NYS Budget Proposals

On Tuesday, January 21st  the governor released his budget for NYS fiscal year 2021, which begins April 1 2020. The proposed budget has a number of provisions that are relevant physicians:

  • - No cuts to Medicaid funding, instead convening a Medicaid Redesign Team to find ways to reduce the growth in Medicaid costs to help combat the $6 billion state budget deficit 
  •  - Restrictions on e-cigarettes, including a ban on all flavored e-liquids and menthols
  •  - Legalization of adult recreational cannabis
  •  - Increased government authority to investigate rising prescription drug prices

Budget Book Highlights

  • Comprehensive tobacco control policy
    • Ban on the sale or distribution of e-cigarettes with flavor
    • Ban on the sale of cigarettes/e-cigarettes in all pharmacies
    • Limits on e-cigarette ads targeting youth
      • Restrict claims about safety and efficacy of vaping as smoking cessation
    • Limit sale of e-liquids to NYS licensed vapor retailers
    • Vape manufacturers must disclose to the DOH commission and the public the ingredients, byproducts and contaminants in vapor products
    • Ban on certain carrier oils
    • Increased penalties for selling to minors
    • Estimated annual cost of 9.7 billion (including 2.7 billion to Medicaid) for nicotine and tobacco related illnesses  and responsible for 22,000 premature deaths in NY
  • Cannabis regulation and taxation act
    • Tax cultivation of cannabis
    • Tax the sale of cannabis at 20%
    • 2% tax on sales to dispensaries
    • Create an office of cannabis management to regulate medical, industrial and adult-use cannabis
  • Medicaid
    • Local cap: has saved counties $20 billion, including $4 billion in SFY 2020 alone
    • MLTCs accounted for 33% of state share Medicaid spending
      • MLTC spending grew 301% from 2013 to 2019
      • Largely driven by Consumer Directed Personal Assistance Program which diverts members from high cost nursing home and institutional setting to less costly in home care
    • Major spending supporting minimum wage workers within the health care sector
      • 44 million to 1.8 billion over ?years
    • 160% increase in state support for distressed hospitals since 2016
    • Reforming Medicaid
      • MRT II
        • Must report back by April 1 to enact a budget plan to deliver 2.5 billion in recurring savings
        • Plan cannot rely on local governments as funding sources
        • Cannot have an impact on beneficiaries
        • Must find solutions through industry efficiencies and rooting out waste, fraud and abuse
      • Enhanced local district Medicaid controls
        • State will continue to assume costs for counties if they adhere to the 2% property tax cap and limit growth in Medicaid expenditures to 3%
      • Integrity and efficiency
        • Office of Medicaid inspector general will add 69 staff
      • Transforming Medicaid
        • Performing Provider System will continue to build on value based payment arrangements
      • Promoting the essential plan
        • Generated 1.5 billion in savings by transitioning certain individuals from state-only Medicaid benefits to federally funded coverage
        • Cap financing for essential health care providers (3.8 billion)
      • Continued support for the NYS exchange
      • Continued support for the life science laboratory public health imitative (750 million)
      • Continued AIDS/HIV funding
  • Prescription drugs
    • $100 cap on insulin co-payments
    • DFS empowered to investigate and hold manufacturers accountable for unjust price increases
    • Pharmacy benefit managers (middle men between insurers and pharmacies)
      • Do not disclose to pharmacies or insurers how much they’re keeping
      • Budget requires PBMs to register with the DFS and disclose financial incentives they received for promoting specific drugs or other arrangements
  • Water safety
    • Evaluate using NYC’s water supply to provide Nassau with additional source of drinking water
  • “NYHealthCareCompare” website to lookup cost of care and access to financial assistance programs
  • Expand access to medication assisted treatment for opioid use disorder
  • Mental Health funding
  • Gun control
    • Removing guns from domestic abusers and disqualify individuals from gun ownership for out of state crimes
    • Sharing flags from mental health professionals in other states to determine gun ownership eligibility
  • Other
    • “discontinue hospital resident compliance audits”
    • “pharmacy adult immunization expansion and collaborative drug therapy management”
    • “physician profile enhancements”
    • “enhancing physician integrity and accountability”
    • Banning fentanyl analogs
    • Antimicrobial resistance preventions


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