One of the guiding principles of the Step Two Policy Project is to explicitly connect our work to policy options in New York State government. For that reason, we were very pleased to see the number of proposals in the 2024 State of the State (SOS) that dovetail well with our areas of interest. Step Two Policy Project has organized its work across five focus areas: Financial Sustainability of Safety Net and Community Hospitals, Data Transparency and the Democratization of Analysis, Maximizing the Healthcare Workforce, Access to Dental and Oral Care, and Care for People with Complex Needs. The State of the State included initiatives relevant to all of these areas. In addition, the SOS was notable because of its announcement of CMS’s approval of a new Medicaid section 1115 waiver, the 1115 waiver, which represented the culmination of years of effort from the Health portfolio in the administration.
The 1115 waiver will provide more than $6 billion of new federal revenue over the next three years to support a number of important strategies. The approval includes authority for spending across four key initiative areas: (1) health-related social needs (HRSN), (2) a health equity regional organization (HERO), (3) a Medicaid Hospital Global Budget Initiative, and (4) strengthening the workforce. This approval will support many of the SOS proposals and other aspects of the focus areas discussed below.
This issue brief highlights a number of the SOS initiatives in the Health sector, especially those that have a particular intersection with work we have been doing. These initiatives include the following:
Resilience of the Healthcare Delivery System
The first proposal of the chapter of the State of the State Book entitled “Improving the Health of New Yorkers” addresses the need for greater resiliency in the healthcare delivery system. As part of these resiliency efforts, the Governor said she would create a new “Healthcare Safety Net Transformation Program” designed to leverage the clinical and operational expertise of larger health systems to strengthen safety net hospitals. As we discussed in our recent Policy Brief, The Challenges of Financially Distressed Hospitals in New York, building such partnerships continues to offer the best prospects for improving safety net hospitals. More details about the program will become available with the release of the Executive Budget. The partnerships between larger health systems and financially distressed hospitals have proven difficult to forge and our hope is that the new Transformation Program will successfully address the obstacles to the creation of those partnerships. The new Transformation Program will build on the work of the Governor’s Commission on the Future of Healthcare.
The 1115 waiver will also be an important element in improving the resilience of the healthcare delivery system. We look forward to reviewing the CMS approval package more closely. Among the key elements of the 1115 waiver are the following:
up to $500 million to support health-related social needs (HRSN) services and $3.2 billion for increased coverage of HRSN services,
up to $125 million in expenditure authority for the creation of one Health Equity Regional Organization (HERO),
up to $2.2 billion over approximately three and a half years (date of amendment approval through March 31, 2027) or $550 million annually to fund the Medicaid Hospital Global Budget Initiative, and
up to $694 million over three years to support workforce recruitment and retention through the Student Loan Repayment for Qualified Providers and Career Pathways Training (CPT) initiatives.
Notably, the 1115 waiver will require that the State increase Medicaid rates generally, but with an additional targeted increase in certain areas in which the existing Medicaid reimbursement rate methodology results in a level of payment that does not adequately support the State’s policy goals. These areas include primary care, behavioral health, and obstetrics care. Our recent paper on financially distressed hospitals noted the extent to which behavioral health and obstetrics care, which are the bread and butter of the business of many safety net hospitals, have historically been underfunded by the Medicaid reimbursement rate methodology.
The 1115 waiver makes a condition of additional support for financially distressed hospitals their participation in “all payer global budgeting” in connection with the federal government’s new AHEAD program. This is a new frontier for hospitals in New York. We think this innovative reimbursement model is absolutely pointed in the right direction, but it remains to be seen how it will work in practice and the extent to which better alignment of incentives will actually improve financial sustainability. According to the approval letter:
Eligible entities will be hospitals located in the Bronx, Kings, Queens, and Westchester Counties, with Medicaid and Uninsured Payor Mix of at least 45%. These counties have higher rates of many challenging comorbidities, infant mortality, and avoidable hospitalizations.
Within those counties, this funding will be available to private, not-for-profit hospitals with an average operating margin ≤0% (over calendar years 2019-2022) based on audited Hospital Institutional Cost Reports (excluding COVID-19 relief funding and state-only subsidy), as well as private, not-for-profit hospitals or their affiliates that received state-only subsidies due to financial distress in State fiscal years 2023 and/or 2024.
Data Transparency and the Democratization of Analysis
The SOS includes several proposals focused on data categories, including those related to: the healthcare delivery and payment system; patients, providers, and populations; public health and social determinants of health; and consumer empowerment. Step Two has discussed these categories of data in previous publications. These SOS proposals are important for linking information to improve the care of individuals and populations and provide the kinds of information policymakers need to monitor and improve the State’s efforts.
One of the most significant data-related proposals is part of the 1115 amendment. The creation of one Health Equity Regional Organization (HERO). Per the CMS approval letter, the HERO will conduct, among other activities, “Data aggregation, analytics, and reporting on statewide demonstration implementation based on managed care organization (MCO)/ SCN/WIO/provider-submitted data, integrating different datasets across health and social services and systems to evaluate needs/ gaps in access to physical health, behavioral health, and HRSN services.” Through the foundational activities of data aggregation, analytics, and reporting, the “HERO will assist New York in developing and designing VBP goals to address HRSN and the most impactful health equity priorities.”
One of the reasons we called for a new Office of Health Data, Information, and Policy Analysis is that we think that such an Office would facilitate the articulation of long-term strategies across payers and sectors, and the tracking of their progress. Massachusetts does this through the Annual Report on the Performance of the Massachusetts Healthcare System. Although the proposal was not included in the 2024 SOS, given its potential to generate information that produces insights on healthcare affordability, we hope the administration will consider the approach.
State data can be more actively used to inform decision-making for policy development, resource alignment, and the delivery of services. To maximize this effort requires progress on several elements:
Integrated data systems: A core building block to use data to inform decision-making is the development of a system to integrate data across state agencies. Integration will result in a whole-person, person-centered perspective.
Enterprise legal and governance framework: Legal agreements are not barriers; they are supports to the ethical and secure sharing of data across agencies’ boundaries. Without statewide governance to encourage and coordinate data-sharing efforts, the result is a fragmented approach to sharing data on high-priority issues, that may miss the forest for the trees. This work is challenging, but some states such as Connecticut have efforts underway to establish a shared data infrastructure.
Supportive infrastructure: The state must find ways to make efficient use of limited resources and develop improved digital services and ‘one-stop’ solutions as part of a focus on increased efficiency. With improved information sharing, agencies can not only avoid duplicative efforts, but also coordinate and improve services.
Maximizing the Healthcare Workforce
The Book includes a number of scope-related proposals, though they are offered as discrete efforts, rather than as part of a broader approach to fully maximize New York’s healthcare workforce. We are pleased to see a continued effort to join the licensure compacts, again address the tasks that direct support professionals in OPWDD’s self-directed program, create opportunities for community paramedicine, and permit the independent practice of physician assistants in certain situations.
The 1115 waiver includes two levers for investing in the healthcare workforce: the Career Pathways Training (CPT) Program and Student Loan Repayment for Qualified Providers.
The CPT program is designed to build up the allied health workforce by funding training and education that focuses on career advancement and targets unemployed individuals. The CPT program will be organized into no more than three regions. CPT participation is conditional upon a three-year commitment of service to providers enrolled in the Medicaid program and serving at least 30% Medicaid members and/or uninsured individuals. The State will contract with Workforce Investment Organizations (WIOs) to implement the CPT program by recruiting participants, coordinating training, and offering supportive services and case management to promote participants’ successful completion of their programs and job placement.
The student loan repayment program will be available to health care professionals in certain workforce shortage professions who make a four-year, full-time work commitment to a practice panel that, as with the CPT program, includes at least 30% Medicaid and/or uninsured members.
“The loan repayment amount varies by healthcare professionals and is limited to psychiatrists (up to $300K), primary care physicians (up to $100K), dentists (up to $100K), nurse practitioners (up to $50K), and pediatric clinical nurse specialists (up to $50K)."
The State continues to explore new ways of deploying our healthcare workforce through innovative care delivery models, but such an approach requires reexamining provider roles. Restrictions on health professional practice that limit their flexibility are inefficient, increase costs, and reduce access to care. As explained in a Perspective piece in the New England Journal of Medicine, “We should improve our approach to regulating health professionals’ scope of practice so that regulations better serve the needs of patients, rather than protect turf in the battles among health professions.”
Step Two Policy Project has previously urged the State to rethink how to reimagine credentials and roles in relation to supporting individuals with complex needs, and adopting commonsense scope of practice changes and optimization of staff roles that increase productivity and retention for financially distressed hospitals.
Access to Dental and Oral Care
Important proposals regarding dental care, another focus area of Step Two, include plans to expand scope of practice within dentistry (though specifics are not available), address existing inequities in dental care access and outcomes, and, through the 1115 waiver, introduce a new loan repayment program for dentists who make a four-year commitment to serving the Medicaid population. This is a supplement to the existing New York State Primary Care Service Corps Loan Repayment Program, which also includes dentists and dental hygienists.
With respect to access and affordability, there are efforts to expand dental care access through school-based health centers, incentivize Medicaid managed care organizations to contract with more dentists, and increase quality oversight of dental care within Medicaid.
Step Two is additionally interested in improving data collection and monitoring specific to adult dental care, the inclusion of dental therapists in the dental workforce, and increased focus on community water fluoridation.
Care for People with Complex Needs
A number of proposals outlined in the 2024 State of the State Book align with Step Two’s vision for improved care of people with complex needs—incorporating innovative models and interventions and leveraging data sharing to overcome siloes and coordinate services along the continuum of care. These include investments in: transitional and permanent housing for people with mental illness; mental health navigators in county court systems who will be responsible for identifying and supporting defendants who have a history of mental health treatment; intensive forensic assertive community treatment for individuals with serious mental illness; and various expansions of coverage for health-related social needs, such as the provision and installation of air conditioners for those in the NYS Essential Plan, and housing, food, and nutrition, and transportation services for Medicaid enrollees (through the recently-approved 1115 waiver).
Other proposals focused on integration of care include expanded access to primary care (and increased Medicaid rates for providers in the Patient-Centered Medical Home model), increased support of DOH-licensed facilities and private practices treating people for mental health conditions, and of providers serving individuals with physical, intellectual, and developmental disabilities. This year, the NYS Most Integrated Setting Coordinating Council (MISCC) will issue an Olmstead plan, so all people with disabilities receive services in the most integrated setting appropriate to their needs. The plan will include people with physical, sensory, developmental, and/or intellectual, mental, and behavioral disabilities.
The 2024 State of the State and the related 1115 waiver include an ambitious agenda across many aspects of health and behavioral health. We applaud the administration for taking on some tough fights, such as common sense healthcare professions recommendations that have been unable to win legislative support in the past, despite compelling arguments in their favor.
Even the 180-page SOS Book and the 239-page CMS approval package for the 1115 waiver represent just the tip of the iceberg of the amount of work that goes into each of these proposed initiatives. When the Executive Budget comes out shortly, we will have a good sense of the administration’s policy agenda for Health and Human Services for the coming year.
We hope that our work, along with the work of other policy analysts and stakeholders, can help make the case for this policy agenda and contribute to a roadmap for constructive policy change in the year ahead.
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