Department of Health
The enacted budget makes the following changes to the Executive Budget (analysis as of 4/2/07):
- Adds $102 million to the department’s All Funds appropriation; which includes a $2.4 million increase in the General Fund; and a $99.6 million increase in the Special Revenue-Other appropriations for this department.
- Adds $1.4 million to the total appropriation for Personal Services.
- Rejects the Executive’s proposal for the establishment of an Early Intervention Program Account within the Center for Community Health Program, and eliminates its $400,000 appropriation. $253,000 of that decrease was for personal service funding and $147,000 was for nonpersonal service funding. The impact of this cut on staff levels should be clarified at Statewide Labor Management.
- Adds $2.2 million to the Health Care Standards and Surveillance Program, which included a $2 million increase in personal service funding; and a $200,000 increase in the maintenance undistributed appropriation for services and expenses of an adult home supplemental security income adequacy study. The impact of these added funds, how much additional staff they may fund, and whether the study will be conducted by state employees at DOH should be clarified at Statewide Labor Management.
- Adds $200,000 to the Office of Medicaid Management’s maintenance undistributed (MU) appropriation. The MU funding change includes: a decrease of $300,000 to the MU’s personal service appropriation; and an overall $530,000 increase to the MU’s nonpersonal service appropriation. The MU’s nonpersonal service increase included decreases to the supplies and materials ($30,000), travel ($7,000), equipment ($23,000), and contractual services ($610,000), but all of these decreases were offset by an appropriation of $200,000 for a Universal Health Care Study and a $1 million appropriation that is to be suballocated to the State Office for Aging for the health insurance information, counseling and assistance program. It is unclear what the impact on staffing levels for this program will be due to the cut in its personal service appropriation. It is also unclear whether department staff or outside contractors will conduct the Universal Health Care Study. These issues should be clarified at Statewide Labor Management.
- Adds $100 million to the Wadsworth Program in the newly created Empire State Stem Cell Research Account.
- Accepts the Executive Article VII language proposal to create the New York False Claims Act with qui tam provisions, which will allow private persons to bring civil actions on behalf of New York State to recover funds wrongfully obtained through fraud.
- Rejects the Executive’s Article VII language to create the Martin Act for Health Care.
- Rejects the Governor’s proposal to create a new public benefit corporation to administer the new Stem Cell Innovation Trust Fund which will instead be administered by a newly created Empire State Stem Cell Board within the Department of Health and chaired by the Commissioner of Health.
- Amends the Executive’s Article VII proposal to create a Public Hospital priority pool and instead establishes a $48 million Priority Restoration Pool, of which $42 million for voluntary hospitals outside of New York City and $6 million for public hospitals not operated by the City of New York (distributions will be made on a per-Medicaid discharge basis and public hospitals must demonstrate at least a 17.5% Medicaid inpatient volume).
- Makes changes to the Executive’s Article VII proposal for Graduate Medial Education (GME): reduces Medicaid spending for those hospitals whose GME current costs have decreased compared to the value in the rates; and applies an across-the-board cut of $24 million in the HCRA GME pool. It is unclear how these changes will affect the SUNY hospitals
The Senate and Assembly recommend (analysis as of March 16, 2007):
Senate:
- Rejects the increase in funding for 90 new full time staff positions and includes funding for only 50 new full time staff positions. According to the Senate Resolution this will realize a General Fund savings of $2.8 million.
- Removes $2.2 million in non personal service spending from the General Fund appropriation for its State Operations programs.
- Rejects the imposition of new Early Intervention Program fees. This rejection may be related to the Executive Budget proposal for a $400,000 appropriation toward an Early Intervention Program Account in the Center for Community Health program. That account included an allocation of $253,000 to Personal Services.
- Rejects the changes to Graduate Medical Education including the Executive Budget’s proposed methodology for distributing GME funds; and rejects the redirection of funds to establish Medicaid payments to public hospitals that serve more than 35 percent of Medicaid recipients.
- Rejects $2.8 million in funding for increased provider audits and the Article VII language that gives DOH audits the “presumption of being correct.” (It is unclear whether the funds are removed from State Operations or Aid to Localities).
- Rejects the proposal to move the rate setting process for Child Health Plus from the Department of Insurance to the Department of Health.
- Cuts $4.5 million from an Insurance department $21.5 million suballocation to DOH for services and expenses incurred for implementation of a forge-proof pharmaceutical prescription program.
Assembly:
- Adds $2.8 million: $3 million in a maintenance undistributed appropriation to the Occupational Health Clinics Account in the Center for Environmental Health Program; and $200,000 in a maintenance undistributed appropriation in the Office of Medicaid Management Program.
- Rejects the Executive proposal for a $400,000 appropriation toward an Early Intervention Program Account in the Center for Community Health program. That account included an allocation of $253,000 to Personal Services.
- Adds Article VII language to establish the Stem Cell Research and Regenerative Medicine Support Program in the Department of Health. According to the Assembly, $500 million in the Health Care Reform Act (HCRA) proceeds from the conversion of a not-for-profit health insurer to a for-profit entity will be reserved to fund this research.
- Adds Article VII language to create two temporary State Commissions. One to examine Universal Health Coverage and the other to examine Health Care Delivery Reform.
- Amends the Executive Budget proposal to redirect funds for Medicaid payments to public hospitals that serve more than 35% Medicaid recipients by lowering the threshold to 25%. This may ameliorate the impact of this cut on SUNY hospitals.
The 21-day amendments to the Executive Budget recommend the following changes (analysis as of February 22, 2007):
- Adds $1.4 million to a Maintenance Undistributed appropriation in the Administration and Executive Direction Program. These funds are for services and expenses related to collecting and posting retail prescription drug prices on the DOH website as a resource to consumers.
The Executive Budget recommends (analysis as of January 31, 2007):
A FY 2007-08 workforce of 5,998. This is an increase of 90 FTEs from the adjusted FTE level for FY 2006-07. The following chart identifies adjustments in current fiscal years FTEs along with the recommended differences in FY 2007-08 FTEs by program (if the FTE’s are the same the program is not listed):
Program
FY 2006-07 Adjustment
FY 2007-08 Difference
Administration and Executive Direction
29
Child Health Insurance
4
Community Health
14
11
Environmental Health
14
Health Care Financing
-12
14
Health Care Standards and Surveillance
39
13
Laboratories and Research
5
Managed Care
7
Office of Medicaid Management
10
7
- The total appropriation for Personal Service is $290.7 million. The Executive Budget book shows that DOH will have a $286,493,816 personal service appropriation which is a $13.73 million increase over the adjusted SFY 2006-07 appropriation for the department.
- An All Funds increase of $24.6 million, 0.5% from SFY 2006-07.
- Establishes an Early Intervention (EI) Program Account, with an appropriation of $400,000, in the Center for Community Health Program, which will collect EI provider fee revenues and be used to offset administrative expenses. The Executive Budget commentary states that five new audit staff will be added to this program which we assume will be funded by the $253,000 personal service appropriation within the EI account. According to the Senate Finance Committee, a State savings of $10 million is expected through an increase in audit recoveries for the EI program.
- Establishes a Medicaid Training Contract Account, with an appropriation of $1 million, in the Office of Medicaid Management Program and allows funds to be used to offset administrative expenses
- The proposed increase of 14 FTEs for the Health Care Financing Program is not reflected in the Personal Service appropriation, which is actually decreased by $724,000, (13%). Additionally, in SFY 2006-07 there was supposed to be an increase of 11 FTEs in this program and instead there was a decrease of 12 FTEs. This funding decrease and the actual number of FTEs should be clarified with management.
- The Executive Budget commentary states that DOH will supplement current HCRA audit capabilities by adding five staff to improve the timeliness of audits and ensure appropriate revenue collections. We assume these 5 new FTEs are part of the 14 FTEs to be added to the Health Care Financing Program. The location and funding of these FTEs should be clarified at statewide labor management.
- According to the Assembly the Executive Budget proposes an increase of $3.5 million to support the addition of 75 new FTE positions related to public health programs. The Senate also references 75 new FTEs. Details should be clarified at statewide labor management.
- Establishes a new Office of Health Insurance Programs (OHIP). This new office will assume responsibility for all government health insurance programs, including Medicaid, Child Health Plus, Family Health Plus, and the Elderly Pharmaceutical Insurance Coverage Program. The Office will also be responsible for developing strategies to reduce the number of uninsured. To ensure that Medicaid pays for the right care in the right setting and at the right price, OHIP will oversee rate setting policies within the Department and also at OASAS, OMH and OMRDD. This office is not specifically funded in the Executive Budget but we assume it is funded by and oversees the Child Health Insurance, EPIC, Health Care Finance, Office of Medicaid Mgt and Office of Managed Care Programs. This issue should be clarified at statewide labor management.
- Establishes the Offices of Information Technology and Long Term Care Services and Programs. These offices are also not specifically funded in DOH’s budget and the Medicaid Management System program remains a separate program in DOH’s budget. How these offices are funded and what programs they are located in with DOH’s budget should be clarified at statewide labor management.
- The Office of Health Systems Management will continue its licensure and surveillance functions and will spearhead implementation of the Berger Report.
- The majority of the accounts within the Institutional Management Program maintained the same level of funding as the prior fiscal year, with the exception of an increase of $630,000 for Helen Hayes and a decrease of $1.6 million for Lower Hudson Veterans Home Account.
- Roswell Park Cancer Institute (RPCI) again received: $78 million in direct support (in the DOH Aid to Localities budget, HCRA funds); $25 million for capital projects (funding is through the HEAL Program); and $15 million for cancer research (HCRA funds). This is the same level of state support as in SFY 2006-07. RPCI gained 65 FTEs from SFY 2005-06 to SFY 2006-07 and will maintain its current staffing level of 1,692 FTEs in SFY 2007-08
- According to the Assembly the Executive Budget proposes an increase of $1.3 million to support a system to comply with federal Payment Error Rate Measurement (PERM) requirements.
- The Nonpersonal Service funding for Medicaid Management Information System Program is solely allocated to Contractual Services and Special Revenue-Federal funding. Contractual Services increased for this program by $4 million, for a total appropriation of $80.8 million for contracts. This may be due to the fact that the system that allows New York State’s health care providers to receive Medicaid payments is a new computerized payment system, known as eMedNY, which is operated by a private company with oversight by State personnel.
- According to the Assembly Ways and Means Committee the Executive Budget proposes an increase of $3 million to support contracts for the development of an improved vital record system. The project and location of funds within the budget should be clarified at statewide labor management.
- According to the Senate Finance Committee the Executive budget includes $500,000 in State funds for contracts to support surveillance activities under the Assisted Living program.
- The Department of Health employed an estimated 500 employees under consultant contracts in SFY 2006-07 at an estimated cost of $219.9 million or an average cost of $439,768 per consultant contract employee. It is estimated that the number of employees under consultant contracts will not increase in SFY 2007-08, nor will the funds with oversight by State personnel, according to the Agency Presentation. It is possible that DOH has not correctly reported its expenditures on consultants but the high cost of DOH consultants is disturbing. The purpose, cost, and use of these contract employees and whether they can be replaced by state employees should be clarified at statewide labor management.
- Article VII legislation provides for the modification and reauthorization of the Health Care Reform Act (HCRA) through March 31, 2008, which is currently scheduled to sunset on June 30, 2007. Additionally, Article VII language includes:
- The following changes to Graduate Medical Education (GME): limits GME payments to actual cost; and redirects $24 million (state share) in HCRA GME pool payments to establish a $48 million Medicaid payment to public hospitals that serve more than 35 percent of Medicaid recipients. At this time PEF is unsure of the impact that these GME changes will have on the SUNY hospitals. According to the Assembly Ways and Means Committee the Executive Budget’s proposal to reimburse GME based on actual costs and removing the hold harmless provisions will result in $36.2 million in Medicaid savings.
- Medicaid Fraud, Waste, and Abuse provisions: the creation of a “New York State False Claims Act” to allow private persons to bring civil actions on behalf of New York State to recover funds wrongfully obtained through fraud; and the establishment of the “Martin Act,” which provides the Attorney General greater authority to investigate and prosecute health care fraud. (The Office of Medicaid Inspector General agency analysis includes more details regarding Article VII Medicaid Fraud language). According to the Assembly Ways and Means Committee increasing the Medicaid Audit Target to account for increased recoveries anticipated from the Governor’s new anti-fraud proposals will result in $100 million in General Fund State share savings in SFY 2007-08. The Assembly also notes that in addition to the actions proposed in DOH, the Governor includes $27.6 million in expected General Fund savings from other State agencies resulting from anti-fraud and quality assurance activities.
Department of Health Program Details-State Operations Enacted Proposed Enacted Change in Percent Program 2006-07 Budget 2007-08 Budget 2007-08 Budget Appropriation Change All Funds $4,645,406,000 $4,671,435,500 $4,773,435,500 $128,029,500 2.8% General Fund $165,742,000 $225,439,000 $227,839,000 $62,097,000 37.5% Special Revenue - Federal $3,979,144,000 $3,960,840,000 $3,960,840,000 ($18,304,000) -0.5% Special Revenue - Other $500,510,000 $485,146,500 $584,746,500 $84,236,500 16.8% Enterprise Fund $10,000 $10,000 $10,000 $0 0.0% Personal Services $179,362,000 $290,658,358 $292,075,358 $112,713,358 62.8% Contractual Services $236,053,641 $235,443,641 Admin & Exec Direction Pgm $65,971,000 $74,436,300 $74,436,300 $8,465,300 12.8% Personal Service $7,463,000 $8,172,300 $8,172,300 $709,300 9.5% Regular $7,667,300 $7,667,300 Temporary Service $250,000 $250,000 Holiday/overtime compensation $255,000 $255,000 Nonpersonal Service $12,990,000 $20,050,200 $20,050,200 $7,060,200 54.4% Supplies and materials $1,077,400 $1,077,400 Travel $381,500 $381,500 Contractual Services $18,517,000 $18,517,000 Equipment $74,300 $74,300 Maintenance Undistributed $580,000 $1,414,000 $1,414,000 $834,000 143.8% Travel $25,000 $25,000 Contractual Services $835,000 $835,000 Equipment $554,000 $554,000 Special Rev - Fed (SRF) $8,984,000 $9,146,000 $9,146,000 $162,000 1.8% Special Rev - Other (SRO) $35,954,000 $35,653,800 $35,653,800 ($300,200) -0.8% Child & Adult Care Food Acct - (SRF) $1,029,000 $867,000 $867,000 ($162,000) -15.7% Fed Food & Nutrition Services acct - (SRF) $2,128,000 $2,074,000 $2,074,000 ($54,000) -2.5% Fed Health &Human Services Fund - (SRF) $419,000 $419,000 $419,000 $0 0.0% Fed Block Grant Fund - (SRF) $5,408,000 $5,786,000 $5,786,000 $378,000 7.0% Technology Transfer Acct - (SRO) $500,000 $500,000 $500,000 $0 0.0% Nonpersonal Service $500,000 $500,000 Contractual Services $500,000 $500,000 Health Occupation Dev & Workplace Demo - (SRO) $2,386,000 $2,202,400 $2,202,400 ($183,600) -7.7% Personal Service $589,000 $541,000 $541,000 ($48,000) -8.1% Regular $501,000 $501,000 Temporary Service $20,000 $20,000 Holiday/overtime compensation $20,000 $20,000 Nonpersonal Service $1,797,000 $1,661,400 $1,661,400 ($135,600) -7.5% Supplies and materials $5,000 $5,000 Travel $25,350 $25,350 Contractual Services $1,184,750 $1,184,750 Equipment $25,000 $25,000 Fringe benefits $270,000 $254,100 $254,100 ($15,900) -5.9% Indirect costs $167,200 $167,200 Pilot Health Insurance Acct - (SRO) $2,437,000 $2,120,600 $2,120,600 ($316,400) -13.0% Personal Services $1,162,000 $991,000 $991,000 ($171,000) -14.7% Regular $991,000 $991,000 Nonpersonal Services $1,275,000 $1,129,600 $1,129,600 ($145,400) -11.4% Supplies and materials $15,000 $15,000 Travel $20,000 $20,000 Contractual Services $148,000 $148,000 Equipment $175,000 $175,000 Fringe benefits $532,000 $465,400 $465,400 ($66,600) -12.5% Indirect costs $306,200 $306,200 Primary Care Initiatives Acct - (SRO) $1,013,000 $897,800 $897,800 ($115,200) -11.4% Personal Services $486,000 $502,000 $502,000 $16,000 3.3% Regular $497,000 $497,000 Holiday/overtime compensation $5,000 $5,000 Nonpersonal Services $527,000 $395,800 $395,800 ($131,200) -24.9% Supplies and materials $5,450 $5,450 Travel $17,550 $17,550 Contractual Services $95,000 $95,000 Equipment $25,000 $25,000 Fringe benefits $223,000 $235,700 $235,700 $12,700 5.7% Indirect costs $17,100 $17,100 Health Care Delivery Administration Acct - (SRO) $897,000 $761,800 $761,800 ($135,200) -15.1% Personal Service $310,000 $236,000 $236,000 ($74,000) -23.9% Regular $231,000 $231,000 Holiday/overtime compensation $5,000 $5,000 Nonpersonal Service $587,000 $525,800 $525,800 ($61,200) -10.4% Supplies and materials $20,000 $20,000 Travel $62,500 $62,500 Contractual Services $225,000 $225,000 Equipment $34,500 $34,500 Fringe benefits $142,000 $110,800 $110,800 ($31,200) -22.0% Indirect costs $73,000 $73,000 Administration Program Acct - (SRO) $11,053,000 $11,395,000 $11,395,000 $342,000 3.1% Personal Service $6,000,000 $5,904,000 $5,904,000 ($96,000) -1.6% Regular $5,904,000 $5,904,000 Nonpersonal Service $5,053,000 $5,491,000 $5,491,000 $438,000 8.7% Travel $50,000 $50,000 Contractual Services $2,529,000 $2,529,000 Fringe benefits $2,474,000 $2,716,000 $2,716,000 $242,000 9.8% Indirect costs $196,000 $196,000 Heatlh-SPARCS - (SRO) $7,648,000 $7,513,000 $7,513,000 ($135,000) -1.8% Personal Service $2,719,000 $2,804,000 $2,804,000 $85,000 3.1% Regular $2,771,000 $2,771,000 Temporary Service $2,000 $2,000 Holiday/overtime compensation $31,000 $31,000 Nonpersonal Service $4,929,000 $4,709,000 $4,709,000 ($220,000) -4.5% Supplies and materials $52,000 $52,000 Travel $18,000 $18,000 Contractual Services $1,858,000 $1,858,000 Equipment $800,000 $800,000 Fringe benefits $1,246,000 $1,290,000 $1,290,000 $44,000 3.5% Indirect costs $691,000 $691,000 Professional Medical Conduct Acct - (SRO) $7,674,000 $8,088,100 $8,088,100 $414,100 5.4% Personal Services $3,900,000 $4,240,000 $4,240,000 $340,000 8.7% Regular $3,930,000 $3,930,000 Temporary Service $300,000 $300,000 Holiday/overtime compensation $10,000 $10,000 Nonpersonal Services $3,774,000 $3,848,100 $3,848,100 $74,100 2.0% Supplies and materials $30,000 $30,000 Travel $75,000 $75,000 Contractual Services $1,700,000 $1,700,000 Equipment $52,000 $52,000 Fringe benefits $1,917,000 $1,991,100 $1,991,100 $74,100 3.9% Vital Records Mgmt Acct - (SRO) $2,346,000 $2,175,100 $2,175,100 ($170,900) -7.3% Personal Services $1,110,000 $1,152,000 $1,152,000 $42,000 3.8% Regular $1,027,000 $1,027,000 Temporary Service $25,000 $25,000 Holiday/overtime compensation $100,000 $100,000 Nonpersonal Services $1,236,000 $1,023,100 $1,023,100 ($212,900) -17.2% Supplies and materials $50,000 $50,000 Travel $2,000 $2,000 Contractual Services $294,100 $294,100 Equipment $97,000 $97,000 Fringe benefits $508,000 $541,000 $541,000 $33,000 6.5% Indirect costs $39,000 $39,000 AIDS Institute $16,329,000 $16,714,000 $16,714,000 $385,000 2.4% Personal Service $10,448,000 $10,833,000 $10,833,000 $385,000 3.7% Regular $10,816,000 $10,816,000 Holiday/overtime compensation $17,000 $17,000 Nonpersonal Service $5,431,000 $5,431,000 $5,431,000 $0 0.0% Supplies and materials $1,333,881 $1,333,881 Travel $311,700 $311,700 Contractual Services $3,556,900 $3,556,900 Equipment $228,519 $228,519 Maintenance Undistributed $450,000 $450,000 $450,000 $0 0.0% Personal Services $247,000 $247,000 Regular $247,000 $247,000 Nonpersonal Services $203,000 $203,000 Supplies and materials $2,600 $2,600 Travel $400 $400 Contractual Services $200,000 $200,000 Center for Community Health Pgm $133,344,000 $136,686,000 $136,286,000 $2,942,000 2.2% Personal Service $703,000 $1,672,000 $1,672,000 $969,000 137.8% Regular $1,672,000 $1,672,000 Nonpersonal Service $1,515,000 $1,662,000 $1,662,000 $147,000 9.7% Supplies and materials $10,000 $10,000 Travel $32,000 $32,000 Contractual Services $1,615,000 $1,615,000 Equipment $5,000 $5,000 Maintenance Undistributed $4,914,000 $4,350,000 $4,350,000 ($564,000) -11.5% Personal Services $50,000 $50,000 Regular $50,000 $50,000 Nonpersonal Services $4,300,000 $4,300,000 Supplies and materials $15,000 $15,000 Travel $10,000 $10,000 Contractual Services $4,260,000 $4,260,000 Equipment $15,000 $15,000 Special Rev. -Fed (SRF) $117,128,000 $118,018,000 $118,018,000 $890,000 0.8% Special Rev. -Other (SRO) $9,084,000 $10,984,000 $10,584,000 $1,500,000 16.5% Child & Adult Care Food Acct - (SRF) $7,458,000 $7,458,000 $7,458,000 $0 0.0% Fed Food & Nutrition Services acct - (SRF) $47,301,000 $47,301,000 $47,301,000 $0 0.0% Fed Health & Human Services Fund 265 - (SRF) $24,149,000 $25,039,000 $25,039,000 $890,000 3.7% Abstinence Education acct - (SRF) $902,000 $902,000 $902,000 $0 0.0% Individuals w/ Disabilities Part C Acct - (SRF) $17,930,000 $17,930,000 $17,930,000 $0 0.0% Fed Block Grant Fund-269 - (SRF) $19,388,000 $19,388,000 $19,388,000 $0 0.0% Alzheimer's Research Acct - (SRO) $1,000,000 $1,000,000 $1,000,000 $0 0.0% Nonpersonal Services $1,000,000 $1,000,000 Contractual Services $1,000,000 $1,000,000 Autism Awareness and Research Acct - (SRO) $20,000 $20,000 $20,000 $0 0.0% Nonpersonal Services $20,000 $20,000 Contractual Services $20,000 $20,000