Second Circuit Remands Decision for Inadequate Medicaid Payments

On October 7, 2014, the Second Circuit remanded the issue of evaluating how the New York Department of Health calculates supplemental Medicaid payment rates for federally qualified health centers (“FQHCs”). While the court threw out most of the FQHCs’ claims on summary judgment, it said disputed facts remained on the Medicaid reimbursement rate calculations.

FQHCs must submit an annual managed care visit and revenue report to the New York State Department of Health, but are unable to report claims where the managed care organization has not reimbursed them for their services, hence resulting in a lack of supplementary Medicaid payments from the state. The Second Circuit said that the trial court erred in ensuring that the FQHCs must absorb any nonpayment by managed care organizations and must dig deeper to assess how these payments are calculated.

New York State’s $6.4 Billion Transformation

After approximately eighteen months of negotiation with the federal government, New York State has received regulatory approval and is ready to restructure its health care delivery system and lower Medicaid costs. Some of New York’s goals include lowering Medicaid costs by 25 percent in five years and decreasing hospital admissions by 5 percent.

The goal of the reform is to pay for performance and increase the quality of primary care while decreasing the costs to clean the waste in the health care system. To avoid the fate these programs have met in the past, there is $6.4 billion federal Medicaid money available for providers that complete the 250-page application and meet performance targets. The state anticipates hospital collaboration since it is not a regulation-led program. Previously, reform efforts have failed when they force providers to downsize, merge, and close.

New York Proposes Uniform Standard for Health Information

New York State made a proposal this month to create a uniform standard for the exchange of electronic health information. The state’s ten regional health information organizations (“RHIOs”) and any other organization that exchanges health information would be required to become certified by the state after adopting the standard policies on privacy and security. This policy may end up being an exemplary plan for other states to follow.

New York State says that benefits of a uniform health information policy would include: an increased availability of patient records; establishing a core set of health information exchange services; increasing participation of stakeholders (including payers); and creating new opportunities for payment and delivery models. These goals are crucial because about 70 percent of hospitals and half of federally qualified health centers in New York currently participate in RHIOs. Additionally, about 8,200 primary care providers and  170 hospitals qualify for the electronic health records meaningful use program incentives established by the Centers for Medicare and Medicaid Services.

New York Proposes Standards for Shielding ACOs from Antitrust Laws

The New York Department of Health (“DOH”) proposed a set of regulations on October 15, 2014, for the New York Commissioner of Health (“Commissioner”) to abide by when issuing accountable care organizations (“ACOs”) immunity from federal and state antitrust laws.

Under Article 29-E of New York’s Health Law, considerations the Commissioner must make include: i) the potential benefits from the ACO (ex: improvements in the quality of care, decrease in the cost of  care, expansion of access to care); ii) market conditions in the location of the ACO (ex: local provider competition, barriers to entry, availability of health care professionals); iii) any possible disadvantages to the ACO; iv) availability of alternative arrangements that would provide equal or greater benefits than the ACO, while being less restrictive of competition; and v) mitigation of disadvantages from supervision of the ACO. If the Commissioner decides to grant immunity for an ACO based on these considerations and its application, immunity will be noted on the ACO’s certificate of authority granted from the Commissioner of the DOH.

The proposed regulation allows the Commissioner and DOH to consider any conditions and request all necessary information that would help reduce any negative consequences presented by ACOs in a particular location, while making determinations on a case-by-case basis.