Senate Passes 2005-06 Health And Mental Hygiene Budget

John J. Flanagan

April 04, 2005

Senator John J. Flanagan (R,C-East Northport) announced today that the New York State Senate passed 2005-06 State Budget legislation that restores more than $762 million for hospitals, nursing homes and health care that the Executive had proposed to be cut, and takes steps to rein in the spiraling cost of Medicaid to local property taxpayers.

"The budget restores funding for hospitals, nursing homes and health care ensuring that these vital services will be there for our loved ones in their time of need while other provisions of the budget will help provide relief to local property taxpayers," said Senator John J. Flanagan.

The budget includes measures aimed at stemming the growth of Medicaid, including a sweeping cap on the program’s cost to local taxpayers. It also increases local accountability, implements an aggressive crackdown on fraud, and places additional emphasis on managed care.

Health care related highlights contained in the 2005-06 State Budget include:

Medicaid Cap- State takeover of local Medicaid costs, beginning with the takeover of costs that exceed an annual growth rate, set as follows: 3.5 percent in 2006, 3.25 percent in 2007 and 3 percent in subsequent years. Together with the takeover of the Family Health Plus program, the cap will save local taxpayers over $3.3 billion annually when fully effective. In exchange for the State takeover, counties will be required to remit a set level of local revenues to the state, and will be subject to new accountability standards aimed at checking excessive local spending growth.

Family Health Plus - An accelerated State takeover of the Family Health Plus program for counties outside of New York City. Under the plan, the state would assume all local costs for the Family Health Plus program, effective October 1. The accelerated takeover of the program will provide $25 million in fiscal relief to local property taxpayers in SFY 2005-06. The Legislature also rejected the Executive’s proposal to increase co-payments and cut benefits available under the program.

Prescription Drugs - A state "Preferred Drug Program (PDP)" and Prior Authorization requirement have been created. The plan ensures that doctors will have the final say in which drugs may be prescribed to patients and will result in $55 million in Medicaid savings.

Senior Citizens - The budget includes $199 million for programs and services administered by the New York State Office for the Aging, a 6.1 percent increase from SFY 2004-05. The Budget also provides an additional $1 million for the Supplemental Nutrition Assistance Program (SNAP) and $1.2 million for the neighborhood Naturally Occurring Retirement Communities (NORCS) program.
Ÿ Improved Efficiency and Accountability - The budget integrates the Health Care Reform Act (HCRA) in the budget, making HCRA spending more transparent to the public and improving accountability. The budget also increases State efforts to combat Medicaid fraud with an estimated savings of $32.2 million.

Merger of Disability-related Offices - The Commission on the Quality of Care for the Mentally Disabled is merged with the Office of Advocate for Persons with Disabilities, into the new Commission on Quality of Care and Advocacy for Persons with Disabilities.

Health Care Facilities - The Budget restores $235.6 million in Medicaid reductions proposed by the Executive and reduces the 0.7 percent Gross Receipts Tax (GRT) proposed by the Executive to 0.35, and restores $124.3 million. It also restores $46.6 million in funding for outpatient mental health services and non-complicated detoxification services.

Drug Prevention - The budget provides $524 million requested by the Executive for the State Office of Alcoholism and Substance Abuse Services and restores an additional $3.1 million for the New York City Department of Education’s Substance Abuse Prevention program and $1 million for drug prevention efforts in upstate communities.