Thirty-one upstate counties in New York can now move ahead with mandatory Medicaid managed care even though state and federal officials continue to haggle over plans for New York City and the rest of the state to go to mandatory Medicaid managed care. The approval of the Section 1915(b) waiver for the 31 counties in mid-March is expected to be the prelude to the long-sought federal approval of New York’s statewide plan, but state officials have stopped saying an agreement will be reached soon. No one is talking about the remaining issues on the negotiating table. Home Relief and SSI "There are two major differences between the 1115 waiver and the 1915 waiver," says Robert Hinckley, spokesman for New York Health Commissioner Barbara DeBuono. "The first, of course, is that the 1915 is not statewide. The second is that it does not take into the program people on Home Relief and SSI." The statewide 1115 Medicaid waiver affects a much larger population and a much sicker population. As proposed, the 1115 waiver would allow New York to place 2.3 million Medicaid recipients into managed care over a five-year period. About 650,000 of those are already voluntarily enrolled.The state is also seeking approval to enroll people with disabilities into managed care and to contract with "special needs plans" that will serve people with serious mental illness and with AIDS. The Home Relief program, which is funded solely through state funds, would bring in childless adults, many of whom have mental or physical disabilities, as well as a small number of families. The waiver for the 31 counties, by contrast, allows them to enroll 196,000 Medicaid clients in health plans. (Some 261,300 Medicaid recipients have already enrolled voluntarily in those counties.) The waiver only applies to recipients in the former Aid to Families with Dependent Children (AFDC) program, a program that accounts for the overwhelming majority of people on Medicaid in those counties, but not the largest share of the cost. Some 25 months after the state first submitted its plans to HCFA for its 1115 waiver, Mr. Hinckley insists that, as far as Albany is concerned, virtually all the substantive issues that have surfaced in that time are settled. These issues include budget neutrality, concern over allowing HMOs have separate provider panels for Medicaid the phase-in period for bringing the population into a mandatory system. "There’s agreement on the vast majority of the issues. I’d say it’s 99% done," Mr. Hinckley says. But he also acknowledged that the state has had its hopes raised falsely in the past. Robert Kirsch of Citizen Action, says a Health Department source told him recently that the feds are still concerned about the cost issue. HCFA officials fear that the state’s plan to include its Home Relief recipients will boost expenses beyond the expected savings of moving everyone else to managed care. Dr. Rosa Gil, chairwoman of New York City s Health and Hospitals Corporation (HHC), says she helped develop a last-minute proposal that may be prolonging the negotiations between state and federal officials. HHC and District Council 37 of the American Federation of State, County and Municipal Employees (the union which represents HHC workers), community-based providers (like community health centers) and advocates for the poor have proposed reinvesting some of the expected savings from managed care into building up provider networks in the poorest sections of New York City. More primary care capacity "Our goals are: one, to create more primary care capacity; two, set some money aside for coverage of the uninsured; and three, we want to use some funding to develop insurance premiums that are very low so that we can work with the small business community," Ms. Gil says. Dr. DeBuono and HCFA "have been very receptive to the idea," she says. Advocacy groups say they believe this proposal is the reason the governor, in amendments to the state budget, added $100 million in Medicaid spending "to help providers make the transition to managed care." "We can’t say for sure, because nobody in the administration will comment on it, but that sounds like about the amount the state might need for its matching share," noted Susan Dooha, senior policy advocate at Gay Men’s Health Crisis. Advocacy groups have been pressing HCFA to address the scarcity of providers in the inner city and the threat mandatory Medicaid managed care poses to community health centers and other facilities, which serve high numbers of the uninsured. HMOs leery of mandates The HMO industry, however, is leery of mandates to contract with these providers, especially if it means they’d be required to contract with HHC hospitals. "The fact that the hospitals are moving resources into outpatient settings is good," says Kathryn Allen, president of the New York State HMO Conference and Council. "The problem would be if we’re mandated to contract with them. As long as they’re required to compete in the market for price and quality, that’s fine." Negotiations over New York’s plans have broken the record for the longest 1115 waiver approval process. Of the 16 waivers granted by HCFA in the past four years, Illinois waited the longest—22 months—before it was approved last July. Only three other states took longer than a year to get approval. In practical terms, Mr. Hinckley says, the 1915 waiver will allow the covered counties to move forward just as if the larger waiver had been approved because HCFA is expected to require that the state phase-in the mandatory system by applying it to AFDC recipients first. "It gives us a leg up," Mr. Hinckley says. "We can begin to do the readiness reviews to ensure that the (managed care) plans are capable of handling all the new enrollees. That kind of review work that needs to be done, we can start soon." —Harvy Lipman Contact Mr. Hinckley at 518-474-7354, Dr. Gil at 212-788-3359, Mr. Kirsch at 518-465-4600, Ms. Dooha at 212-337-3342 or Ms.Allen at 518-462-2293.