Over the next five years, the state will keep the federal savings
it makes by reforming its existing Medicaid program. The savings,
slated to total more than $17 billion by the end of the 2014-2015
financial year, were identified by a group established in 2011 by
New York Governor Andrew Cuomo.
New York state spending on Medicaid is among the highest in the
country. The system of medical insurance for people on low incomes
will cost around $58 billion in the coming year. In 2010, New York
spent $8,910 per patient compared to a national average of $5,563,
according to data from the Kaiser Family Foundation non-profit group
that focuses on health care policy.
The federal government pays about half of that, meaning the issue
has traction outside New York.
Cuomo hailed the agreement even though the waiver was $2 billion
less that the state had originally requested.
"This waiver amendment allows us to invest these savings in keeping
Brooklyn's hospitals open, providing new community based primary
care clinics in neighborhoods that need them and preserving health
care services across our state," Cuomo said.
New York City's new mayor, Bill de Blasio, who campaigned against
hospital closures in the city, called the waiver 'a major milestone
that will help break the vicious cycle of heedless hospital
In an era of tighter budgets, the federal government is keen to cut
the amount it reimburses states. Federal spending of health care
totaled about $772 billion in 2013, or a fifth of the federal
budget, according to the Center on Budget and Policy Priorities.
Medicaid accounts for nearly $500 billion of that.
[to top of second column]
Last year, the federal government cut $1.2 billion from the Medicaid
money it gives to the state after the Center for Medicaid Services
(CMS), the federal agency that administers the system, found over
billing at centers for people with developmental illnesses in the
Fiscal conservatives see New York's Medicaid system as expensive,
wasteful and unaccountable.
A congressional report last year said over billing for the
developmental centers reached $15 billion during the last 20 years.
CMS opened an audit of those billing rates last year but has yet to
issue a final report and has not said whether it will seek
"Today's formal agreement with New York represents a significant
commitment to improve care delivery in Medicaid that will result in
better health outcomes for New Yorkers, improved efficiency, and
lower health care costs for the program," said CMS spokeswoman Emma
(Reporting by Edward Krudy; editing by Grant McCool)
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