 4          state budget.  That's not within my ability 

 5          to do.  But I think that that's really a fix 

 6          too, not simply the maintenance and patching 

 7          up the doors.  They're still eyesores.  

 8                 And we've worked with the OCA and the 

 9          courts, because they should really move the 

10          foreclosure proceedings for these properties, 

11          where there's no homeowner there, move those 

12          along.

13                 SENATOR SAVINO:  I just want to leave 

14          you with -- as you know, the database doesn't 

15          apply to real estate-owned properties, where 

16          there's no mortgage and the bank is in 

17          control.  

18                 SUPERINTENDENT VULLO:  Good point, 

19          yes.

20                 SENATOR SAVINO:  So we're considering 

21          maybe adding them to the program, perhaps 

22          through another piece of legislation, because 

23          again we need to make sure we capture all of 

24          them.  These abandoned properties drive down 


 1          everyone's property value and, you know, it 

 2          makes it that much harder for homeowners who 

 3          live next door to maintain their property.  

 4                 One of the other problems we're 

 5          having, and I'll end on this, I'm not sure if 

 6          other localities are seeing it, but we now 

 7          have a prevalence of people moving into these 

 8          abandoned properties.  And through the right 

 9          of that first possession -- it's the most 

10          amazing thing.  You don't own the house, you 

11          don't pay a quarter for this house, you can 

12          go to Con Edison with a lease that you bought 

13          at Staple's, they'll turn on the electricity, 

14          it's your house now.  It's insane.

15                 So we need to continue to work on 

16          this, and I look forward to doing that with 

17          you.

18                 SUPERINTENDENT VULLO:  Yeah, thank 

19          you.  And just -- I mean, you raise a good 

20          point, because the statute only applies to 

21          homes with mortgages.  So we've actually 

22          gotten many, many complaints and 

23          unfortunately we haven't been able to address 

24          them because if it's not a house with a 


 1          mortgage on it, it's not subject to the 

 2          database.  

 3                 And then you have the registry 

 4          requirements or the maintenance requirements, 

 5          and then you could have people who are once 

 6          servicers and then they basically acquire it 

 7          themselves or sell it cheap, and then it no 

 8          longer becomes part of the law.  So I think 

 9          that's an important point.

10                 And the other, you know, when my 

11          inspectors go out, if there's a person in the 

12          property, we don't go on it, and we wouldn't 

13          have the ability to do anything about that.  

14          You know, maybe some of the local officials 

15          could.  But that -- I recognize that concern.

16                 ASSEMBLYMAN CAHILL:  Assemblyman 

17          Gottfried.

18                 ASSEMBLYMAN GOTTFRIED:  Thank you.

19                 One question.  Early Intervention.  

20          For several years we have been trying to get 

21          more than about $15 million out of the 

22          non-governmental insurance world for EI, 

23          without success.  About 60 percent of 

24          nongovernmental insurance is self-insured 


 1          plans that we can't regulate anyway.  So we 

 2          spend all this effort torturing EI providers 

 3          by trying to make them jump through hoops to 

 4          appeal denials, inevitable denials, from 

 5          health plans.

 6                 So my question is, why not simply say 

 7          to the insurance industry:  We're going to 

 8          tax health insurance as a collective 

 9          $15 million -- or pick any number -- and then 

10          you're off the hook, we don't want you to 

11          handle claims for EI services.  Just give us 

12          our $15 million, you go your way, we'll go 

13          ours.  Why not do that?

14                 SUPERINTENDENT VULLO:  Assemblyman, I 

15          don't know if the $15 million is a number 

16          that you wanted me to comment on, because I 

17          don't have any reason for thinking what the 

18          number is.

19                 ASSEMBLYMAN GOTTFRIED:  Well, it's the 

20          concept.

21                 SUPERINTENDENT VULLO:  I think Early 

22          Intervention, obviously, we need to provide 

23          the services to those infants and toddlers 

24          with disabilities.  


 1                 There is a piece of the pie where the 

 2          municipalities are paying providers and not 

 3          always asking for the reimbursement from 

 4          insurance.  But there's also the other side 

 5          of that coin where insurance policies don't 

 6          cover all services or don't cover them for 

 7          the full amount of days or treatments that 

 8          there are, and there are other issues there.

 9                 But it seems to me that pulling that 

10          out of the insurance system is pulling just 

11          one thing out.  You could do that for a 

12          number of other things, and I'm not sure that 

13          that would be appropriate comprehensive care.  

14          And I think, you know, the question really is 

15          are we getting all of the reimbursement that 

16          is due from the insurance, the commercial 

17          insurance, and that's what this effort is 

18          trying to get at, is to ensure that they're 

19          paying when they're obligated to pay.  And if 

20          they are obligated and they don't, that's 

21          where the fines come in.

22                 ASSEMBLYMAN GOTTFRIED:  Well, I would 

23          just urge you to think about the idea that we 

24          spin an awful lot of wheels trying to get 


 1          blood from a stone.  Insurance companies 

 2          spend a lot of money denying claims, because 

 3          you've got to spend a little money to even 

 4          deny a claim.

 5                 It doesn't -- to me, it doesn't make a 

 6          whole lot of sense to go through all of those 

 7          gyrations for $15 million or -- I mean, I 

 8          don't care if it's 14 or $18 million, it's in 

 9          that ballpark.  Why not just tell the 

10          industry as a whole, Write us a check and 

11          we're done with you?  I just urge you to 

12          think about that.

13                 SUPERINTENDENT VULLO:  Okay.

14                 SENATOR HANNON:  Senator Kaminsky.

15                 SENATOR KAMINSKY:  Thank you.  

16                 Good afternoon, Superintendent.

17                 SUPERINTENDENT VULLO:  Hi, Senator.

18                 SENATOR KAMINSKY:  The North Shore and 

19          Child and Family Guidance Center recently 

20          released a report about access to mental 

21          health and addiction treatment called 

22          "Project Access."  And I really urge you to 

23          look at it.  It is really a damning statement 

24          on the inability for people to find access to 


 1          good providers when they've had the courage 

 2          to come forward and say, I do have an issue 

 3          with mental health or addiction.  

 4                 Many of them surveyed -- 650 Long 

 5          Islanders were surveyed; many had said that 

 6          they were getting the runaround from their 

 7          insurance company, that the ability to find a 

 8          provider was too difficult, some even gave up 

 9          during the process.  And it's just a really 

10          tough atmosphere.  

11                 I've heard from some clinicians who 

12          tell me it's actually better to have Medicaid 

13          than commercial insurance when trying to find 

14          mental health treatment on Long Island.

15                 So I just -- I know that I've talked 

16          with your office before on this, and I 

17          certainly do appreciate that.  I just wanted 

18          to make you aware of this and ask that your 

19          department really double down on network 

20          adequacy and make sure that there are decent 

21          options for people out there looking for 

22          treatment.

23                 SUPERINTENDENT VULLO:  Thank you, 

24          Senator.  And thank you for making us aware 


 1          of that report.  Obviously network adequacy 

 2          overall is something that we as well as the 

 3          Department of Health looks at with respect to 

 4          mental health services in particular.  I do 

 5          think that more needs to be done on that.  I 

 6          mean, the rules do require that there be a 

 7          provider in each territory, with each of the 

 8          services that are mandated by law.  And we 

 9          look at that carefully.

10                 I will say that at DFS we're doing 

11          more on also price transparency.  We're doing 

12          an analysis of that so that there will be 

13          more information provided by the health 

14          insurers to the consumer so that they can 

15          access the information.  

16                 We're also -- we have a small federal 

17          grant that we're using specifically for 

18          mental health, and we've added mental health 

19          to our market conduct examinations to make 

20          sure that insurance companies are providing 

21          that parity for mental health.  And obviously 

22          the adequacy of the network is something -- 

23          so it is something we have a collaborative 

24          effort with the Office of Mental Hygiene and 


 1          the commissioner there.  We're working on all 

 2          of these issues.

 3                 But I agree with you, this is 

 4          something that we need to do more on, and we 

 5          will.

 6                 SENATOR KAMINSKY:  Well, thank you.  

 7          And I think it's worth viewing this also 

 8          through the lens of the opioid crisis we're 

 9          all facing.

10                 SUPERINTENDENT VULLO:  Of course.

11                 SENATOR KAMINSKY:  You know, when 

12          someone is unable to get that treatment or 

13          they find it too difficult, of course 

14          sometimes they will unfortunately seek a 

15          different path.  And we certainly want to get 

16          them the help that they believe they require.  

17          So I really appreciate that.

18                 Thank you for your attention to this.  

19          I think if you talk to one or two people who 

20          have gone through this, you'll see right away 

21          that something needs to be done.  And I 

22          really appreciate your attention, and it's 

23          great to see an NYU law grad doing so well.  

24          So thank you.


 1                 SUPERINTENDENT VULLO:  Great.  Thanks, 

 2          Senator.

 3                 ASSEMBLYMAN CAHILL:  Mr. Raia.

 4                 ASSEMBLYMAN RAIA:  Thank you very 

 5          much.

 6                 SUPERINTENDENT VULLO:  Sure, 

 7          Assemblyman.

 8                 ASSEMBLYMAN RAIA:  We touched on it 

 9          before, but where are we with Health 

10          Republic?

11                 SUPERINTENDENT VULLO:  Okay.  So --

12                 ASSEMBLYMAN RAIA:  The condensed 

13          version, please.

14                 SUPERINTENDENT VULLO:  Sure.  The 

15          Health Republic liquidation is actually 

16          moving apace.  We through -- we've 

17          transitioned all of the administrative 

18          services to the Liquidation Bureau, so we've 

19          reduced costs.  We've gone through all of the 

20          claims, the policy claims -- it was about 

21          600,000 -- and we issued about 188,000 

22          explanation of benefits.  

23                 There was about 1100 appeals, because 

24          we had a process for appeals.  So we issued 


 1          the EOBs and then we provided -- this was all 

 2          under court supervision -- we provided an 

 3          appeal process, and only 1100-something asked 

 4          for appeals.  We're going through that 

 5          process now.

 6                 I filed a lawsuit in the Court of 

 7          Federal Claims in September seeking the -- 

 8          the request is $577 million for risk corridor 

 9          reinsurance and CSR subsidies.  That case is 

10          on hold because there recently was an appeal 

11          argued in some cases that had preceded us 

12          that may decide some of the legal questions 

13          there.  I would like to continue forward and 

14          get, you know, some money back.  

15                 We finished the financial statements, 

16          and I think we've made a transparent process.  

17          You can go on the website and you can find 

18          all of this information there, including the 

19          financial statements.  But I think that's the 

20          general -- I mean, obviously there still will 

21          be, you know, money that is not there to pay 

22          the claims unless we can get the money from 

23          the health insurer.  

24                 We did collect some money from a 


 1          reinsurance policy.  We got $1.8 million from 

 2          there.  We're looking at directors and 

 3          officers to be able to get the D&O policy to 

 4          bring some money in there.  But it's pretty 

 5          close to concluding.  Again, we know now 

 6          what -- more what the amount of claims are, 

 7          and it's in the financial statement.  I think 

 8          it's about $211 million, is in my head as to 

 9          what the claims are.

10                 ASSEMBLYMAN RAIA:  Okay, thank you.  

11                 I mentioned this before to the 

12          gentleman that preceded you; there's a 

13          proposal to reduce the nonprofit plan 

14          reserves to a minimum level.  I get a little 

15          concerned when we talk about First Republic, 

16          when we talk about how a lot of these plans 

17          are on a shoestring or are a flu season away 

18          from going bankrupt, maybe.  That doesn't 

19          concern you, that they have to drain their 

20          reserves down to a very limited number?

21                 SUPERINTENDENT VULLO:  My 

22          understanding, Assemblyman, of that 

23          provision, that provision relates to Medicaid 

24          nonprofits -- and again, which is not mine.  


 1          But my understanding of that provision is 

 2          that it's where the nonprofit Medicaid Public 

 3          Health Law entity, HMO, what have you, has 

 4          excess or surplus reserves.  And where that 

 5          is the case, that excess amount would then 

 6          reduce the capitation rate that that insurer 

 7          would get.

 8                 But again, that's -- I'm not trying to 

 9          duck the question, but it's not really my 

10          agency's --

11                 ASSEMBLYMAN RAIA:  It would be nice to 

12          have you all together and go, This is a 

13          serious --

14                 SUPERINTENDENT VULLO:  Well, that's -- 

15          whatever.

16                 ASSEMBLYMAN RAIA:  Fair enough.

17                 SUPERINTENDENT VULLO:  I'm happy to 

18          answer.  But that's my understanding of that.  

19          And again, it's just the Medicaid capitation 

20          rates where there is, you know, excess or 

21          surplus reserves.

22                 ASSEMBLYMAN RAIA:  Now, Chairman 

23          Gottfried touched on the Early Intervention.  

24          There's obviously a big expansion proposed in 


 1          the Governor's budget.  One of the things -- 

 2          and you touched on the fines, and it kind of 

 3          went over my head a little bit.  But we're 

 4          actually giving DFS the ability to increase 

 5          fines from $1,000 to over $10,000, depending 

 6          on the case.

 7                 Is this happening on a regular basis 

 8          that you need to use such a big hammer on 

 9          this?  Is something like Assemblyman 

10          Gottfried recommended a better way to go?  

11          What's your opinion on this?  Because I think 

12          going from a thousand dollars to $10,000 is 

13          pretty excessive.

14                 SUPERINTENDENT VULLO:  I think the 

15          question, Assemblyman, is whether -- you 

16          know, what we really want here is that we 

17          want where there's coverage under an 

18          insurance policy for Early Intervention 

19          services, that we save the municipalities and 

20          the state budget from that cost if there's a 

21          commercial that can be made first.  

22                 And we've done a couple of things.  

23          Certainly from my agency, you know, we issued 

24          guidance very recently saying that the 


 1          insurance companies have to provide within 

 2          15 days the information requested as to 

 3          whether or not the family whose child is 

 4          receiving services has coverage to try to do 

 5          that, but then to make sure that we get that 

 6          full coverage without having to go through 

 7          external appeals and a process which may 

 8          delay the services or cause the municipality 

 9          to expend funds, that if you have the higher 

10          fine, you may get the actual coverage.

11                 ASSEMBLYMAN RAIA:  Has there been talk 

12          about reforming the policy as far as, you 

13          know, the appeal after appeal after appeal?

14                 SUPERINTENDENT VULLO:  Well, I mean, 

15          the policies are not necessarily -- the 

16          different coverages in insurance policies are 

17          not -- we don't have -- we certainly have 

18          standard coverage requirements.  But the 

19          issues of how much is covered, you know, how 

20          much in services, what the rates are that 

21          would be provided, tend to be determined in 

22          the contracts between the insurer and the 

23          provider, which we don't have oversight over.

24                 ASSEMBLYMAN RAIA:  Then it's not 


 1          standardized across the --

 2                 SUPERINTENDENT VULLO:  Not always, no.  

 3          Not usually.

 4                 ASSEMBLYMAN RAIA:  Thank you.

 5                 SUPERINTENDENT VULLO:  Sure.

 6                 SENATOR HANNON:  Senator Krueger.

 7                 SENATOR KRUEGER:  Hi, good afternoon.

 8                 (Exchange off the mic.)

 9                 SENATOR KRUEGER:  So you already 

10          answered questions about long-term-care 

11          insurance is really not the place for anyone 

12          to be looking.  My office has been getting 

13          any number of complaints recently about -- 

14          that people discover that the company they 

15          work for is self-insured and that they can't 

16          even get answers about what it's supposed to 

17          cover, and that when we follow through with 

18          your division, you're helpful but you 

19          actually don't know anything either.

20                 So help me understand how we have a 

21          secondary system for insurance in the State 

22          of New York where no one's ever sure what 

23          they're covered for and where to go to even 

24          find out that information.  It just seems to 


 1          me to sort of be a little crazy.

 2                 SUPERINTENDENT VULLO:  It's called 

 3          ERISA.  And it's, you know, federal employee, 

 4          whatever, retirement insurance -- whatever 

 5          ERISA stands for.  And it has a clear 

 6          preemption of state law, state regulation in 

 7          it.  So whenever there's a plan that is an 

 8          employee benefit plan -- and obviously that 

 9          could be retirement, it could also be 

10          healthcare -- and these self-funded plans are 

11          governed by ERISA and the Department of 

12          Labor, the U.S. Department of Labor, and we 

13          don't have any regulation, or could we, of 

14          them.  

15                 And it does create real issues.  Which 

16          is one reason why I'm very much against the 

17          expansion of association health plans, 

18          because that's -- the Department of Labor 

19          came out with a proposed rule, this is the 

20          U.S. Department of Labor, trying to expand 

21          that definition.  Because if you expand it 

22          too much and you do it in a context where 

23          there would be further a risk of preemption, 

24          we wouldn't have any oversight over that 


 1          additional.

 2                 So it's one of those things that is 

 3          frustrating.  And what happens is we often 

 4          get consumer complaints about things.  And 

 5          even some of the -- you know, the things that 

 6          we've done, the great work that we've done in 

 7          New York State with coverage of certain, you 

 8          know, diseases or treatments or screening 

 9          doesn't apply to them.  And it's frustrating, 

10          and it's a problem.

11                 SENATOR KRUEGER:  Just quickly, do you 

12          have any reason why you'd see a growth in 

13          complaints from consumers on ERISA healthcare 

14          insurance?  Are they all reducing the 

15          benefits somehow?

16                 SUPERINTENDENT VULLO:  I don't -- I'm 

17          not saying that we have received an increase 

18          in those complaints, but we do receive 

19          complaints, which unfortunately our answer 

20          is, you know, when they come to us and then 

21          we contact -- because there will be -- there 

22          will often be an insurer, but that insurer is 

23          acting basically as an administrator, and 

24          it's an ERISA plan.  So the consumer doesn't 


 1          always know, because they're getting 

 2          something from what they think is an 

 3          insurance company, and they come to us, and 

 4          then when we investigate it, we find out it's 

 5          actually a self-funded plan.

 6                 SENATOR KRUEGER:  Shifting off of 

 7          insurance to a proposal in the budget to 

 8          create a student loan ombudsman within DFS.  

 9          So can you explain a little bit about how 

10          this is going to work?  And is it a different 

11          proposal than last year?  

12                 I mean, there is such an enormous 

13          amount of student debt and shenanigans going 

14          on to direct students to sign up for things 

15          through these debt consultants.  So I want us 

16          to have a fix, but tell me how we're going to 

17          do that.

18                 SUPERINTENDENT VULLO:  So this is a 

19          multipronged proposal.  It includes a 

20          proposal that we had last year, and we added 

21          to it.  You know, student load debt is number 

22          two in debt to mortgage.  Mortgage is number 

23          one, student loan debt is number two.

24                 New York, the average student loan 


 1          debt is $32,000, which is almost 10 percent 

 2          higher than the national average.  So we 

 3          obviously have a lot of student debt in 

 4          New York.  

 5                 Obviously the best way to reduce 

 6          student debt is the Excelsior Scholarship 

 7          Program, but that's not addressing everyone, 

 8          and certainly not people that currently have 

 9          debt.  The federal government is not doing 

10          what the prior administration was doing.  The 

11          U.S. Department of Education is shirking its 

12          responsibility towards students.  The 

13          Consumer Financial Protection Bureau, the 

14          federal bureau, has been -- has really been 

15          defanged in the new administration.  And they 

16          had a program to license and regulate the 

17          student debt servicers.  So the states have 

18          to fill in the void.

19                 So this proposal, ombudsman is clearly 

20          one of the proposals, which is in the 

21          Department of Financial Services, in my 

22          agency.  That will address questions, mediate 

23          disputes, educate consumers.  But that 

24          ombudsman needs the other provisions in 


 1          there, which are two pieces of legislation.  

 2          One is the licensing of student debt 

 3          servicers.  These are the people who are the 

 4          debt collectors, and they should be licensed 

 5          just like mortgage loan servicers are 

 6          licensed, and just like banks are licensed.

 7                 And so we would license them.  And 

 8          then you mentioned debt consultants, which is 

 9          very, very important.  We have a piece of 

10          legislation that bans inappropriate practices 

11          of the debt consultants.  You know, these are 

12          people that will call you up and say, If you 

13          give me, you know, 15 percent up front, I'm 

14          going to reduce your overall debt.  And they 

15          obviously have predatory practices, and so we 

16          want to get rid of some of those bad 

17          practices.  So that's a piece of it too.

18                 And I think it's really all of a 

19          package.  The ombudsman is not actually 

20          legislative, because we can appoint somebody 

21          to educate.  But the ombudsman only has teeth 

22          if we give the department the powers and we 

23          do the legislation on the debt consultants 

24          and the servicers.


 1                 SENATOR KRUEGER:  And are those 

 2          included in the Governor's budget language?

 3                 SUPERINTENDENT VULLO:  They are.  

 4          They're I think W, TED W.  There's a whole 

 5          package in there.  I'm happy to send it to 

 6          you if you need it, but it's in the 

 7          Governor's budget, the whole piece of it.

 8                 SENATOR KRUEGER:  I just wanted to be 

 9          sure.

10                 SUPERINTENDENT VULLO:  The ombudsman's 

11          not in there because it's not actually 

12          legislative, it's just appointing somebody in 

13          the department.

14                 SENATOR KRUEGER:  And is the 

15          assumption -- just very quickly -- that you 

16          could draw out of your revenues to cover the 

17          cost of the people needed to operate these 

18          programs?

19                 SUPERINTENDENT VULLO:  Oh, yes, yeah.  

20          We do it through assessments.  All of the -- 

21          except for a very, very small piece of the 

22          agency, the agency is by assessments.  So we 

23          would need FTE help for that, but we would do 

24          it through assessments of the licensed 


 1          entities.

 2                 SENATOR KRUEGER:  Thank you.  Thank 

 3          you.  

 4                 SUPERINTENDENT VULLO:  Sure.

 5                 ASSEMBLYMAN CAHILL:  We have been 

 6          joined by Assemblywoman Nily Rozic, and she 

 7          has a few questions.

 8                 ASSEMBLYWOMAN ROZIC:  Thank you, 

 9          Mr. Chair.

10                 It's good to see you, Superintendent.

11                 So I'm going to follow the line of 

12          questioning as the Senator just mentioned, 

13          because there is a piece that I'm more 

14          intrigued by in the student loan piece that 

15          is all about professional licenses.  So can 

16          you speak to that a little bit?  I know that 

17          other states across the country are looking 

18          at this issue as well, so maybe you can 

19          expand upon that.

20                 SUPERINTENDENT VULLO:  Sure.  And 

21          thank you for reminding me of that, because 

22          there are other provisions in the Governor's 

23          budget -- they're not specific to DFS, but 

24          it's that no state agency can deny a license 


 1          or deny the renewal of a license because 

 2          someone has not paid their student loan debt.

 3                 We don't believe that we're doing that 

 4          today, but we know that in other states this 

 5          is a problem and we should put this in our 

 6          law, to prevent the denial of licenses or the 

 7          failure to renew licenses just because 

 8          somebody has a student loan.  Because we know 

 9          that when people have student debt, it 

10          carries with them for a very long time.  And 

11          the last thing we want is to prevent them 

12          from being able to have an occupation where 

13          they can earn a livable wage so that they can 

14          pay back their debt, because that's really 

15          what we want.

16                 And in fact there's a lot of the 

17          initiatives to address this.  There's also a 

18          piece in the Governor's budget to require 

19          colleges to provide full disclosure of the 

20          terms for loans before students sign up.  

21          Last year we did a financial aid worksheet 

22          which provides that.  So we're really trying 

23          to educate, but also addressing the predatory 

24          conduct that goes on and trying to get these 


 1          people who have the education to be able to 

 2          earn a living wage and pay back their debt 

 3          without onerous debt collecting, predatory 

 4          activities at them.

 5                 ASSEMBLYWOMAN ROZIC:  It's certainly 

 6          an issue for my generation.  And I know many 

 7          people out there who have struggled with 

 8          FANNY MAE over the years, so I wouldn't want 

 9          to see them detrimentally impacted.

10                 The last thing I want to mention, I 

11          know Senator Savino mentioned her support for 

12          the IVF coverage.  I want to echo that 

13          sentiment.  I think it's a big issue that we 

14          need to address, in addition to 3D 

15          mammograms.

16                 And the last piece that really does 

17          impact a lot of women, it wasn't in the first 

18          part of the Council on Women and Girls, but 

19          I'm hopeful that you and I can work on eating 

20          disorders as they impact young women and men 

21          across the state.  I have a bill that the 

22          chair of the Insurance Committee has helped 

23          me work through that would redefine 

24          biologically based mental illnesses to 


 1          include all sorts of eating disorders and not 

 2          just anorexia and bulimia.  It's a big issue 

 3          that's impacting many women across the state.  

 4          So I'd like to work with you on that as well 

 5          in the future.

 6                 SUPERINTENDENT VULLO:  Be happy to 

 7          work with you on that.  And it's obviously an 

 8          important issue that we need to make sure 

 9          that appropriate coverage is there.  And so 

10          I'll be happy to look at that and see what we 

11          can do to make it happen.

12                 ASSEMBLYWOMAN ROZIC:  Great.  Thank 

13          you so much.

14                 SUPERINTENDENT VULLO:  Thank you.

15                 SENATOR HANNON:  Senator Seward.

16                 SENATOR SEWARD:  Thank you very much.

17                 I had just a couple of quick 

18          follow-ups.

19                 Getting back to the health insurance 

20          tax issue, you stated in response to my 

21          earlier question on this that it was unclear 

22          how you could force premium savings from the 

23          tax reduction, the corporate tax reduction of 

24          these for-profit health insurers.


 1                 But you also stated that the higher 

 2          rates -- their corporate rate was already 

 3          built into your health insurance rates this 

 4          year.  Did I understand that correctly?

 5                 SUPERINTENDENT VULLO:  No, what I was 

 6          saying, Senator, is --

 7                 SENATOR SEWARD:  You said that you 

 8          were unclear whether you could get at the 

 9          corporate tax cut to provide savings to 

10          ratepayers here in New York.

11                 SUPERINTENDENT VULLO:  What I was 

12          saying, Senator, is that when the insurance 

13          companies propose their rate increases -- and 

14          remember, my rate review is solely in the 

15          individual and the small group markets, which 

16          are community-rated.  There are very few 

17          large groups that are community-rated.  

18                 The large group markets that are 

19          experience-rated, I don't have rate review 

20          over.  And all of that, plus whatever other 

21          contracting that health insurance companies 

22          do make up the corporate entity that either 

23          itself is a taxpayer or is part of a 

24          consolidated group across the country that 


 1          has one parent company taxpayer.

 2                 So when I do -- but when those 

 3          companies came out with their rates, I'm sure 

 4          they took into account what their financial 

 5          picture was, and they didn't think they were 

 6          going to get a 14 percent tax cut.  So it's 

 7          not something that they accounted for.  So it 

 8          is a windfall, and it's found money that they 

 9          didn't otherwise have.

10                 When you look at my rate review and 

11          when you look at the medical loss ratio -- 

12          medical loss ratio, 82 percent is payment of 

13          claims, 18 percent is everything else, 

14          administrative claims and profit for that 

15          book of business -- so the individual market 

16          or the small group market, not the whole 

17          thing.  And if I were to take into account 

18          federal taxes, taxes is a payment.  This is a 

19          windfall, but taxes is a payment.  And if I 

20          were to take that into account, what would 

21          happen is that the administrative expense 

22          piece of the MLR would go up, which could put 

23          pressure on the MLR in terms of claims and 

24          result in higher rates.


 1                 If that's what we were going to do as 

 2          our overall rate -- we do take into account 

 3          premium taxes.  We don't take into account 

 4          federal corporate income taxes, which are two 

 5          different things.

 6                 SENATOR SEWARD:  How would you be 

 7          treating -- in rate-making for next year, how 

 8          will you be treating this proposed new health 

 9          insurance tax if it became law?  How would 

10          that impact this process?

11                 SUPERINTENDENT VULLO:  Well, the 

12          proposal in the Governor's budget is to -- is 

13          the application of a fee, a 14 percent fee on 

14          the net underwriting gain at the corporate 

15          level of the company.  And that's a number 

16          that is an equivalent number to an income tax 

17          number, net underwriting gains, like net 

18          income.

19                 And so we would apply that 14 percent 

20          on the net underwriting gain.  That money 

21          would be collected, and it would go to HCRA 

22          for the purposes of funding healthcare in the 

23          state budget.  It's not a DFS -- I mean, we 

24          may -- we would make sure that this is 


 1          enforced, but it's money that would go to 

 2          HCRA.  

 3                 And that's what the calculation is.  

 4          It's on net underwriting gain.  It's -- it 

 5          cannot be offset by, you know, 20 years of 

 6          net operating losses or other things, it's 

 7          just on that one net underwriting gain.  

 8          That's the proposal in the Governor's budget.

 9                 So that's not part of rate review, 

10          it's a separate statutory proposal to collect 

11          that money.

12                 SENATOR SEWARD:  So you're telling us 

13          that it would have no impact on health 

14          insurance rates here in New York.

15                 SUPERINTENDENT VULLO:  The statute 

16          that's in the Governor's budget has an 

17          explicit provision that says that the 

18          insurance company shall not pass along this 

19          14 percent to increase rates, and we will 

20          enforce that provision.  But there's an 

21          explicit provision in that statute that they 

22          shall not.  

23                 And again, it's net underwriting gain, 

24          it's not premium tax.  Premium tax generally 


 1          gets passed on.  This budget provision 

 2          explicitly says that the insurance company 

 3          shall not pass it along to the consumer in 

 4          higher rates.  And we will certainly look at 

 5          that.  In the large group market that we 

 6          don't regulate, they still have to abide by 

 7          that law.

 8                 SENATOR SEWARD:  And finally, I just 

 9          wanted to reiterate my request in terms of -- 

10          I would be very interested to get the 

11          two-year history in terms of what fines have 

12          been imposed on -- in the P&C area, health, 

13          and life.  You know, the number of 

14          infractions and the fines.

15                 Because I think you were -- I would 

16          just like to have that information prior to 

17          making a determination on these dramatically 

18          higher fines that have been requested here.

19                 I think you were much too modest in 

20          terms of what tools you would have at your 

21          disposal if an insurer is not paying claims 

22          and is providing misinformation and false 

23          information to the department.  You and the 

24          Governor have the bully pulpit in terms of 


 1          press releases.  You could create some very 

 2          bad press for an insurer.  You are the 

 3          regulator of these companies, and plenty of 

 4          tools at your disposal as the regulator -- 

 5          you control the licenses of many of the 

 6          people involved in these companies, and you 

 7          have the power to do examinations.

 8                 So anyway, that was just a comment, 

 9          not a question.  But I think you --

10                 SUPERINTENDENT VULLO:  I'd like to 

11          respond to that.

12                 SENATOR SEWARD:  -- you were quite 

13          modest in terms of what tools you have at 

14          your disposal.

15                 SUPERINTENDENT VULLO:  Senator, I'd 

16          like to respond to that.  Because if you have 

17          an insurance company that is troubled and has 

18          management that's not doing a good job and 

19          you have policyholders there, particularly 

20          those in long-tail-type coverage, meaning 

21          they're not going to get the benefit for some 

22          time, the last thing I want to do is use a 

23          bully pulpit to criticize the company and 

24          have the policyholders flee.


 1                 And you can't always, you know, 

 2          exercise some of the other powers.  The 

 3          licensing power for an insurance company 

 4          means that I can put it in rehabilitation or 

 5          liquidation.  It means I have to sign a 

 6          petition that then becomes part of a court 

 7          proceeding with the oversight of a Supreme 

 8          Court justice, and it's a public proceeding 

 9          as well.

10                 So with some of these companies that 

11          are troubled and that have policyholders 

12          there, I have to balance the need to get the 

13          company to do the right thing without 

14          damaging the company such that the 

15          policyholders flee or -- you know, and if 

16          that happens -- again, if you have 

17          renewal-type policies, for example, 

18          healthcare is slightly different than P&C 

19          and, you know, other types of longer-tail 

20          policies.  Life insurance is another one.

21                 If you have policyholders fleeing, 

22          then you're going to increase the level of 

23          insolvency of the company.  And then that 

24          company, if it has to go into liquidation, 


 1          you either have a guaranty fund or you don't, 

 2          but the policyholder is not benefited from 

 3          that.  So increasing those tools and 

 4          preventing some of the misconduct by having, 

 5          you know, more of a deterrent on fines or the 

 6          administrative supervision or the financial 

 7          hazardous bill, is something that's 

 8          important.  

 9                 If I had the tools to do it with some 

10          of these recalcitrant ones, I would.  But 

11          that's the balance that is struck.  You can't 

12          just -- you can't just pull a license, 

13          because you have policyholders there that 

14          have policies that they're expecting some 

15          money from.  And if the guaranty fund is hit, 

16          while they may get paid something that is an 

17          actuarially determined amount, all of the 

18          other companies pay for that guaranty fund 

19          for that company that goes under.

20                 So as I said, these are not the 

21          majority of the companies, but there are ones 

22          that are difficult to deal with and create 

23          problems.

24                 CHAIRWOMAN WEINSTEIN:  Assemblyman 


 1          Cahill.

 2                 ASSEMBLYMAN CAHILL:  Thank you, Madam 

 3          Chair.

 4                 Superintendent, I have actually seven 

 5          specific questions.  I'm going to try to get 

 6          them all in in the five minutes.

 7                 But is there specifically a compliance 

 8          problem with EI in this state?  Is there a 

 9          compliance problem with insurance companies 

10          not paying claims or not doing so in a timely 

11          fashion?

12                 SUPERINTENDENT VULLO:  We have heard 

13          that, but I don't have any data on that.

14                 ASSEMBLYMAN CAHILL:  Regarding the 

15          fines, the tenfold increase in fines, how 

16          much were the collections in the last fiscal 

17          year for which you have information on the 

18          very fines that you're seeking to increase?

19                 SUPERINTENDENT VULLO:  As I said to 

20          Senator Seward, I don't have that number.  

21          And a lot of these fines come out of market 

22          conduct examinations that we don't make 

23          public, for good reason.

24                 ASSEMBLYMAN CAHILL:  But you have a 


 1          fiscal impact on them.  You must know how 

 2          much they generate -- I know you didn't know 

 3          last year when I asked you the same thing.  

 4          And apparently you haven't had a chance to do 

 5          the research to find out what that answer is?

 6                 SUPERINTENDENT VULLO:  Assemblyman, 

 7          with all respect, I don't have the number in 

 8          my head.  It's not something I carry around 

 9          with me.  But I can get it back to you. 

10                 ASSEMBLYMAN CAHILL:  It's not 

11          something you anticipated you would be asked 

12          this year because you were asked it last 

13          year.

14                 With regard to the CVS-Aetna proposed 

15          merger, do you believe the Department of 

16          Financial Services has any authority over 

17          that corporate restructuring, over that --

18                 SUPERINTENDENT VULLO:  We do.  We have 

19          approval authority, as does all of the states 

20          in which Aetna does business.  We have 

21          approval authority over that transaction, and 

22          it's in the very early stages.  And we're 

23          looking at it.  It obviously raises a number 

24          of issues.


 1                 ASSEMBLYMAN CAHILL:  Do you have any 

 2          unique authority because of the state in 

 3          which these companies are incorporated?  I 

 4          think Aetna is a New York company.

 5                 SUPERINTENDENT VULLO:  It's actually 

 6          domiciled in Connecticut, so Connecticut is 

 7          the lead state.  I actually saw the 

 8          Connecticut commissioner last weekend, and we 

 9          spoke about it, and there's going to be 

10          regular communication among the states that 

11          have approval authority over it.  It's a very 

12          massive transaction that raises a number of 

13          issues.  But we do have approval authority 

14          for purposes of the Aetna New York business.

15                 ASSEMBLYMAN CAHILL:  And what if the 

16          companies merge and the department determines 

17          that it's not in the best interest of 

18          New Yorkers?  What is the impact on Aetna the 

19          insurance company and CVS the drugstore 

20          company?

21                 SUPERINTENDENT VULLO:  If it does 

22          merge?

23                 ASSEMBLYMAN CAHILL:  If you make a 

24          determination -- if the federal government 


 1          approves the merger and you decide that they 

 2          will not be allowed to do business in 

 3          New York in that format, what is the impact 

 4          on the people of New York, particularly those 

 5          who use Aetna for their insurance?

 6                 SUPERINTENDENT VULLO:  The federal 

 7          government's jurisdiction is antitrust.  It's 

 8          not an overall approval of the transaction.  

 9          So when you had the Anthem-Cigna, for 

10          example, and the federal government sued, 

11          that was an antitrust complaint that the 

12          Department of Justice filed that killed that 

13          one.  

14                 So that's the federal government's 

15          role in the pure insurance -- you know, this 

16          is really a change of control application.  

17          It's not two insurance companies merging, 

18          it's a commercial entity acquiring an 

19          insurance company, so it's technically a 

20          change of control.  Which every state who has 

21          a statute like we do has authority over, so 

22          we could say yes or we could say no or we can 

23          condition it.  

24                 And it's obviously a very complicated 


 1          transaction.  You'd want the states to be 

 2          somewhat on the same page.  But, you know, 

 3          it's certainly possible that some states can 

 4          go one way and then other states go another 

 5          way.  I mean, I certainly hope not.  But it's 

 6          very early in the process.  And it's a unique 

 7          transaction because it's not two insurance 

 8          companies coming together.

 9                 ASSEMBLYMAN CAHILL:  Is DFS going --

10                 SUPERINTENDENT VULLO:  And it raises 

11          obvious, you know, issues with respect to 

12          pharmacy benefit managers, which I talked 

13          about last year.

14                 ASSEMBLYMAN CAHILL:  Is DFS going to 

15          be registering in with the Department of 

16          Justice on a position that the State of 

17          New York would be taking from an insurance 

18          regulatory perspective?

19                 SUPERINTENDENT VULLO:  It's not for us 

20          and the Department of Justice.  The 

21          Department of Justice is not --

22                 ASSEMBLYMAN CAHILL:  In terms of the 

23          overall merger to determine whether it 

24          violates antitrust laws, it would be --


 1                 SUPERINTENDENT VULLO:  That's not our 

 2          jurisdiction.  Our jurisdiction --

 3                 ASSEMBLYMAN CAHILL:  I understand.  I 

 4          understand it's not your jurisdiction.  My 

 5          question was whether you were going to 

 6          register the point of view of New York State 

 7          with the Department of Justice as they were 

 8          doing that review.

 9                 SUPERINTENDENT VULLO:  Likely not, 

10          because I don't think this is an antitrust 

11          issue.  I think it's an issue of whether or 

12          not this is a good new ownership for an 

13          insurance company.

14                 ASSEMBLYMAN CAHILL:  So you don't see 

15          an antitrust issue, okay.

16                 SUPERINTENDENT VULLO:  No, because I'm 

17          not the antitrust person.  That's the 

18          attorney general, the New York attorney 

19          general.

20                 I did manage that bureau when I was in 

21          the New York attorney general's office.  It's 

22          not our jurisdiction.  

23                 ASSEMBLYMAN CAHILL:  The next question 

24          is about the Fidelis proposal, Fidelis and 


 1          Centene.  Absent new legislation, what is the 

 2          authority of the department in regulating 

 3          this conversion?

 4                 SUPERINTENDENT VULLO:  So this is a 

 5          transaction where both DFS and the Department 

 6          of Health have roles.  You have -- Fidelis is 

 7          a Medicaid managed plan, so the Department of 

 8          Health actually has the certificate of 

 9          authority.  The relevant regulation provides 

10          that the commissioner of health is to take a 

11          recommendation from the DFS superintendent, 

12          that's me.  

13                 In addition, the proposal includes a 

14          license that DFS would issue or not, so we 

15          have that approval authority as well.  

16                 And that too -- that transaction is a 

17          little bit farther along than the prior one 

18          that you mentioned, but we're in the middle 

19          of our review of that transaction.  So we do 

20          have approval authority and recommendation 

21          authority, and DOH also has approval 

22          authority.

23                 ASSEMBLYMAN CAHILL:  Do you believe 

24          there's any need for legislation to create 


 1          the mechanism by which the State of New York 

 2          would receive some benefit of the assets in 

 3          the conversion?  Or will existing legislation 

 4          do the job?

 5                 SUPERINTENDENT VULLO:  I think that 

 6          looking at additional legislation is a good 

 7          idea.

 8                 ASSEMBLYMAN CAHILL:  Is the Governor 

 9          going to propose any by Thursday in his 

10          30-day?

11                 SUPERINTENDENT VULLO:  I don't know.

12                 ASSEMBLYMAN CAHILL:  Because I know 

13          he's counting on that money in the budget.  

14          One would assume that if he's counting on the 

15          money, he would want to be certain that he 

16          has the authority to actually get that money.

17                 SUPERINTENDENT VULLO:  I don't know 

18          about what amounts are in the budget or not.  

19          But I do know --

20                 ASSEMBLYMAN CAHILL:  $750 million.

21                 SUPERINTENDENT VULLO:  -- that the 

22          issue of the need for legislation is 

23          something that has been under active 

24          consideration.


 1                 ASSEMBLYMAN CAHILL:  Madam Chair, if I 

 2          could -- I know my time's expired, but if I 

 3          could go with two more quick questions.

 4                 CHAIRWOMAN WEINSTEIN:  Sure.  Sure.

 5                 ASSEMBLYMAN CAHILL:  The next one is, 

 6          are there any refinements to the health tax 

 7          to weed out those non-health insurers 

 8          currently believed to be covered under the 

 9          existing proposal?  That would be the 

10          long-term-care insurers, the income 

11          replacement insurers, people like that who 

12          believe that they are currently covered under 

13          the Governor's 14 percent health tax.

14                 SUPERINTENDENT VULLO:  The concept of 

15          that fee is to capture the writing of health 

16          insurance to residents of the State of 

17          New York, and not to capture the writing of 

18          non-health insurance.

19                 ASSEMBLYMAN CAHILL:  Will it be 

20          amended to be clear, to make that clear?  

21          Because currently people -- 

22                 SUPERINTENDENT VULLO:  If it needs to 

23          be.  I don't know whether it does.  But 

24          certainly I'll take it back and look at that.


 1                 But it's -- there are insurance 

 2          companies that are not health insurers that 

 3          write accident and health plans.  So there 

 4          are life insurance companies, for example, 

 5          and P&C companies that write some other kind 

 6          of insurance and write health insurance.  And 

 7          the idea is to capture the plans, the writing 

 8          of the health insurance plans, regardless of 

 9          where the license is.

10                 So a strict health insurance company 

11          has just a health insurance license.  A life 

12          insurance company has a life insurance 

13          license that also allows it to write health 

14          insurance.  So -- and there are P&C 

15          companies, a few of them, that also write 

16          health insurance.  I'm not talking about 

17          long-term care, I'm talking about health 

18          insurance.

19                 You know, there's some big ones that 

20          are not health insurers that are intended to 

21          be captured by this, for the writing of the 

22          health insurance piece.

23                 ASSEMBLYMAN CAHILL:  And my last 

24          question, regarding the comprehensive 


 1          contraceptive care legislation that you 

 2          referred to in your direct testimony.  That 

 3          originated as an Attorney General's program 

 4          bill under Attorney General Eric 

 5          Schneiderman.  Have you or the Governor 

 6          extended the courtesy to Attorney General 

 7          Schneiderman to ask for his input on the 

 8          proposal to now roll it into the budget as a 

 9          legislative proposal?

10                 SUPERINTENDENT VULLO:  I cannot speak 

11          to conversations that were had between the 

12          two.  But we've had dialog with the Attorney 

13          General's office about that bill.  And it's 

14          in the Governor's -- I don't know if it's the 

15          exact same bill, but there's a contraceptive 

16          care bill in the Governor's -- or he advanced 

17          legislation -- actually, I can't remember 

18          whether it's in the budget or he advanced 

19          legislation for contraceptive coverage.

20                 ASSEMBLYMAN CAHILL:  My question was 

21          just whether you've had conversations with 

22          the Attorney General about the proposal 

23          that's in the budget.

24                 SUPERINTENDENT VULLO:  Our staffs have 


 1          been in contact, yes.

 2                 ASSEMBLYMAN CAHILL:  Okay, thank you.

 3                 CHAIRWOMAN WEINSTEIN:  Thank you.

 4                 We've been joined by Assemblywoman 

 5          Gunther and Assemblywoman Seawright.

 6                 Mr. Hannon.

 7                 SENATOR HANNON:  Thank you.

 8                 Superintendent, just as an aside, you 

 9          had made a couple of mentions about the HCRA 

10          monies going to health.  Just as a matter of 

11          fact, not all HCRA monies go to health.  

12          There is diversion -- and it's not just this 

13          year, though it's increased this year -- 

14          there is diversion to the General Fund.  So 

15          it's not simply to be able to say, oh, yeah, 

16          I'll be helping the health.  And that 

17          would -- that's actually part of my problem, 

18          you may have heard, with the health 

19          commissioner, that monies are not going to 

20          health.

21                 A couple of different topics.  Health 

22          Republic.  You answered that pretty 

23          comprehensively, but you then finished by 

24          saying there's a suit that's going on that 


 1          you anticipate to be wrapped up shortly or 

 2          soon or near future or -- I just wondered if 

 3          there's any way to put some framework into 

 4          that time limit.

 5                 SUPERINTENDENT VULLO:  I wish I could.  

 6          But we sued in September of 2017.  There were 

 7          a number of cases -- it's the risk corridors, 

 8          mainly, that's created the legal battle, and 

 9          there have been a number of cases at the 

10          trial court level that have been decided, and 

11          there were conflicting opinions. 

12                 There was an appeal to the federal 

13          circuit that was argued I want to say three 

14          or four weeks ago.  I've actually read the 

15          transcript of that.  It's unclear how that's 

16          going to go.  But it's been argued.  There 

17          are two cases, it was Moda and Land of 

18          Lincoln, and we await the decision of that 

19          federal circuit court, because I think that 

20          will inform -- hopefully it will be a good 

21          decision, but it's really uncertain.

22                 And then, you know, obviously if that 

23          decision is favorable to the position of -- 

24          whether it's the department's or the health 


 1          insurance, because there are health insurance 

 2          companies that brought these claims as well, 

 3          then -- but if not, then we'd have to look to 

 4          see.  

 5                 We also have a reinsurance claim, and 

 6          we have a cost-sharing subsidies claim that's 

 7          separate from the appellate one.  So we're 

 8          moving as fast as we can, but that is a 

 9          holdup.

10                 SENATOR HANNON:  Both of those claims, 

11          the reinsurance and the offsetting claims, 

12          would be adding to the corpus that's left for 

13          Health Republic?

14                 SUPERINTENDENT VULLO:  Yes.

15                 SENATOR HANNON:  And then last year 

16          you had talked about -- when you were 

17          contemplating bringing this suit, you said 

18          that there might be offsetting claims for 

19          New York against it.  And did those develop?  

20          Did that become any cogent --

21                 SUPERINTENDENT VULLO:  Those are 

22          claims that the federal government may assert 

23          with respect to the loans that Health 

24          Republic received from the loan programs, the 


 1          federal government loan programs.  And our 

 2          position on that, so the complaints that we 

 3          filed, includes the argument that there shall 

 4          be no offset for those loans because our view 

 5          is that any claims that the federal 

 6          government would have under those loan 

 7          programs, under New York law is subordinate 

 8          to the claims of the policyholders, including 

 9          the providers.

10                 But that's something that has to be 

11          litigated.  We don't know, but we expect the 

12          federal government to take that position.  It 

13          would be nice if they don't.  But that is 

14          intended to be part of the litigation. 

15                 And I think even with that, there's 

16          still some amount that we could collect.  But 

17          the main thing is are we going to win on the 

18          risk corridors, because the overwhelming 

19          majority of that claim is the risk corridors 

20          claim.

21                 SENATOR HANNON:  Thank you.

22                 Let me go to another topic, the 

23          Medical Indemnity Fund.  We had had a 

24          roundtable on that last year.  There was 


 1          subsequently a change in the administrator of 

 2          that fund.  We've received mixed reviews as 

 3          to how that new administrator is doing.  

 4                 One of the things that we were trying 

 5          to avoid through the roundtable was not have 

 6          the administrator simply apply Medicaid 

 7          reimbursement rates.  Otherwise, people would 

 8          not go into the fund, they would just go take 

 9          their -- roll the dice on a lawsuit and they 

10          could do no worse than Medicaid.

11                 And I just wanted to know what type of 

12          input you're having from people who are 

13          making claims and people who are already in 

14          the Fund, because some of the people have 

15          come to us and said, just like you're talking 

16          about for other purposes, they could use an 

17          ombudsman to steer their way through whether 

18          or not they're getting correctly treated by 

19          the Fund.

20                 SUPERINTENDENT VULLO:  So, Senator, 

21          there was a transition in the administrator 

22          of the claims from Alicare to -- it was an 

23          RFP -- PCG.  And in all candor, there were 

24          some hiccups in that transition process.  


 1          We've actually worked very hard to -- you 

 2          know, to right that ship, and PCG has worked 

 3          very hard.  Some of those hiccups were due to 

 4          the concerns that we had as to the prior 

 5          administrator and some of the recordkeeping.  

 6          There was some absence of W-9s, for example, 

 7          and the right records.

 8                 No -- no family failed to receive the 

 9          benefit.  Any delays was the providers didn't 

10          get paid as promptly as they should have.  So 

11          the benefits were all provided, it was just 

12          the providers did not always get the payments 

13          because there was more documentation, for 

14          example, that was needed.

15                 I think we're in a pretty good shape 

16          now.  We obviously are overseeing them very 

17          carefully.  But I think we're in a decent 

18          situation now.

19                 SENATOR HANNON:  That brings me to a 

20          whole subject area of medical malpractice, 

21          which you've had administrative action during 

22          the course of the year on PRI.  We hear 

23          outstanding that there is an offer from 

24          Berkshire Hathaway to buy MLMIC.  I also know 


 1          the fact that one of the people -- one of the 

 2          large institutions, SUNY Stony Brook, which 

 3          had been covered by Academic, has withdrawn 

 4          and formed their own.  

 5                 I just wonder what is the general 

 6          direction you are looking at for medical 

 7          malpractice in this state, especially if 

 8          we're going to have some type of bonus 

 9          situation coming out of the Berkshire 

10          Hathaway purchase.  And I presume it's a 

11          purchase.

12                 SUPERINTENDENT VULLO:  So the MLMIC 

13          situation is a demutualization, and so there 

14          would be -- there is a process for that that 

15          we're undergoing.  Ultimately there would be 

16          a public event for that.  And the owners of 

17          that company, who are really the subscribers, 

18          would have to be compensated for that 

19          transaction, compensated equal to -- equal or 

20          above their ownership interest in the company 

21          for that to be approved.  So that's in 

22          process.  

23                 You know, medical malpractice, there 

24          are too few carriers.  And certainly I would 


 1          like to encourage more carriers in this 

 2          market.  At the same time, it's important to 

 3          shore up what we have.  And so we discourage 

 4          the SUNY Stony Brook situations, because what 

 5          happens in some of those situations is you 

 6          can get RRGs coming in and, you know, 

 7          charging what they would say would be lower 

 8          rates, but ultimately that's not good for the 

 9          market, it's not good for the providers.  

10                 Because if you are covered by a risk 

11          retention group, we don't have oversight, 

12          that's another federal preemption, as I know 

13          you're aware.  Not only do we not have 

14          oversight, but there's no guaranty fund, so 

15          the provider is not well-served by the RRG.  

16          And the plaintiff who might have a claim of 

17          malpractice is not served by the RRG.

18                 So if that's where I use my bully 

19          pulpit, I do, to be against the RRGs.  And 

20          the MLMIC transaction, I made that very 

21          clear, that that's not going to be an RRG.  

22                 So, you know, but if we can do more -- 

23          but we're doing our level best to manage this 

24          market.  The companies that you mentioned, I 


 1          think we're doing our best to manage the 

 2          situation, including with the administrative 

 3          action that I took, which was a long time 

 4          coming.  And I think we're doing our best to 

 5          right that ship.  But we could still -- we 

 6          need everybody to stay in the market.

 7                 SENATOR HANNON:  I've had legislation 

 8          restricting people doing malpractice in the 

 9          state not to use an RRG.

10                 But I would urge you to look at that 

11          demutualization as an opportunity and maybe 

12          to go beyond the statute and say, No, there's 

13          a bigger picture here, that we have to have a 

14          stable system in the state.

15                 SUPERINTENDENT VULLO:  Agreed.  

16                 And I think we've talked about your 

17          statute before, and I don't think it's a bad 

18          idea.

19                 SENATOR HANNON:  And the last thing 

20          is, you're not going to have any proposals on 

21          PBMs this year?

22                 SUPERINTENDENT VULLO:  I would 

23          still -- the bill that we proposed last year, 

24          I still think it's a good bill.  And if 


 1          anyone wanted to take up that bill, I think 

 2          the pharmacy benefit managers are still a 

 3          black box, in a lot of ways, that just 

 4          increases costs, and that providing for 

 5          licensing of the PBMs is one way to tackle 

 6          that.

 7                 SENATOR HANNON:  Thank you.

 8                 SUPERINTENDENT VULLO:  Sure.

 9                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

10          Raia.

11                 ASSEMBLYMAN RAIA:  Thank you.

12                 I don't sit on Ways and Means, so I 

13          didn't get a chance to ask some of the 

14          questions that might be for them, but you 

15          seem to be the next best thing, and I just 

16          want to dovetail on some of the things that 

17          Chairman Cahill was talking about.

18                 On the 14 percent, are there any other 

19          businesses that had a windfall as a result of 

20          the federal tax plan?

21                 SUPERINTENDENT VULLO:  Sure.  Many.

22                 ASSEMBLYMAN RAIA:  We're not going 

23          after any of those, right?

24                 SUPERINTENDENT VULLO:  That's up to 


 1          you.

 2                 (Laughter.)

 3                 ASSEMBLYMAN RAIA:  Okay.  Well, we're 

 4          talking about a Governor's Executive Budget 

 5          proposal.  I'm not done yet.  But I thank you 

 6          for your candor.  I always do enjoy having a 

 7          conversation with you.

 8                 The other thing is it's -- we came up 

 9          with the 14 percent number because that's 

10          exactly what the reduction was.

11                 SUPERINTENDENT VULLO:  Thirty-five 

12          percent to 21 percent, yes.

13                 ASSEMBLYMAN RAIA:  Well, we all know 

14          that there's always other things that go into 

15          that number.  So did we take into account all 

16          the changes with the federal tax plan, 

17          deductions, how the income is measured, which 

18          way -- you know, there's a lot of things that 

19          go into that.  They may have a -- you know, 

20          it might be 14 percent, but there might be 

21          other competing things on that, so it's 

22          really not 14 percent.

23                 SUPERINTENDENT VULLO:  We're 

24          addressing the 14 percent with respect to 


 1          New York residents and healthcare for 

 2          New York residents, and not -- and not the 

 3          sort of national picture of what a 

 4          consolidated tax return might be from a 

 5          national/federal perspective.

 6                 ASSEMBLYMAN RAIA:  Well, but the 

 7          Governor quite clearly said the 14 percent 

 8          tax on the health insurance is necessary 

 9          because the federal tax plan, quote, unquote, 

10          transfers health costs to the state.  But 

11          from everything I'm seeing, there's actually 

12          increases in Medicaid over time.

13                 SUPERINTENDENT VULLO:  I think there's 

14          clearly a reality that the federal government 

15          is using -- is applying tax cuts and then 

16          cutting domestic programs, including 

17          healthcare.  The CSR subsidies have still not 

18          been paid.  Finally, Child Health Plus, 

19          because of this Medicaid, is not something 

20          that we think is going to be --

21                 ASSEMBLYMAN RAIA:  You don't want to 

22          go up that aisle, because there are a lot of 

23          groups depending on that increase in the 

24          minimum wage bump that we still haven't 


 1          gotten to them -- nursing homes, assisted 

 2          living.  So, I mean --

 3                 SUPERINTENDENT VULLO:  There's a lot 

 4          of needs.

 5                 ASSEMBLYMAN RAIA:  -- we drag our feet 

 6          a lot too.

 7                 SUPERINTENDENT VULLO:  There's a lot 

 8          of needs in the healthcare space, and we 

 9          think that it's an appropriate surcharge for 

10          a windfall that the health insurers are 

11          receiving, to put it into the state budget in 

12          order to address the healthcare needs of 

13          New Yorkers.

14                 ASSEMBLYMAN RAIA:  Fair enough.  Thank 

15          you.

16                 SUPERINTENDENT VULLO:  Sure.

17                 CHAIRWOMAN WEINSTEIN:  I believe 

18          that's it for questions.  So thank you for 

19          all the time you've spent here with us.

20                 SUPERINTENDENT VULLO:  Great, thank 

21          you.  Thanks for having me.

22                 CHAIRWOMAN WEINSTEIN:  So we are ready 

23          to call our third witness today, the New York 

24          State Office of Medicaid Inspector General, 


 1          Dennis Rosen, inspector general.  

 2                 And on behalf of myself and Senator 

 3          Cathy Young, I do want to remind people that 

 4          we do have your testimony that was emailed to 

 5          us over the past couple of days, so we will 

 6          be having a much shorter time period after 

 7          the inspector general goes.  And don't feel 

 8          compelled to have to stay to be the last one.  

 9          But we will stay for everybody who wants to 

10          participate today.  

11                 CHAIRWOMAN YOUNG:  Welcome.

12                 INSPECTOR GENERAL ROSEN:  All set?  

13                 CHAIRWOMAN YOUNG:  Looking forward to 

14          your testimony.

15                 INSPECTOR GENERAL ROSEN:  Thank you.

16                 You have my full testimony before you.  

17          I'll read from an abbreviated statement.

18                 OMIG's comprehensive investigative and 

19          auditing efforts, extensive partnerships with 

20          law enforcement agencies, and wide range of 

21          compliance initiatives and provider education 

22          efforts are projected to result in more than 

23          $2.4 billion in Medicaid recoveries and cost 

24          savings in calendar year 2017.


 1                 OMIG's recoveries were significantly 

 2          higher in 2017.  Preliminary numbers for 

 3          recoveries including audits, third-party 

 4          liability, and investigations total more than 

 5          $485 million, which represents an increase of 

 6          more than $67 million over 2016.

 7                 OMIG's cost-avoidance efforts continue 

 8          to deliver impactful results for the Medicaid 

 9          program, as preliminary 2017 data show a 

10          savings of more than $1.9 billion.

11                 OMIG's teams of auditors, 

12          investigators, data analysts, and licensed 

13          healthcare professionals provide vital 

14          support and resources in collaborative law 

15          enforcement actions, which include takedowns 

16          of multi-million-dollar fraud schemes, 

17          criminal "pill mill" operations and drug 

18          diversion cases, as well as enrollment fraud 

19          prosecutions.

20                 For example, OMIG played a critical 

21          role in a multi-agency takedown of a massive 

22          $146 million scheme operating out of Brooklyn 

23          that billed Medicaid and Medicare for 

24          thousands of medical tests and services that 


 1          were never done or were unnecessary.

 2                 As part of New York State's 

 3          multifaceted response to the opioid crisis, 

 4          preliminary data on OMIG's Recipient 

 5          Restriction Program, which limits recipients 

 6          suspected of overuse or abuse to a single 

 7          designated healthcare provider and pharmacy, 

 8          shows more than $77 million in cost savings 

 9          to the Medicaid program was realized and, 

10          quite likely, many lives were saved.

11                 OMIG's preliminary 2017 statistics 

12          regarding enforcement activity also show 

13          strong results.  OMIG opened 3,224 

14          investigations, completed 3,186, and referred 

15          898 cases to law enforcement and other 

16          agencies.

17                 As New York continues to transition 

18          from traditional fee-for-service Medicaid to 

19          a managed-care system, and alternative 

20          payment arrangements are introduced such as 

21          value-based payments, OMIG has developed and 

22          implemented new mechanisms to address fraud, 

23          waste, and abuse -- including match-based 

24          audits and data mining and conducting on-site 


 1          visits with managed care organizations to 

 2          discuss program-integrity-related processes 

 3          and procedures.  

 4                 Further, as part of the agency's 

 5          managed-care efforts, OMIG's Value-Based 

 6          Payment Project Team works closely with other 

 7          state agencies to identify potential 

 8          program-integrity risk areas and effective 

 9          measures to mitigate those risks as part of 

10          value-based-payment implementation.

11                 To expand upon these efforts and 

12          provide OMIG with the tools necessary to 

13          provide flexibility to address program 

14          integrity issues as they arise, the 

15          Executive Budget includes authorization to 

16          enable OMIG to fine providers and 

17          managed-care organizations that fail to 

18          comply with the requirements of the Medicaid 

19          program.  In the case of a managed-care 

20          organization, fines could also be imposed for 

21          failure to comply with its contract with the 

22          state.  The proposals also would require 

23          managed-care organizations to refer all 

24          instances involving potential fraud, waste, 


 1          or abuse to OMIG, in conformance with federal 

 2          law.

 3                 Additionally, OMIG's budget proposals 

 4          seek to address managed-care recovery of 

 5          overpayments paid to network providers by a 

 6          managed-care organization.  The proposals 

 7          explicitly acknowledge that payments made by 

 8          the Medicaid program to a managed-care 

 9          organization, and from a managed-care 

10          organization to any subcontractors or 

11          providers, are public funds.  This clarifies 

12          a misconception that once monies are paid by 

13          the state to an MCO, those monies are somehow 

14          no longer public funds and therefore not 

15          subject to oversight or recovery.  

16                 This provision would provide a 

17          mechanism for OMIG to continue to recover 

18          inappropriate payments from network 

19          providers.  And if unsuccessful in those 

20          efforts, OMIG could require the managed-care 

21          organization to recover the amount from its 

22          network provider.

23                 Going forward, as the healthcare 

24          landscape and the Medicaid program continue 


 1          to evolve and change, OMIG will continue to 

 2          aggressively protect the integrity of the 

 3          program, which is a key component in 

 4          maintaining and sustaining the state's 

 5          high-quality healthcare delivery system.

 6                 Thank you, and I'd be pleased to 

 7          answer any questions you may have.

 8                 CHAIRWOMAN YOUNG:  Thank you, 

 9          Inspector General.  We truly appreciate your 

10          testimony today.

11                 And I just wanted to go over a couple 

12          of things.  The audit target for this coming 

13          fiscal year is $1.19 billion, is that right?

14                 INSPECTOR GENERAL ROSEN:  Again, I'm 

15          having the trouble I've had in the past, 

16          hearing you in the well.  But if you speak 

17          slowly -- I think you said $1.9 billion, that 

18          was our cost savings figure?

19                 CHAIRWOMAN YOUNG:  Yes, the audit 

20          target for 2019 --

21                 INSPECTOR GENERAL ROSEN:  That was for 

22          2017, $1.9 billion.

23                 CHAIRWOMAN YOUNG:  Okay.  So it's 

24          actually -- it says in the Governor's 


 1          proposal it's $1.19 billion, an increase of 

 2          $300 million from the current year target of 

 3          $1.16 billion.  

 4                 The Governor also proposes to expand 

 5          OMIG's authority to allow recovery of 

 6          improper Medicaid payments made by 

 7          managed-care organizations, MCOs, to 

 8          providers.  The proposal would require MCOs 

 9          to report fraud to the OMIG and would impose 

10          penalties if they knowingly failed to do so.  

11          And the Governor also includes a provision 

12          that states that payments made by the 

13          Medicaid program to a managed-care 

14          organization, MCO, and from an MCO to any 

15          subcontractor or provider, are public funds.

16                 So first of all, you've gone over some 

17          audit recovery targets and strategies for the 

18          coming fiscal year.  Do you think that a 

19          $300 million increase is realistic?

20                 INSPECTOR GENERAL ROSEN:  Yes, I think 

21          it is.

22                 CHAIRWOMAN YOUNG:  And why is that?

23                 INSPECTOR GENERAL ROSEN:  The 

24          increase, I think, is realistic based on 


 1          enhanced technology that we've been using and 

 2          other improvements in our techniques and our 

 3          processes.

 4                 CHAIRWOMAN YOUNG:  Okay.  Thank you.

 5                 Do you think that the language 

 6          included in the Governor's budget that 

 7          states, and this is a quote --

 8                 INSPECTOR GENERAL ROSEN:  I'm sorry, 

 9          I'm having trouble -- I always have trouble 

10          hearing in this well.  It's the only place in 

11          the world I do.

12                 CHAIRWOMAN YOUNG:  Yeah.

13                 INSPECTOR GENERAL ROSEN:  Can I come 

14          up there, and then I'll come back and I'll 

15          answer your question.

16                 CHAIRWOMAN YOUNG:  No, it's --

17                 INSPECTOR GENERAL ROSEN:  Or if you 

18          could speak up or do something.

19                 CHAIRWOMAN YOUNG:  Okay.  Do you -- do 

20          you think -- 

21                 INSPECTOR GENERAL ROSEN:  Whatever you 

22          want to do.

23                 CHAIRWOMAN YOUNG:  I feel like a phone 

24          commercial:  Can you hear me now?  


 1                 (Laughter.)

 2                 CHAIRWOMAN YOUNG:  Do you think the 

 3          language that the Governor included in the 

 4          budget that states, quote, Payment made by 

 5          the Medicaid program to a managed care 

 6          organization, and from those organizations to 

 7          any subcontractor or provider, are public 

 8          funds -- so that's the quote.

 9                 INSPECTOR GENERAL ROSEN:  Yes.

10                 CHAIRWOMAN YOUNG:  Do you think that 

11          would create a precedent and allow for the 

12          same interpretation in other areas of the 

13          state budget?

14                 INSPECTOR GENERAL ROSEN:  I'm not 

15          familiar with that, other areas of the state 

16          budget.  What I know is the Medicaid budget, 

17          and this is I think very well accepted 

18          language.  But it has not been made explicit 

19          in New York State, and it's important that we 

20          do.  

21                 And the view expressed is that 

22          Medicaid funds paid to a managed-care plan 

23          are public funds.  The managed-care plan is 

24          acting as an agent of the state, in effect, 


 1          certainly a contractor of the state when it 

 2          pays those funds.  And because of that, when 

 3          it pays the money to a provider or a 

 4          subcontractor, the nature of that money does 

 5          not change.  In fact, part of the Medicaid 

 6          reimbursement to a managed-care organization 

 7          is based on administrative costs on behalf 

 8          of -- paid by the MCO toward a program -- not 

 9          just medical care, but program integrity, 

10          efforts in protecting the money that's been 

11          given to them.  

12                 Whether or not that could be extended 

13          to other areas, I couldn't say with 

14          certainty.  I know we have had discussions 

15          with people who are expert in the field, and 

16          they feel that at least with respect to 

17          Medicaid, this is an absolutely truthful 

18          statement.  Other states have adopted this 

19          language too.

20                 CHAIRWOMAN YOUNG:  Okay, thank you.  

21                 Senator Hannon.

22                 SENATOR HANNON:  You mention in your 

23          testimony -- I'm sorry --

24                 INSPECTOR GENERAL ROSEN:  If you could 


 1          speak up.

 2                 SENATOR HANNON:  You mentioned in your 

 3          testimony the move to value-based 

 4          reimbursement for providers, which is a major 

 5          change from fee-for-service.  And 

 6          fee-for-service gave you as auditor, 

 7          inspector, a chance to look at the contract, 

 8          whether the service was delivered, and 

 9          whether it was billed correctly.

10                 Value-based payment is a whole 

11          different concept, saying that we're going to 

12          give outcomes as a result of the obligation 

13          to the provider.  And so it does not have the 

14          four corners that you'd necessarily have with 

15          fee-for-service.  

16                 What you mentioned, that you've made 

17          adjustments in regard to your audits for 

18          value-based payment, I wonder if you could 

19          elaborate on that.

20                 INSPECTOR GENERAL ROSEN:  Well, that 

21          is really something that is still in process, 

22          as you know.  And we're in constant 

23          contact -- we have a Value-Based Team that's 

24          an interdisciplinary team comprised of 


 1          auditors and investigators, we even have a 

 2          nurse on the team, and they have engaged in 

 3          discussions with the managed-care plans.

 4                 SENATOR HANNON:  Actually, I think the 

 5          nurse would be the most valuable addition.

 6                 (Laughter.)

 7                 INSPECTOR GENERAL ROSEN:  And they 

 8          have engaged in discussions with the industry 

 9          and with the Department of Health, so we are 

10          on board with things as they go along.

11                 But as you know, even from the 

12          Department of Health's point of view -- and 

13          it's been the Department of Health that's 

14          been promulgating the metrics -- things are 

15          still in the process of development.  So that 

16          I think this is more a work in progress right 

17          now than something that I can point to and 

18          say, That's what it is and is going to be.

19                 SENATOR HANNON:  Are you going to be 

20          consulting with private industry which --  

21          the private insurance industry, which already 

22          has in each of the insurance companies SIUs 

23          to look after fraud?  And they themselves are 

24          moving to value-based payment, so there must 


 1          be some precedent also outside of government.

 2                 INSPECTOR GENERAL ROSEN:  I agree, and 

 3          we are also in regular contact with the SIUs 

 4          for the managed-care plans.  We have regular 

 5          meetings with them, we talk about value-based 

 6          payments, we talk about provider problems -- 

 7          because if one SIU is investigating a 

 8          provider who is part of their network and 

 9          their plan, we need to know about it because 

10          that provider may be in lots of other 

11          networks.  So communication has been the key, 

12          and we have stepped that up dramatically. 

13                 SENATOR HANNON:  Thank you.  

14          Appreciate that.  Appreciate your patience, 

15          too.

16                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

17          Cahill.

18                 ASSEMBLYMAN CAHILL:  Thank you, 

19          Inspector General Rosen.  I'll be brief.  

20                 I was a big fan of your transformation 

21          of the State Liquor Authority during your 

22          tenure there, and I was quite pleased that 

23          you were asked to serve in probably what is 

24          one of the most difficult jobs in the State 


 1          of New York, and that you said yes.

 2                 In your testimony, in your written 

 3          testimony, and you touched on it in your oral 

 4          testimony, you talked about your emphasis on 

 5          the front end of the business here, the 

 6          prevention education, the outreach that the 

 7          office is doing.  And I know that uncovering 

 8          a fraud gets you a headline in the New York 

 9          Times, and keeping a fraud from ever 

10          happening doesn't show up in the papers.  

11                 But in your estimation, have these 

12          preventive programs been bearing fruit?  Have 

13          you seen people who might have otherwise or 

14          entities that might otherwise unintentionally 

15          get caught in the web not do so?  And just 

16          talk a little bit more about your emphasis on 

17          the front end.

18                 INSPECTOR GENERAL ROSEN:  Sure.  One 

19          of the statistics, ironically, that I'm most 

20          proud of -- and of course, you know, the 

21          emphasis has to be on the recoveries and the 

22          cost avoidance -- but nonetheless, one of the 

23          statistics I'm most proud of, which is in the 

24          full testimony, is the 90,000 hits to our 


 1          compliance portion of our website.  It's not 

 2          the whole website, it's just the compliance 

 3          portion, which is basically educational kinds 

 4          of materials for the industry.

 5                 We also do a lot of presentations to 

 6          the industry.  And I have seen a change, I've 

 7          gotten feedback from people saying, Thank you 

 8          for what you've been doing.  Because as 

 9          people have explained to me since I've been 

10          in this position, very often people do the 

11          wrong thing because they don't know what the 

12          right thing is.

13                 And to be perfectly frank with you, my 

14          view as a regulator reflects my view as a 

15          person, and that is that I've never had 

16          anybody complain to me once in my entire life 

17          about not having a big enough pile of 

18          problems to deal with.  And the one thing 

19          that I will do while I'm on this earth is, as 

20          a regulator and as a person, is not add to 

21          somebody's pile.  The only time I will do 

22          that is when they're adding to other peoples' 

23          piles through their conduct.  As a person and 

24          as a regulator, that's when I will intervene.  


 1                 And, you know, we will -- we want to 

 2          up our enforcement game where people are 

 3          bilking the system.  I want to have fining 

 4          authority because right now, in almost every 

 5          case, all we can do is take back money if 

 6          you've done something wrong.  We can't have a 

 7          deterrent in place so maybe you'll think 

 8          twice about not doing something wrong in the 

 9          first place.  So in those instances, I will 

10          act and I will act strongly.  But I don't 

11          want to make anybody's life more miserable, 

12          whether it's an MCO, a provider, or my 

13          next-door neighbor.  

14                 And I will make every effort before we 

15          take any action to educate the provider, the 

16          person, or the MCO on what the right thing is 

17          to do so they don't get sandbagged.  I don't 

18          believe in doing that.

19                 And thank you for the compliment with 

20          respect to my tenure at the Liquor Authority.  

21          And I remember one of the things I did there 

22          which I've done to some degree here is I 

23          spent a year giving the industry a message 

24          that we were going to tighten up enforcement.  


 1          And I did a lot of presentations, a lot of 

 2          conversations, and we did some record 

 3          enforcement at the SLA, and overall there 

 4          were no complaints.  

 5                 We also changed laws that were 

 6          unreasonable from the Prohibition Era --  

 7          when we came out of Prohibition and they 

 8          first established the agency.  Because they 

 9          were unfair, they were unreasonable.  That's 

10          what I'm trying to do at OMIG.  

11                 We are talking about fines in our 

12          proposals because you need to deter bad 

13          behavior.  Right now, all you can do is just 

14          take the money back.  If somebody's doing 90 

15          on the 787 and they get stopped by a trooper, 

16          the chances are just apologizing isn't going 

17          to get them off the hook.  He's going to give 

18          them a ticket.

19                 ASSEMBLYMAN CAHILL:  I'd better make a 

20          note of that.

21                 INSPECTOR GENERAL ROSEN:  And you can 

22          argue that, oh, he's raising money for 

23          government, and he is.  But the primary 

24          purpose in writing that ticket is to deter 


 1          this person from doing 90 miles per hour 

 2          again.  Because if people were told that 

 3          somehow the state troopers have changed their 

 4          policy and nobody gets a speeding ticket 

 5          anymore, I think the 787 is going to be 

 6          strewn with dead bodies for quite a while 

 7          until that policy changes.  

 8                 And it's the same thing in what we're 

 9          dealing with.  I want to deter bad behavior.  

10          If I can deter it, I'd rather do that than 

11          punish it.  And if we deter bad behavior, 

12          then that's good for the good providers and 

13          the good MCOs and the needy recipients.  And 

14          it's good for the taxpayer.  That's all I'm 

15          trying to do.

16                 ASSEMBLYMAN CAHILL:  Well, thank you 

17          so much.  If there was a way to give you the 

18          ability to issue fines that could sunset on 

19          the end of your tenure, I would be 

20          100 percent for it.  I'm a little concerned 

21          about --

22                 INSPECTOR GENERAL ROSEN:  You know, 

23          it's funny you mention that, because when I 

24          was at the State Liquor Authority I had a 


 1          proposal to give the -- the Liquor Authority 

 2          is governed by a chairman and two 

 3          commissioners.  And the power was very 

 4          diffuse, and over the years that was one 

 5          reason why it had been very inefficient in a 

 6          lot of ways.  And we put in a bill that would 

 7          give the chairman, me, all the administrative 

 8          authority -- not the regulatory authority, 

 9          that would still be shared.  And people were 

10          very leery about it, because that agency had 

11          had a history that gave some people pause.  

12          And the bill was passed with a three-year 

13          sunset.  

14                 But I will tell you that I was there 

15          once when it was renewed, and since I've left 

16          and somebody else is there, it's been 

17          renewed.  And the thing about --

18                 ASSEMBLYMAN CAHILL:  He's a very good 

19          commissioner and a constituent, so --

20                 INSPECTOR GENERAL ROSEN:  And I agree.  

21          I'm familiar with him.

22                 And I will tell you that the fining 

23          proposal that is included in the Governor's 

24          budget, there are very clear restrictions on 


 1          how the agency would do it.  One, no fine 

 2          would be issued without prior consultation 

 3          with the Department of Health.  Two, there's 

 4          a listing of eight or nine criteria that we 

 5          would have to consider, things like how 

 6          culpable was the provider, whether there were 

 7          factors beyond than provider's control, did 

 8          the provider have prior violations, how large 

 9          is the provider -- you know, because that 

10          might impact the amount of a fine that would 

11          have some deterrent value.  Very clearly laid 

12          out.  

13                 Also in the budget proposal there's a 

14          clear commitment to draft regulations, if the 

15          bill is passed, in consultation with DOH that 

16          would make very clear what the specific 

17          violations are, what the fines are, what the 

18          range of fining would be, and what the 

19          due-process rights would be.  

20                 Right now, in the model contracts with 

21          the MCOs, there are provisions for fining 

22          them because the federal authorities in 2016 

23          passed regulations that tightened things up 

24          when it came to managed care, for example, 


 1          and among other things they wanted provisions 

 2          in the managed-care contracts that said 

 3          penalties and fines could be taken.  But it's 

 4          very amorphous.  It's very vague.  We want -- 

 5          the purpose of this proposal is to clarify 

 6          that, to make clear if you do this, this will 

 7          happen, and here are your rights.

 8                 Again, to actually to circle back to 

 9          your initial compliment, which again I do 

10          appreciate, it will tell people clearly what 

11          the rules are, and there's no reason for 

12          violating them, if you've looked at it.  

13          There's no legitimate reason.  And again, we 

14          need fines so that people -- good providers 

15          who are hard up for money these days aren't 

16          strewn along the highway like dead bodies 

17          because somebody is driving 90 or 100 miles 

18          an hour and nobody is stopping them.

19                 ASSEMBLYMAN CAHILL:  Thank you.

20                 CHAIRWOMAN YOUNG:  Anyone else?

21                 Senator Hannon.

22                 SENATOR HANNON:  The point about all 

23          of that, I think, is we don't have to go to 

24          granting that power when we should be 


 1          insisting on those provisions being in the 

 2          contract, and that's what commercial entities 

 3          do.  They have contracts, they have penalty 

 4          clauses, they have failure to perform, they 

 5          have all sorts of reasons that are laid out 

 6          specifically instead of leaving it to 

 7          regulatory agency.  I think that would be a 

 8          far better approach.  The firmer we can be, 

 9          the better.  And to do it up-front instead of 

10          doing it subsequently, so we don't go through 

11          what we have -- sometimes, with your 

12          predecessor, retroactive five and 10 years -- 

13          revised standards that come about.  

14                 But I do believe that the public 

15          monies is the public monies, and we have to 

16          be firm about it.  But the most transparent 

17          we can be is to set it forth at the 

18          beginning.

19                 INSPECTOR GENERAL ROSEN:  I think 

20          there's limits to what you can do in a 

21          contract sometimes because we're negotiating 

22          with the people that, as you know, that we're 

23          overseeing.  We're negotiating with the 

24          people who we're going -- with the people -- 


 1          some of whom may be fined as a result of this 

 2          if they do engage in bad conduct.  So that I 

 3          think when it comes to the specifics, rather 

 4          than take the next two or three years to 

 5          negotiate a contract, I think New York State 

 6          needs to make a statement now.  

 7                 As to the fact that the one agency 

 8          that's been singled out in statute to deal 

 9          with fraud, waste, and abuse in the Medicaid 

10          system -- OMIG -- has the authority to fine, 

11          I think that needs to be made clear by 

12          New York State.  

13                 I think just that we can take money 

14          back that is inappropriately gotten by a 

15          provider isn't enough.  And I think that's a 

16          statement actually for you folks to make, 

17          that I'm asking you to make.  I don't expect 

18          the providers necessarily to make it.

19                 And again, there's language -- you're 

20          familiar with the -- I know you're brilliant 

21          when it comes to these issues.  You're 

22          familiar with the MCO contracts, and you know 

23          what's in there.  But it's very general, it's 

24          very vague, because to negotiate a good 


 1          specific, clear provision is going to take 

 2          forever.  And the system doesn't have that 

 3          time.  That's a luxury.  I don't think that 

 4          our Medicaid program can afford it, not if we 

 5          want to take care of the people in it.  And 

 6          again, when I say the people in it, I'm 

 7          talking about the good providers, the needy 

 8          recipients, and the taxpayers who are footing 

 9          the bill.  And I don't see an excuse for us 

10          not to do it legislatively.

11                 In my prior experiences -- years at 

12          the AG's office, my time at the SLA -- I 

13          dealt very much with the securities industry, 

14          the insurance industry, at the SLA, the 

15          liquor industry -- I could go through a whole 

16          list of the industries that I had very, very 

17          significant interactions with, and lawsuits.  

18                 When I came to OMIG, I was totally 

19          flabbergasted that this was the first 

20          regulatory agency I'd seen that didn't have 

21          real fining authority.  There are a couple of 

22          very narrowly drafted provisions and 

23          regulations in Title 18 that give us very, 

24          very narrow fining authority with respect to 


 1          fee-for-service, but it's something that's 

 2          never been used because it's unrealistic.  I 

 3          don't know of any other regulatory agency 

 4          with comparable responsibilities that doesn't 

 5          have that as a tool.

 6                 CHAIRWOMAN YOUNG:  Thank you.

 7                 And I'm sure we'll have further 

 8          discussions on this issue, so we appreciate 

 9          you being here today, and again, it's always 

10          great to see you.

11                 INSPECTOR GENERAL ROSEN:  Thank you 

12          very much.  

13                 SENATOR KRUEGER:  Thank you.

14                 CHAIRWOMAN YOUNG:  Thank you.

15                 Our next speaker is the Healthcare 

16          Association of New York State, HANYS, Bea 

17          Grause, president.

18                 Welcome.

19                 MS. GRAUSE:  Welcome.

20                 Thank you, Madam Chairwoman, and 

21          members of the Senate and the Assembly.  I 

22          appreciate your time and perseverance today.  

23          I will be brief.

24                 I wanted to thank you for your 


 1          thoughtful questions and also thank the 

 2          Governor for what we think is a good start to 

 3          the budget that shares our priority of 

 4          protecting and strengthening New York's 

 5          healthcare system.  I'll identify four areas 

 6          of support and four areas of concern.  

 7                 The first, in the areas of support 

 8          that you've talked about quite a bit today, 

 9          is a Healthcare Shortfall Fund.  We do think 

10          there is reason for that because we think 

11          there are continued threats on coverage, 

12          undermining coverage, such as what Ms. Vullo 

13          said around the association health plans, and 

14          continued threats to payments to providers.  

15                 The second item is we support the 

16          capital funding, the $425 million in capital 

17          funding, that has been part of a series.  And 

18          again, I think it's very needed by our 

19          providers.  We also support continued funding 

20          for the distressed hospitals, the VBP QIP, 

21          the VAP-AP, and the safety net funding for 

22          our hospitals, both rural and urban.  And we 

23          support the expansion in the scope and use of 

24          telehealth that is occurring through the 


 1          regulatory modernization initiative.

 2                 The four areas of concern are the 

 3          $425 million that has been transferred out of 

 4          the global cap, the proposal that was in the 

 5          last year's budget that was removed 

 6          eventually; the potentially preventable 

 7          emergency room visits, the $15.7 million cut; 

 8          also, as has been discussed before, the 

 9          nursing home cuts; and the cuts to the 

10          quality pool.

11                 So with that, I'm happy to take any 

12          questions.

13                 (Laughter.)

14                 MS. GRAUSE:  Okay.  Thank you.  

15                 CHAIRWOMAN YOUNG:  We always 

16          appreciate your input very much --

17                 MS. GRAUSE:  Thanks.

18                 CHAIRWOMAN YOUNG:  So thank you for 

19          being so patient today.

20                 CHAIRWOMAN WEINSTEIN:  Thank you.

21                 (Discussion off the record.)

22                 CHAIRWOMAN YOUNG:  Next we have 

23          President Ken Raske, Greater New York 

24          Hospital Association.


 1                 How are you?

 2                 MR. RASKE:  I'm fine, thank you.

 3                 CHAIRWOMAN YOUNG:  Glad to have you 

 4          here today.

 5                 MR. RASKE:  Thank you very much.  It's 

 6          always nice being with you at this annual 

 7          event, having an opportunity to comment on 

 8          matters of great importance to the healthcare 

 9          community.  

10                 I have the pleasure of -- have joining 

11          me this afternoon, Dr. Steve Safyer, the head 

12          of Montefiore Medical Center in the Bronx, a 

13          world-class institution and dedicated to a 

14          lot of the issues which we pride ourselves 

15          in.

16                 The testimony that I provided to the 

17          members of the committee is in a panel form, 

18          and I can walk you through it pretty smartly 

19          so that we can save time and then focus on 

20          some things that really need to be clarified 

21          for all of the members.  

22                 To begin with, we start off by saying, 

23          you know, that there are 27 hospitals that 

24          are on a watch list of the Department of 


 1          Health.  I'm not sure if the commissioner 

 2          spoke to that issue this morning, but 27 is 

 3          quite a few.  And they're scattered all over 

 4          the place, from the western part of the state 

 5          through -- including, obviously, New York 

 6          City.  Senator Hannon, there's none on the 

 7          island as of this point.

 8                 But when you move to the next list of 

 9          institutions, those are the near-watch-list 

10          institutions, and there's about 30 of those, 

11          again scattered all over the state.  And they 

12          are identified by having a low commercial 

13          insurance base, having a lot of Medicare 

14          government payers, Medicare and Medicaid, 

15          overall negative margins or near-negative 

16          margins.  

17                 So that is another 30 institutions, 

18          and by the time you get -- if you start 

19          adding them all up, you've got about a third 

20          of the hospitals in New York State are in 

21          fragile condition.

22                 Now, part of what you see here when we 

23          move to Panel 6 is the Medicare and Medicaid 

24          payment-to-cost ratio.  If you have a lot of 


 1          Medicare and Medicaid -- and I believe, 

 2          Dr. Safyer, you will attest to this in your 

 3          portion of the testimony -- you're in 

 4          trouble.  When they pay below cost -- in the 

 5          case of Medicare, 82 percent; in the case of 

 6          Medicaid, 86 percent -- that is not a 

 7          financially viable model if you have a lot of 

 8          government payers.  And that is an absolute 

 9          fact.  Viability only occurs when you have a 

10          substantial commercial base.

11                 But ladies and gentlemen, things are 

12          changing.  Go to the next panel.  Here we see 

13          the percent of discharges that have gone on 

14          Medicare and Medicaid and have grown over the 

15          last 10 years.  And at the same time we're 

16          looking at the commercial base dropping.  So 

17          the ability to cost-shift, which has been a 

18          viable option for some institutions, is 

19          diminishing.  

20                 One step further, if you go to the 

21          next panel, what we're seeing on the 

22          commercial insurance base is the 

23          proliferation of high-deductible plans.  What 

24          does high mean?  Well, probably for the 


 1          single coverage, 1200 to 1500 bucks.  For a 

 2          deductible for a family it could be 3,000, it 

 3          could be more.  

 4                 So now what does that translate to?  I 

 5          can tell you what that translates to:  

 6          $720 million worth of bad debt for New York 

 7          State hospitals last year, and growing.  Bad 

 8          debt.

 9                 So I have a proposal, the first one 

10          for you today.  I have a proposal to reduce 

11          hospital bad debt, and here it is.  It's on 

12          Panel 9.  Require private insurers to 

13          reimburse hospitals for bad debt incurred on 

14          behalf of their enrollees.  This is a real 

15          winner.  And to show you that you can 

16          actually do this -- Medicare does it now.  

17          Follow the lead of the federal government and 

18          this will then bleed off some bottom-line 

19          pressure that institutions have.

20                 I have more proposals for you.  Now 

21          let's turn to Panel 10.  Our future economic 

22          situation is defined by two variables going 

23          forward, ongoing threats from D.C. and then 

24          no Medicaid trend factor for the past decade.  


 1          Lets drill down to both of them.  

 2                 On Panel 11 you hear the good news:  

 3          CHIP reauthorization.  God bless CHIP 

 4          reauthorization.  Medicaid DSH was done too, 

 5          the next panel.  That's why it's shaded in 

 6          orange.  But here's the problems.  One, 

 7          Medicare DSH cuts are clocking in at 

 8          $600 million a year.  Senator, I know you 

 9          questioned that earlier -- we are actually 

10          experiencing a third of that right now.  It 

11          is draining off of his bottom line and 

12          draining off of the others across the state.

13                 340B program, outpatient drug 

14          subsidies, that is a $50 million hit.  The 

15          loss of the CSRs, the cost-sharing 

16          reductions, $975 million.  

17                 Tax reform.  Now, who would have 

18          thought that we would have a tax reform 

19          problem in relationship to the hospitals, 

20          since they're tax-exempt?  Except for one 

21          little thing -- I've been holding the SALT 

22          provisions aside for the moment -- we're 

23          going to be taxed now for our employee 

24          benefits that we're providing for transit.  


 1          Up to $260 a month, it's now going to go back 

 2          to the employer -- the gentleman to my left 

 3          is an example -- for each employee that is 

 4          provided a transit benefit in many urban 

 5          areas that's done across the United States.

 6                 Finally, hang the bell on the cat on 

 7          this one.  This morning we got great news.  

 8          The president of the United States decided to 

 9          release the U.S. budget, and you have two 

10          boxes that need to be filled in right here, 

11          entitlement and then Medicaid.  Well, let's 

12          fill them in.  GME is being cut to the tune 

13          of $48 billion in the president's budget.  

14          Translate that national number to New York 

15          State -- we produce 15 percent of all the 

16          residents in the United States, you all know 

17          that -- well, that's $7.2 billion over 

18          10 years.  That is in the president's budget 

19          this morning.  

20                 Also in the president's budget, 

21          Medicare DSH cuts again of $70 billion and a 

22          bad debt cut sitting there at $37 billion.  

23                 So the bottom line is we're under 

24          siege.  I call it economic tyranny from 


 1          Washington, and that's exactly what I said in 

 2          a statement this morning.  And it just 

 3          doesn't end.  It's been 12 to 14 months of 

 4          this, and it just keeps on getting worse.

 5                 Let's go to Panel 12.  Here's Medicaid 

 6          domestic, your responsibility in terms of 

 7          policy formulation.  We haven't had a rate 

 8          increase -- we haven't had a rate increase 

 9          for 10 years.  What I've done here is simply 

10          deflated -- a Medicaid dollar 10 years ago is 

11          now worth 75 cents today.  Seventy-five 

12          cents.  And I have labor costs, and we want 

13          to be fair to labor because we must be, 

14          because they're the backbone of the 

15          healthcare community, and we have to pay them 

16          fairly and justly.  And I'm a big supporter 

17          of doing that, and how are we going to do 

18          that when you have this kind of situation?  

19          You just can't do it.  

20                 So the Governor in his wisdom put 

21          together a budget, a budget which we support, 

22          but we have some suggestions for which we 

23          would like your help on.  He is proposing a 

24          $1 billion Healthcare Shortfall Fund.  And 


 1          that shortfall fund addresses the D.C. cuts 

 2          as well as the Medicaid rate increase 

 3          problem.  

 4                 The problem with it, as I do the math, 

 5          ladies and gentlemen, I would argue that the 

 6          fund should be $1.5 billion.  So my second 

 7          suggestion to you is to increase it from 1 

 8          billion to 1.5 billion.  So that is the 

 9          second suggestion on top of the bad debt 

10          suggestion that I had earlier for insurers.

11                 Also in the Governor's budget is a 

12          $425 million proposal for capital funding for 

13          transformation and value-based payment 

14          participation and the like.  We support that.

15                 Finally, in conclusion, members of the 

16          committees, you know the Executive Budget 

17          also proposes to continue to fund the watch 

18          list institutions, we support that; extends 

19          the Indigent Care Pool allocation for one 

20          year, it needs to be reexamined thereafter; 

21          and continues safety net proposals.  

22                 Finally, on med-mal, the Executive 

23          Budget proposes to change the interest rate 

24          requirement that currently sits in statute at 


 1          9 percent to basically a market rate.  And 

 2          that would obviously drop it.  Now, where 

 3          does that come from?  That comes from when a 

 4          decision is made in the court about a 

 5          malpractice case and then it goes to appeal, 

 6          that would be the time frame that this thing 

 7          would kick in -- what interest rate are you 

 8          going to charge.  The Governor's proposal is 

 9          suggesting that.  

10                 And then, finally, we have some issues 

11          as it relates to deposing expert witnesses.  

12          We think both sides should be able to do 

13          that -- plaintiff, defendant, it doesn't make 

14          any difference.  It's a good thing for the 

15          country.

16                 So with that in mind, that is what 

17          I've outlined.  This is our statement of 

18          fact, our statement of proposals, and we 

19          really ask you to support it as you continue 

20          your deliberations.  

21                 Madam Chairman, I would now defer to 

22          any questions or to my partner, Dr. Safyer.

23                 CHAIRWOMAN YOUNG:  Thank you.  I think 

24          Senator Hannon has a question.


 1                 SENATOR HANNON:  I had a little 

 2          trouble following it.  You gave me an 

 3          unnumbered set of panels.

 4                 MR. RASKE:  Well, you know staff work 

 5          ain't what it used to be, Senator.

 6                 (Laughter.)

 7                 DR. SAFYER:  Kemp, you need your eyes 

 8          checked.  You need your eyes checked, Kemp.

 9                 MR. RASKE:  I'm sorry, I forgive you 

10          for that.

11                 SENATOR HANNON:  So I'm trying to best 

12          follow -- are you suggesting that there be a 

13          Medicaid increase this year?

14                 MR. RASKE:  Oh, absolutely.

15                 SENATOR HANNON:  And how would that be 

16          structured?  Among which providers, and in 

17          what percentage?

18                 MR. RASKE:  Well, Medicaid by 

19          definition goes to Medicaid institutions.  

20          And since Medicaid institutions -- since 

21          we've seen the growth in that payer source, 

22          there would be natural gravitational pull no 

23          matter what you did to where the Medicaid 

24          business is at.  This is all by definition.  


 1                 So therefore, a rate increase of 

 2          sufficient magnitude would be necessary that 

 3          would then drive into that government payer 

 4          source and also, as a result, help buoy -- 

 5          raise the boating level there, the water 

 6          level, so that you get more financial 

 7          stability.  So that's exact how the proposal 

 8          would work.

 9                 Now the question is how much.  And the 

10          answer is I'm not prepared to say that at 

11          this particular time.  

12                 CHAIRWOMAN YOUNG:  Thank you.  Anyone 

13          else?

14                 Okay.  As always, we truly value your 

15          input and appreciate you being here today.

16                 MR. RASKE:  Well, thank you.

17                 CHAIRWOMAN YOUNG:  Thank you.

18                 MR. RASKE:  Like I said, it's always a 

19          pleasure.  And next year we'll number the 

20          pages, sorry.

21                 CHAIRWOMAN YOUNG:  Yes, we need them 

22          numbered next year, Mr. Raske.

23                 MR. RASKE:  All right.  Thank you.

24                 CHAIRWOMAN YOUNG:  Thank you.


 1                 Our next speaker is Helen Schaub, 

 2          New York State policy and --

 3                 DR. SAFYER:  Oh, wait, wait -- forgive 

 4          me.

 5                 CHAIRWOMAN YOUNG:  Oh, okay.

 6                 DR. SAFYER:  Dr. Safyer.

 7                 CHAIRWOMAN YOUNG:  I'm sorry, Doctor.  

 8          Do you want to say something?

 9                 DR. SAFYER:  If that's okay.

10                 CHAIRWOMAN YOUNG:  Okay.

11                 DR. SAFYER:  I'm going to be brief, 

12          and the key to that is my opening prepared 

13          remarks says "good morning."  

14                 (Laughter.)

15                 DR. SAFYER:  So I'm going to skip the 

16          "good morning," yes.

17                 I appreciate being here.  I want to 

18          build upon what Ken has to say, and then to 

19          some very definitive extent I want to answer 

20          Kemp's question about Medicaid.

21                 So Montefiore Health System and the 

22          Albert Einstein College of Medicine together 

23          make Montefiore Medicine.  And these are two 

24          institutions that have come together and make 


 1          up an academic medical center that is very 

 2          unique in many, many ways.  

 3                 So how is it unique?  It serves four 

 4          counties -- the Bronx, its home; it serves 

 5          Westchester, Orange, and Rockland.  There are 

 6          about 4 million people in our footprint, and 

 7          we take care of at least half of them on a 

 8          regular basis.  And we do that through a 

 9          number of platforms which are also unusual 

10          for an academic medical center because we 

11          have a very, very large primary care 

12          platform.

13                 Two hundred and fifty sites provide 

14          the care in the community where people live.  

15          And we do, in those 250 sites, 5 million 

16          visits a year -- half of them are primary 

17          care and/or GYN or maternity.  That is 

18          unusual.  

19                 Two, we do everything that's done by 

20          the other important institutions in town, 

21          which means we do everything that is 

22          complicated -- very necessary cancer care, 

23          the most advanced heart -- the most advanced.  

24          We are the only other lung transplant program 


 1          in the lower part of New York State.  And if 

 2          you watch CNN, and I bet a lot of you are 

 3          addicted to it now, you might have noticed 

 4          that we separated those two twins that were 

 5          conjoined at the brain and the head, and that 

 6          is the fifth of seven successful ones in the 

 7          history of medicine.

 8                 So we do very, very complicated care.  

 9          And here's the punch line, and it goes back 

10          to what Ken was saying.  Over time, our payer 

11          mix has become more troubled.  Part of that 

12          is the cap on spending and Medicaid in 

13          facilities that we run for 10 years.  And 

14          that happened at the same time that 

15          pharmaceutical prices have some years gone up 

16          12 percent.  The vendor prices are averaging 

17          5 to 7 percent in rise, and the withholds 

18          from the private insurance companies are 

19          through the roof.  We're owed, at any one 

20          time, $150 million from the big three.  To be 

21          owed that is a loan without interest, and it 

22          is very challenging.

23                 To cut to the chase, most institutions 

24          that have Medicaid at all underwrite the 


 1          losses 65 cents for a dollar's worth of what 

 2          it costs us.  Medicare is about 70 cents on 

 3          the dollar, so there is an underwriting need 

 4          that you fulfill with more commercial 

 5          insurance.  Our footprint doesn't yet have 

 6          that kind of commercial insurance to 

 7          underwrite it.

 8                 How have we gotten through this all of 

 9          these years?  Kemp helped us one way.  We 

10          have moved boldly -- and that was in '95 -- 

11          boldly into value-based purchasing, taking 

12          risks and getting rewarded when we keep 

13          people out of the hospital, not take them 

14          into the hospital.  That has allowed us to 

15          basically close many, many beds -- which is a 

16          mandate for the state -- keep people healthy 

17          in the community, and get higher up on the 

18          premium stream so we keep more.

19                 If you're 85 percent Medicaid and 

20          Medicare and 15 percent commercial, it is 

21          extremely challenging.  Those 5 million 

22          ambulatory visits are actually 60 percent 

23          Medicaid and 20 percent no-pay.

24                 So the combination of turning 


 1          hospitals around that were failing, 

 2          repurposing hospitals that were failing -- 

 3          Westchester Square -- building hospitals -- 

 4          we have a 300,000-square-foot hospital 

 5          without beds in the Hutch Metro Center.  Our 

 6          platform has allowed, through shared services 

 7          and overarching redirection, to bring back 

 8          New Rochelle, Mount Vernon, work with 

 9          Our Lady of Mercy -- which is now a going 

10          concern in the Bronx, it's called Wakefield 

11          now -- and many, many, many others, and the 

12          Health Department keeps engaging us to take 

13          on affiliates.

14                 So at this moment we are 40,000 

15          employees in that arena, we're 55 percent 

16          organized, NYSNA's here, 1199 is here -- 

17          Montefiore was the birthplace of 1199, and we 

18          were paying $15 an hour three or four years 

19          ago to all our employees, so we pay a living 

20          wage.  Forty thousand people, of which 15,000 

21          people live in the Bronx -- that is the 

22          economic engine of the Bronx, that is how the 

23          Bronx turned around from a 17 percent 

24          unemployment rate in the recession to what it 


 1          is today.  One in five in New York State work 

 2          in healthcare.  In the footprint I'm 

 3          describing to you, it's probably higher.

 4                 So -- and this is the punch line.  I 

 5          don't see how the state can supply a fix for 

 6          Medicaid everywhere that Medicaid is used.  

 7          But, you know, I could be wrong.  But where 

 8          you are successful and you are moving towards 

 9          a model that actually is changing the way we 

10          do healthcare, we have 400,000 lives in that 

11          risk-taking arena right now.  We were the 

12          most successful pioneer institution in the 

13          country in Obamacare, and we just were named 

14          by Jason two days ago as an innovator program 

15          where we can get further up on the Medicaid 

16          revenue stream.  But we need a fix for now.  

17          And I believe a carrot should be something 

18          that you use to incent high Medicaid 

19          institutions to get higher.  

20                 So here -- final, final, just so you 

21          have some ability to navigate this.  If you 

22          took our payer mix and replaced it with the 

23          four other big institutions that do the same 

24          things we do that are outstanding 


 1          institutions in town with medical schools, 

 2          our bottom line would move from a 1 percent 

 3          or 1.5 percent to a 10 or 12 percent.

 4                 One institution's payer mix at what we 

 5          get paid would add a billion dollars to our 

 6          bottom line.  So I'm not asking for a billion 

 7          dollars, I'm asking for some ability to make 

 8          this very important experiment.  And I think 

 9          an institution that is blazing a new way to 

10          do healthcare, bringing it into the 

11          community, keeping people well, keeping them 

12          out of the hospital, is worth your 

13          consideration for investment.  

14                 I'll stop now.

15                 SENATOR HANNON:  Well said.

16                 CHAIRWOMAN YOUNG:  Thank you.

17                 Senator Savino.

18                 SENATOR SAVINO:  Thank you.  

19                 I just have a question.  First of all, 

20          thank you for your testimony.  And last 

21          Friday I attended a briefing at Richmond 

22          University Medical Center on the effect of 

23          the Governor's budget on our local hospitals, 

24          and David Rich was there, and I see Helen 


 1          from 1199, and the nurses were there, and we 

 2          got a snapshot of just what it will do to 

 3          local healthcare delivery for Staten Island 

 4          University and for Richmond.  So I want to 

 5          thank you both for being here and sitting 

 6          through that.  

 7                 In your testimony, though -- in your 

 8          slide on Number 19, the numbers are here in 

 9          the corner, okay, in the gray -- you 

10          referenced hospital drug costs growing, it's 

11          almost a 40 percent increase just in two 

12          years.  So I was wondering if you have an 

13          opinion on the issue of the opioid surcharge.  

14                 When we took testimony the other day 

15          at the revenue hearing, we didn't get a clear 

16          answer as to who's actually going to pay that 

17          surcharge, and there's a concern on the part 

18          of hospice providers and on the part of 

19          hospitals and other -- because you purchase 

20          drugs, it's one of the big costs, as you 

21          pointed out in your testimony --

22                 MR. RASKE:  Oh, yeah.

23                 SENATOR SAVINO:  Has there been any 

24          discussion about how to hold the hospitals 


 1          harmless from the increase, this surcharge on 

 2          opioid purchases?  Has anybody spoken with 

 3          you?

 4                 MR. RASKE:  You know, that's an 

 5          excellent question.  I don't have a good 

 6          answer for that.  

 7                 Our struggling with the drug prices -- 

 8          we do have a group-purchasing operation  

 9          that's actually national.

10                 SENATOR SAVINO:  Mm-hmm.

11                 MR. RASKE:  And I think we do the 

12          purchasing, Steve, for Montefiore.

13                 DR. SAFYER:  You do.

14                 MR. RASKE:  Which uses enormous market 

15          muscle when we put it in that context.  Yet 

16          we're still seeing the kinds of price 

17          increases that we're seeing here.  

18                 But I know, Senator, that's really an 

19          important question.  I don't have a good 

20          answer, but I can give you an answer on it 

21          and some ideas on how to tackle that, to help 

22          that -- hold the hospitals harmless on it.  

23          It's a great idea.

24                 DR. SAFYER:  Can I just add to that?


 1                 MR. RASKE:  Please.

 2                 DR. SAFYER:  In my opinion, if we 

 3          could use Medicare to discipline the 

 4          pharmaceutical companies, it would be over in 

 5          one night.  So we would go from this enormous 

 6          increase in what we're paying in the 

 7          aggregate -- which is for off-patent drugs, 

 8          some of them having to do with the opioid 

 9          crisis in terms of being therapy -- all the 

10          way to the drugs that are brand-new and 

11          highly complex and very innovative coming 

12          from our medical schools.

13                 I don't think that's going to happen 

14          in the next two or three years.  Medicare 

15          being disciplined.

16                 SENATOR SAVINO:  Mm-hmm.

17                 DR. SAFYER:  So the State of New York 

18          in many different ways -- the pharmaceutical 

19          companies cannot abandon this market, period.  

20          And we need to show them that we can 

21          discipline what they do.  And I would urge us 

22          to tax what we can and/or force them to not 

23          continue to do what we are watching all the 

24          time in the news.  


 1                 And the second thing I just want to 

 2          say, the opioid effort on the national basis, 

 3          I don't think I have to convince anybody, is 

 4          tepid at best.  It's nothing.  The Bronx 

 5          never got better.  It's the same heroin 

 6          epidemic, it just says fentanyl now.  I mean, 

 7          it never went away.

 8                 Kentucky understandably is new.  But 

 9          in our footprint right now we have 

10          St. Luke's-Cornwall, which is arguably a 

11          rural hospital.  And in that neighborhood and 

12          that community we are seeing things through 

13          the emergency room that are horrific.  It's 

14          not five out of seven days there's a death -- 

15          which is the Bronx -- but it is moving up in 

16          those communities.  So I think we need to 

17          take action on that.

18                 SENATOR SAVINO:  Mm-hmm.  I agree.  I 

19          spoke at the meeting on Friday about the 

20          repeat performances in the emergency room of 

21          people who are not necessarily using heroin 

22          and fentanyl on the street, they're using 

23          prescription drugs that they get their 30-day 

24          supply and go through them in a week, and 


 1          then they wind up in your emergency rooms and 

 2          they go through withdrawal, and then we send 

 3          them on their way and they go back home and 

 4          they do it again every month.

 5                 MR. RASKE:  Yes.

 6                 SENATOR SAVINO:  And I think there has 

 7          to be some analysis of the costs on the 

 8          hospital system for providing short-term 

 9          detox in the emergency room until people come 

10          back again next month.

11                 MR. RASKE:  Correct.

12                 DR. SAFYER:  Yes, Senator.

13                 SENATOR SAVINO:  Thank you.

14                 CHAIRWOMAN YOUNG:  Senator Hannon.

15                 SENATOR HANNON:  I think your point 

16          about the federal government is correct, but 

17          it just doesn't go one way or another.  First 

18          of all, that is very devastating news about 

19          graduate medical education --

20                 DR. SAFYER:  Terrible.

21                 SENATOR HANNON:  -- which is an 

22          extraordinary revenue source that has not 

23          been on the radar in New York.

24                 DR. SAFYER:  Right.


 1                 SENATOR HANNON:  Second, though -- but 

 2          at some point, sometimes they give instead of 

 3          just take away.  I also read that they 

 4          changed the 340B drug subsidy and they took 

 5          it away from just 340B hospitals, but they 

 6          took that money and gave it to all hospitals.  

 7          Now, how that benefits or not -- the changing 

 8          dynamic of policy is probably overarching 

 9          above the dollar figure, trying to figure out 

10          where you're going to put your footprint and 

11          where you're going to go forward.  And the 

12          academic medicine which had been the hallmark 

13          of New York really has to be really argued 

14          for very strongly.

15                 So whether you numbered the pages or 

16          not, I think -- 

17                 (Laughter.)

18                 SENATOR HANNON:  -- I think, President 

19          Safyer --

20                 MR. RASKE:  I can see I'm not going to 

21          live this down.

22                 SENATOR HANNON:  Neither am I.  

23                 -- I think your point about 

24          Montefiore -- and you took -- you have the 


 1          hospitals not because you went there and 

 2          said, We want to acquire hospitals, but 

 3          rather the State of New York said to you:  

 4          Please take these hospitals.  

 5                 So it's the state's obligation to 

 6          continue in a strong way, and I think those 

 7          are points well-made.

 8                 MR. RASKE:  I'm not going to debate 

 9          the issue on the GME, but I do want to -- 

10          just one fact.  The way the proposal of the 

11          Executive is coming out is that they will 

12          take all the money from Medicare and GME, all 

13          the money from Medicaid and GME, all the 

14          money that comes from the child health 

15          programs and GME, pool it, cut it, and 

16          redistribute it.  

17                 So when you sit on a situation where 

18          New York State produces 15 percent of all the 

19          residents in the United States, the outflow, 

20          Senator, will be astronomical.  I just did 

21          proportionality:  $7.2 billion out of 

22          New York.  And where is it going to go?  

23          Outside of the cut that would be in, it's 

24          going to flow across the United States.  And 


 1          that's the way it is.  

 2                 And Steve, forgive me, I just wanted 

 3          to elaborate.

 4                 DR. SAFYER:  No, no, no.

 5                 MR. RASKE:  That's what we understand 

 6          this proposal is.

 7                 SENATOR HANNON:  Thanks.  The chairs 

 8          of Finance who are over to my left, your 

 9          right, know that we have 35 more witnesses 

10          today.  So I should be quiet.

11                 CHAIRWOMAN YOUNG:  Thank you.  Thank 

12          you for being here.

13                 DR. SAFYER:  I've got to make one 

14          comment, and then I'm leaving.  I do.  

15                 GME is not just not just a resource 

16          for the institution.  It's how we bring 

17          people to New York and to footprints, like I 

18          was describing.  One-half of the physicians 

19          working at Montefiore, anywhere, train there 

20          or went to med school there, 1500 at any one 

21          time.  That's how we recruit them.

22                 SENATOR HANNON:  Thank you very much.

23                 MR. RASKE:  Thank you.  

24                 CHAIRWOMAN YOUNG:  Thank you.


 1                 Our next speaker is Helen Schaub, 

 2          New York State policy and legislative 

 3          director, from 1199SEIU United Healthcare 

 4          Workers East.

 5                 She brought her fan club with her.

 6                 MS. SCHAUB:  We had a few more folks 

 7          here, but unfortunately they had to leave.  

 8                 But thank you for having me.  I wanted 

 9          to -- I'll be brief, I know there's a lot of 

10          folks who are waiting to testify.  I wanted 

11          to just make a couple of points related to 

12          the discussion that we were just having and 

13          then talk about a few of the long-term care 

14          proposals in the budget.

15                 So our organization has spent much of 

16          the last year doing battle in Washington -- 

17          all around the country, really -- to talk 

18          about the devastating impact of the cuts that 

19          have been coming at us.  We have fought a lot 

20          of them off, but certainly not all of them.  

21          And the ones that remain are very serious, 

22          and I think that's why we're supporting the 

23          Governor's proposal around the shortfall 

24          fund, although we'd like to see it a little 


 1          bit larger.  

 2                 As the previous speakers mentioned, we 

 3          have Medicare DSH cuts which are already 

 4          happening.  We have the cost-sharing 

 5          reduction payments which have already 

 6          happened.  And then even though presidents' 

 7          budgets are not generally enacted as written, 

 8          putting very serious Medicaid cuts on the 

 9          table -- which the president did this 

10          morning -- we think reanimates the discussion 

11          that we were having, the bitter battle that 

12          we were having all last year around Medicaid 

13          cuts, and we're very concerned that a 

14          Cassidy-Graham or some of these other 

15          proposals that would cap federal Medicaid 

16          spending are going to be revived by what the 

17          president has put on the table.  

18                 So the federal threat is very real.  

19          We've been combating it every way we know how 

20          all around the country, but we know that we 

21          need to take steps here in New York to 

22          protect New Yorkers, and we think the 

23          shortfall fund is the right way to do that.  

24                 We also think that it can address, 


 1          really, the underlying crisis that we were 

 2          talking about that previous speakers were 

 3          talking about in terms of the lack of 

 4          increases in Medicaid rates for the last 

 5          10 years.  You know, we get calls really 

 6          almost on a weekly basis from institutions 

 7          saying we're not sure if we can make the 

 8          benefit fund payment, we're not sure if we 

 9          can make payroll -- and we're scrambling to 

10          try to put together some sort of aid.  It's 

11          the 27 watch list hospitals, which are urban 

12          and rural, they're all over the state, and 

13          the others that are on the brink.  It's 

14          because of the structural deficit.  

15                 The more you depend on public payers, 

16          the more that you are just losing money every 

17          day you keep your doors opened.  And we think 

18          having a shortfall fund is an opportunity not 

19          only to fend off some of the impact of the 

20          federal cuts, but to strengthen our provider 

21          systems.

22                 Our union has been in favor of 

23          transforming the healthcare system, 

24          recognizing that a lot of care can be 


 1          provided in the community.  Even though maybe 

 2          that's not in our direct interest as a place 

 3          that has fought for decent-paying jobs in 

 4          hospitals, we believe it's the right thing to 

 5          do.  But if you do that wrong and if you 

 6          don't make sure that you have the 

 7          infrastructure there, you're not going to 

 8          have emergency care, you're not going to have 

 9          the institutions that people depend on.  

10                 So again, we think the Governor's 

11          budget is a good start.  We think it's right 

12          to recapture some of the dollars that large 

13          for-profit corporations are gaining from the 

14          tax cuts and from the postponement of the ACA 

15          insurance taxes, and we think it's right to 

16          recapture some of the proceeds from the sale 

17          of a company that was really created with 

18          public investment, and to use that to 

19          stabilize our healthcare system -- both, 

20          again, to deal with the effects of these 

21          cuts, which are real, and also to raise rates 

22          for Medicaid-dependent institutions who are 

23          really struggling and the cracks are starting 

24          to show.


 1                 Just on that last point, you know, I 

 2          know there was some testimony from the 

 3          commissioner and from the Medicaid director 

 4          earlier about nursing homes.  Our experience 

 5          is nursing homes are not in good shape.  And 

 6          again, we hear from our members all the time 

 7          how terrible they feel about trying to take 

 8          care of people without the appropriate staff 

 9          or the appropriate resources to do that.  In 

10          many cases it's because the nursing homes are 

11          driving down the costs of operating those 

12          homes in a way that is not safe for residents 

13          and certainly not good for workers.  So we 

14          don't think the condition is good and do 

15          think an investment there is certainly 

16          warranted.  

17                 Last piece, I know you're going to be 

18          hearing from the Home Care Association on 

19          some of the long-term-care proposals.  We 

20          think that this budget proposal from the 

21          Executive really kind of recognizes the 

22          limitations of the partially capitated 

23          managed-care plans.  We always thought that 

24          that could be something that was on the way 


 1          station to a fully capitated plan where you 

 2          could capture Medicare and reinvest that to 

 3          take care of people.  

 4                 If you're only capping Medicaid costs, 

 5          you're really just managing utilization or 

 6          price.  It has not been good for quality in 

 7          many cases, and we think it's right to 

 8          recognize that.  By eliminating coverage for 

 9          folks who are long-term nursing home 

10          residents, paying that fee for service -- the 

11          same thing with low utilizers -- you're not 

12          cutting services, you're just changing the 

13          way they're paid in a way that we think makes 

14          sense.

15                 Very last point on long-term care.  

16          There is a proposal to limit the number of 

17          licensed home care agencies that are 

18          contracted for by managed-care plans.  We 

19          think that's the right proposal.  We think 

20          there's a lot of implementation questions, 

21          the number might be wrong, but we need to 

22          strengthen that delivery system, we need to 

23          have companies and providers that can really 

24          provide high-quality care.  We can't do that 


 1          with 1600 companies, many of whom are kind of 

 2          in a Wild West of obeying or not obeying 

 3          rules.  And so we think that proposal is a 

 4          very strong start, and we would support it.

 5                 CHAIRWOMAN YOUNG:  Questions?

 6                 Well, thank you so much.

 7                 CHAIRWOMAN WEINSTEIN:  Thank you.

 8                 CHAIRWOMAN YOUNG:  The next speaker is 

 9          President Joanne Cunningham from the Home 

10          Care Association of New York State.  

11                 Welcome.  So we have five minutes on 

12          the clock, and if you could summarize, that'd 

13          be great.  Thank you.  

14                 MS. CUNNINGHAM:  Thank you very much.  

15                 This has been quite a marathon 

16          session, so out of respect for your going on 

17          your eighth hour of hearing testimony and 

18          asking great questions, and also out of 

19          respect for all my colleagues who are still 

20          in the room waiting to speak with you, I'm 

21          going to keep my testimony short.  

22                 We gave you a copy of my written 

23          comments, you can all read them, they're very 

24          comprehensive.  We also gave you two other 


 1          documents:  One is a financial condition 

 2          report that articulates what the fiscal 

 3          status is of the home- and community-based 

 4          care sector across New York State.  This is 

 5          the ninth year in a row we have done this, 

 6          and there are some troubling trends with 

 7          respect to the financial standing of the home 

 8          care system in New York.

 9                 Thank you again for the opportunity to 

10          speak with you today.  Again, I'm Joanne 

11          Cunningham, I'm the president and CEO of the 

12          Home Care Association of New York State.  We 

13          represent home- and community-based 

14          providers, certified agencies, licensed home 

15          care service agencies, hospices, as well as 

16          managed long-term-care plans and what is left 

17          of the long-term home health care program 

18          providers all across the state, from the tip 

19          of Long Island to the Adirondacks to out west 

20          in Cattaraugus County and the Finger Lakes 

21          and all across the state.  

22                 Our providers offer services to keep 

23          patients in their home and provide care in 

24          the home.  These services are uniquely 


 1          matched to meet the patient's individual 

 2          needs as well as the physician's care plan.  

 3          Whether it's chronic care management, 

 4          assistance with activities of daily living, 

 5          medication management, wound care post-acute 

 6          therapies, maternal newborn care, nutrition, 

 7          infection control, public-health-oriented 

 8          interventions, palliative and end-of-life 

 9          care, and a range of additional services.

10                 So as you can see, the care that is 

11          provided by the home- and community-based- 

12          care sector is very comprehensive.  It 

13          includes public health primary care as well 

14          as post-acute care and long-term care.

15                 Annually about 400,000 patients 

16          receive home care services in New York State, 

17          and all of these services are aiming to 

18          support the entire healthcare system as well 

19          as the state's overarching healthcare 

20          cost-containment goals, and they do this by 

21          preventing hospitalizations, by keeping 

22          patients out of hospitals as well as doctor's 

23          offices by providing an alternative to 

24          nursing home care, and by improving the 


 1          health and safety of frail elderly citizens.

 2                 Today I'm going to just point to a 

 3          couple of highlights in our financial 

 4          condition report, because I think it's really 

 5          helpful to understand what the fiscal climate 

 6          is for the home- and community-based sector.  

 7          Mr. Raske spoke about the troubles with 

 8          reliance on Medicare and Medicaid as payers 

 9          and, you know, the cost-shifting that 

10          hospitals and other providers do to 

11          commercial payers.  Well, in the home care 

12          sector we don't have the opportunity to have 

13          commercial payers offset some of the 

14          underpayment of Medicare and Medicaid, and as 

15          a result what we have seen over the past 

16          decade, certainly, since we have been 

17          collecting data and evaluating cost reports 

18          for both home care agencies as well as 

19          managed long-term-care plans, is that this is 

20          a system that is declining in terms of their 

21          fiscal standing.

22                 Approximately 62 percent of all MLTC 

23          plans had negative premium incomes in 2016.  

24          That was up from 42 percent in 2012, just 


 1          four years earlier.  Fifty-two percent of all 

 2          MLTCs had medical expense ratios over 

 3          90 percent in 2016, compared to 42 percent of 

 4          MLTCs in 2015.

 5                 And that indicates that their PMPM 

 6          revenues from the state are not sufficient to 

 7          meet the overall plan medical expenses to pay 

 8          their contractors, the certified home health 

 9          agencies, the licensed home care agencies and 

10          other network providers.

11                 I just want to highlight a couple of 

12          things.  One is you've heard a lot about the 

13          LHCSA limit.  We absolutely are opposed to 

14          the LHCSA limit.  You heard a lot about the 

15          reasons why -- it's anticompetitive, it's 

16          anti-consumer choice.  But consider this.  In 

17          some communities, the LHCSA limit is 

18          precluding -- or is offering consumers a home 

19          health aide that speaks Cantonese or speaks 

20          Russian, and that's really important to match 

21          those.  And that's one of the reasons why 

22          some of those LHCSAs have contracts with 

23          certain plans.  They have a certain language 

24          proficiency, and that's particularly evident 


 1          in New York City.

 2                 Just categorically, some of those MLTC 

 3          changes are extremely troubling and will 

 4          cause significant fiscal pressure and harm to 

 5          the home care system.  You've talked about 

 6          them:  the eligibility requirement, the other 

 7          cuts that are imposed on the MLTC plans as 

 8          well.  

 9                 And then finally, I just want to -- no 

10          one has really talked about workforce.  We 

11          have a lot of work to do on workforce.  There 

12          was an article in the Ithaca newspaper today 

13          about the struggle with retaining and 

14          attracting workers in the home care sector -- 

15          not just home health aides, but RNs, clinical 

16          staff as well.

17                 I thank you so much for your attention 

18          today, and we'd welcome any questions. 

19                 CHAIRWOMAN YOUNG:  I think we're all 

20          set, but thank you so much.

21                 SENATOR KRUEGER:  Thank you.

22                 MS. CUNNINGHAM:  Thank you.

23                 CHAIRWOMAN YOUNG:  Our next speaker is 

24          Claudia Hammar, president of the New York 


 1          State Association of Health Care Providers.

 2                 We look forward to you summarizing 

 3          your testimony.

 4                 MS. HAMMAR:  Absolutely.  Thank you 

 5          for your time today.  I appreciate that, and 

 6          I will keep my remarks brief as well.  You 

 7          have our written testimony there.  

 8                 My name is Claudia Hammar, and I'm 

 9          president of the New York State Association 

10          of Health Care Providers.  We are a trade 

11          association that represents approximately 

12          350 offices of licensed home care services 

13          agencies, certified home health agencies, and 

14          health-related organizations throughout the 

15          state. 

16                 Most of HCP's members are licensed 

17          agencies that provide long-term-care services 

18          for the disabled, chronically ill, and 

19          elderly New Yorkers.  Many serve as fiscal 

20          intermediaries for the state's 

21          Consumer-Directed Personal Assistance Program 

22          as well.  Most of these services are 

23          reimbursed in the state's Medicaid program, 

24          with more than 180,000 people currently 


 1          enrolled.  The long-term population is 

 2          rapidly growing as part of New York State's 

 3          Medicaid program.  

 4                 Over the past few years, home care 

 5          providers have faced unprecedented challenges 

 6          with mounting labor costs, a rapidly changing 

 7          regulator environment, and reimbursements 

 8          that do not begin to cover an agency's real 

 9          cost.  HCP believes that some of the 

10          proposals in the Executive Budget will 

11          jeopardize New York's home healthcare system 

12          and put patients that it serves in jeopardy.  

13                 In the interests of time, I would just 

14          like to focus on a couple of key issues.  

15                 First, the minimum wage and its 

16          implementation.  This year, the Governor 

17          funds minimum wage for direct care workers at 

18          approximately $703 million.  Home care 

19          providers have had tremendous difficulty 

20          receiving minimum wage funding for Medicaid 

21          managed-care plans, and stronger mechanisms 

22          are needed to ensure these funds are actually 

23          distributed in a timely manner to home care 

24          providers to support their workforce.  


 1                 For the second year in a row, the 

 2          process of getting minimum wage funds from 

 3          plans to providers by the December 31st 

 4          effective date is inherently broken, and in 

 5          many cases providers and plans did not meet 

 6          that date.  Some plans were issuing contract 

 7          amendments the week between Christmas and 

 8          New Year's, right up to the deadline, making 

 9          it nearly impossible for home care agencies 

10          to ask questions, get information from plans, 

11          or negotiate rates in time for their 

12          implementation.  Many home care providers had 

13          no contract amendments at all from plans.  

14          But despite the controversy and uncertainty, 

15          home care agencies still needed to pay their 

16          workers the increased minimum wage by 

17          December 31st.  

18                 Given this problematic situation, HCP 

19          is encouraging the Legislature to implement a 

20          process by which plans must distribute funds 

21          to providers 90 days prior to the effective 

22          date in order to avoid late contracts.  

23                 We also urge that insurers provide the 

24          funds in an amount that supplements any 


 1          existing contracts.  HCP also urges the 

 2          Legislature to disallow risk adjustments on 

 3          all statutory wage obligations on 

 4          managed-care providers to ensure that the 

 5          plans distribute the full amount given by the 

 6          state for the intended purpose of paying the 

 7          workers.  Without adequate rates, home care 

 8          agencies will have no choice but to reduce 

 9          services, negatively impacting consumers' 

10          access to care and the workers who provide 

11          these services, all at a time when the demand 

12          for these services is increasing.

13                 Secondly, I'd like to comment on the 

14          Executive Budget proposal limiting the number 

15          of LHCSA contracts a managed long-term care 

16          plan can have to 10.  Given this proposal, 

17          and recent statements by the state Medicaid 

18          director, it is no secret that the state is 

19          looking to reduce the number of licensed 

20          agencies.  

21                 However, this proposal would create 

22          significant access-to-care issues for tens of 

23          thousands of New Yorkers who receive 

24          essential home care services from licensed 


 1          agencies.  This is included as an 

 2          administrative proposal, and is not included 

 3          in the Health/Mental Hygiene Article VII 

 4          language.  

 5                 However, there is a savings of 

 6          $13.71 million to the state for the fiscal 

 7          year.  At this time industry stakeholders, 

 8          including HCP, are unaware of the methodology 

 9          by which this savings is calculated.  And in 

10          terms of DOH's position that this proposal 

11          would increase quality, we fail to see how 

12          this is possible with a significantly reduced 

13          number of licensed agencies handling a 

14          growing number of clients.  Simply put, there 

15          is no reasonable justification for the 

16          limitation of LHCSA/MLTC contracts to 10.

17                 This proposal would provide additional 

18          leverage to MLTC plans over home care 

19          providers in negotiations where providers are 

20          already significantly disadvantaged.  

21          Moreover, plans hold the majority of the 

22          power during plan/provider negotiations.  If 

23          an MLTC does not want a contract with a 

24          particular agency, they simply do not have 


 1          to.  Therefore, there is no need to place an 

 2          arbitrary statutory number on planned 

 3          provider contracts.

 4                 In addition, the timing of this 

 5          proposal is extremely problematic.  It would 

 6          go into effect on October 1, leaving little 

 7          time to shift provider/plan contracts and 

 8          little time to place tens of thousands of 

 9          consumers into a different network if 

10          necessary.  By restricting the number of 

11          LHCSAs and MLTCs plans can contract with, 

12          elderly and disabled Medicaid enrollees would 

13          be forced into a severely limited home care 

14          provider network that would significantly 

15          constrict consumer choice.

16                 Finally, HCP believes that this 

17          discussion about licensed agencies needs to 

18          happen outside of the budget process, 

19          something stakeholders thought was going to 

20          be discussed further through the regulation 

21          modernization initiative process.  In order 

22          to evaluate LHCSAs where there may be too 

23          many, where there aren't enough, where 

24          perhaps there are bad actors, the state needs 


 1          to look at Article 36 of the Public Health 

 2          Law which governs these agencies in order to 

 3          have the appropriate discussion about the 

 4          viability of an industry.  

 5                 HCP urges the Legislature to reject 

 6          this proposal outright, not only because it 

 7          would lead to the closure of many home care 

 8          businesses, but it would severely limit 

 9          access to essential and specialized care for 

10          consumers, including those in niche 

11          communities.

12                 Thank you.  I'd be happy to take any 

13          questions.

14                 CHAIRWOMAN YOUNG:  Thank you very 

15          much.

16                 SENATOR KRUEGER:  Thank you.

17                 CHAIRWOMAN YOUNG:  So our next speaker 

18          is Bishop Edward Scharfenberger from the 

19          Archdiocese of New York, and then we'll go to 

20          NYSHFA after that.  The bishop is joined by 

21          Jenn Hyde, Catholic Charities Tri-County 

22          Services.  

23                 So welcome to both of you.

24                 BISHOP SCHARFENBERGER:  Thank you very 


 1          much.  And good evening, Chairpersons and 

 2          other distinguished legislators.

 3                 And I appreciate the opportunity to be 

 4          here tonight.  As bishop of the Diocese of 

 5          Albany -- I am actually not the Archdiocese.  

 6          I've got Brooklyn roots, you can probably 

 7          tell by my accent, but I'm the Diocese of 

 8          Albany -- but I'm humbled every day with the 

 9          honor and privilege serving as the spiritual 

10          leader and advisor to New Yorkers of every 

11          social-economic level, background, 

12          birthplace, and walk of life.  I am energized 

13          by the stories I hear from them and so many 

14          others, and of how they've overcome 

15          challenges, the selfless acts they do for 

16          others and the positive outlook they maintain 

17          in the midst of some of the most 

18          heartbreaking tragedies.  In your roles as 

19          elected officials, I'm sure that you too are 

20          inspired by the life stories of your 

21          constituents who overcome seemingly 

22          insurmountable odds to improve their lives 

23          and those around them.  

24                 But I am here today as a governing 


 1          member of Fidelis Care, the New York State 

 2          Catholic Health Plan, in connection with the 

 3          sale of the assets of Fidelis Care.  The 

 4          transaction has created an historic 

 5          opportunity for a new foundation to help 

 6          transform the lives of New York’s poor, 

 7          neediest, and most vulnerable populations.

 8                 It is an opportunity to provide 

 9          billions of dollars to improve the health and 

10          welfare of individuals and families across 

11          New York State, from each urban neighborhood 

12          to the most rural corners of the state -- 

13          billions of dollars that will help 

14          New Yorkers remove the shackles of poverty 

15          and enable them to achieve the opportunities 

16          most of us in this room enjoy.  The funds 

17          will expand access to healthcare, provide 

18          homecare to our rural elderly, improve 

19          immigrant health, feed the hungry, raise 

20          childhood literacy levels, facilitate 

21          supportive housing, quell the opioid 

22          epidemic, and further countless other goals 

23          shared by the Catholic Church and the State 

24          of New York.    


 1                 Yet New York State may miss this 

 2          opportunity.  The state's financial plan, as 

 3          presented in the Executive Budget, relies on 

 4          the state seizing virtually all of these 

 5          funds that are otherwise intended for 

 6          New York's poor.  We have been advised that 

 7          such a taking is illegal and 

 8          unconstitutional.  That this unprecedented 

 9          confiscation is directed at a faith-based 

10          institution, and seeks to disrupt our mission 

11          of caring for the poor of every race, creed, 

12          color or disability, is even more alarming.  

13          The state's announced action would of course 

14          make it impossible for us to move forward 

15          with this transaction, which would create a 

16          tragic loss of an unexpected resource for 

17          New York.  

18                 Now, common sense and logic show that 

19          a charitable foundation that will permanently 

20          assist New York's poor will provide a greater 

21          public benefit than catering to special 

22          interests with a one-shot budget solution.  

23          My sincere prayer is that wisdom and common 

24          sense will ultimately prevail and will 


 1          prevent this from happening.  

 2                 So with that fervent hope, please let 

 3          me discuss further the transaction and its 

 4          importance to our state. 

 5                 As you may know, Fidelis Care began 

 6          operating in 1993 as the Catholic Health 

 7          Services Plan of Brooklyn and Queens.  In 

 8          1997, the eight bishops of the Catholic 

 9          Dioceses of New York, led by John Cardinal 

10          O'Connor, expanded Fidelis Care across the 

11          state to improve the health and wellness of 

12          underserved New Yorkers.  It has become a 

13          model for managed care in the United States. 

14                 It is no surprise to those of you in 

15          this room that the healthcare financing and 

16          delivery system is rapidly changing due to a 

17          variety of factors, including federal and 

18          state regulation and funding as well as 

19          technological innovations.  Recently it 

20          became clear to my fellow bishops and me that 

21          we can best serve those most in need by 

22          exiting the health insurance business.  

23                 We decided that in order to elevate 

24          Fidelis Care to the next level of service, it 


 1          was in the best interests of Fidelis Care's 

 2          insureds to find a better capitalized and a 

 3          more technologically advanced national 

 4          organization to carry on Fidelis Care's 

 5          commitment to New York State.  We identified 

 6          and secured the best partner for this 

 7          undertaking in the Centene Corporation, a 

 8          national health plan which has the financial, 

 9          technical and medical expertise to 

10          successfully operate and manage Fidelis Care 

11          in New York.  

12                 We believe that Fidelis Care members 

13          and employees will benefit from enhanced 

14          access to capital markets, ensuring greater 

15          resources to provide new, state-of-the-art 

16          technology, and a transfusion of industry 

17          best practices. 

18                 Centene has promised us and the State 

19          of New York that New Yorkers in all 

20          62 counties will continue to have the same 

21          wide access to quality health insurance, 

22          compassionate customer support, and the 

23          information and resources they need to make 

24          informed health decisions.  Centene, 


 1          recognizing the strength and value of Fidelis 

 2          Care's New York State workforce, will retain 

 3          all current employees to ensure a seamless 

 4          transition.  The company already operates in 

 5          over 25 states and brings deep industry 

 6          knowledge to Fidelis Care that very few other 

 7          firms can offer.

 8                 As we pass the baton to a 

 9          sophisticated national organization with 

10          resources which can effectively assist our 

11          state's Medicaid population, Fidelis Care will 

12          take those proceeds and transform them into a 

13          major healthcare foundation to provide aid to 

14          the most vulnerable New Yorkers to cover the 

15          things they need which Medicaid may not 

16          currently provide.  

17                 As a grant-making foundation, Fidelis 

18          can more effectively focus its resources and 

19          efforts on addressing greater access to 

20          quality health care for all New Yorkers, 

21          addressing social determinants of health, 

22          such as housing, employment, nutrition, 

23          mental health and social support.  There has 

24          never been such an undertaking in New York 


 1          State.  There is no precedent.  The 

 2          foundation, though born of our faith's need 

 3          and obligation to provide charity, will help 

 4          all needy New Yorkers of every color and 

 5          every creed, consistent with our Catholic 

 6          values.  

 7                 The foundation will be the largest 

 8          foundation focused totally on New Yorkers and 

 9          will advance and accelerate Fidelis Care's 

10          founding mission to provide for the health 

11          and well being of underserved New Yorkers of 

12          every religion and walk of life.  The 

13          foundation will be meticulously managed and 

14          adhere to the strictest governance structure 

15          under the law as an effective and transparent 

16          philanthropic organization.

17                 The proceeds from the transaction will 

18          allow Fidelis to make up to $200 million in 

19          grants every year specifically to charitable 

20          programs serving the needs of vulnerable 

21          populations.  These funds will help ensure 

22          that New York's poor, disadvantaged, and 

23          infirm are getting the services, 

24          opportunities and support they need to live 


 1          healthy, dignified lives so that living the 

 2          dream becomes a reality for so many whose 

 3          days seem like nightmares.

 4                 CHAIRWOMAN YOUNG:  Your Excellency -- 

 5          Your Excellency, we do have your testimony.  

 6          If you could wrap it up and -- I know that 

 7          Catholic Charities --

 8                 BISHOP SCHARFENBERGER:  Yes.  The 

 9          point I would like to make is that this is a 

10          foundation that will exist in perpetuity, and 

11          that this is more than just addressing what 

12          is a temporary budgetary -- albeit 

13          important -- this is unprecedented.  This 

14          will give us an opportunity to reach many 

15          more people, building on the wonderful 

16          history of the foundation itself, of Fidelis 

17          Care, and will enable us to reach so many 

18          people who we already have relationships -- 

19          as you well know, between the state and many 

20          of our agencies, Catholic Charities in 

21          particular -- people who will come to us in 

22          order to receive the services that we're able 

23          to deliver.

24                 And of course, the other point -- and 


 1          I'd like to close -- in closing, I 

 2          respectfully request that we work together to 

 3          ensure that our foundation can begin to help 

 4          the poorest and neediest among us as.  Let us 

 5          make sure together that this unprecedented 

 6          opportunity is not wasted.

 7                 CHAIRWOMAN YOUNG:  Thank you.

 8                 BISHOP SCHARFENBERGER:  And I'd now 

 9          like to introduce Jenn Hyde, our executive 

10          director of Tri-County Services, an agency 

11          that coordinates an array of essential basic 

12          needs and youth services in Albany.

13                 CHAIRWOMAN YOUNG:  We do have your 

14          testimony, and if you could please summarize 

15          it, that would be helpful.

16                 MS. HYDE:  I will.  I'll be very 

17          brief.

18                 The Fidelis Foundation would provide 

19          the critical funding that we need to expand 

20          our services.  I think that we can all agree 

21          that the challenges in the community are very 

22          real.  We see folks every day who struggle 

23          with:  Where will my next meal come from?  

24          Should I pick up my medicine at the pharmacy 


 1          or should I pay my heating bill?  My children 

 2          need school clothes, they're growing so 

 3          quickly, how can I afford it?  

 4                 This funding and this support is 

 5          essential to meeting folks where they truly 

 6          are at.  We have a moral duty to make sure 

 7          that we're not leaving anyone behind.  

 8                 I appreciate your time in reading the 

 9          rest of my testimony.

10                 CHAIRWOMAN YOUNG:  Thank you very 

11          much.  Thank you.  

12                 Our next speaker is -- actually, we 

13          have two -- President and CEO Stephen Hanse, 

14          New York State Health Facilities Association, 

15          and executive director, Foundation for 

16          Quality Care, Nancy Leveille.  

17                 Welcome.  Again, if everyone could try 

18          to adhere to the five-minute rule, summarize 

19          your testimony, we do have it on file.

20                 MR. HANSE:  Absolutely.

21                 CHAIRWOMAN YOUNG:  Thank you.

22                 MR. HANSE:  Good evening.  And my 

23          testimony was prepared for "good afternoon."  

24                 My name is Stephen Hanse, and I have 


 1          the privilege of serving as president and CEO 

 2          of the New York State Health Facilities 

 3          Association and the New York State Center for 

 4          Assisted Living, a statewide association 

 5          whose members and 60,000 employees provide 

 6          essential long-term care services to over 

 7          50,000 elderly, frail, and physically 

 8          challenged men, women, and children and over 

 9          400 skilled nursing and assisted living 

10          facilities throughout the state.  

11                 Joining me today is Nancy Leveille.  

12          She serves as executive director for the 

13          Foundation of Quality Care, and she has over 

14          30 years' experience as a practicing 

15          clinician in both acute and long-term-care 

16          settings.  

17                 It has been said that to care for 

18          those who once cared for us is one of life's 

19          greatest honors.  And it is with this 

20          sentiment in mind that I would like to 

21          provide you first with a brief overview of 

22          the current constraints affecting New York's 

23          skilled nursing providers. 

24                 And while there are many proposals 


 1          affecting skilled nursing providers in the 

 2          proposed 2018-2019 Executive Budget which we 

 3          address in our submitted testimony, Nancy and 

 4          I will highlight briefly five specific issues 

 5          contained in the Executive Budget.

 6                 The constraints facing nursing homes 

 7          in New York are significant.  Over the past 

 8          11 years, funding cuts to New York State's 

 9          long-term-care providers have exceeded nearly 

10          $1.9 billion.  At $61 per patient per day, 

11          New York unfortunately leads the nation with 

12          the largest shortfall between the rate of 

13          Medicaid payment and actual cost in providing 

14          resident care in nursing homes.  

15                 Additionally, as was previously 

16          stated, it's been over 10 years since the 

17          state's skilled nursing providers have 

18          received a trend factor for inflation, and we 

19          continue to endure ever-growing operational 

20          expenses to meet the requirements of 

21          New York's expanded minimum wage, paid family 

22          leave, health insurance increases, and 

23          ever-rising food and utility costs -- costs 

24          which, unlike almost all other industries, 


 1          cannot be passed through to consumers.

 2                 Turning to the first issue we'd like 

 3          to discuss, NYSHFA supports the Executive 

 4          Budget proposal of the transition, for 

 5          nursing home residents, from managed 

 6          long-term-care enrollment to, after six 

 7          months of continuous nursing home care, 

 8          fee-for-service Medicaid.  This proposal 

 9          would be effective April 1st of 2018 and is 

10          anticipated to save the state $147 million in 

11          the 2018-2019 fiscal year and $245 million in 

12          the following fiscal year.  

13                 NYSHFA supports this proposal and 

14          further recommends the threshold period be 

15          moved from the proposed six-month period to a 

16          three-month period.  Moving to three months 

17          is in line with the 100-day federal Medicare 

18          nursing home stay requirements as well as 

19          nursing home patient-care plan assessment 

20          requirements, and will provide residents a 

21          more timely opportunity to return to the 

22          community.  

23                 Moreover, by moving to three months, 

24          the state will save additional monies, monies 


 1          which we respectfully request that the 

 2          Legislature utilize to offset the Executive's 

 3          arbitrary cuts to skilled nursing providers, 

 4          cuts in case mix, capital, and penalties 

 5          imposed upon the state's most struggling 

 6          providers.

 7                 MS. LEVEILLE:  We know that there's a 

 8          concern about residents needing managed-care 

 9          organizations to discharge them back to home, 

10          and they worry about their homes being 

11          displaced.  But those elders that come into 

12          the nursing home, at the 100-day mark they're 

13          still able to use their Medicare up to that 

14          point if they're eligible.  But these are the 

15          more complex residents that are elderly, have 

16          comorbidities, that we would continue to 

17          reassess and plan for either long-term care 

18          or to continue to plan for their discharge.  

19          We have intervals of six, nine, 12 months 

20          where we have successfully been able to 

21          discharge them back to home or back to less 

22          restrictive entities like assisted living or 

23          adult homes.

24                 So we know there is concern about 


 1          that, but this is something the nursing homes 

 2          continue to do in terms of discharge planning 

 3          for the elderly.  But they need more time.

 4                 MR. HANSE:  The second issue included 

 5          in the Executive Budget we would like to 

 6          highlight is an administrative proposal to 

 7          cut the case-mix payments to skilled nursing 

 8          provider Medicaid rates by $15 million 

 9          annually, for a $7.5 million state share.  

10                 By way of background, the case-mix 

11          index is a direct reflection of a resident's 

12          acuity in a nursing home.  New York State as 

13          well as 34 other states utilize the case-mix 

14          system for reimbursing care to providers.  

15          Nursing homes throughout New York are 

16          expanding their clinical skill set and caring 

17          for residents with more comorbidities and 

18          medical acuity than ever before.  As such, 

19          hospitals are able to discharge individuals 

20          in a more timely manner, knowing that skilled 

21          nursing providers can deliver advanced care 

22          to their patients.

23                 MS. LEVEILLE:  I'm going back to 2006 

24          to 2009.  Case-mix payments were frozen at 


 1          the state level as we changed from the old 

 2          PRI instrument to the newer minimum dataset.  

 3          At that time, because payment was frozen, the 

 4          nursing homes had to really kind of cut the 

 5          medically complex residents that they were 

 6          taking because of the dollars less -- you 

 7          know, the underpayment in Medicaid at that 

 8          time, even, to care for residents.  

 9                 With the change now to the minimum 

10          dataset and also the major shift to those 

11          med/surge residents coming into the nursing 

12          homes, we now have a much more accurate tool.  

13          And this is one of the reasons why there's 

14          been an increase in costs and reimbursement, 

15          because it's more accurately assessing the 

16          residents.  

17                 But in addition, the shift to the more 

18          medically complex is also the other reason 

19          why the costs have gone up in this area.  But 

20          it's really just reimbursing for the care 

21          that's been provided.  If this gets cut, if 

22          this arbitrary cut gets made, we may go back 

23          to that where the nursing homes are not going 

24          to be able to afford to take those 


 1          higher-level med-surge residents.  That can 

 2          cause a real shift in terms of backup to the 

 3          hospitals, increasing their length of stay in 

 4          the hospitals, and maybe never even moving, 

 5          which would cause a major logjam.

 6                 So the Executive's proposed cut 

 7          creates a disincentive to admit the neediest 

 8          and highest-cost-care residents as a 

 9          consequence of the state's insufficient 

10          reimbursement for the provision of care.  So 

11          recognizing that, in 2014 the Legislature 

12          rejected the Executive's Budget proposal just 

13          for that main fact.  

14                 So NYSHFA is respectfully requesting 

15          the Legislature to once again reject the 

16          Executive's efforts to cut patient care 

17          reimbursement.

18                 MR. HANSE:  All right.  To summarize 

19          our final issues, we oppose the capital cut.  

20          The Executive Budget proposal arbitrarily 

21          cuts nursing home capital rate reimbursement 

22          by 1 percent.  Our providers have made 

23          decisions based on previously approved 

24          determinations of the Department of Health.   


 1                 We let -- Nancy touched on this real 

 2          quick -- we would also -- the 1 percent 

 3          restoration, if you recall the 2014-2015 

 4          enacted budget, the Legislature approved the 

 5          restoration of the 2 percent across-the-board 

 6          cut.  As was mentioned earlier by the 

 7          Medicaid director -- actually, this was not 

 8          mentioned -- 1 percent of that 2 percent was 

 9          used for a one-time settlement with nursing 

10          homes.  It was not included in the rates, it 

11          did not go to nursing home rates.  The state 

12          has yet to return these funds to nursing 

13          homes.  We respectfully request that the 

14          state share of these funds be paid.  

15                 And lastly, the 2 percent -- 

16                 CHAIRWOMAN YOUNG:  Okay, if you could 

17          please wrap it up, because we have a lot of 

18          people to testify.

19                 MR. HANSE:  Sure.  Nancy just will 

20          touch on the 2 percent cut that is --

21                 MS. LEVEILLE:  The 2 percent quality 

22          cut, in addition to the Nursing Home Quality 

23          Initiative, which already takes $60 million 

24          out of the Medicaid fund -- so the 


 1          $60 million is a cost-neutral Nursing Home 

 2          Quality Initiative already.  It's set up in 

 3          five quintiles.  So Quintiles 4 and 5 pay 

 4          that $60 million to Quintiles 1 and 2 

 5          already.  That's the basic plan.  

 6                 This additional 2 percent cut will add 

 7          another $20 million to those Quintiles 4 and 

 8          5 to pay out.  So it can be $80 million to 

 9          about 100 nursing homes across the state.  

10                 These nursing homes -- the other part 

11          of this is in the Nursing Home Quality 

12          Program, there's always going to be five 

13          quintiles.  In 2017, the department just sent 

14          out a report that showed the improvement the 

15          pools had by moving up in their quality 

16          measures.  We have to reset targets because 

17          they're improving.  So it doesn't mean those 

18          in 4 and 5 are always the poorest performers, 

19          it's just that you've got to have five 

20          quintiles to make it work.  So that 

21          additional $20 million could be financially 

22          disastrous to some of these nursing homes.

23                 MR. HANSE:  Again, I'd just like to 

24          leave you on the fee-for-service proposal.  


 1          Again, we strongly support moving from six 

 2          months to three months.  That would ensure 

 3          folks would be able to move to the community 

 4          at a faster rate, it's in line with the 

 5          federal Medicare 100-day requirements.

 6                 And thank you very much for your time.

 7                 CHAIRWOMAN YOUNG:  Thank you.

 8                 MS. LEVEILLE:  Thank you.

 9                 SENATOR KRUEGER:  Thank you.

10                 CHAIRWOMAN YOUNG:  Our next speaker is 

11          Ami Schnauber, vice president of -- 

12                 ASSEMBLYMAN RAIA:  I have a question 

13          for them.

14                 CHAIRWOMAN YOUNG:  Oh, I'm sorry.

15                 ASSEMBLYMAN RAIA:  Thank you.  

16                 Very quickly, I heard "trend factor" 

17          mentioned a whole lot here today, but when I 

18          quizzed Mr. Helgerson on it, he told me they 

19          don't use trend factors any more.  Do you 

20          know what he was talking about?

21                 MR. HANSE:  No, you're correct.  As 

22          Helen Schaub mentioned, as Ken Raske 

23          mentioned prior, it's been over 10 years 

24          since Medicaid providers have been allocated 


 1          a trend factor for inflation in New York 

 2          State.  

 3                 We have not received that, all the 

 4          while facing increasing costs for care of 

 5          patients and all the ancillary issues that we 

 6          deal with -- utilities, everything goes up.  

 7          And again, as I mentioned, unlike almost all 

 8          other industries, we are unable to pass that 

 9          cost through to our residents as Medicaid 

10          providers.

11                 ASSEMBLYMAN RAIA:  Thank you.

12                 MR. HANSE:  Thank you.  

13                 Any other questions?  Thank you.

14                 CHAIRWOMAN YOUNG:  Thank you.

15                 Our next speaker is Ami Schnauber, 

16          vice president of advocacy and public policy 

17          for LeadingAge New York.  

18                 I'd like to remind the speakers, we've 

19          gotten your testimony in advance.  Speakers 

20          are supposed to adhere to a five-minute 

21          limit.  So if you could please summarize, 

22          that would be really helpful, because we have 

23          many, many, many other people waiting to 

24          speak.


 1                 Hi, Ami.

 2                 MS. SCHNAUBER:  Hi.  Thank you so 

 3          much.  

 4                 My name is Ami Schnauber.  I'm with 

 5          LeadingAge New York.  We represent over 400 

 6          not-for-profit aging services providers 

 7          across the state, from independent senior 

 8          housing, assisted living, managed long-term 

 9          care, and nursing homes.

10                 I'm going to just focus on a few 

11          things that others have not.  I think Jason 

12          Helgerson mentioned the quandary we're in, 

13          which is that we have an aging population.  

14          In the next 10 years, 20 percent of 

15          New York's population is going to be over age 

16          65.  At the same time, we have a diminishing 

17          workforce who's going to be able to take care 

18          of them, and New York ranks above the 

19          national average for diabetes.  We have sort 

20          of a perfect storm coming -- and 

21          unfortunately, once again, we have a state 

22          budget that cuts and disinvests in long-term 

23          care instead of putting money in.  

24                 If you look at page 1, you'll see that 


 1          $407 million are being taken out of managed 

 2          long-term care and nursing homes and other 

 3          aging-services providers at a time that we 

 4          really need to be investing.

 5                 On page 2, you can see that of the 

 6          transformation grants that were provided last 

 7          year, less than 5 percent went to 

 8          long-term-care providers.  And on page 3, the 

 9          pie chart will tell you that while there -- 

10          we were pleased to see the Governor dedicate 

11          funding to the Assisted Living Program in 

12          nursing homes, we would suggest that it needs 

13          to be far greater than that.  Long-term care 

14          makes up 30 percent of the Medicaid spend, 

15          and we would suggest that the capital should 

16          be at that amount as well.  So we're asking 

17          for $150 million.

18                 The other thing we're gravely 

19          concerned about is the $325 million that is 

20          being cut from the managed long-term-care 

21          providers.  Many people mentioned the LHCSA 

22          contract limit -- we're really concerned 

23          about that.  We think, instead, the PHHPC 

24          should stop approving additional LHCSAs and 


 1          perhaps the state should look at uniform cost 

 2          reports to get a real sense of what LHCSAs 

 3          are out there and what their costs look like.

 4                 We're also very concerned about the 

 5          marketing and referral ban.  Unfortunately, a 

 6          number of these $325 million cuts in managed 

 7          long-term care are administrative, and there 

 8          don't seem to be real program changes, and it 

 9          really is just pushing down the rate for 

10          managed long-term-care plans, and we really 

11          encourage you to reverse some of those cuts.

12                 As NYSHFA said before, we're concerned 

13          about the $42.6 million that's being cut from 

14          nursing homes.  Chief among them are the cap 

15          on case-mix rate increases and reducing 

16          capital rates.  

17                 We are also very concerned about the 

18          opioid surcharge, particularly as it relates 

19          to hospice.  Our hospice -- 2 cents per 

20          milligram is going to have a really big 

21          impact on hospice, and they suggest that 

22          anywhere from 25 to 45 percent of their drug 

23          costs are going to increase.  And it's just 

24          simply unsustainable.  


 1                 We are not doing a good job in hospice 

 2          in this state.  We need to do better.  We 

 3          have a recommendation where we would like you 

 4          to help us get people who live in the ALP 

 5          access to hospice.  Right now they cannot 

 6          access hospice, and we think that's wrong.  

 7          We think that we need to make sure that if 

 8          we're doing an ALP expansion, which we 

 9          support, there ought to be a need methodology 

10          that has it reasonably placed throughout the 

11          state, and we would like to provide you with 

12          some language on that.

13                 And then we've been looking for -- we 

14          got some historic funding in last year's 

15          budget, $125 million for independent senior 

16          housing.  We know that housing is a social 

17          determinant of health for seniors.  It often 

18          allows people to return to the community when 

19          they couldn't have returned to their own 

20          home.  We really need a service advisor 

21          program that would accompany that, would 

22          provide for some wellness programs, much like 

23          the HUD offers through their service 

24          coordinator.  We would like to see that in 


 1          independent senior housing where they do some 

 2          wellness, make sure that they have access to 

 3          food, affordable housing, and we're asking 

 4          for $10 million over the next five years to 

 5          help facilitate that.

 6                 And workforce investment.  We already 

 7          have service gaps in this state, and if we 

 8          don't start doing something about workforce, 

 9          we're going to be in a real difficult spot 

10          with our seniors.  We're a little 

11          disconcerted that the MLTC workforce money, 

12          which was $250 million last year, is suddenly 

13          $150 million.  We don't know where the 100 

14          went, and we're concerned that that money is 

15          only going to go to home care providers when 

16          that was never the intent.

17                 So we think that we have to take a 

18          systemic approach to long-term care to start 

19          meeting this growing demand.

20                 Thank you.

21                 CHAIRWOMAN YOUNG:  Any questions?

22                 Thank you.

23                 MS. SCHNAUBER:  I did that in less 

24          than five minutes.


 1                 CHAIRWOMAN YOUNG:  Yes, you did.  Very 

 2          good.

 3                 Our next speaker is President and CEO 

 4          Eric Linzer, from the New York Health Plan 

 5          Association.

 6                 Welcome.

 7                 MR. LINZER:  Hello.  Thank you for the 

 8          opportunity to testify today.  With me today 

 9          is Kathy Preston, HPA's vice president of 

10          government affairs.  And in the interests of 

11          time, I'm going to try and be as brief as 

12          possible.

13                 We're obviously concerned about a 

14          number of provisions in the proposed 

15          Executive Budget.  First among them is the 

16          proposed 14 percent tax on for-profit health 

17          plans.  You know, our main concerns on this 

18          is that, first, it unfairly affects one 

19          specific industry when the changes in 

20          corporate tax reductions affect many, many 

21          more companies than just health plans.  

22                 Second, taxes on health insurance are 

23          already too high in New York.  We collect 

24          nearly $5 billion in taxes, fees, and 


 1          assessments, making health insurance taxes 

 2          the third-largest revenue generator behind 

 3          sales and income taxes.  If we're going to be 

 4          looking at additional fees and costs, we 

 5          ought actually to be thinking about how to 

 6          better utilize that $5 billion in taxes.

 7                 Third, this tax is unnecessary because 

 8          the federal cuts that are expected to be used 

 9          to fund this aren't materializing.  You heard 

10          DOH say earlier today that there is the 

11          potential that this money could get 

12          reallocated and reappropriated.  That's not a 

13          good thing for employers and consumers.  

14                 And at the end of the day, if we're 

15          going to create a piggybank to fund against 

16          potential costs in the future, then we really 

17          need to be thinking about shared 

18          responsibility.  And as you heard some of the 

19          hospitals talk earlier about this need for 

20          additional funding, then there should be an 

21          element of sharing in that responsibility, 

22          and we may want to look at certain things 

23          such as the indigent care formula and perhaps 

24          asking hospitals to provide greater 


 1          transparency around their margins.

 2                 Second, we're also opposed to the 

 3          proposal that would reduce Medicaid rates for 

 4          nonprofit health plans if their reserve 

 5          levels are above the statutory minimum.  As 

 6          you heard earlier today, there is concern 

 7          with this proposal, as the bare-bones minimum 

 8          represents exactly the amount needed in order 

 9          to maintain stability in the marketplace and 

10          avoid panic.  

11                 Going below that threshold by pushing 

12          down on Medicaid rates, we think, has the 

13          potential to have a very destabilizing impact 

14          on the marketplace, and you need look no 

15          further than the recent example of Health 

16          Republic and the liquidation that came about 

17          from that.  It created a great deal of 

18          confusion for consumers and their 

19          providers who, to this day, still haven't 

20          been paid.  

21                 You know, reserves are there for a 

22          reason, to protect against the unanticipated 

23          cost, whether it's a bad flu season like the 

24          one we're having this year or it's the cost 


 1          of new drugs to marketplace like Sovaldi.  

 2          Reducing reserves as a way to place a sort 

 3          of -- balance the budget or fill in the gaps 

 4          in the budget is destabilizing, and it 

 5          doesn't understand the reason why reserves 

 6          are there.

 7                 And then finally, we're opposed to the 

 8          creation of the Healthcare Shortfall Fund 

 9          from the proceeds of nonprofit health plans 

10          to convert into for-profits, and we think 

11          this creates a very bad precedent for the 

12          marketplace and essentially allows the states 

13          to seize the proceeds from a private 

14          transaction, which would make New York a less 

15          attractive place to do business and, more 

16          importantly, does nothing to address 

17          underlying healthcare costs.

18                 And with that, I'll turn it over to 

19          Kathy to talk a little bit about some of the 

20          other provisions in the Governor's budget 

21          that we have concerns about.

22                 MS. PRESTON:  Good evening.  We've 

23          talked a lot today about MLTCs, so I'm going 

24          to throw in one more that we haven't talked 


 1          about today.  We support the state's efforts 

 2          to get control over the growth of the MLTC 

 3          program.  We think there's probably a lot of 

 4          better ways to do that.  What we don't 

 5          support are proposals that are just cuts 

 6          masquerading as reforms.  That would include 

 7          reducing the MLTC administrative 

 8          reimbursement by $40 million, with the vague 

 9          promise of future regulatory relief.  We're 

10          pretty sure the cut's going to come, but the 

11          regulatory relief won't.

12                 We do support the ban on marketing for 

13          certain long-term-care providers; we think it 

14          should be implemented immediately instead of 

15          waiting until October.  

16                 And we also agree that it is critical 

17          to the Health Department to begin collecting 

18          detailed cost reports from the licensed home 

19          care agencies and the fiscal intermediaries 

20          in the consumer-directed program.  We don't 

21          get them, and now there's $700 million in 

22          minimum wage and other wage-related funding 

23          going out the door this year, and it's time 

24          to start understanding more clearly where all 


 1          of that money is going.

 2                 Health Homes, nobody's mentioned 

 3          Health Homes today.  There's a two-year All 

 4          Funds appropriation in the Health Department 

 5          budget of $170 million.  The actual current 

 6          year spending is anticipated to be 

 7          $512 million.  What little performance data 

 8          is available has been questionable at best.  

 9          And it was an interesting experiment when the 

10          federal government was paying 90 percent of 

11          the reimbursement, but it has failed to prove 

12          its value now that the state is footing 

13          50 percent of the bill.  So we urge the 

14          Legislature to reject the planned specific 

15          Health Home enrollment targets and penalties 

16          on plans.

17                 And then finally, on program 

18          integrity, we think that the OMIG provisions 

19          in this budget proposal are a little too 

20          onerous, and we would urge you to oppose the 

21          fines and clarify the referral requirement.  

22          We are more than happy to work with the OMIG, 

23          but they were created when the Medicaid 

24          program was largely fee-for-service.  And a 


 1          lot of their work is now duplicative to what 

 2          the SIUs within the plans are doing, and we 

 3          think there's a better way to do it.

 4                 Thank you.

 5                 CHAIRWOMAN YOUNG:  Thank you.

 6                 The next speaker is President and CEO 

 7          Rose Duhan, Community Health Care Association 

 8          of New York State.

 9                 Welcome.

10                 MS. DUHAN:  Good afternoon -- no, good 

11          evening, Chairperson Weinstein, Chairperson 

12          Young, Chairperson Hannon.  Thank you for the 

13          opportunity to comment.

14                 I'm Rose Duhan, I'm the CEO of the 

15          Community Health Care Association of New York 

16          State.  We represent federally qualified 

17          health centers, 68 FQHCs in New York State.  

18          We have over 750 sites where we deliver care.  

19          FQHCs provide primary care, the day-to-day 

20          healthcare that we all need, with a focus on 

21          patient education, prevention, and treatment 

22          of chronic conditions.  And as we know, 

23          primary care is fundamental to the state's 

24          transformation of the healthcare system and 


 1          the reduction of overutilization of 

 2          hospitals.

 3                 There's four points in the budget that 

 4          I want to touch on.  Before I do, I will 

 5          refer to the facts about FQHCs that are in 

 6          the written testimony.  We serve over 

 7          2.2 million New Yorkers -- that's one out of 

 8          every nine New Yorkers get healthcare at an 

 9          FQHC.  Over 50 percent of our population is 

10          on Medicaid, and the rate of uninsured that 

11          we see is three times the state average.  So 

12          even though there has been a tremendous 

13          increase in insurance coverage throughout 

14          New York State, we are still seeing a larger 

15          proportion of uninsured patients at community 

16          health centers.

17                 The first item that I want to comment 

18          on in the budget is the Safety Net Pool.  We 

19          were very pleased to see that the Governor 

20          has continued the $54.4 million of funding 

21          for the Safety Net Pool that was authorized 

22          last year by the Governor and the 

23          Legislature.  That funding is critical to 

24          serving the uninsured, which I just referred 


 1          to; as I mentioned, it's much higher at 

 2          FQHCs.  At some of our health centers, as 

 3          much as 50 percent of the population is 

 4          uninsured, especially at health centers that 

 5          serve specifically the homeless population.  

 6          So that Safety Net Pool is really critical to 

 7          making sure that everybody has access to 

 8          care.

 9                 Federally qualified health centers are 

10          required to see everybody who comes through 

11          their door, regardless of their insurance 

12          status or their ability to pay, and we are 

13          proud to do so.  And that funding, the 

14          safety-net funding, allows us to do so.

15                 The second item I would like to 

16          highlight, as Senator Krueger mentioned, is 

17          the reduction to the patient-centered medical 

18          home.  We're very concerned about that.  As 

19          Senator Krueger said, we're somewhat the 

20          victims of our own success.  Over 90 percent 

21          of FQHCs have achieved PCMH certification -- 

22          we're very proud to do so, that was one of 

23          the goals of the DSRIP program, and we have 

24          accomplished that.  Those incentive patients, 


 1          those incentive payments are really crucial 

 2          to allowing the health centers to achieve 

 3          those high-quality levels and to sustain the 

 4          quality of that program and provide a lot of 

 5          the care management and wraparound services 

 6          that help enhance the primary care.  

 7                 So we are very concerned about that 

 8          cut and urge the Legislature to reject that 

 9          cut.

10                 The third item I will mention is the 

11          capital funding that is in the budget.  We 

12          are very pleased to see that there's 

13          $60 million set aside for community-based 

14          providers.  However, we would urge that the 

15          proportion of funding for community-based 

16          providers remains proportional, continues at 

17          the same proportion of the investment that 

18          was made last year, which was 15 percent of 

19          the total funding was available for 

20          community-based providers.  

21                 So notwithstanding the $20 million 

22          that's set aside for ALP, we would like to 

23          see the same level investment, $60 million, 

24          preserved for community-based providers, 


 1          which includes community health centers, 

 2          behavioral health providers, home care, and 

 3          substance abuse disorder services.

 4                 We were also pleased to see that the 

 5          capital funding included authorization for 

 6          utilization of capital to fund telehealth.  

 7          As was mentioned earlier, telehealth is 

 8          really critical to insuring access, 

 9          especially in rural areas.  And really a lot 

10          of health centers have been on the forefront 

11          of using telehealth to -- especially in terms 

12          of ensuring access to speciality providers 

13          and behavioral healthcare providers.  

14                 We are a little bit concerned that the 

15          language that is in the budget specifically 

16          mentions acute care, post-acute care, and 

17          long-term care.  We understand that it is not 

18          the Executive's intention to exclude primary 

19          care.  We think there should be a language 

20          clarification to make that clear so that 

21          primary care can access the capital funding 

22          for telehealth purposes.

23                 The final item I will mention, I know 

24          Senator Hannon is very fond of the RMI, and 


 1          we are pleased to see that recommendations 

 2          from the RMI were included in the budget.  

 3          Two of the recommendations that came out of 

 4          the workgroups that we're especially 

 5          supportive of are expanding the definition of 

 6          originating site for telehealth and the 

 7          lifting of caps on the limits of behavioral 

 8          health services that can be provided in the 

 9          primary care setting.  We think that being 

10          able to expand those services will greatly 

11          facilitate the integration of primary care 

12          and behavioral health.

13                 Thank you.

14                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

15          Cahill.

16                 ASSEMBLYMAN CAHILL:  Thank you.  I'll 

17          be very brief.

18                 I don't know if you were here earlier 

19          when Dr. Zucker was testifying that the 

20          legalization of corporate, shareholder-owned 

21          Minute Clinics would help primary care 

22          doctors do their job better.  How do you 

23          think that would help you help your primary 

24          care facilities do their job better?


 1                 MS. DUHAN:  I think Minute Clinics are 

 2          really a convenience for consumers, and I 

 3          think that the health care system really has 

 4          to adapt for what consumers need and want.  

 5                 We think that a lot of the language 

 6          that's in the budget that ensures that there 

 7          is connection to primary care, to more robust 

 8          primary care, is really important so that 

 9          when people are going to Minute Clinics they 

10          can make sure that there is -- that they do 

11          have a regular source of primary care so that 

12          there's those connections.  Those pieces are 

13          really important to make sure that people can 

14          have -- especially individuals with chronic 

15          conditions, and who need ongoing treatment, 

16          that those treatments -- that that treatment 

17          is provided in the appropriate setting.

18                 ASSEMBLYMAN CAHILL:  Well, will it let 

19          your doctors see patients longer?

20                 MS. DUHAN:  Will it make our -- let 

21          our patients --

22                 ASSEMBLYMAN CAHILL:  -- doctors see 

23          their patients longer?

24                 MS. DUHAN:  I can't speak to 


 1          Dr. Zucker's comments.  I mean, I think there 

 2          are some things that can be treated quickly 

 3          at the clinics, at the retail clinics.  And 

 4          that that's something, as I said, that's 

 5          happening now.  So I think it's a matter of 

 6          how do we make sure that there's a robust 

 7          connection with the primary care.

 8                 ASSEMBLYMAN CAHILL:  Okay.  Thank you.

 9                 CHAIRWOMAN YOUNG:  Thank you.

10                 Our next speaker is Morris Auster, 

11          senior vice president and chief legislative 

12          counsel for the Medical Society of the State 

13          of New York.  

14                 Great to see you.

15                 MR. AUSTER:  Good evening.  Thank you 

16          very much.  I will also try to be brief.  I 

17          actually have a 12-year-old who is home sick 

18          with the flu who has been texting me, when 

19          can I bring her home a milkshake.

20                 (Laughter.)

21                 MR. AUSTER:  So I also want to go.

22                 (Discussion off the record.)

23                 MR. AUSTER:  So good evening.  My name 

24          is Moe Auster.  I'm speaking on behalf of the 


 1          over 20,000 physicians, residents and medical 

 2          students and members of the Medical Society.  

 3          We represent physicians across the primary 

 4          care and specialty care spectrum representing 

 5          solo, small group, large group, and health 

 6          system employees.

 7                 To begin with, I have to mention that 

 8          more and more physicians are facing enormous 

 9          challenges in remaining in practice to 

10          deliver patient care due to the untenable 

11          squeeze between rapidly rising practice costs 

12          and stagnant insurance payments.  As a 

13          result, many physicians have basically felt 

14          they've had no choice but to become employed 

15          in various hospital systems.  While that can 

16          actually help to reduce in some cases 

17          administrative burdens, it can also result in 

18          the elimination of jobs in some cases, as 

19          well as the disruption of some long-standing 

20          patient relationships.  In fact, the number 

21          of employed physicians has actually doubled 

22          between 2012 and 2015.  

23                 While New York State has always been 

24          known to be a difficult place to be a doctor, 


 1          actually last year it was designated as being 

 2          the absolute worst in the country, according 

 3          to the website Wallet Hub, in large part due 

 4          to our enormous medical liability premiums 

 5          and relatively low reimbursements compared to 

 6          other states in the country.

 7                 And these costs are going to go up, 

 8          potentially significantly, as a result of the 

 9          malpractice bill that was just signed into 

10          law.  In fact, New York has by far and away 

11          the highest medical liability costs in the 

12          country, nearly three times as California.  

13          Why?  Because in those states they've enacted 

14          reforms to help bring those down, while 

15          New York has not.

16                 Given these dynamics, there certainly 

17          is a level of frustration among physicians 

18          that more is not being done to address 

19          various physician shortages across the state, 

20          and with the only solutions being offered -- 

21          what seems like I've heard multiple times 

22          today is to expand the use of non-physicians.  

23          Certainly there are other ways which we 

24          believe you can look at to address the 


 1          physician shortage, such as improving the 

 2          practice climate in New York State.  

 3                 Now, we will note that there are some 

 4          positive initiatives in the budget.  We are 

 5          pleased that the Governor has funded the 

 6          excess medical malpractice insurance program 

 7          at a historical level without additional 

 8          preconditions.  We also appreciate that the 

 9          Governor has -- is trying to initiate a 

10          conversation on some needed liability reforms 

11          by reducing the interest rate, by proposing 

12          to reduce the interest rate on judgments.  

13          And we support the proposal to disincentivize 

14          the use of use of e-cigarettes by taxing them 

15          similar to traditional cigarettes.

16                 We all know, however, that there are 

17          many items in the budget with which we have 

18          concerns.  It has been talked about before, 

19          the cuts to the Patient-Centered Medical Home 

20          project -- which has certainly helped a lot 

21          of physicians who historically have not been 

22          paid very well within Medicaid.  It's 

23          actually helped to compensate them for a lot 

24          of the care management that they were already 


 1          doing.  

 2                 They will face a significant cut on 

 3          May 1st, according to the proposal, and will 

 4          potentially be in a position to have to 

 5          really ramp up very quickly into value-based 

 6          payments, which they may not be ready to do.  

 7          This may cause some folks to actually drop 

 8          out of the program.

 9                 I thank you, Assemblyman Cahill, for 

10          also recognizing the -- commenting on the 

11          concerns with Minute Clinics that could 

12          potentially go into big box stores and 

13          drugstores.  While MSSNY has had concerns 

14          about these proposals in past years, these 

15          concerns are magnified even more this year 

16          because it's occurring concurrently with the 

17          proposed acquisition of health insurance 

18          giant Aetna by drugstore giant CVS, which 

19          also happens to own a PBM, giant Caremark.  

20                 It's an enormous amount of 

21          concentration in the healthcare sector, which 

22          we're very concerned that they will take 

23          advantage of that power, in which it could be 

24          used to steer patients away from community 


 1          primary care practices and towards these 

 2          retail clinics.  At the very least, we should 

 3          at least wait to see what happens with the 

 4          federal government before this provision -- 

 5          before we allow this measure to go forward.

 6                 Like the anesthesiologists, which 

 7          you'll hear later on, we share their strong 

 8          concerns with the proposal that would grant 

 9          increased independence for nurse anesthetists 

10          in anesthesia delivery.  We believe that the 

11          current system that's been in place for 

12          30 years has served patients well and should 

13          not be changed.  

14                 And finally, we also note our concerns 

15          with the proposal to expand the existing 

16          collaborative drug therapy program that 

17          exists on a demonstration basis.  We 

18          certainly would be okay with extending that 

19          program, but we do have concerns with 

20          potentially expanding it outside of the 

21          hospital, where a pharmacist may not have a 

22          common EMR.  But we're willing to continue to 

23          talk about that.  

24                 We are also very concerned about 


 1          expanding it to include nurse practitioners.  

 2          While many states across the country have 

 3          established these collaborative drug therapy 

 4          programs, it's our understanding that very 

 5          few have actually extended it to nurse 

 6          practitioners and pharmacists.  And even 

 7          those that have done it, in those states they 

 8          still require a collaborative agreement 

 9          between the nurse practitioner and the 

10          physician.

11                 And finally, the last thing we note is 

12          our opposition to the proposed consolidation 

13          of the 30 important public health programs 

14          into the four pools, and urge that those -- 

15          that funding be restored.

16                 And with that, there's a lot of things 

17          we had in the budget, I know I tried to do 

18          the elevator talk on each one, but I'll be 

19          happy to answer any questions you may have.

20                 CHAIRWOMAN YOUNG:  Any questions?

21                 Well, you know how to track us down.  

22          So thank you very much.

23                 CHAIRWOMAN WEINSTEIN:  Thank you.  

24                 CHAIRWOMAN YOUNG:  Our next speaker is 


 1          Jill Furillo, registered nurse, executive 

 2          director of the New York State Nurses 

 3          Association.

 4                 Welcome.

 5                 MS. FURILLO:  Good evening.  I 

 6          represent the New York State Nurses 

 7          Association, the largest organization of 

 8          registered nurses in New York State, 

 9          representing thousands of nurses in every 

10          healthcare setting.  Whether it's in suburban 

11          areas, urban areas, rural areas, you name it, 

12          that's where we are, on the front lines of 

13          healthcare delivery.  

14                 We want to thank everyone for last 

15          year passing the enhanced safety net bill.  

16          It's very much appreciated.  I do believe 

17          that when we passed it the year before, we 

18          were able to get some additional money into 

19          the enhanced safety net system or the 

20          hospitals that were identified such as the 

21          rural hospitals, the rural safety net, and 

22          the urban safety net.

23                 So we are urging, again, that to be 

24          addressed in this Executive Budget.  We stood 


 1          shoulder to shoulder with other people this 

 2          whole last year in protecting, trying to 

 3          protect our healthcare here in New York 

 4          State, which we believe was under attack.  We 

 5          stood with the hospitals, we stood with the 

 6          doctors, we stood with all of the other 

 7          healthcare givers and with many of the 

 8          elected officials.  And we believe that we 

 9          had some success in trying to stop the 

10          dismantling of the ACA, but of course as we 

11          all know, it's under attack now with the 

12          attacks through the canceled cost-sharing 

13          reduction payments, which is really going to 

14          significantly undermine the ACA.  

15                 We do support, in the contingency 

16          measures in the state Executive Budget, the 

17          authorized process for the Governor to make 

18          midyear budget adjustments in the event of  

19          catastrophic events from Washington that 

20          exceed $850 million.  

21                 We support the proposal to fund the 

22          contingency fund with a surcharge on any 

23          conversion of a not-for-profit insurer to 

24          for-profit status.  We believe that the 


 1          $750 million per year that's generated should 

 2          be targeted to support enhanced safety net 

 3          hospitals to the tune of $500 million, and 

 4          the remainder, $250 million, into the 

 5          healthcare contingency fund.

 6                 Increase the health insurance windfall 

 7          profit fee and support safety net hospitals.  

 8          We support efforts to tax insurers' profits 

 9          but propose an increase in the surcharge to 

10          28 percent, with the $280 million that would 

11          be generated to be targeted to support 

12          enhanced safety net hospitals, using the 

13          definition in the 2017 vetoed legislation.

14                 On the Vital Access Provider Assurance 

15          Program and the Value Based Payment Quality 

16          Incentive Program, we support the proposed 

17          increase of $68.6 million, and we believe 

18          that public hospitals that are currently 

19          excluded from this program -- we support 

20          making public safety net hospitals eligible.

21                 In capital financing for essential 

22          healthcare providers, we support this ongoing 

23          program but believe that funding should be 

24          increased and clearly targeted to support 


 1          urban and rural hospitals that meet the 

 2          definition of enhanced safety net hospitals.

 3                 We this year oppose the inclusion of 

 4          budget legislation that threatens the nursing 

 5          scope of practice.  We believe that any 

 6          legislation that affects nursing scope of 

 7          practice should be hashed out in standalone 

 8          legislation that is fully debated and is part 

 9          of the regular legislative process, not in 

10          the budget.  

11                 And I just want to point out a couple 

12          of those.  There is the authorization of 

13          community paramedic collaboratives, which we 

14          would like to have more conversation in 

15          trying to work that out in a way that would 

16          not affect patients in any negative way.  As 

17          currently proposed, there's a lot missing, 

18          and we believe that patients would be at risk 

19          and that frankly it wouldn't achieve any cost 

20          savings.  If you look at the studies, we know 

21          that registered nurses and licensed nurses 

22          are the ones that actually bring cost savings 

23          to the system through their care.  

24                 On the CRNA scope of practice and 


 1          licensing issue, we also believe that should 

 2          not be addressed in the budget, that should 

 3          be a standalone bill as well.  

 4                 There's a lot of issues that need to 

 5          be worked out.  We believe that in the past, 

 6          when we've done this kind of bill, some folks 

 7          have fallen through the cracks -- and 

 8          grandfathering, et cetera -- and we need to 

 9          address that.

10                 We stand with MSSNY on the opposition 

11          to corporate for-profit ownership and 

12          operation of the retail health clinics as 

13          proposed.  

14                 I'd like to spend just a second on the 

15          state reductions of psychiatric and mental 

16          health hospital capacity.  You can read that 

17          in our written testimony.  It's really a very 

18          serious situation throughout the state.  It's 

19          becoming untenable, and I believe we're in a 

20          crisis situation when it comes to mental 

21          health.

22                 And all the other issues you see in 

23          our written testimony.  So thank you very 

24          much for allowing me to testify.


 1                 SENATOR KRUEGER:  Thank you.

 2                 CHAIRWOMAN YOUNG:  Thank you.

 3                 Senator Hannon.

 4                 SENATOR HANNON:  Thanks for being 

 5          quick.

 6                 MS. FURILLO:  That's okay.

 7                 SENATOR HANNON:  But I just am 

 8          curious.  Has anybody engaged you as an 

 9          organization about this whole thing about the 

10          community paramedics proposal?  

11                 MS. FURILLO:  There's been some 

12          conversations, but not really where we need 

13          it to happen.  I think this proposal came out 

14          of one of the DSRIPs, and it was -- has not 

15          been fully vetted.  We have concerns about 

16          it, but we also believe that we should be 

17          working on this as a standalone piece of 

18          legislation so that we can work through a lot 

19          of these scope issues, and that's our 

20          position on it.

21                 SENATOR HANNON:  Thank you.  

22          Appreciate it.

23                 CHAIRWOMAN YOUNG:  Anyone else?

24                 Thank you so much for being here.


 1                 MS. FURILLO:  Thank you.

 2                 CHAIRWOMAN YOUNG:  Our next speaker is 

 3          Dr. Carol Smith, president of the New York 

 4          State Association of County Health Officials.  

 5                 Welcome.  Thank you for being here.

 6                 DR. SMITH:  Good evening, Senators and 

 7          members of the Assembly.  Thank you so much 

 8          for giving us the opportunity to speak to you 

 9          tonight.  You do have our written testimony, 

10          so I promise you I will be brief.  

11                 I am Dr. Carol Smith.  I serve as the 

12          commissioner of health and mental health for 

13          Ulster County, and I'm also the president of 

14          the New York State Association of County 

15          Health Officials, NYSACHO.  

16                 NYSACHO represents all 58 local health 

17          departments across the State of New York and 

18          the City of New York.  As local health 

19          leaders, it is our job to protect the health 

20          of the hundreds of communities and the 

21          millions of citizens that we and you serve.

22                 As we all know, on the federal level 

23          in the past year there's been a serious 

24          challenge to public health.  The CDC's 


 1          funding has been cut -- $1.35 billion will be 

 2          removed from the CDC's public health and 

 3          prevention fund over the next 10 years, and 

 4          the CDC is now being pulled out of 39 of the 

 5          49 countries that it had previously served 

 6          in.  As we know, the work of the CDC has been 

 7          on the front lines and is keeping our shores 

 8          safe from the Ebola scourge that just broke 

 9          out within the last couple of years.  

10                 Also, we believe we serve as the 

11          infrastructure for public health in New York 

12          State.  We are in effect the first responders 

13          to public health disease outbreaks.  We are 

14          also the standard barriers for prevention and 

15          for any programs in our community that help 

16          to prevent chronic diseases.  

17                 So we stand tonight, and I'll be 

18          brief, but we are asking you to oppose the 

19          20 percent cut to the public health funds 

20          that is in the current 2019 budget.  It 

21          affects over 30 programs that are sponsored 

22          by our community partners to help prevent 

23          chronic diseases such as heart disease, 

24          childhood asthma, and the scourge of nicotine 


 1          addiction, obesity among our adults and our 

 2          children, and multiple programs.

 3                 We also ask you for some direct takes 

 4          on the -- in the current budget -- we've 

 5          asked for this in the past, we were asking 

 6          for an increase in the Article VI-based grant 

 7          from 650,000 to 750,000 for our full-service 

 8          local health departments and an increase from 

 9          500,000 to 550 for partial service, an 

10          increase from 36 percent to 38 percent in the 

11          Article VI percent reimbursement above the 

12          base grant and an increase in the per capita 

13          reimbursement amount from 65 cents to $1.53.

14                 The sad reality is that even in a 

15          tough budget year -- we acknowledge things 

16          are difficult, but New York's support for 

17          public health programs comprise just 

18          1 percent of the Department of Health's Aid 

19          to Localities budget.  Year after year, when 

20          fiscal times are tough, the first things that 

21          seem to be cut are programs in public health.  

22          This is undermining our ability to work 

23          within the counties that we serve to protect 

24          the food quality, to protect the water, and 


 1          to help prevent outbreaks of diseases.  So 

 2          streamlining efficiencies in our local health 

 3          departments have really maximized to the 

 4          point where we're seeing an eroding in our 

 5          public health workforce and the 

 6          infrastructure which is so critical to 

 7          protecting the health of all New Yorkers 

 8          across the state.

 9                 So thank you again for the opportunity 

10          to speak to you.  We elaborate on these asks 

11          within our testimony, and I'll be happy to 

12          answer any questions that you might have 

13          tonight.  Thank you.  

14                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

15          Cahill.

16                 ASSEMBLYMAN CAHILL:  Thank you, 

17          Dr. Smith, and welcome to Albany.  And thank 

18          you for your good work back in my hometown 

19          and my home county.

20                 DR. SMITH:  It is my pleasure.

21                 ASSEMBLYMAN CAHILL:  You do terrific 

22          work there, and there's a lot of work to be 

23          done.

24                 You mentioned, I think, 20 or 30 of 


 1          the things that you're involved with.  Five 

 2          come to mind that are just pressing, they're 

 3          just urgent, in my view, almost a public 

 4          health emergency.  The opioid crisis --

 5                 DR. SMITH:  Absolutely.

 6                 ASSEMBLYMAN CAHILL:  -- keeping our 

 7          water clean and making sure that it gets 

 8          tested on a regular basis so that after it 

 9          gets taken care of, we're sure that it stays 

10          that way.

11                 Of course, we have long suffered in 

12          our part of the state with the scourge of 

13          Lyme disease and all that that has to do 

14          with.

15                 DR. SMITH:  Correct.

16                 ASSEMBLYMAN CAHILL:  And continued 

17          growth of -- maybe not growth, but the 

18          continued use of tobacco by young people has 

19          to be addressed.

20                 DR. SMITH:  Absolutely.

21                 ASSEMBLYMAN CAHILL:  And the last one 

22          is one we often forget that has become a very 

23          important public health one -- certainly not 

24          the last one you're dealing with, but the 


 1          last one on my list is the delivery of 

 2          community-based services to a mental health 

 3          population.  It has to be an incredibly 

 4          difficult task to -- many of those folks who 

 5          are in that population are multiply 

 6          diagnosed, they oftentimes have more than 

 7          just a mental illness issue, they have 

 8          physical issues, they have emotional issues.  

 9                 When you face a budget that looks like 

10          it's going to not only not increase but 

11          result in a diminishment of that, how do you 

12          go about the point of figuring out how you're 

13          going to continue to deal with these 

14          emergencies, just these five?  Not to mention 

15          the other 20 that you --

16                 DR. SMITH:  Absolutely.  I mean, it is 

17          a daily threat or daily challenge.  And you 

18          know I do have the distinction of having both 

19          the Department of Health and Department of 

20          Mental Health within my purview, which gives 

21          me a unique, I think, insight into how we can 

22          sort of look at the holistic aspect of the 

23          issue and stop funneling, you know, our 

24          efforts into one particular area versus 


 1          another, and look for the synergies that we 

 2          can obtain by working with our community 

 3          partners in new and novel ways.

 4                 So, you know, I think we've done a 

 5          rather good job of that to date, but you know 

 6          we're really reaching the point, I think, 

 7          where our resources are so stretched that 

 8          we've accomplished almost as much as we can 

 9          do without really drawing upon the support of 

10          our community partners, the American Cancer 

11          and Mental Health Association, et cetera.

12                 So funding to these community-based 

13          organizations is very much key to what we do 

14          in government to help preserve and to better 

15          the health of our citizens.

16                 ASSEMBLYMAN CAHILL:  I don't want to 

17          keep you much longer or my colleagues here, 

18          but specifically would you agree that the 

19          opioid crisis is different from one community 

20          to the next, that there is no statewide 

21          opioid crisis?

22                 DR. SMITH:  No, there is a state 

23          opioid crisis.  And one of our asks really is 

24          to -- if there is the 2 cents charge per 


 1          milligram morphine equivalent of the opioid 

 2          prescriptions, is to try to re-funnel that 

 3          money back into the public health system.  

 4          Because even though it's being called a 

 5          public health crisis, the fact of the matter 

 6          is -- and OASAS is a wonderful partner of 

 7          ours, and as commissioner of mental health I 

 8          work with them, I appreciate the work they 

 9          do, the monies that come into our communities 

10          through the local governmental units, through 

11          OASAS.  However, money is not being dedicated 

12          to the public health departments that would 

13          be looking at this crisis in a totally 

14          different perspective.

15                 You know, we're looking at it from the 

16          multiple layers that it exists in.  The 

17          supply in the community, the law enforcement, 

18          the educational piece to our schoolkids about 

19          the issues surrounding the opioid use, 

20          dealing with the aftermath of the opioid 

21          fatalities, the charges to counties to deal 

22          with the medical examiner issues.  All county 

23          share, there's no state support for any of 

24          that, even though we're paying multiple 


 1          millions of dollars in the toxicology screens 

 2          which allow us to say that that decedent had 

 3          fentanyl or some other opioid in their 

 4          systems.  That's being borne by counties.  

 5          There's no state assistance for that.

 6                 But you know, I can look at -- the 

 7          medical examiner program comes under me as 

 8          well.  So in looking at the opioid problem 

 9          from its many prongs, I think I'd be in a 

10          better position really to deal with bringing 

11          the community together to really evaluate it 

12          and to draw upon all of our resources to deal 

13          with it -- the law enforcement, the 

14          educational piece, and dealing with the 

15          medical providers, you know, and urging them 

16          to not prescribe the opiates, to go to the 

17          ibuprofen, et cetera, the less toxic and 

18          addictive compounds.

19                 So, you know, I do have a lot to say 

20          about it, but I think that the health 

21          departments are uniquely poised to really do 

22          a good job in helping with the public health 

23          crisis, although they're not getting money to 

24          do it.


 1                 ASSEMBLYMAN CAHILL:  I won't belabor 

 2          it, but my point was that the crisis is 

 3          different from community to community, not 

 4          that it wasn't widespread across the state.  

 5          And I would just -- this is not a question.

 6                 DR. SMITH:  I think communities deal 

 7          with it -- it might be a little different -- 

 8          I think in effect it's very similar, to be 

 9          honest with you, in speaking with my 

10          colleagues.  But again, you know, as the 

11          health department we are not getting 

12          resources to deal with it.

13                 ASSEMBLYMAN CAHILL:  Right.  I was 

14          just going to draw a parallel to the local 

15          nature of the problem to that which exists 

16          with making sure we have quality water, which 

17          I know is another problem.  Sometimes it's a 

18          public water system, sometimes it's a 

19          privately owned water system, sometimes it's 

20          individual wells.

21                 DR. SMITH:  Right, but the health 

22          departments that are involved in -- 

23          especially the full service, and that's why I 

24          went with the increase to a full-service 


 1          department, because we're involved in the 

 2          testing of public water systems and 

 3          maintaining that they are free of 

 4          contaminants that are so problematic.

 5                 ASSEMBLYMAN CAHILL:  Well, I can't 

 6          take up any more time.  That clock has four 

 7          zeroes on it, that means I can't talk 

 8          anymore.  So thank you very much.

 9                 DR. SMITH:  But please, don't hesitate 

10          to contact me.

11                 ASSEMBLYMAN CAHILL:  Thank you.

12                 DR. SMITH:  I'd be happy to discuss 

13          this further.

14                 CHAIRWOMAN YOUNG:  Thank you.

15                 CHAIRWOMAN WEINSTEIN:  Thank you.

16                 CHAIRWOMAN YOUNG:  Our next speaker is 

17          Director Neal Kalish, United Ambulette 

18          Coalition.

19                 Welcome.  Good evening.

20                 MR. KALISH:  First, good evening.  I 

21          know you've all had a long day.  Thank you 

22          very much for your time; I truly do 

23          appreciate it.  I will attempt to be very 

24          brief here, as you do have my written 


 1          testimony in front of you.  

 2                 The United Ambulette Coalition is a 

 3          nonprofit industry advocacy group.  We 

 4          represent and provide a voice for the 

 5          New York City ambulette providers.  We work 

 6          with the Department of Health, with you the 

 7          Legislature, and the various agencies 

 8          providing regulatory oversight.  Our primary 

 9          objective is to help ensure industry 

10          sustainability, and in so doing -- and most 

11          importantly -- that ensures that the Medicaid 

12          recipient has access to critical care and 

13          medical treatments.  

14                 We're seeking your help and your 

15          support on one issue that's really critical 

16          to us in the Executive Budget, and that is 

17          minimum-wage rate relief, which is 

18          dramatically, dramatically underfunded for 

19          our direct care workers as we wrestle with 

20          minimum wage which is spiralling upward, 

21          going to $15 at the end of this year in 

22          New York City.

23                 In a forum like this, before I get 

24          specifically into the issue, I do like to 


 1          give some brief background on the industry 

 2          and who we are and what we do, because I 

 3          believe in many respects we keep many of the 

 4          groups that were here speaking today -- 

 5          New York City hospitals, dialysis facilities, 

 6          nursing homes, adult daycare programs, drug 

 7          rehab facilities, mental rehab programs, and 

 8          virtually any other medical facility that is 

 9          dependent on Medicaid recipients and serving 

10          the Medicaid population -- we keep them 

11          operational.  

12                 Oftentimes I believe we're overlooked 

13          because we are somewhat the tail wagging the 

14          dog in the Medicaid program.  On a 

15          $64 billion-plus program, we account for less 

16          than 1 percent of that program.  I believe it 

17          is very fair to suggest that without the 

18          service that we provide, the population we 

19          serve, truly the most vulnerable and most in 

20          need of the Medicaid population, would be 

21          under extreme duress if they could not access 

22          medically necessary care and treatments.

23                 Briefly, and very specifically, we 

24          employ thousands of predominantly minority 


 1          employees -- drivers, matrons, and helpers 

 2          aboard our vehicles that help carry 

 3          wheelchairs and wheelchair-bound Medicaid 

 4          recipients up and down flights of steps in 

 5          non-elevator buildings in New York City, as 

 6          well as mechanics, office clerical, 

 7          logistics, admin staff -- now at $13, going 

 8          to $15 at the end of this year.  That's 

 9          $22.50 overtime, and overtime is -- while we 

10          would like to curb it, it becomes very 

11          necessary in order to meet the needs of the 

12          hospitals which run 24/7 and the dialysis 

13          facilities which run close to that.

14                 We carry wheelchair-bound clients up 

15          and down steps -- I already said that -- in 

16          non-elevator buildings.  We help ensure the 

17          smooth transfer of dialysis patients in and 

18          out of treatment.  We move in and out of some 

19          of the most dangerous and challenging housing 

20          projects in the nation, and in New York City 

21          we sit snarled in what is an average of 

22          8-mile-per-hour traffic.  If any of you have 

23          been there recently, it makes the work that 

24          we need to do very challenging.  


 1                 The cost structure to operate in 

 2          New York City is the highest in the country.  

 3          We have the highest liability insurance rates 

 4          in the country.  We're moving slower with 

 5          traffic than anywhere else in the city.  It's 

 6          very difficult and burdensome for us.  

 7                 Specifically on the issue of minimum 

 8          wage not being adequately funded in the 

 9          Executive Budget, I put a chart in here 

10          basically showing that we have $7 million for 

11          next year.  And Senator Savino, you had asked 

12          Mr. Helgerson this morning if direct care 

13          transportation was funded, and his response 

14          was it is funded in the budget.  The missing 

15          component is that approximately 50 to 

16          60 percent of the transports that we're now 

17          completing are going through MLTC programs, 

18          and that remains unfunded.  There is no 

19          funding in the budget, and there is 

20          approximately $14 million that is needed to 

21          bring the rates for the MLTC side of the 

22          program up to the fee-for-service side.  

23                 And I think that it's important to 

24          note that on the fee-for-service side we've 


 1          had many meetings with the Department of 

 2          Health fee-for-service, they've heard us out 

 3          on our issue, they've analyzed data, they've 

 4          analyzed our cost structure that we've 

 5          presented to them, and they've taken 

 6          appropriate action to move our reimbursement 

 7          rates.  That has not happened on the MLTC 

 8          side, and that's where we need help.  

 9                 On page 4 of this document I provide 

10          an illustration here.  We have home care 

11          workers funded on both sides of the equation 

12          to the tune of almost $682 million.  We have 

13          transportation funded right now at 

14          $7 million, and that falls dramatically short 

15          of what we need.

16                 We're pleading with you, the 

17          Legislature, for your help and your support.  

18          The funding needs to be earmarked 

19          specifically for ambulette transportation so 

20          that it is in fact passed along to the 

21          ambulette provider so that we can fairly 

22          compensate our employees at the minimum wage.  

23                 Thank you so much.  I will answer any 

24          of your questions.


 1                 SENATOR HANNON:  Thank you.

 2                 CHAIRWOMAN YOUNG:  Thank you very 

 3          much.

 4                 MR. KALISH:  Thanks.

 5                 CHAIRWOMAN YOUNG:  Next we have 

 6          President John Tomassi, Upstate 

 7          Transportation Association.

 8                 Thank you.  

 9                 MR. TOMASSI:  Good evening.  My name 

10          is John Tomassi, and I represent the Upstate 

11          Transportation Association.  The Upstate 

12          Transportation Association is a 

13          not-for-profit association representing 

14          private passenger transportation companies.  

15          Our members include taxi, livery and in this 

16          case, for this purpose, medical 

17          transportation providers.  

18                 The issue we'd like to address today 

19          is the Governor's proposed carve-out of the 

20          medical transportation benefit from the 

21          MLTCs, which would shift the funding from 

22          Medicaid long-term-care plans and their 

23          brokers over to the Medicaid fee-for-service.  

24          We are in support of the program to implement 


 1          the carve-out.  We believe doing so is the 

 2          only fair and reasonable way to ensure 

 3          transporters are paid properly and 

 4          compensated for the minimum wage issue.

 5                 I think as we all know, when the 

 6          managed care was set up, the whole idea was 

 7          to give comprehensive care -- that the MLTCs 

 8          could provide a complete service to their 

 9          constituents.  And that's how it started.  

10          But from the transportation side, that isn't 

11          how it is anymore.  

12                 On my attachment there's a list of all 

13          the MLTCs that have chosen not to handle 

14          transportation anymore but have passed it off 

15          to a third-party transportation provider who 

16          is now deciding the rates as well as who the 

17          providers are.  So no longer are the MLTCs 

18          managing the transportation and choosing and 

19          selecting the transportation providers; 

20          that's being handled by third-party brokers.

21                 The problems with that is that the -- 

22          obviously, the MLTCs are in a per-capitated 

23          rate, so where does this money come from to 

24          pay these outside brokers?  It comes from the 


 1          rate that's being paid to the transportation 

 2          providers.  As such, today an identical trip 

 3          in New York City under 5 miles on a 

 4          fee-for-service and one provided by MLTC -- 

 5          the MLTC side is probably 30 percent less for 

 6          the exact same trip, because there's been a 

 7          third party introduced, which is the outside 

 8          transportation providers.  

 9                 So our effort here today is to go back 

10          to a one fee-for-service to handle all -- 

11          since the MLTCs are no longer really 

12          selecting the providers, we're about to go 

13          back to a fee-for-service approach for all 

14          medical transportation.  

15                 As the speaker before me mentioned, 

16          there has been no money set aside for minimum 

17          wage last year nor this year.  And by next 

18          year, it's up to $15.  And MLTC has become 50 

19          to 60 percent of the industry now, and 

20          growing, so it's becoming more and more of an 

21          issue for us.

22                 Essentially, that's the essence of 

23          my -- of our effort here, is that we're 

24          looking to get a similar wage for our work 


 1          that we were getting from Medicaid, the 

 2          Office of Medicaid, who as we've explained is 

 3          deforming our costs and we're not getting 

 4          anything from the MLTC side.  The 

 5          introduction of a third party seems to have 

 6          taken a lot of the dollars allocated for 

 7          transportation away from us.

 8                 CHAIRWOMAN YOUNG:  Okay.  Any 

 9          questions?

10                 MR. TOMASSI:  Questions?

11                 SENATOR HANNON:  Thank you, no.

12                 CHAIRWOMAN YOUNG:  Very good.  Thank 

13          you.

14                 Our next speaker is Executive Director 

15          Kathy Febraio, from the Pharmacists Society 

16          of the New York State.  And I believe she's 

17          joined by President Roxanne Richardson.

18                 MS. FEBRAIO:  Thank you very much.

19                 CHAIRWOMAN YOUNG:  Thank you.

20                 MS. RICHARDSON:  You guys really have 

21          stamina to do this.  I'll start on page 1, 

22          that'll be good.

23                 First of all, I'd like to thank you 

24          all for your past and continued support of 


 1          pharmacy in the State of New York and also 

 2          our community pharmacies especially.  I 

 3          believe you all know the Pharmacists Society; 

 4          the majority of our members are community 

 5          pharmacists, and many of them are independent 

 6          owners that own their own pharmacy.

 7                 What we want to do -- we have 

 8          submitted testimony, but what we want to do 

 9          is take this opportunity to be helpful in 

10          possibly helping close the budget deficit for 

11          the state.  We have a way that you could 

12          generate money for the State of New York by 

13          the oversight and transparency of the 

14          multibillion-dollar PBM industry.  

15                 The PBMs have been around since the 

16          '60s.  Back then, they were the little 

17          plastic card people, and we used the little 

18          machine and that was about it.  And they paid 

19          the pharmacies.  And they've become the 

20          multibillion-dollar industry responsible, we 

21          feel, for raising the cost of prescription 

22          drugs to the consumers, to New York State, 

23          and also to the health plans.

24                 Just as an example, to generate the 


 1          $200 million in the Governor's proposed 

 2          budget to treat the opioid crisis in 

 3          New York, you would just need a fraction of 

 4          their $300 billion annual revenue for the 

 5          whole industry.  The fraction that comes out 

 6          to would be .00067.  That would give you the 

 7          $200 million, which comes out to .067 

 8          percent.  So if you want to round it up to 

 9          .1 percent, that would be fine too.

10                 They work under secrecy.  All their 

11          contracts are proprietary.  They get the 

12          manufacturers' rebates they secure, which 

13          local community pharmacies cannot, in most 

14          cases.  They have their own mail orders, 

15          which many times will try to convince the 

16          community pharmacies' customers to get the 

17          90-day supplies -- which in some cases are 

18          fine; in other cases, that adds to the drug 

19          disposal problem and the opioid crisis.

20                 The PBMs direct the providers to 

21          medications that they have secured the rebate 

22          for on their formularies, pushing market 

23          share for the drug manufacturers at the same 

24          time as they're reimbursing pharmacies at a 


 1          very low cost.  Many times it's under what 

 2          the pharmacy actually paid for the 

 3          medication, and they capture the spread for 

 4          themselves.

 5                 So unlike the manufacturers, they 

 6          don't have costs for drug research and 

 7          development or any of the risks associated 

 8          with that.  They don't have the 

 9          brick-and-mortar costs of a community 

10          pharmacy, which is needed in the community to 

11          serve the patients.  We really believe that.

12                 In 2017, the three big PBMs covered 

13          80 percent of covered lives in New York 

14          State.  Here we are with the hospitals, the 

15          nurses, the other professionals, the health 

16          plans speaking to you today, and the only 

17          unregulated member of the healthcare space is 

18          the PBMs.  That's it.  

19                 Many other states -- the ones that 

20          come to mind are Ohio, Kentucky, Arkansas, 

21          Alabama, Florida.  Those are the ones we've 

22          just heard from lately that are enacting 

23          legislation and proposed legislation.  

24          West Virginia in this past summer, in 2017, 


 1          their Medicaid department just eliminated the 

 2          PBMs, and since July 31st of last year 

 3          they've saved $30 million.

 4                 So there is money out there, 

 5          obviously, but nothing like that has happened 

 6          here in New York.  But we certainly wanted to 

 7          propose that as a possibility.

 8                 New York needs revenue.  The PBMs have 

 9          been here in New York for a very long time 

10          with no benefit for the state that we can 

11          see, in our opinion.  For these reasons, the 

12          society strongly supports and wholeheartedly 

13          recommends that New York join other states in 

14          finally tackling the issue of PBM management, 

15          regulation, oversight, and licensure.

16                 And again, that .067 percent equals 

17          $200 million.

18                 MS. FEBRAIO:  On another note, 

19          pharmacists are very pleased they were able 

20          to vaccinate 6300 children in the ongoing flu 

21          crisis.  We're also pleased to see that the 

22          Governor released today his 30-day 

23          amendments, codifying his executive 

24          order allowing pharmacists to vaccinate 


 1          children two to 18 years of age.

 2                 We look to clarify a question 

 3          Assemblyman Oaks posed earlier.  There would 

 4          be no cost to the state to educate 

 5          pharmacists to do so.  Education and 

 6          continuing professional development is the 

 7          responsibility of the pharmacist.  And 

 8          current education for vaccination is set at 

 9          the national level by the American 

10          Pharmacists Association and the CDC, and it 

11          currently covers the vaccination for 

12          children.  

13                 So any pharmacist vaccinating today an 

14          adult would be able to vaccinate a child as 

15          well.  And this is just one example of how a 

16          pharmacist practicing at the top of their 

17          license and education could assist the state 

18          in some of the workforce development problems 

19          that they've been discussing today.  They are 

20          an underutilized individual in the healthcare 

21          team.

22                 Thank you.

23                 SENATOR HANNON:  Thank you.

24                 MS. RICHARDSON:  Any questions?


 1                 CHAIRWOMAN YOUNG:  No.  Thank you so 

 2          much.

 3                 MS. RICHARDSON:  Thank you.  

 4                 CHAIRWOMAN YOUNG:  Our next speaker is 

 5          President Michael Duteau, Chain Pharmacy 

 6          Association of New York State.

 7                 Welcome.

 8                 MR. DUTEAU:  Good evening, honorable 

 9          Chairwomen Young and Weinstein, Senators 

10          Hannon and Valesky, and other distinguished 

11          members of the Committee.  Thank you so much 

12          for your past support of community pharmacy 

13          in New York and all that we continue to try 

14          to do to care for our patients here in 

15          New York State.  

16                 The Chain Pharmacy Association and our 

17          member committees are extremely focused on 

18          protecting patient access to pharmacy care 

19          and helping strengthen the relationship and 

20          the role