NYS budget gap closing plan. Warning: Likely Boring.

NYAPRS Note: True to word, Governor Andrew Cuomo’s 2011-12 NYS budget contains deep cuts, including almost $3 billion in state Medicaid cuts, a 10% cut to state operations which could mean as much as 10,000 state job layoffs and deep education cuts.

In the mental health arena, the cuts are more targeted. Look for continuation of last year’s 1.1 cuts, no COLA, cuts to continuing day treatment, closing of family based treatment beds, a likely % cut to local community support dollars and county administration and a housing freeze, except for the 1,500 beds for adult home residents required in a recent court ruling. There’s no word yet on a possible OMH merger with other state agencies or details on the number of state hospitals and wards that might have to be closed.

The biggest impact on our community and the services they use lie in the final decisions made by the Administration, Medicaid Redesign Team and state legislature. What hangs in the balance is the possible transfer of Medicaid mental health care for New Yorkers with psychiatric disabilities to health plans. NYAPRS is joined by most leading state advocacy groups in backing an alternative plan to reorganize and improve mental health care and link it to needed health services implemented through regional care coordination programs operated by behavioral health organizations.

There’s a lot of details to parse out. What is clear is that the February 15 NYAPRS 13th Annual Legislative Day at Albany’s Hart Auditorium (the Egg) will bring out over 700 self and system advocates who’ll be working to improve care in ways that doesn’t take down the community recovery safety net by turning it over to the HMOs. For more details, contact [email protected].

The following has been culled by Administration budget documents and news releases.

Cuomo 2011-12 Mental Health Budget:

$27m Local Assistance Cuts Including Continuation of Last Year’s 1.1% Cut

10% State Operations Cuts, Authorization Sought to Close Facilities This Year

No New Housing Except for Adult Home Residents

No Word Yet on Possible OMH Merger

Almost $3 Billion in State Medicaid Cuts

Governor Andrew M. Cuomo today unveiled a proposed 2011-2012 Executive Budget that transforms the state budget process to conform to fiscal realities and eliminates a $10 billion dollar deficit without raising taxes or borrowing.

The Agency also regulates and/or licenses more than 2,500 mental health programs operated by local governments and private agencies serving nearly 700,000 persons annually, including inpatient, outpatient, emergency, residential and family care, and community support services;

• All Funds spending of $132.9 billion in the fiscal year that begins April 1, 2011, a decrease of 2.7 percent or $3.7 billion from 2010-11.

• State Operating Funds spending of $88.1 billion, an increase of $900 million, or 1 percent. State Operating Funds exclude federal funds and long-term capital spending.

• State Operating Funds is adjusted to reflect the loss of significant one-time federal funding received in 2010-11 to cover Medicaid costs normally paid from State funds and other actions

State Agency Consolidations:

Here’s what we know now:

“The Executive Budget proposes to merge or consolidate 11 separate State entities into four agencies to streamline and eliminate duplicative bureaucracy, better align State responsibilities with need and improve services through superior coordination. Proposals include merging

· the Banking and Insurance departments and the Consumer Protection Board into a new Department of Financial Regulation;

· merging the Department of Correctional Services and the Division of Parole into the new Department of Corrections and Community Supervision; consolidating the Office for the Prevention of Domestic Violence, the Office of Victim Services and the State Commission of Correction into the Division of Criminal Justice Services; and

· consolidating the New York State Foundation for Science, Technology and Innovation into the Empire State Development Corporation.

More to come?

“To help redesign and transform government, Governor Cuomo has created the Spending and Government Efficiency (SAGE) Commission. As part of this effort, Governor Cuomo has directed the Commission to make recommendations to reduce the number of agencies, authorities, and commissions by 20 percent over the long term. The SAGE Commission is directed to submit to the Governor a rightsizing plan to reduce the number of agencies by May 1, 2011. Under legislation proposed by the Governor, the Governor would then submit the rightsizing plan to the Legislature for action with the plan going into effect pursuant to a resolution of the Legislature.”

Medicaid Cuts

· Cuts of $2.85 billion for 2011-12.

· Specifics will be advanced by the Medicaid Redesign Team, which will report its findings and recommendations for cost reductions to the Governor by March 1, 2011 for consideration in the budget negotiation process. As mentioned, NYAPRS is very concerned about possible proposals to turn the mental health safety net services over to health plans.

· 4% limit on Medicaid Growth: In addition, these proposals will limit future Medicaid Program State Funds growth to the 10-year rolling average of the medical care component of the Consumer Price Index (currently four percent).

· OMH licensed programs don’t current seem affected.

LOCAL ASSISTANCE:

These initiatives will:

• Restructure Non-Residential OMH Programs. Restructure non-residential OMH programs, including Continuing Day Treatment, to encourage use of the more effective Personalized Recovery Oriented Services program. The budget also reflects targeted funding reductions to encourage efficiencies in certain community support programs including children’s Clinic-Plus, non-direct services such as training and education, as well as local administration. The budget maintains 2010-11 spending levels for existing local aid programs. Continue the 1.1 percent across-the-board reduction on existing local aid programs implemented in 2010-11. (2011-12 Value: $27 million; 2012-13 Value: $30 million)

• Freeze Development of All New OMH Community Residential Programs for One Year. This freeze will help provide resources for the additional costs of certain adult home residents in New York City as required by a federal court order. Funding will be eliminated over the next two years for family-based treatment beds, which have not been as effective as projected. In addition, the Executive Budget will reduce aid to providers that are funded above the regional per-bed models for supported housing; convert residential pipeline units to lower-cost alternatives, which will also reduce capital expenditures by $20 million; and reprogram 250 planned supported housing beds for adult home litigation requirements. (2011-12 Value: $32M; 2012-13 Value: $32M)

• OMH COLA and Trend: Defer the planned 1.2 percent Human Services COLA for one year, but extend the legislation for another year through 2014-15. Additionally, the rates for Residential Treatment Facilities and the Community Residence/Family Based Treatment programs will be maintained at existing levels.

• Improve Collections through Audits and Third Party OMH/OASAS/OPWDD Payments:

The Executive Budget promotes greater accountability by investing in technologies and procedures to improve auditing and billing processes. Proposals are included to:

- Improve audit and billing processes and procedures for State-operated programs to maximize Federal and third-party payments. (2011-12 Value: $46M; 2012-13 Value: $46M)

- Continue expanded efforts to recover State funds through enhanced audit activities and financial reviews of not-for-profit providers. (2011-12 Value: $46M; 2012-13 Value: $43M)

Enhanced Auditing for Recovery of OMH Medicaid and State Aid Payments: OMH will renew efforts to recover State funds with enhanced audit activities, including reconciliations, State aid letters and direct contract close-outs.

• Forgo Planned Cost of OMH/OASAS/OPWDD Living Adjustments/Rate Increases:

The Executive Budget maintains current levels for certain programs rather than provide funding increases scheduled for 2011-12. Proposals are included to:

- Defer the planned 1.2 percent annual human services COLA for one year. (2011-12 Value: $22 million; 2012-13 Value: $22 million)

- Maintain existing rates for OMH residential treatment facilities and community residences/family based treatment. (2011-12 Value: $20 million; 2012-13 Value: $20 million)

STATE OPERATIONS

• Ten Percent General Fund OMH/OASAS/OPWDD State Operations Reduction

The Executive Budget will decrease General Fund spending for State agency operations by 10 percent through a redesign effort focused on rightsizing government, increasing efficiencies, as well as by reducing workforce spending. Governor Cuomo intends to partner with State employee labor unions to achieve these workforce savings; if negotiations are not successful, significant layoffs are likely. (2011-12 Value: $251 million; 2012-13 Value: $258 million)

“The Governor's budget proposal reduces General Fund State Operations spending by 10 percent at State agencies. Commissioners and agency heads will be instructed to maximize savings in non-personal services. To achieve the rest of the savings, the Governor intends to seek a partnership with the State employee labor unions to seek savings in personal service spending in a way that causes the least disruption to State employees while ensuring the continued provision of necessary services for the citizens of New York. Management employees would also contribute to these savings. If workforce saving cannot be accomplished jointly, as a last resort up to 9,800 layoffs would be necessary. Contracts covering the vast majority of State employees are up for renewal at the outset of the 2011-12 State fiscal year.

Reform/Efficiencies in State Operations: As part of State Operations reductions of 10 percent, OMH will reduce State-operated inpatient capacity based on a review of current census patterns, and continue efforts to maximize community placement and consolidate capacity and administrative functions throughout the system.

Other Budget Actions

Adult Homes. In response to a Federal court order, the Executive Budget continues a multiyear plan to provide additional funding for supported housing and support services needed for 4,500 individuals leaving certain New York City adult homes. In 2011-12, $41.3 million, roughly $40 million above 2010-11 levels, (growing to $72M in 2012-13) will fund 1,500 rental housing units and services for the first of these individuals beginning February 1, 2011.To address a portion of the funding needed for these individuals, resources will be reprogrammed for this purpose from 250 planned Supported Housing units.

Continuation of Restructuring Efforts: OMH will continue implementing the Ambulatory Care restructuring started in 2008-09, which will rationalize the reimbursement of providers of mental health clinical services. Additionally, OMH will focus on best practices modalities, including the creation of a behavioral health care coordination effort to improve quality care for individuals with mental illness. Also, OMH was awarded a third Federal grant of nearly $10 million (an increase of $4 million over 2010-11 levels) to continue improving employment opportunities for individuals with mental illness.

Department of Corrections: The Department continues to expand and enhance its services for inmates with mental illness. The Department of Correctional Services opened a state-of-the-art Residential Mental Health Unit (RMHU) at Marcy Correctional Facility in Oneida County in December 2009 for up to 100 inmates with serious mental illness and disciplinary sanctions. The Department also plans to open a second, 60-bed RMHU at Five Points Correctional Facility in Seneca County in 2011-12.

Legislation Required by Health and Mental Hygiene Budget Proposals

• Improve public health services and achieve savings by modifying Elderly Pharmaceutical Insurance Coverage, Early Intervention, and General Public Health Work, and implementing various other changes.

• Suspend implementation of a new nursing home reimbursement method and extend the reimbursement cap, authorize certain Medicaid payments and extend authorization to collect nursing home assessment revenue.

• Extend the Health Care Reform Act (HCRA) for three years.

• Extend various provisions of the Public Health, Social Services and Mental Hygiene laws, including continued authorization of previously enacted Medicaid savings initiatives.

• Amend the Medicaid eligibility status of individuals served in Institutions for Mental Diseases (IMD).

• Establish a one-year deferral of the Human Services Cost of Living Adjustment.

• Ensure the efficient and cost-effective delivery of programs and services operated by the Office of Mental Health.

• Eliminates one year notification requirement to close state facilities.