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

13 Senator Catharine M. Young
Chair, Senate Finance Committee
14
Assemblywoman Helene E. Weinstein
15 Chair, Assembly Ways & Means Committee

16 PRESENT:

17 Senator Liz Krueger
Senate Finance Committee (RM)
18
Assemblyman Robert Oaks
19 Assembly Ways & Means Committee (RM)

20 Senator Kemp Hannon
Chair, Senate Committee on Health
21
Assemblyman Richard N. Gottfried
22 Chair, Assembly Health Committee

23 Senator David J. Valesky
Vice Chair, Senate Committee on Health
24

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
5
Assemblyman Kevin A. Cahill
6 Chair, Assembly Committee on Insurance

7 Senator Diane Savino
Vice Chair, Senate Finance Committee
8
Senator Gustavo Rivera
9
Assemblyman Andrew P. Raia
10
Senator James Tedisco
11
Assemblyman Phil Steck
12
Assemblyman Andrew Garbarino
13
Senator Elizabeth O'C. Little
14
Assemblyman John McDonald
15
Senator Martin J. Golden
16
Assemblyman Edward P. Ra
17
Senator Patricia A. Ritchie
18
Assemblywoman Michaelle Solages
19
Assemblyman Kevin M. Byrne
20
Assemblywoman Rodneyse Bichotte
21
Assemblywoman Patricia Fahy
22
Senator James Sanders
23
Assemblyman Walter T. Mosley
24

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

17

18

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.
Commissioner
6 NYS Department of Health
-and-
7 Jason Helgerson
NYS Medicaid Director 12 23
8
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
13
Bea Grause
14 President
Healthcare Association of NYS
15 of NYS (HANYS) 402

16 Kenneth E. Raske
President
17 Greater New York Hospital Assoc.
-and-
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

23

1 2018-2019 Executive Budget
Health and Medicaid
2 2-12-18

3 LIST OF SPEAKERS, Continued

4 STATEMENT QUESTIONS

5 Joanne Cunningham
President
6 Home Care Association of
New York State 437
7
Claudia J. Hammar
8 President
NYS Association of Health
9 Care Providers 443

10 Edward Scharfenberger
Bishop
11 Diocese of Albany
-and-
12 Jenn Hyde
Executive Director
13 Catholic Charities Tri-County
Services 449
14
Stephen Hanse
15 President and CEO
NYS Health Facilities Association
16 NYS Center for Assisted Living
-and-
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
24

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
7
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
President
13 NYS Association of County
Health Officials 502 505
14
Neal Kalish
15 Director
United Ambulette Coalition 512
16
John Tomassi
17 Executive Director
Upstate Transportation
18 Association 518

19 Roxanne Richardson
President
20 Kathy Febraio
Executive Director
21 Pharmacists Society of
the State of New York 521
22
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
President
8 NYS Association of Nurse
Anesthetists
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.
Secretary
14 New York State Society of
Anesthesiologists 548
15
Amy Kennedy
16 Executive Director
Lauren Pollow
17 Director of Government Affairs
NYS Center for Assisted Living 553
18
Lisa Newcomb
19 Executive Director
Empire State Association of
20 Assisted Living 558

21

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
12
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
17
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
24

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

9

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.

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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.

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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

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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,

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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

104

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

105

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

106

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

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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

108

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

109

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

110

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

111

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

112

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

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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,

114

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?

115

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

116

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.

117

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

118

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

119

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.

120

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,

121

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

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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.

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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

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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

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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.

126

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

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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

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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.

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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

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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

131

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

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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

133

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

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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

135

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.

136

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

137

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.

138

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

139

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

140

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

141

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?

142

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

143

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,

144

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

145

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

146

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

147

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

148

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

149

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,

150

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

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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.

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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.

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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

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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

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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

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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

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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

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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.

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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.)

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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

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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

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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?

163

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

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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.

165

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

166

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

167

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

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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

169

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

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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

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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

172

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

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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

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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

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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

176

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

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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

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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

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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

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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

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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.

182

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

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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

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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

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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

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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

187

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.

188

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 --

189

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

190

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,

191

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

192

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.

193

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.

194

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

195

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

196

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

197

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

198

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?

199

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

200

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

201

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

202

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

203

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

204

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

205

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

206

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

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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

208

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,

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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

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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

211

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

212

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,

213

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.

214

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

215

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

216

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,

217

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

218

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

219

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

220

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.

221

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.

222

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,

223

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,

224

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

225

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

226

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

227

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

228

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

229

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

230

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

231

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

232

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

233

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

234

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 --

235

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

236

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

237

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.

238

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

239

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

240

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

241

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

242

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

243

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

244

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

245

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,

246

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

247

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.

248

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

249

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.

250

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

251

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

252

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,

253

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

254

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.

255

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

256

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.

257

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

258

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

259

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

260

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

261

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

262

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

263

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

264

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

265

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

266

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.

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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.

268

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.

269

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

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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

271

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.

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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

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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

274

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,

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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

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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

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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

278

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

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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

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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

281

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

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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;

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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

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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

285

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

286

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

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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.

288

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

289

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.

290

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

291

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

292

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

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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.

294

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

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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

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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.

297

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

298

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

299

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

300

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

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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.

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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.

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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

304

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

305

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

306

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

307

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

308

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

309

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 --

310

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

311

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.

312

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

313

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.

314

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

315

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

316

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

317

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

318

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

319

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

320

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

321

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

322

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

323

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.

324

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

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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

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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

327

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

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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.

329

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

330

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

331

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.

332

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

333

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

334

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

335

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

336

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

337

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

338

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

339

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

340

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.

341

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

342

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

343

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

344

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

345

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.

346

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

347

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.

348

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

349

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

350

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

351

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.

352

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,

353

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

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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

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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.

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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

357

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

358

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 --

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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

360

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

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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.

362

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.

363

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

364

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

365

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

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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

367

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

368

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

369

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.

370

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

371

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

372

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

373

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

374

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

375

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

376

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

377

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,

378

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.

379

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

380

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

381

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,

382

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

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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

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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

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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?

386

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,

387

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

388

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

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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

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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

391

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

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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.

393

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.

394

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

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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

396

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

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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,

398

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

399

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 --

400

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

401

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

402

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

403

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

404

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.

405

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

406

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

407

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

408

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.

409

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.

410

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

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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

412

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

413

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.

414

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.

415

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.

416

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

417

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

418

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

419

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

420

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

421

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

422

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

423

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

424

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?

425

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.

426

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

427

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.

428

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

429

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

430

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.

431

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

432

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,

433

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

434

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.

435

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

436

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

437

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

438

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

439

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

440

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

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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

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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

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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

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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.

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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

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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

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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

448

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

449

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

450

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

451

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.

452

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

453

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

454

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,

455

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

456

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

457

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

458

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

459

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

460

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

461

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,

462

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

463

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

464

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

465

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

466

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.

467

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

468

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.

469

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

470

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.

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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

472

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

473

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.

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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

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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.

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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

477

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

478

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

479

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

480

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

481

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

482

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

483

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

484

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,

485

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,

486

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

487

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?

488

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

489

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

490

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,

491

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

492

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

493

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

494

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

495

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

496

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

497

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

498

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

499

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

500

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.

501

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.

502

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

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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

504

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

505

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

506

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

507

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

508

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

509

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

510

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.

511

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

512

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

513

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

514

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

515

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.

516

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

517

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.

518

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

519

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

520

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

521

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

522

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

523

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

524

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,

525

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

526

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?

527

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 that a pharmacist can play in

21 improving patient health outcomes while

22 reducing costs.

23 With that being said, we echo the

24 comments of PSSNY. We are extremely pleased

528

1 with the Governor's press release this

2 morning that he seeks to make his executive

3 emergency order permanent, allowing

4 pharmacists to immunize children. Community

5 pharmacies are extremely accessible, open

6 nights and weekends, and this would allow

7 entire families to get their flu shot in one

8 visit.

9 I think they mentioned also that

10 community pharmacies over the last two weeks

11 literally mobilized overnight, and since then

12 have immunized 6300 children. We greatly

13 appreciate your support in making this

14 important treatment option available to all

15 families in New York State.

16 I'd like to briefly comment on four

17 proposals within the Executive Budget. First

18 and foremost, I would like to state that we

19 fully support the efforts to prevent opioid

20 addiction and the devastation that it can

21 cause to individual families and entire

22 communities.

23 We also agree that more must be done

24 to discourage inappropriate opioid use and

529

1 create more accessible and effective

2 treatment programs across our state. And I

3 think it can be said that by introducing

4 I-STOP and other effective legislation,

5 New York has led the way nationally in

6 fighting the opioid epidemic.

7 However, upon close review of the

8 Executive Budget, we oppose the proposal to

9 impose a surcharge on opioids to be paid by

10 the establishment making the first sale in

11 the state. Upon further review, we have come

12 to determine that pharmacies would most

13 likely be the most often affected entity --

14 not manufacturers, not wholesalers. There

15 are few manufacturers and few wholesalers in

16 New York. There are thousands of community

17 pharmacies that could be on the hook for

18 paying this tax when dispensing the drug

19 directly to patients.

20 Two quick examples. We've done some

21 math using some industry cost analysis, and

22 for a drug that might cost $2, the New York

23 State surcharge, proposed surcharge, could be

24 $10. For a $50 bottle of morphine,

530

1 100 milligrams, that same tax could be $200.

2 Pharmacies' reimbursement is based on

3 our costs, so if you're layering on a $200

4 surcharge and we are the ones paying it,

5 unfortunately, many operators, many

6 pharmacists may decide not to stock that

7 medication, which ultimately would be

8 negative for patients who have a legitimate

9 need for those drugs.

10 With that being said, we would ask

11 that you reject this proposal, or at the very

12 least amend it to exclude pharmacies so that

13 we can continue to care for patients without

14 being penalized.

15 Now, I know it does seem odd for me to

16 sit here before you and say that I'm here to

17 talk to you tonight about an increase in

18 Medicaid reimbursement. But we do have an

19 8-cent increase in the cost of dispensing

20 fees in the budget. And while we do not feel

21 that that reflects the national average for

22 the cost of dispensing, we are grateful that

23 it was included in the budget and we request

24 that the Legislature consider numerous other

531

1 ways to continue to properly reimburse

2 pharmacy for their services in the dispensing

3 of important prescriptions.

4 We also support the proposal for

5 comprehensive medication management. This is

6 a voluntary proposal that would allow

7 physicians, pharmacists, and patients all to

8 work together to improve patient health care.

9 By allowing a pharmacist and a physician to

10 form a voluntary collaborative practice

11 agreement, that would streamline the

12 treatment plan as well as the communication.

13 And we're currently doing this with

14 other initiatives such as immunizations,

15 where we use a protocol and a standing order

16 in conjunction with a physician's

17 authorization. We feel that it is an

18 excellent way for pharmacists to expand how

19 they care for patients, and we also feel that

20 there is added financial value in helping

21 pharmacists reduce the cost of healthcare in

22 many areas of the state.

23 Finally, the last two proposals we

24 oppose are related to Medicaid copays. One

532

1 of the proposals would raise the Medicaid

2 copay from 50 cents to $1. We have been here

3 before testifying that most patients indicate

4 they are unable to afford their current

5 copays, to pay their copays, which indicates

6 to us that it's already too high. If you're

7 raising it to a dollar, we think that that

8 number would only increase. And of course if

9 a patient is unable to pay their copay, that

10 amount is deducted from the pharmacy

11 reimbursement. We are not able to collect

12 that amount.

13 Finally, the budget also proposes

14 reducing the amount of over-the-counter

15 products available to Medicaid patients.

16 Over-the-counter products are a

17 cost-effective, first-line defense to a lot

18 of patients who have been used to having them

19 as a prescription item. If it's removed --

20 some examples would be digestive aids,

21 multivitamins, even some important cough and

22 cold products. If they don't have access to

23 them as an over-the-counter prescription, two

24 things could happen. Number one, they would

533

1 go without any type of treatment, or number

2 two, a physician might decide to prescribe a

3 more expensive treatment, which I think

4 defeats the purpose of having that on the

5 formulary.

6 So we would ask that you would reject

7 both of these two proposals and keep Medicaid

8 products in place and copays at the current

9 level.

10 Thank you very much for your time.

11 CHAIRWOMAN YOUNG: Questions?

12 Thank you.

13 SENATOR KRUEGER: Thank you.

14 CHAIRWOMAN YOUNG: Our next speaker is

15 Director of Health Policy Bill Hammond, from

16 the Empire Center for Public Policy.

17 Welcome, Bill.

18 MR. HAMMOND: Thank you. Good

19 evening, Senators, Assemblymembers. I

20 appreciate you listening to us all day.

21 I am in the glass-half-full school of

22 thought; I don't think there's an immediate

23 crisis of healthcare funding. Among the

24 other things that survived last year was the

534

1 Medicaid expansion, and that's been quite

2 generous to New York. As a result of that,

3 we're seeing our Medicaid matching aid

4 actually increase. It went from 53 percent

5 last year to 54 percent this year -- that's

6 $2.3 billion. And I think we can expect a

7 similar amount going forward, at least for

8 the time being.

9 Even if there were -- and as of last

10 week, as we've heard many times today,

11 Child Health Plus, DSH, community health

12 centers were all restored. With the

13 exception of the cost-generating reductions,

14 which I'll talk about later. Even if there

15 were a crisis, I don't think it makes sense

16 to, as the Governor's proposal would do,

17 raise revenue from the healthcare industry in

18 particular. Medicaid and these other health

19 programs, if they're worth doing, they are

20 shared responsibilities. And singling out

21 health insurance can be counterproductive,

22 because it makes health insurance more

23 expensive for those who buy it and pushes

24 people onto the Medicaid system.

535

1 So in that category would be the

2 14 percent surcharge on underwriting gains.

3 I would point out that it probably exempts

4 large employers who self-insure, because they

5 don't have technically underwriting gains to

6 pay tax on. And so the burden of that would

7 fall primarily on small groups and

8 individuals, and I think they're kind of the

9 last people who we should be asking to pay

10 more for their health insurance.

11 And the other point to make is that

12 this is a rare example where they might be

13 due for some rate relief, or at least less of

14 an increase, if because of this tax cut we

15 have existing regulations and oversight from

16 DFS, that would likely ensure that all or

17 part of the tax cut would go to the consumer.

18 I don't think the Fidelis -- taking

19 the money from Fidelis is justified. This is

20 a charitable organization. As we heard from

21 the bishop, he wants to spend that money

22 doing good work around the state. I don't

23 see a good reason why the state should take

24 it.

536

1 And I guess another angle on this that

2 I think is kind of interesting is that

3 Centene is going to be doing the work that

4 Fidelis used to be doing while paying taxes,

5 so the transaction is a net positive for the

6 state and local government. And I don't

7 think you want to blow it up by taking away

8 too much of what the bishops would be

9 receiving.

10 The opioid tax, if --

11 SENATOR HANNON: It's not us blowing

12 it up. It's the Governor.

13 MR. HAMMOND: I'm using the royal

14 "you," I guess.

15 (Discussion off the record.)

16 MR. HAMMOND: The opioid tax, I think

17 a lot of that would be paid by Medicaid. I

18 looked up some numbers -- in the first six

19 months of 2017, New York State Medicaid paid

20 for 22 million oxycodone pills. That's more

21 than one pill for every resident of New York.

22 I did some rough calculations; it works out

23 to something like 500 million morphine

24 milligram equivalents. So that's $10 million

537

1 paid by the Medicaid system for six months on

2 one drug. So that's a bit expensive, if my

3 math is correct.

4 I don't think it's a good idea to go

5 after the reserve funds of the Medicaid

6 managed care plans. You're penalizing

7 responsible behavior. The Governor is

8 proposing $425 million in capital grants. I

9 feel like those -- there are some

10 institutions that need capital support. I

11 don't feel like that money's been

12 distributed -- not all of it has gone to

13 struggling facilities. Some of it has gone

14 to quite well-off facilities.

15 And I've used up my time, so ...

16 CHAIRWOMAN YOUNG: Any questions?

17 MR. HAMMOND: Thank you.

18 SENATOR KRUEGER: Thank you, Bill.

19 ASSEMBLYMAN CAHILL: Bill, just a

20 quick comment. While you are certainly an

21 engaging speaker, clearly I read your

22 testimony -- you're still a better writer.

23 (Laughter.)

24 MR. HAMMOND: Oh, thank you.

538

1 ASSEMBLYMAN CAHILL: And thank you so

2 much for not using the one line in here that

3 I underlined, and I'll show you later.

4 MR. HAMMOND: Oh, I know. I know what

5 you're --

6 ASSEMBLYMAN CAHILL: Yeah, keep going.

7 CHAIRWOMAN YOUNG: The next speaker is

8 President Cheryl Spulecki, New York State

9 Association of Nurse Anesthetists.

10 Thank you for being here.

11 MS. SPULECKI: Thank you for having

12 me. In addition, I'll be joined by Dr. Juan

13 Quintana, past president of the American

14 Association of Nurse Anesthetists. His

15 testimony is before you as well, and has been

16 submitted online.

17 So good evening to the distinguished

18 members of the subcommittee. Again, I am

19 Dr. Cheryl Spulecki, a certified registered

20 nurse anesthetist and current president of

21 the New York State Association of Nurse

22 Anesthetists, also the assistant program

23 director for the Nurse Anesthesia Program at

24 SUNY at Buffalo.

539

1 I am testifying today for full scope

2 of practice support for certified registered

3 nurse anesthetists as part of the healthcare

4 budget. NYSANA, as you may know from us

5 being here year after year after year,

6 represents nearly 1600 certified registered

7 nurse anesthetists and student nurse

8 anesthetists. We have been coming to Albany

9 all this time looking not only for state

10 recognition but scope of practice, as we are

11 advanced practice nurses, commensurate with

12 our national certification, our advanced

13 education, our clinical training and our

14 expertise.

15 And we are grateful to the Governor

16 for adding us to his budget proposal, as well

17 as to Assemblyman Gottfried for carrying our

18 bill as well.

19 More than 30 years of scientific

20 study, evidence-based research, demonstrates

21 that CRNAs not only administer safe

22 anesthesia -- I said safe anesthesia --

23 cost-effective quality care with patient

24 outcomes that are equivalent to other

540

1 anesthesia providers. We practice in every

2 setting currently. Every type of procedure,

3 every complex procedure, every category of

4 patient, including those metropolitan

5 facilities such as Memorial Sloan Kettering,

6 Level 1 trauma centers such as Erie County

7 Medical Center, suburban locations such as

8 South Buffalo Mercy in Buffalo -- and most

9 importantly, those rural critical-access

10 sites: United Memorial Medical Center in

11 Batavia, Mount St. Mary’s Hospital in

12 Lewiston, Wyoming County Hospital System in

13 Warsaw, as well as Brooks Hospital in

14 Dunkirk, New York.

15 It's been well established that when

16 anesthesia is provided by a nurse

17 anesthetist, it is the practice of nursing,

18 and when provided by a physician it is the

19 practice of medicine. Similar to other

20 specialties, there is overlap. But it is

21 important to realize that it is administered

22 exactly the same way. Our techniques are the

23 same, the equipment and the anesthesia agents

24 are the same, and most importantly our

541

1 patient outcomes are the same.

2 It is obvious to those in New York and

3 across the United States that anesthesia

4 services will be outpaced by the number of

5 providers that are necessary in the next

6 several years, and we are looking for

7 enactment of scope of practice in law.

8 CRNAs often work in areas with low

9 median income, higher unemployment, uninsured

10 and higher Medicaid-enrolled as compared to

11 anesthesiologists. That's a fact. The

12 geographic balance is no more pronounced than

13 in our rural counties across upstate New York

14 as the sole anesthesia provider in most rural

15 hospitals.

16 Allowing us to practice as advanced

17 practice nurses is currently afforded to the

18 nurse practitioners, the nurse midwives, and

19 clinical nurse specialists. We'll not only

20 continue to ensure patient access amongst the

21 vulnerable populations, but help New York

22 State meet the needs.

23 The bottom line is removing

24 restrictive barriers to practice -- including

542

1 outdated, unnecessary supervision

2 requirements -- translates into greater

3 access to more efficient and cost-effective

4 care for our hospitals at a time where it is

5 needed most fully around New York State.

6 We have time and time again been

7 challenged with our education to know that

8 CRNAs are part of a challenging, rigorous

9 program, anywhere from seven to eight to nine

10 years of education, and being that we are the

11 only provider currently with intensive care

12 training as an ICU nurse before being

13 accepted into our program, as compared to any

14 other anesthesia provider. Our candidates

15 are emergency flight registered nurses,

16 cardiac pediatric, and surgical ICU nurses.

17 New York State has been blessed with three

18 top-notch schools that have been nationally

19 ranked: Columbia University; the Albany

20 Medical Nurse Anesthesia program; and the

21 SUNY school, University at Buffalo, ranked

22 within the top 10 of the country. Our

23 students currently are graduating with a

24 master's degree, a doctoral degree, years of

543

1 education above and beyond, with

2 underlying -- again -- ICU experience.

3 I'd like to thank you for the

4 opportunity to speak publicly about the

5 support for full scope of practice for nurse

6 anesthetists. We would love to make this the

7 year we finally achieve what 48 other states

8 currently have. And we will continue to

9 provide what we have been known to do --

10 provide safe, high-quality, cost-effective

11 anesthesia services to the residents of the

12 state and around the country.

13 DR. QUINTANA: Good evening. I'm

14 Dr. Juan Quintana. I'm a certified nurse

15 anesthetist. And I just wanted to quickly

16 address -- first, I want to commend you all

17 this evening for -- wow, still hanging out

18 here, huh? You guys rock. And so certainly

19 the citizens of New York have a lot to be

20 proud of. You've heard a lot of information

21 today.

22 I just want to say certified

23 registered nurse anesthetists didn't just pop

24 up. We've been around for an extremely long

544

1 time -- at least 150 years, by many accounts.

2 Gallup Polls show that nursing as a whole is

3 one of the most trusted and ethical

4 professions in the nation, 16 years running.

5 I don't know why I like that, I just do.

6 It's something about nursing, right? And so

7 I like to present that.

8 Myself, I have a business in Texas

9 where I provide anesthesia services. I am

10 the sole proprietor, and I actually provide

11 services in a rural county where there are no

12 other providers. So this is not unique or

13 something different, something new that's

14 come about; this is something that's been in

15 practice for a long time.

16 We're excited at the national level to

17 hear that New York is actually considering

18 codification of the CRNA practice as

19 something that is part of that APRN, Advanced

20 Practice Registered Nurse contingency. You

21 know, we're excited because we've been

22 waiting, we're thinking yeah, good, this is

23 about time, right? Why has this been

24 prolonged?

545

1 We know, as Cheryl mentioned earlier,

2 that CRNAs practice in all kinds of settings,

3 every setting that you can think of, and we

4 practice with all kinds of physicians,

5 gastroenterologists, ophthalmologists, all of

6 them, and we practice in the military, which

7 is something that often goes unnoticed, in

8 forward surgical teams. In fact, CRNAs are

9 the designated anesthesia provider for

10 forward surgical teams in the line of

11 conflict.

12 In rural America, there are places

13 where CRNAs provide 100 percent of the

14 anesthesia and there are no other providers

15 available. In terms of our education,

16 sometimes it's called into question -- you

17 don't have as much education, we're told, as

18 your anesthesiologist colleagues. That is

19 absolutely, 100 percent correct. Our

20 education follows a different format. We are

21 nursing, then master's and doctorally

22 prepared individuals providing anesthesia.

23 And so I bring that out to you because

24 there was some concerns by the Assemblywoman

546

1 from Brooklyn, I believe, about a two-tiered

2 system. We provide the exact same type of

3 anesthesia services to all our patients. It

4 is the same format, we study the same books,

5 and we do the exact same thing.

6 We have studies -- in case you're

7 worried, we have three really good studies

8 that tell us, number one, that in fact we are

9 the most cost-effective provider for

10 anesthesia services; number two, that

11 comparing the states that have opted out of a

12 supervision rule to states that still have

13 it, there is no difference in the service;

14 and, number three, that erecting barriers

15 like supervision barriers creates no

16 difference in the outcome. Whether the CRNA

17 provides the service or whether the

18 anesthesiologist provides the service or

19 whether they do it together, there's no

20 difference.

21 So you can feel safe in the fact that

22 we continue to provide a high-quality

23 anesthesia service that is cost-effective

24 and -- I mean, the reverberation I heard

547

1 through the room from the Hospital

2 Association, from everyone else, is that we

3 need revenue, right? This is -- we need

4 revenue, we need access. This is an

5 excellent way for New York to amplify the

6 number of CRNAs that are utilized here and at

7 the same time reduce the cost of the

8 services, because the hospitals and

9 facilities bear that cost.

10 So I'll leave it at that and just

11 encourage you to seriously consider it. We

12 are nursing, we're here for you. We're here

13 for your children, for your mom, we're here

14 and we take care of you every single day, and

15 we would love this consideration.

16 I thank you.

17 CHAIRWOMAN YOUNG: Thank you very

18 much.

19 SENATOR KRUEGER: Thank you.

20 CHAIRWOMAN YOUNG: Thank you.

21 I would remind the speakers to stay

22 within the five minutes that they are

23 allotted. Our next speaker is -- actually

24 there are two. Dr. Rose Berkun, M.D.,

548

1 immediate past president, and Dr. Vilma

2 Joseph, M.D., secretary, of the New York

3 State Society of Anesthesiologists.

4 Welcome.

5 DR. BERKUN: Chairwoman Young,

6 Chairwoman Weinstein, Assemblyman Cahill,

7 Senator Hannon and all respected members of

8 this committee, I am Rose Berkun, a

9 board-certified physician anesthesiologist

10 and also immediate past president of the

11 New York State Society of Anesthesiologists,

12 a medical society consisting of 3700

13 physician anesthesiologists with a primary

14 mission to provide the safest and highest

15 quality of anesthesia care to the citizens of

16 New York State.

17 We're here today to bring to your

18 attention our profession's grave concerns in

19 opposition to the proposal in Part H of the

20 health budget which would allow nurses to

21 administer anesthesia without any physician

22 supervision and would provide unrestricted

23 prescriptive authority to more than 1200

24 mid-level providers untrained in pain

549

1 medicine to prescribe narcotics at the time

2 of the largest opioid overdose crisis we have

3 ever seen.

4 Our biggest concern is patient safety.

5 Current laws and regulations mandating

6 physician supervision require physicians to

7 be immediately available to manage medical

8 emergencies. Independent studies -- one of

9 those we included for you to read -- have

10 shown that the chances of an adverse outcome

11 are significantly higher when anesthesia is

12 provided by an unsupervised nurse

13 anesthetist. Physician anesthesiologists

14 complete a bachelor's degree, four years of

15 medical school, and 12,000 to 16,000 hours of

16 clinical medical training.

17 Nurses are trained to work under the

18 supervision of physician anesthesiologists,

19 and not independently. Nurses have neither

20 the level of education nor training of

21 physicians. The bill grants authority for

22 nurses to perform pre-anesthesia evaluations,

23 anesthetic induction, and emergence. These

24 are functions that they have not been trained

550

1 for or allowed to perform without direct

2 supervision of physicians.

3 As for the cost savings, this proposal

4 incorrectly claims that there is $10 million

5 in savings to New York. Under Medicare and

6 Medicaid, the reimbursement for anesthesia

7 services is exactly the same whether it's

8 administered by a physician anesthesiologist,

9 anesthesia care team, or a nurse anesthetist.

10 As for access, we do not have a

11 shortage of anesthesia providers in New York.

12 Our association survey of New York hospitals

13 found no hospitals in the state are

14 performing surgeries without access to a

15 physician anesthesiologist. The 2016

16 American Medical Association workforce study

17 determined that out of 1276 nurse

18 anesthetists practicing in New York, over

19 two-thirds -- 870 of them -- practiced from

20 Albany down south. This provision will not

21 expand coverage to the western part of the

22 state.

23 In conclusion, we'd like to say that I

24 agree with our esteemed nurse anesthetist

551

1 colleagues that anesthesiology is the

2 practice of medicine and it should be

3 determined by education and not by politics.

4 We also agree with the New York State Nurses

5 Association that CRNA's scope of practice

6 language expansion should be taken out of the

7 budget.

8 Thank you.

9 DR. JOSEPH: As Dr. Berkun stated, the

10 Legislature should reject the Governor's

11 proposal and not risk the safety and

12 well-being of all New York citizens.

13 I'd like to add some other reasons.

14 Let's talk about discrimination and

15 healthcare disparities. I'm very disturbed

16 that this proposal will create a two-tier

17 care system in my community. I work in the

18 Bronx. Trust me, it creates a system where

19 the quality of anesthesia care will be

20 determined by a patient's insurance or some

21 other socioeconomic reasons. Those with

22 resources will be cared for by physicians,

23 and those without will be cared for by

24 nurses.

552

1 Now, with regards to the opioid

2 crisis, we are all aware that it's

3 devastating our communities and creating many

4 unnecessary deaths. Now this expansion of

5 scope of practice will allow approximately

6 1,300 to 1,600 undertrained and unsupervised

7 prescribers to write opioid pain medication,

8 and will exacerbate this crisis.

9 Anesthesiologists are trained in

10 opioid-sparing pain medicine techniques and

11 are the experts in this area.

12 Now, what about patients' rights? Our

13 anesthesia patients are at their most

14 vulnerable while being rendered unconscious

15 for surgery. They should continue to have

16 the right to have a physician

17 anesthesiologist who is properly trained to

18 supervise their anesthesia care.

19 Finally, every day I work with nurses

20 on our anesthesia care teams. I respect

21 their work and their participation. However,

22 the medical practice of anesthesia is not a

23 collaborative practice. When the patient's

24 life is on the line, seconds count. There is

553

1 no time for discussion. As a physician

2 anesthesiologist, we are trained to act

3 decisively due to our medical education.

4 Nurses do not receive the same level of

5 training and are not equipped for this level

6 of practice expansion.

7 This proposal dangerously weakens

8 anesthesia care in New York and may lead to a

9 high mortality rate. Dr. Berkun and I, on

10 behalf of the 3,640 members of the New York

11 State Society of Anesthesiologists, call upon

12 the Legislature to keep anesthesia safe in

13 New York and reject the Governor's proposal.

14 CHAIRWOMAN YOUNG: Any questions?

15 Thank you.

16 DR. BERKUN: Thank you.

17 DR. JOSEPH: Thank you.

18 SENATOR HANNON: Thank you.

19 SENATOR KRUEGER: Thank you.

20 CHAIRWOMAN YOUNG: Our next speakers

21 are Lauren Pollow, director of government

22 affairs, and Executive Director Amy Kennedy,

23 from the New York State Center for Assisted

24 Living.

554

1 Again, please adhere to the five

2 minutes. Thank you for being here.

3 MS. KENNEDY: Thank you.

4 Good evening, and thank you for

5 allowing me the opportunity to testify on the

6 Health and Medicaid proposals included in the

7 2018-19 Executive Budget. My name is Amy

8 Kennedy, and I serve as the new executive

9 director of the New York State Center for

10 Assisted Living, known as NYSCAL, the

11 assisted living arm of New York State Health

12 Facilities Association, NYSHFA.

13 CHAIRWOMAN YOUNG: You have quite

14 lengthy testimony. Could you please

15 summarize it for us?

16 MS. KENNEDY: Sure.

17 So as a registered nurse and a former

18 executive director of an adult home and

19 assisted living programs and an enriched

20 housing program for 25 years, I've witnessed

21 how the landscape as a provider has had to

22 acclimate to the multitude of changes in the

23 delivery of care of the population. Please

24 read my testimony to expand on what I have to

555

1 say.

2 We are pleased to see in Governor

3 Cuomo's Executive Budget different options to

4 expand access to the ALP programs for

5 existing providers and development of new

6 programs where there is a demonstrated need.

7 NYSCAL is supportive of the expedited 90-day

8 review process for the ALP slots. The number

9 of additional assisted living beds will be

10 based on previously awarded beds withdrawn or

11 denied by DOH, and additionally for ALP

12 providers licensed on or before April 1,

13 2020, who may apply for an additional

14 increase of nine beds every two years.

15 We are also in support of awarding 500

16 additional ALP beds in counties where either

17 one ALP or no ALP providers are present.

18 These providers provide service only for

19 public-pay residents, and maintain a

20 collaborative agreement with an ACF, a

21 nursing home, or a general hospital. So it's

22 500 beds in counties where utilization of

23 existing program beds is higher than

24 85 percent, and the second 500-bed proposal

556

1 is for the solicitation and award of ALP beds

2 in counties where there are no ALP beds or

3 only one ALP provider.

4 MS. POLLOW: There is an addition to

5 that proposal requiring that those providers,

6 in order to qualify for those expedited slots

7 or enhanced slots, would need to have

8 managed-care contracts. We're slightly

9 concerned with the timing of that, given the

10 rocky implementation of managed long-term

11 care in the nursing home setting. We feel as

12 though that requirement should be stricken

13 given the time-sensitive nature of ensuring

14 access to ALP in the next several years to

15 meet the requirements of low-income seniors

16 in the areas that they're serving.

17 And to add two additional points

18 before we wrap today, we would like to say

19 that we're in support of the Governor's

20 proposal for including assisted living

21 providers in a list of community-based

22 providers for the Statewide Health Care

23 Facility Transformation Program funding. We

24 have seen nursing homes who have qualified

557

1 with transformational projects benefit

2 greatly from this funding.

3 Unlike the last two rounds in

4 solicitations, our providers and other

5 community-based providers were not qualifying

6 entities, so we'd like to see that proposal

7 mirrored in the Legislature's one-house

8 proposals and, hopefully, the enacted budget.

9 And additionally, one item that we

10 were disappointed we didn't see in the

11 Governor's Executive Budget was -- the item I

12 know you're familiar with is the SSI

13 increase. We thank the Legislature for

14 having passed this unanimously in both houses

15 last session. As you're well aware, those

16 receiving SSI are served in adult homes and

17 enriched housing programs. They're receiving

18 non-residential care services because they

19 are longer able to live independently. This

20 is a bargain for the State of New York.

21 These are individuals who would be discharged

22 to higher cost settings if they didn't have

23 this option available to them.

24 Not to belabor the point, but the

558

1 Governor had a very robust list of social

2 reforms, as usual, in his testimony. And,

3 you know, he said we should hold ourselves to

4 a higher standard. It's our obligation as a

5 caring people, a compassionate society, to

6 reach out and provide whatever social

7 services or address whatever needs

8 individuals present, and we couldn't agree

9 more. So we do feel as though supporting

10 ACFs and allowing for this increase would

11 support seniors to live in an HCBS-compliant

12 setting. The current rate of $41 per day is

13 wholly inadequate.

14 I won't discuss that further because I

15 know that we've, you know, just beat that to

16 death in past testimony. But we really

17 appreciate your support, like last session,

18 and hope to see this in each one-house

19 proposal.

20 Thank you.

21 CHAIRWOMAN YOUNG: Thank you.

22 MS. POLLOW: Thank you.

23 CHAIRWOMAN YOUNG: Questions?

24 CHAIRWOMAN WEINSTEIN: No.

559

1 CHAIRWOMAN YOUNG: Thank you very

2 much.

3 Our next speaker is Executive Director

4 Lisa Newcomb, Empire State Association of

5 Assisted Living.

6 Thank you for being here.

7 MS. NEWCOMB: Hi, thank you. I will

8 be brief, less than five minutes.

9 I am Lisa Newcomb, as you said, the

10 executive director of the Empire State

11 Association of Assisted Living.

12 I will focus my testimony on two

13 areas: The urgent need for an immediate

14 increase in the supplemental SSI rate for our

15 low-income seniors -- it's $41 a day, as the

16 ladies had just mentioned -- as well as our

17 second priority is the need for a process

18 which rationally awards Assisted Living

19 Program beds, also as mentioned.

20 With regard to SSI, I want to thank

21 the chairs and both houses for passing a

22 $20 increase last year. For a very brief

23 moment, we were hopeful that we would find

24 much-needed fiscal relief. However, Governor

560

1 Cuomo vetoed this critical legislation. In

2 his message he stated that any proposed

3 increase to the state supplement must be

4 handled in the Executive Budget.

5 Regrettably, and inexplicably, he has failed

6 to include any funding in this budget.

7 Notwithstanding the state of crisis

8 faced by the providers serving low-income

9 residents where facilities are closing at an

10 alarming rate -- 25 have closed since 2014,

11 12 of them within the last 12 months.

12 In years past, testifying on behalf of

13 ESAAL was a local upstate provider, Jim Kane,

14 who I know some of you know. He is not here

15 this year because his facilities have either

16 closed or they are being sold. Needless to

17 say, he and his staff have become victims of

18 inadequate funding. But more importantly, by

19 failing to increase the SSI rate, the state

20 is failing more than 12,000 seniors

21 throughout New York State that rely on SSI.

22 As many of you have now heard, the SSI

23 rate of $41 day that we spend on housing and

24 caring for our most vulnerable seniors is

561

1 less than the daily cost of boarding a dog in

2 a kennel. We've been saying that for about

3 20 years now, and it is still the truth.

4 This reimbursement is unsustainable in

5 light of the increased mandates -- most

6 especially, the ultimate back breaker was the

7 $15 minimum wage, which has really devastated

8 us. We estimate about $170 million annually,

9 which means the minimum wage alone is

10 approximately $34 per day. That leaves us

11 with $7 a day to provide food, services,

12 housekeeping, personal care, case management,

13 as well as all of the insurances to some very

14 frail and vulnerable people. It's simply not

15 possible. And amazingly, unlike all other

16 healthcare providers, the adult care facility

17 industry received no assistance to bear the

18 cost of this mandate.

19 So when our facilities close, what are

20 their options? You're going to be paying

21 more because they're going to nursing homes,

22 so you're going from the $41 a day to between

23 approximately $150 to $250 a day in a nursing

24 home under Medicaid.

562

1 Where we have found programs that were

2 working, such as the Medicaid Assisted Living

3 Program -- and we thank you for your support

4 of that program -- in the past the Governor

5 has moved to prevent the expansion of this

6 program. But we have fought to bring the ALP

7 program under the certificate of need

8 process, another bill that you passed -- and

9 thank you again -- last year, only to be

10 vetoed by the Governor.

11 While we applaud the addition of ALP

12 beds in the budget, there needs to be a

13 rational and transparent process for the

14 award of such beds. Please revise the

15 proposal to reflect a formal application

16 process comparable to the bill unanimously

17 passed last year.

18 We implore you to help this growing

19 industry that is serving seniors that are

20 choosing to live there every day, and we

21 could use your financial support.

22 Thank you.

23 CHAIRWOMAN YOUNG: Thank you very

24 much.

563

1 SENATOR KRUEGER: Thank you.

2 CHAIRWOMAN YOUNG: Our next speaker is

3 Lauri Cole, executive director of the

4 New York State Council for Community

5 Behavioral Healthcare.

6 MS. COLE: Good evening.

7 CHAIRWOMAN YOUNG: Good evening.

8 MS. COLE: We thought we'd give you

9 the bargain of the two of us together. We're

10 comrades, and so we're both on the list and

11 we combined our time, if that's okay.

12 CHAIRWOMAN YOUNG: Okay.

13 MS. COLE: Okay, you're welcome.

14 So my name is Lauri Cole, I'm the

15 executive director of the New York State

16 Council. And very briefly, we represent

17 mental health and substance abuse addiction

18 treatment providers across the state. That

19 includes community-based freestanding

20 organizations, hospitals that provide

21 behavioral health services, as well as

22 counties that continue to deliver them as

23 well as administrate over them.

24 And so I'm here today both as an

564

1 advocate over the last 30 years for mental

2 health and substance abuse services, as well

3 as recently, unfortunately, the bereaved

4 significant other of a person who died as a

5 result of the opioid crisis.

6 And so I'm shaking. So I wanted to

7 talk to you about the opioid surcharge. I

8 have nothing in front of me but, you know, I

9 have my head and my words. The opioid

10 surcharge proposal, we think, is probably the

11 greatest hope of getting the infusion of

12 revenue and funding that the system

13 desperately needs across New York State.

14 There is a kind of collective trauma that is

15 occurring in our workforce as people working

16 in programs, residential outpatient clinics,

17 et cetera, continue to treat individuals one

18 day and learn that they're no longer with us

19 the next.

20 Our workforce desperately needs

21 resources. In addition to educational and

22 all kinds of financial incentives, we need to

23 be able to address the trauma that is

24 occurring in our programs and services and

565

1 really take a look at the recruitment and

2 retention problems that we already had before

3 this crisis multiplied to the extent where

4 people will do anything rather than working

5 in our programs and services.

6 So the opioid surcharge right now, as

7 we read it, does not explicitly state that

8 the money from the revenue would go directly

9 to OASAS. And this is vital. As we've

10 talked about here today, "trust but verify"

11 is my motto. We've asked the Executive to

12 direct 85 percent of the resources associated

13 with the revenue from the surcharge directly

14 to OASAS for prevention, treatment and

15 recovery services to include new initiatives.

16 In fact, for it to be about new initiatives,

17 not to offset costs of previous budgets and

18 previous appropriations.

19 So we need your help. And I'm happy

20 to take a question or two after my colleague

21 Andrea is done. But I just wanted to thank

22 you in advance for your support. I see heads

23 nodding and -- it's not a perfect situation,

24 it's not a perfect revenue item, but it is

566

1 probably our greatest hope of some new

2 resources into the system.

3 Thank you.

4 MS. SMYTH: And thank you for your

5 forbearance. I'm Andrea Smyth, the executive

6 director of the Coalition for Children's

7 Behavioral Health.

8 The Legislature was very supportive

9 last year of #bFair2DirectCare. We

10 appreciate that. You were also supportive of

11 expanding the number of providers or types of

12 providers that would be eligible for

13 statewide health facilities capital

14 funding -- but the children's residential

15 treatment facilities were not included in

16 that eligibility.

17 So after four years of trying that

18 tack, I'm going to try something different.

19 I'm going to propose that you consider the

20 fact that there was $10 million added for

21 children's mental health capacity, capital

22 money last year from the Legislature, and

23 this year the Executive proposed $50 million

24 for mental health facilities improvement.

567

1 Maybe we work in that atmosphere, in the OMH

2 budget, instead of trying to change something

3 in the statewide facilities budget.

4 Again, we have a modest request to do

5 some carve-outs on the crisis, money that's

6 proposed to make sure children's services are

7 addressed appropriately and to repeat the

8 investment last year specifically addressing

9 the residential treatment facilities.

10 You're no strangers to scope of

11 practice concerns. I heard a lot of them

12 today. We have our own problem proposed in

13 the Executive Budget. Again, we were

14 offered, with the exemption to the clinical

15 practice, a process between last year's

16 extension and this one. That process didn't

17 take place.

18 We are fifth in the nation in mental

19 health labor shortage. Anything that is done

20 to change the status right now of who we are

21 using to provide services will only

22 exacerbate that. We're fifth now, and

23 there's a proposal to create a new bottleneck

24 that we just cannot afford to have happen

568

1 when we have children waiting and waiting and

2 waiting to get referred to care. So I ask

3 you to look carefully at Part Y of the

4 Executive Budget proposal in the Mental

5 Health Article VII bill related to the scope

6 of practice.

7 And lastly, just relating to a

8 surprise in the budget. As recently as

9 December 5th, the Children's Medicaid

10 Redesign Team met. We were informed that the

11 Medicaid design transformation for children

12 would go ahead as expected July 1st. My

13 providers had changed practices, hired

14 people, they have closed programs. They have

15 invested millions.

16 And this budget proposes a two-year

17 delay to putting new children's services out

18 for the communities. The school districts

19 wrote a report, they cannot access behavioral

20 health services, they're trying to pay for it

21 in the education budget. Children's mental

22 health is in a crisis. My testimony shows

23 that you've written checks for these new

24 services to be -- to come up in the past.

569

1 The money's there. There's no reason to try

2 to save it again for the third year in a row.

3 I urge you to put money on the streets

4 for children's behavioral health. We're

5 talking about $15 million.

6 MS. COLE: I second the motion.

7 CHAIRWOMAN YOUNG: I'm just curious.

8 So the Mental Health hearing is tomorrow, but

9 you chose to be here today.

10 MS. COLE: Yes. Yes.

11 MS. SMYTH: It is very difficult,

12 since we have broken out the responsibility

13 for the Medicaid budget to be solely in the

14 realm of DOH, because the Office of Mental

15 Health doesn't have a role in the budget

16 restorations that happened in Medicaid. That

17 happens here. And so we struggle to try to

18 figure out really who we need to be talking

19 to. We'll submit testimony tomorrow, but

20 this is a Medicaid request. This is a

21 Medicaid global cap problem, and it's very

22 challenging.

23 MS. COLE: We've been here on issues

24 like uncompensated care, Medicaid APG,

570

1 government rates -- these are all issues that

2 are the responsibilities and purview of this

3 table, so I've been coming here for years.

4 CHAIRWOMAN YOUNG: Okay. Well, thank

5 you very much.

6 MS. COLE: Thank you.

7 MS. SMYTH: Thank you.

8 CHAIRWOMAN YOUNG: Our next speaker is

9 CEO Louise Cohen, Primary Care Development

10 Corporation.

11 MR. KWAN: I am not Louise Cohen --

12 CHAIRWOMAN YOUNG: Okay.

13 MR. KWAN: Unfortunately, Louise had

14 to go back on the last train to New York.

15 My name is Patrick Kwan, K-W-A-N. I'm

16 the senior director for advocacy and

17 communications for the Primary Care

18 Development Corporation.

19 For over 25 years we've been working

20 in the State of New York with over 600

21 healthcare sites throughout the State of

22 New York, every corner, helping to expand and

23 strengthen primary care throughout by

24 providing capital investment, practice

571

1 transformation, and policy advocacy in

2 support of the primary care sector.

3 I would like to thank the Legislature

4 for the previous appropriation of the

5 $19.5 million for community healthcare

6 involving capital funds as we talk about the

7 opioid crisis throughout today.

8 I also want to mention that one of the

9 projects that we're very excited about is up

10 in Saranac Lake. It's going to be an

11 integrated outpatient facility with primary

12 care, 24/7 access, and referrals to keep

13 outside of expensive emergency room visits

14 and integrate a care that will help people

15 with the opioid crisis. And we are expecting

16 the facility to open in December of 2018.

17 And the revolving capital fund allows

18 us to make sure that we get the dollars and

19 financing quicker to facilities so that they

20 can build and meet the needs quicker in the

21 State of New York with the facilities

22 throughout the State of New York, that we do

23 have an immediate need to expand these

24 facilities and services throughout the State

572

1 of New York. And we thank the Legislature in

2 support of the Community Health Care

3 Revolving Capital Fund.

4 Nationally, in the State of New York,

5 primary care is undervalued and underfunded

6 despite evidence that it improves health

7 outcomes and reduces cost. Primary care

8 transformation efforts underway throughout

9 the State of New York, through DSRIP and

10 other initiatives -- you know, while they

11 very much rely heavily on primary care to

12 deliver the better care outcomes, better at

13 lower cost, they do not provide the full and

14 necessary support to ensure success.

15 Simply, our recommendations include

16 that DSRIP should provide a more significant

17 portion of funding directly to primary care

18 providers. Currently, it's under 5 percent.

19 New York State should maintain its robust

20 PCMH incentive payments, and the New York

21 State healthcare capital programs should

22 increase the proportion of dollars directed

23 to primary care and community-based health

24 care providers.

573

1 We also want to thank the Legislature

2 for including the $400,000 for PCDC in the

3 final 2018 budget, and we're very

4 appreciative of that continued support. The

5 funding allowed PCDC to undertake important

6 initiatives to ensure sustainable growth of

7 primary care in underserved communities.

8 We also would like to share that by

9 March 30th we will have a full report of

10 primary care access in the State of New York,

11 a county-level-wide analysis of data of

12 primary care facilities and the access to

13 care that's needed. While we are still

14 finalizing the data in the analysis, we can

15 say that what we've found, as in other

16 studies that have been shown throughout, that

17 people who live in counties with more primary

18 care providers have better health outcomes

19 and longer longevity. And we're very

20 encouraged and excited to share it with you

21 when the report is released on March 30th.

22 Finally, I also would like to echo

23 that we do hope that the Legislature will

24 reject the $20 million decrease of medical

574

1 home incentive payments in the New York State

2 Medicaid program. It takes an average of

3 almost $14,000 per full-time provider to

4 achieve PCMH and an additional average of

5 more than $8600 per provider, full-time

6 provider, annually to maintain it.

7 We also know that studies show that

8 the longer a practice has been transformed,

9 the overall impact of practice

10 transformation, particularly the cost

11 savings, is increased. We very much urge the

12 Legislature to help protect the PCMH

13 incentive program.

14 Thank you.

15 CHAIRWOMAN YOUNG: Great.

16 MR. KWAN: Thank you, Senator.

17 CHAIRWOMAN YOUNG: Any questions?

18 Thank you very much. Thanks for

19 filling in.

20 Our next speaker is Executive Director

21 Bryan O'Malley, Consumer Directed Personal

22 Assistance Association of New York State.

23 Thank you for being here.

24 MR. O'MALLEY: Thank you very much.

575

1 And thank you for putting in so much time. I

2 think it has -- it's been a long day.

3 We had about 450 individuals with

4 disabilities, workers and others here in

5 Albany today. You can see my shirt, left

6 over from Lobby Day.

7 I'm here to talk about much of what

8 I'm going to tell you tonight, and primarily

9 that is despite the fact that

10 consumer-directed personal assistance is

11 probably one of the fastest-growing

12 industries in the State of New York -- we

13 have added about 15,000 consumers to this

14 program over the past five years. That's

15 about 25,000 new workers around the State of

16 New York -- we do find ourselves in the state

17 of a workforce crisis throughout the state.

18 Consumers who utilize this program

19 cannot find staff. And if it weren't for the

20 fact that one-third or so of the consumers

21 who utilize this program are able to utilize

22 family, the crisis would be that much more

23 dire.

24 Last year we conducted a study and we

576

1 were able to determine that it took -- for

2 20 percent of the consumers who are in this

3 program, it took them over six months to find

4 a staff person to perform the services they

5 needed to survive every day. For about

6 8 percent of those consumers, it took them

7 over a year to find somebody to perform those

8 services.

9 These are critical home care services

10 that are as basic as getting out of bed and

11 going to the bathroom. They're things that

12 all of us take for granted every day.

13 The origination of this crisis is

14 simple. We have taken a job that used to pay

15 about 150 percent of the minimum wage and

16 turned it into a minimum-wage job. This

17 job -- and let's be clear, this is not a

18 minimum-wage job at Burger King levels or

19 Walmart levels. We are making $1.10 to $1.50

20 less than other minimum-wage sectors in the

21 economy.

22 When confronted with those two

23 choices, for how to go to work and earn a

24 living every day, it takes a very special

577

1 person to sign up for this work.

2 The wage structure is broken not

3 because FIs are greedy -- they're not saving

4 money, many of the FIs are losing money

5 themselves. Many of them are going out of

6 business. Our fee-for-service system is

7 broken, as many of you have heard today. The

8 direct care ceiling has not been raised in

9 10 years. That has resulted in costs where

10 providers are already losing a nickel to a

11 dime per hour.

12 As the minimum wage increases, the

13 rate is being funneled back into those direct

14 care costs, and it is being foisted on

15 providers. So where the Department of Health

16 does initially fund it in Year 1 and Year 2,

17 as we move further out, it is being foisted

18 on providers and that money is leaving the

19 system.

20 The managed-care system is broken. In

21 New York City, providers are required to pay

22 $17.09 an hour in wages and benefits.

23 Fidelis is paying those FIs $17.70 per hour.

24 That leaves 61 cents for workers'

578

1 compensation, unemployment, payroll taxes,

2 billing, administrative expenses, MTA tax,

3 and more. You cannot run a business on

4 61 cents.

5 This is the state of the home care

6 industry. This is the state of CDPA. This

7 is what is creating the crisis. If we don't

8 do something about it, people will wind up in

9 nursing homes, people will die. It is that

10 simple.

11 I also wanted to spend 30 seconds

12 talking briefly about the proposed marketing

13 and referral ban. We were flat-out told by

14 the Department of Health that they wish to

15 institute a marketing and referral ban

16 because people are seeing advertisements for

17 consumer direction, they are signing up for

18 MLTC, and they would like to see that stop.

19 In other words, people are finding out about

20 a Medicaid service they qualify for that

21 improves their quality of life, and the

22 Department of Health would prefer that didn't

23 happen because it is hurting the Medicaid

24 budget's bottom line and the global cap.

579

1 We find that intolerable, and a

2 backdoor benefit cut. It is politically

3 unpopular to cut the consumer-directed

4 program, so they would rather people just not

5 know about it.

6 I will just note we would like

7 rejection of the six-month -- the rejection

8 of moving people out of MLTC after six months

9 in a nursing home, rejection of the proposal

10 on the UAS score of 9, and a rejection of the

11 proposal to require 12-month continuous care

12 within one MLTC as well.

13 Thank you very much.

14 CHAIRWOMAN YOUNG: Thank you, Bryan.

15 Any questions? Thank you. Right on

16 the dot.

17 CHAIRWOMAN WEINSTEIN: Thank you.

18 CHAIRWOMAN YOUNG: Thank you.

19 Next, we have Government Relations

20 Director Julie Hart, from the American Cancer

21 Society Cancer Action Network.

22 I think I saw you in the hallway about

23 eight hours ago.

24 (Laughter.)

580

1 MS. HART: Thank you for the

2 opportunity to testify today. I appreciate

3 it very much.

4 You have a copy of my written

5 testimony which shows you what the cancer

6 burden is in New York State. We have

7 overall, in terms of new diagnoses expected

8 in 2018, we expect about 110,000 people are

9 going to receive a cancer diagnosis this year

10 and we'll see about 35,000 deaths from cancer

11 this year across the state.

12 I have broken it down by selected

13 cancers. The blue chart shows diagnosis for

14 2018 by select cancers. And then the red

15 chart on page 2, you'll see expected number

16 of deaths, again, by select cancers there.

17 So I just want to highlight a couple

18 of areas very quickly. The first relates to

19 tobacco use.

20 This is an area where New York --

21 traditionally, we've really been a leader

22 when it comes to tobacco control. Our adult

23 smoking rate is 14.2 percent. That's the

24 ninth-lowest in the country. Our youth

581

1 smoking rate is 4.3 percent, that is the

2 lowest in the nation, and that is thanks to

3 the works that you guys have been doing. We

4 have a strong Clean Indoor Air Act, we have a

5 high cigarette tax, and we have a great

6 although underfunded tobacco control program.

7 So we've made great progress when it

8 comes to our high school smoking rate.

9 That's very encouraging. Now, what's not as

10 encouraging is if we look at overall tobacco

11 use with kids.

12 So when we take in all of those other

13 products, the overall high school use rate is

14 about 25 percent, which is astonishing. And

15 it's actually increased since 2010. Now,

16 that's not surprising given that these are

17 the products that they can be flavored,

18 they're enticing to kids, and there's also a

19 price difference there. When it costs $10 or

20 $11 to get a pack of cigarettes but you can

21 get flavored cigars, two for $1.99 -- these

22 products are cheaper, so these are the ones

23 that kids are going to gravitate to.

24 Same with e-cigarettes. Price varies

582

1 considerably and, again, you'll see a

2 significant amount of flavoring -- anything

3 from grape to peanut butter and jelly -- and

4 these are things that really are appealing

5 and enticing to kids.

6 Now the Governor has proposed a tax on

7 e-cigarettes in his budget. We support that

8 in concept, but we do have concerns with the

9 way he has structured this and we do think

10 that you need to reconsider and, instead of

11 creating a whole new tax on this, tax these

12 cigarettes like you tax other tobacco

13 products, based on wholesale price.

14 The proposal in the Executive Budget

15 taxes by milliliter fluid, and therefore you

16 wouldn't see an increase as the wholesale

17 price increases if you do that. And what

18 could be more problematic is that, you know,

19 say if the industry turns around -- this is a

20 very stealthy industry -- if they turn around

21 and just increase the concentrations of the

22 fluid so they can undermine the tax that way.

23 So we would encourage you to look at

24 the e-cigarette cigarette tax, but in a

583

1 different way so that it's structured the

2 same as other tobacco products.

3 As far as the tax on other tobacco

4 products, we have not seen it increase in

5 those products since 2010. And again, we're

6 not seeing the same progress that we're

7 seeing with cigarettes there, so this is

8 another area where we would strongly

9 encourage you to increase the tax on those

10 tobacco products so that we have parity with

11 cigarettes, so that we again can keep kids

12 from ever starting to use these products.

13 If you increase the tax on other

14 tobacco products to provide tax parity, you'd

15 have to increase from 75 percent of wholesale

16 price to 97 percent of wholesale price. And

17 we estimate that that would also bring in

18 $25 million in additional revenue. And this

19 again is outside of the Governor's projection

20 for e-cigarettes.

21 So we hope that you will consider

22 that, and when we strongly urge you to

23 consider that -- because there really is a

24 public health need to look at this policy

584

1 approach and to increase the price there --

2 we would also encourage that some of that

3 money go back to the state's tobacco control

4 program so that hopefully we can keep more

5 kids from beginning this addiction and help

6 smokers that need assistance with their

7 addiction.

8 In addition, I wanted to talk very

9 briefly about the state's Cancer Services

10 Program. We are very fortunate that we do

11 have an excellent Cancer Services Program

12 across the state. The Executive Budget

13 proposes flat funding for the program at a

14 little over $19 million. However, the

15 program received a $5.4 million cut in the

16 current fiscal year, so that has impacted

17 legal services, breast cancer support groups,

18 and then, most notably, clinical services --

19 the actual screening. So fewer screenings

20 are being done because contractors are

21 running out of money at this point.

22 In one case, there was a contractor

23 that gave me a call, they said they could no

24 longer screen for colorectal cancer. They

585

1 couldn't give them the FIT kit -- which is

2 the home-based kit, which is the

3 least-expensive option -- because they

4 couldn't afford the colonoscopy that followed

5 that. So we would urge you to restore

6 funding on that.

7 And then just very quickly, two issues

8 that the Governor's budget does not touch on.

9 HPV vaccine, this is an area on page 6, I

10 actually have what the vaccination rates are

11 for New York State for children ages 13 to 17

12 there. Again, very low HPV vaccine, it's a

13 cancer vaccine, and we want that conversation

14 with the provider and with parents to be

15 about cancer. This is not about STDs. We

16 need to do education there, so we're asking

17 for $500,000 so that we can increase those

18 vaccination rates.

19 And then childhood cancer research and

20 treatment, about 1,000 kids each year are

21 diagnosed with cancer across the state.

22 Diagnosis and risk factors for childhood

23 cancer are very different than they are for

24 adults, treatment options are very different

586

1 than they are for adults, so very

2 heartbreaking for those families. So we

3 would encourage the state to look at putting

4 in some additional funds for research and

5 treatment.

6 Thank you.

7 CHAIRWOMAN YOUNG: Thank you.

8 CHAIRWOMAN WEINSTEIN: Thank you.

9 CHAIRWOMAN YOUNG: Our next speaker is

10 New York Policy Manager Allison Cook,

11 Paraprofessional Health Institute.

12 After that, we've got the manager of

13 government affairs, Dr. Greg Beratan, Center

14 for Disability Rights. Is he here? Okay,

15 speeding right along.

16 (Discussion off the record.)

17 CHAIRWOMAN YOUNG: Okay. After that

18 we've got Dr. James McGuirk, Ph.D., CEO,

19 Astor Services for Children & Families. He's

20 here.

21 Welcome. Thanks for being here.

22 DR. McGUIRK: Thank you very much for

23 hanging around and listening to our request.

24 I am also the president of the

587

1 New York State Coalition for Children's

2 Behavioral Health. You heard from Andrea a

3 little bit earlier. I'm here to talk

4 specifically about the RTFs.

5 The RTFs are a relatively small

6 program in the scope of all the state's

7 mental health programs, and if you read my

8 testimony you'll see some of the profiles of

9 the kids that we serve. And you'll notice

10 that they're young kids from the ages of 5 to

11 21. They have very serious emotional and

12 behavioral challenges that really create

13 significant stress on families and on

14 communities. And for these kids, the RTF is

15 a godsend and a safety net provider.

16 And what we're here to talk about is

17 the role of the RTF in this new

18 transformation. And we've been working very

19 closely with the Office of Mental Health and

20 the Department of Health to really find a

21 place for RTFs within the new Medicaid

22 redesign service system. And what's been

23 clear to us is that the monies available to

24 the behavioral health providers, and RTFs

588

1 specifically, have been minimal. And as a

2 result, it's putting the entire system at

3 risk.

4 And so what we're asking for

5 specifically is capital, because we need to

6 transform our environments to make sure they

7 can safely provide the care and treatment for

8 these very challenging children. Most of the

9 RTFs were created at a time when they were in

10 residential treatment centers, so these had

11 been old residential units that have been

12 converted and they no longer meet the needs

13 of the populations that we're serving. And

14 so making sure that we have the capital to be

15 able to renovate and rebuild our programs is

16 critical.

17 And an important part of that is debt

18 relief. Astor has been fortunate that we

19 have the ability -- we had the ability due to

20 OMH to build a brand-new facility, and it's

21 gorgeous and it meets the needs of the kids.

22 However, in this changing environment we are

23 not confident that our debt will be paid for

24 throughout the life of our loan, because at

589

1 some point, as the managed-care companies are

2 the ones that will be paying, that we're not

3 sure that they will pay for the debt service,

4 number one. And number two, the flexibility

5 that we're being asked to consider really

6 requires us to think about different models

7 besides an RTF model.

8 And so debt relief allows us to have

9 the flexibility to really work more closely

10 with the Office of Mental Health to design a

11 program that meets the needs of this new

12 environment. And so that becomes very

13 important.

14 Now, why are we here in this

15 committee? There have been hundreds of

16 millions of dollars set aside for healthcare

17 transformation for hospitals and

18 community-based providers. The RTFs have not

19 had access to those dollars and that money,

20 and we think that's unfair. We think it

21 really disadvantages us as an important

22 provider for some very difficult kids, and we

23 ask that you create a separate pool

24 specifically for these RTFs.

590

1 So with that, I say thank you very

2 much. Are there any questions?

3 CHAIRWOMAN YOUNG: Questions?

4 Yes, Mr. Cahill.

5 ASSEMBLYMAN CAHILL: It's not a

6 question. But Jim, thank you for coming up.

7 Your facility, the Astor Home, serves

8 children in my community but from communities

9 all over New York State. I know there's some

10 from the speaker's community, some from the

11 majority leader's community on Long Island.

12 And I just wanted to point out from

13 our previous conversations that this building

14 program that you embarked on was absolutely

15 necessary. Compared to the -- I looked at

16 the old facilities versus the new, and I

17 don't know whether it would have made sense

18 if you didn't think you could rely on

19 funding, and things have changed dramatically

20 since you made that building.

21 So in addition to the fact that it's

22 just a good idea because it's a good idea,

23 it's also a good idea that we keep our word

24 and that we make sure you have an adequate

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1 funding stream to support those improvements.

2 DR. McGUIRK: And it puts our agency

3 at risk, not just the RTF program.

4 CHAIRWOMAN YOUNG: Senator Hannon has

5 a question.

6 SENATOR HANNON: I understand the

7 shortcomings of -- the frustration of not

8 getting in the capital program. That's the

9 Governor's choice that we have to address.

10 But you also mentioned that it's

11 getting referrals, necessarily, from private

12 insurance. Where else would they refer if

13 not to one of the RTFs in New York?

14 DR. MCGUIRK: Out of state.

15 SENATOR HANNON: So that's the

16 alternate that's going on right now?

17 DR. McGUIRK: Yes. Yes.

18 SENATOR HANNON: And we have actually

19 worked to try to bring people back into the

20 state.

21 DR. McGUIRK: That is correct.

22 SENATOR HANNON: Thank you.

23 CHAIRWOMAN YOUNG: Thank you.

24 DR. McGUIRK: Thank you very much.

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1 CHAIRWOMAN YOUNG: The next speaker is

2 Executive Director Tim Hathaway, from Prevent

3 Child Abuse New York.

4 MR. HATHAWAY: Good evening, members

5 of the committee. Thank you very much for

6 the chance to speak with you this evening.

7 Prevent Child Abuse is an organization

8 working statewide really doing three things:

9 Policy advocacy work, professional

10 development and training at a community level

11 across the state, and then on the issue of

12 changing the narrative about issues related

13 to child maltreatment.

14 So there are really three things that

15 come for the issue of health. Child

16 maltreatment really is a public health issue.

17 It impacts hundreds of thousands of children

18 in the State of New York every year, costing

19 the state millions and millions of dollars.

20 Three things that there's been a

21 little bit of discussion about today. The

22 first one is the issue of early childhood

23 home visiting programs. So maternal/infant

24 early childhood programs fall under the

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1 auspices of the Health Department. It's a

2 federal program, but it's serving a lot of

3 kids across the State of New York. So we are

4 disappointed to see that the Governor's

5 budget does not include as much increase

6 around this issue as we know is important.

7 When we talk about programs that work,

8 home visiting works -- reductions of up to

9 50 percent in terms of child maltreatment.

10 So if we could cut the number of kids being

11 abused by 50 percent by supplying these

12 front-end preventative services, we'd be in

13 much better shape. So I would encourage you

14 to reexamine this work.

15 There is a proposal for about

16 $200,000, a little drop in the bucket, to

17 really build infrastructure around the

18 workforce. These programs -- again, you have

19 heard a lot of testimony about direct service

20 folks. The people working in these programs

21 really will benefit from workforce

22 development efforts.

23 The second issue I'd like to speak

24 with you about is the Comprehensive

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1 Contraceptive Care Act. So why is this

2 important in terms of child maltreatment? We

3 believe very strongly there's good evidence

4 that when women and families have more and

5 better access to family planning, they have

6 better outcomes in terms of kids. It reduces

7 risk, reduces stress for families, creates

8 opportunities for people to be thoughtful

9 about how they're bringing children into the

10 world and the options that they have to care

11 for children. We appreciate the fact that

12 safeguarding reproductive health for women is

13 an important issue in terms of creating the

14 sort of environment where families thrive.

15 The third issue is related to

16 relationship and sexuality education for all

17 children. This again is a very important

18 public health issue. When children have

19 better information about relationship health

20 and about sexuality health, they are

21 inoculated against sexual abuse.

22 Sexual abuse is something that we're

23 hearing a lot about in our communities, in

24 our national news. We're hearing a lot about

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1 how we can protect kids very simply by

2 helping them, equipping them early throughout

3 their growing and formative years. So I

4 would encourage you to really examine the

5 proposals, the proposals that are out there

6 relative to that work. They're critical to

7 the health of our children.

8 With that I will say thank you, and I

9 hope you have a great rest of the evening.

10 CHAIRWOMAN YOUNG: Thank you so much.

11 SENATOR HANNON: Thank you very much.

12 CHAIRWOMAN YOUNG: Our next speaker is

13 Executive Director Steven Sanders, Agencies

14 for Children's Therapy Services, ACTS.

15 Welcome back, Steven.

16 MR. SANDERS: Good evening. Thank you

17 all for still being here at this late hour.

18 I heard there were some people who were going

19 to start their testimony by saying "good

20 morning," and they were worried that they

21 might have to start their testimony by saying

22 "good morning." But I don't think it will be

23 that long.

24 Yes, my name is Steven Sanders, I am

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1 the executive director of Agencies for

2 Children's Therapy Services. The agencies

3 that belong to my association provide a

4 majority of the early intervention services

5 across the state each year. In the interests

6 of time, I'm just going to try to address

7 three points and do it very quickly, three

8 points from the Governor's proposals.

9 The Governor once again is proposing

10 to drastically change, reduce, and condense

11 the evaluations, which is the starting point

12 for children to be identified who may have

13 learning disabilities and developmental

14 disabilities. He wants to change it in such

15 a way that fewer evaluations will be done.

16 There will not be any assurety that

17 multidisciplinary evaluations will any longer

18 be done, and that is key to the program

19 because there are a lot of disabilities and

20 problems that youngsters have that are subtle

21 or not that obvious, and you need a rigorous

22 multidisciplinary evaluation system to

23 identify all those issues that kids have.

24 When you get rid of that, you run the

597

1 risk of kids not being identified or being

2 underidentified. And the result of that does

3 not save the state any money, if that's what

4 the Governor's intent is, but rather it

5 delays the identification of these problems

6 and it becomes a much bigger problem and a

7 much more expensive problem for special

8 education and preschool special education

9 programs. So I encourage you to reject that

10 proposal, as you have done in the past.

11 The second point I want to address is

12 something that I think is a good idea that

13 the Governor has proposed. The primary

14 reason why commercial insurance rejects

15 claims -- and they reject about 85 percent,

16 almost 85 percent of the early intervention

17 claims that they receive each year. That

18 number has remained consistent for virtually

19 the entire 25 years of the program. The

20 primary reason why they reject claims is

21 because of a lack of prior authorization, by

22 their definition of what prior authorization

23 should be.

24 What the Governor is suggesting is to

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1 make the individual family service plan or a

2 doctor's script, both of which are required

3 before services can begin in early

4 intervention, to make that doctor's script,

5 that IFSP, tantamount to prior authorization.

6 If you make that change in the

7 insurance law, then commercial insurance

8 companies will have one less reason to reject

9 claims. If they reject fewer claims, that

10 means there will be more money coming from

11 the insurance space, which means there will

12 be less money coming from the state and

13 counties to reimburse providers.

14 So commercial insurance clearly does

15 not pay their fair share. Clearly. And this

16 is a change that I think would be a welcome

17 change and one that I think you ought to

18 embrace.

19 Finally, the Governor is proposing

20 that all denials of claims, all denials of

21 claims -- commercial insurance, Medicaid --

22 must be appealed. To appeal all claims,

23 number one, really doesn't guarantee there

24 will be a different outcome at the end, but,

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1 number two, will add more layers of work,

2 more layers of cost, more layers of

3 time-consuming administrative work which

4 providers have already had layered upon them.

5 And it will delay reimbursement to providers

6 by weeks, probably months.

7 It's not a good idea. It's not going

8 to lead to greater reimbursement, in all

9 likelihood. What it will lead to is greater

10 expense for providers and greater time.

11 So I hope that you will reject that

12 claim and simply embrace a proposal that

13 providers receive a clean 2 percent rate

14 increase, a rate they haven't seen in

15 16 years.

16 So with that, I've just about made it,

17 and I thank you so much for your time.

18 CHAIRWOMAN YOUNG: That's great.

19 Senator Krueger has a question.

20 SENATOR KRUEGER: Evening, Steve.

21 So you come here every year to

22 testify, and it does seem that there's just

23 some fundamental fight with the

24 administration every year over whether early

600

1 intervention costs the state more money or

2 saves money, and I know you testify every

3 year that it saves money.

4 Are there some studies that have been

5 done that actually we can wave around showing

6 if we invest in quality early intervention

7 we're actually saving the state money?

8 Because I think that helps you win.

9 MR. SANDERS: Yes. There are several

10 authoritative studies -- I'm not sure if they

11 originated in New York State or not, but the

12 studies all agree that when a child who

13 should receive early intervention services

14 does not, it will cost the state, whatever

15 state we're talking about, approximately

16 seven times that amount of money by virtue of

17 the fact that there will be delayed services

18 required in special education -- preschool

19 special ed, special education, and beyond.

20 Because, you know, I think one thing

21 which is a given -- I'll say this really

22 fast -- one thing which is a given is that

23 the earlier that you try to remediate

24 disabilities, the easier it is and the more

601

1 successful you will be.

2 So when you wait an additional two or

3 three years once that child gets into a

4 school-age situation or later, it's going to

5 cost a lot more money for the state and

6 counties. Seven times seems to be the number

7 that has been embraced by most of the studies

8 that I've seen. I'll try to find you one or

9 two of those studies.

10 SENATOR KRUEGER: Thank you.

11 MR. SANDERS: Okay.

12 CHAIRWOMAN YOUNG: Thank you.

13 MR. SANDERS: Thank you all. Thanks

14 very much.

15 ASSEMBLYMAN CAHILL: Very briefly, on

16 this question of providers filing appeals.

17 What kind of charges does a per-visit get

18 that would have to be appealed? My

19 recollection is that many of the providers

20 who are providing services in early

21 intervention are getting $25, $35, $45, $50

22 for their service. And that's what is being

23 proposed, that we require an appeal on top

24 of, already, the bill collecting that they

602

1 have to do?

2 MR. SANDERS: Yeah. There are a range

3 of services, the most expensive being

4 probably in the autism area and ABA, applied

5 behavioral services. Those are the most

6 expensive.

7 But you're correct, there are a lot of

8 services, especially evaluations, which are

9 $25 or $30 a session. All of these denials

10 would have to be appealed. Tens of

11 thousands of denials would now have to be

12 appealed. It's going to take time, it's

13 going to take much more expense, more

14 administrative work, with very little

15 additional return.

16 ASSEMBLYMAN CAHILL: Thanks, Steve.

17 MR. SANDERS: Thank you very much.

18 Thank you all very much.

19 CHAIRWOMAN YOUNG: Thank you.

20 Our next speaker is the director of

21 the health law unit, Rebecca Novick, Legal

22 Aid Society.

23 Welcome.

24 MS. NOVICK: Thank you for the

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1 opportunity to testify this evening. My name

2 is Rebecca Antar Novick, and I'm the director

3 of the health law unit at the Legal Aid

4 Society in New York City. The Legal Aid

5 Society is a private, not-for-profit legal

6 services organization, the oldest and largest

7 in the nation, dedicated since 1876 to

8 providing quality legal representation to

9 low-income New Yorkers.

10 The health law unit provides direct

11 legal services to low-income health care

12 consumers from all five boroughs of New York

13 City. We are very grateful that overall the

14 Executive Budget maintains the strength and

15 integrity of New York’s Medicaid program,

16 especially in the face of persistent threats

17 from the federal government to Medicaid and

18 the health care system as a whole. We are

19 confident that New York will continue to be a

20 leader in providing high-quality

21 comprehensive health care in the Medicaid

22 program.

23 As the program continues to implement

24 sweeping changes to programs and products, it

604

1 is particularly important to protect

2 low-income New Yorkers' access to quality

3 benefits and services. I'm going to briefly

4 comment on just a few of the issues that I

5 discuss in my written testimony.

6 First, we oppose the managed long-term

7 care 12-month lock-in because it takes away

8 an important way for members to assert their

9 rights. Though there is a similar lock-in

10 provision in mainstream managed care, the

11 grace period in the mainstream program is

12 90 days, versus 30 or 45 in this proposal.

13 And it would be unreasonable to impose a more

14 stringent requirement on a population by

15 definition that has more extensive needs.

16 In addition, mainstream beneficiaries

17 eligible for health and recovery plans or for

18 special needs plans are able to switch into

19 one of those programs at any time. This

20 recognition of the importance of flexibility

21 for high-needs individuals should get

22 preserved in MLTC.

23 Unfortunately, we have observed

24 serious information gaps about the services

605

1 available through plans and the likelihood of

2 getting them and other failures of case

3 management in MLTC.

4 Of course, we hope that all MLTC

5 members are able to reach an advocate or

6 avail themselves of the dispute resolution

7 options. But too often when a client gets to

8 us, we find out that for months or sometimes

9 years they've been attempting unsuccessfully

10 to even request additional services from

11 their plan. And sometimes we hear that

12 they've heard from a neighbor or a friend

13 about a plan that is actually serving them

14 very well, and even with outreaching an

15 advocate they're able to get to another plan

16 and are able to get the services that they

17 really need that way.

18 I just want to briefly mention, with

19 regard to the nursing home carve-in, because

20 I know it's been discussed a lot today, that

21 from the consumer perspective I just want to

22 emphasize, first of all, how common it is for

23 members to be in a nursing home for six

24 months or more but they want to and are able

606

1 to live safely in the community.

2 And I also just want to emphasize how

3 incredibly difficult it is to get out of a

4 nursing home into the community, especially

5 when you've been there for a long time, and

6 how much more difficult it was before the

7 carve-in, and we really fear going back to

8 that time. Making the stars align just

9 doesn't even begin to describe the amount of

10 coordination that needs to happen to get

11 somebody into MLTC and into the community.

12 I want to strongly support the

13 $2.5 million appropriation for the Community

14 Health Advocates program in the Executive

15 Budget, and urge the Legislature to provide

16 an additional $2.25 million to fortify and

17 expand this critical program, as well as

18 $2 million to revive the Small Business

19 Assistance Program.

20 We are proud to serve as a specialist

21 organization in the CHA network, which has

22 served more than 300,000 New Yorkers with

23 every kind of health insurance since 2010.

24 In the face of so much uncertainty about the

607

1 ACA and the Medicaid program, our role in

2 providing consumer assistance is more

3 important than ever.

4 In my last few moments I just want to

5 comment on -- really briefly -- on a couple

6 other access-to-care things. First of all,

7 we strongly oppose the increased copayment

8 for over-the-counter medication. Our clients

9 do not have additional money to pay, and too

10 often it really does happen that even though

11 they shouldn't be, they're turned away from

12 the pharmacy without getting their drugs.

13 I really want to emphasize the

14 importance of reminding plans and consumers

15 and pharmacies about the fact that people

16 cannot be denied a drug without their

17 copayment, but the fact is that it happens

18 and it happens more when copayments are

19 higher.

20 I also want to support the increase in

21 the physical therapy cap from 20 to 40

22 visits, but I want to say that really there

23 should be no cap at all. This should be

24 aligned with the requirement in Medicaid as a

608

1 whole that there is a medical necessity

2 standard, and people should be getting the

3 services that are necessary for them.

4 Thank you very much.

5 CHAIRWOMAN WEINSTEIN: Thank you.

6 CHAIRWOMAN YOUNG: On the dot.

7 Thank you.

8 SENATOR KRUEGER: Thank you.

9 CHAIRWOMAN YOUNG: Our next speaker is

10 Charles King, president and CEO of

11 Housing Works.

12 MR. KING: I've been threatened by one

13 of the senators but --

14 (Laughter.)

15 ASSEMBLYMAN CAHILL: Let's make it

16 unanimous for both houses.

17 MR. KING: I was here before all of

18 you this morning, and I will be here until

19 you're ready to leave. So bear with me.

20 SENATOR HANNON: Let the record show

21 you're just being jocular.

22 MR. KING: There you go.

23 So first of all, I want to share with

24 you some very good news, and that is that if

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1 you look at the 2016 surveillance data for

2 HIV, New York State is well on track to

3 ending AIDS as an epidemic by 2020, as the

4 Governor committed in 2014. And as somebody

5 who's been riding herd on top of this

6 process, I can't tell you how proud we are

7 that we have gotten this far along.

8 However, I do want to point out that

9 there is a growing disparity in the progress

10 we're making in New York City versus the

11 progress we're making in the rest of the

12 state. And one singular difference between

13 New York City and the rest of the state has

14 to do with housing for people living with

15 HIV. Through the 30 percent rent cap

16 approved in the budget two years ago,

17 through -- three years ago, through action by

18 the Governor, two years ago they changed the

19 definition of HIV disease. Now New York City

20 is the one jurisdiction anywhere in the

21 entire world where low-income people living

22 with HIV are guaranteed housing through

23 enhanced rental assistance or through

24 supportive housing.

610

1 That same benefit does not apply to

2 the rest of the state, neither the 30 percent

3 rent cap nor an enhancement sufficient for

4 anyone to get a decent apartment. As a

5 consequence, there are some 28,000 people in

6 New York City taking advantage of this

7 benefit and 72 households taking advantage of

8 this benefit in the entire rest of the state.

9 We tried to fix it this year. Being

10 judicious with my words, I would say that the

11 Division of the Budget was inartful at best

12 in how it worded the changes. We are working

13 to get it corrected in the 30-day amendments,

14 but failing that, we are definitely going to

15 need the support of both houses.

16 It is fundamentally unfair that

17 someone living in Rochester, in Westchester,

18 on Long Island or anywhere else in this state

19 does not have the same benefit that people

20 living with HIV are afforded in New York.

21 And by the way, that could be funded

22 out of Medicaid to the point that Jason

23 answered this morning, inasmuch as

24 Medicaid -- two studies show that housing for

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1 people with HIV accrues up to $15,000 a year

2 in savings just in averted emergency room and

3 inpatient.

4 And by the way, I don't think

5 anybody's really noticed that a couple of

6 years ago, two years in a row, in your budget

7 you passed legislation that appropriated

8 $44 million in Medicaid savings under the cap

9 to housing. That money was borrowed by DOB

10 to help pay for the federal government's

11 recruitment and was to be paid back this

12 year. That money was not restored to OHIP,

13 and that money in and of itself could pay the

14 cost of this expansion for several years.

15 Very quickly, the other things that I

16 just want to comment on. The Governor

17 announced December a year ago a commitment to

18 end AIDS mortality -- that is, death

19 associated with AIDS -- by 2020 and to end

20 HIV transmission among people who use drugs

21 by 2020. Workgroups came forward with

22 proposals to do that using the same

23 sentinel-events methodology that we've used

24 to get to near-zero perinatal transmission.

612

1 It would only cost $3 million a year to

2 implement this methodology.

3 The Governor has not included this

4 money in his budget. Before I fault him, I

5 should say that since we began this effort to

6 end AIDS as an epidemic, neither the Assembly

7 nor the Senate has put forward any

8 contribution other than approving what the

9 Governor put in his budget, so I would urge

10 you this year to put the $3 million in so

11 that we can eliminate AIDS mortality and

12 eliminate transmission through injection drug

13 use, which we now already have down below 120

14 cases a year. It's an amazing, phenomenal

15 accomplishment that no other state can claim.

16 Very quickly, to drug user health. I

17 just want to point out that Dr. Zucker evaded

18 a question that he was asked this morning.

19 The AIDS Institute has received $300,000 a

20 year from naloxone -- no increase now for

21 over three years. If we want to stop opioid

22 overdoses, we need to make it happen.

23 We also need to invest in other forms

24 of drug user health, and that includes

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1 supervised injection facilities. I was

2 gratified to hear what Jason said today about

3 hepatitis C and negotiating for rebates, but

4 we do need money to establish competent

5 provider networks around the state. We can

6 do it, we can eliminate hepatitis C in this

7 state, we could be the first state to

8 eliminate hepatitis C., even though we now

9 have 150,000 or more people living with it.

10 But we need the resources to begin to build a

11 campaign to make that happen.

12 And last but not least, I want to echo

13 the testimony that you've heard about the

14 public health campaign dollars. TB across

15 the state was cut from this pot of money by

16 20 percent last year, and what is envisioned

17 this year is an additional decrease of

18 20 percent in funding when we now have TB

19 actually on the rise, including new cases of

20 multidrug-resistant TB.

21 And then one last point and I'll be

22 done, and that is that Health Home has been

23 critical to ending the AIDS epidemic and is

24 critical to eliminating hepatitis C and to

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1 drug user health. I urge you not to take the

2 advice of the Plan Association and eliminate

3 or cut any further Health Home.

4 Thank you so much.

5 CHAIRWOMAN YOUNG: Thank you,

6 Mr. King. Thank you for being here.

7 Any questions?

8 MR. KING: I thought Senator Rivera

9 had one for me.

10 CHAIRWOMAN YOUNG: He just needed the

11 Heimlich maneuver.

12 I just want to verify that they're not

13 here -- Planned Parenthood Empire State Acts,

14 Robin Chapelle Golston, was supposed to be

15 here?

16 CHAIRWOMAN WEINSTEIN: No.

17 CHAIRWOMAN YOUNG: No, they were

18 invited.

19 Yes, thank you. Okay, that concludes

20 the Health Budget Hearing, and we'll see

21 everyone tomorrow for Mental Health. Thank

22 you.

23 (Whereupon, the budget hearing

24 concluded at 8:28 p.m.)

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