New York State Senate Approves Health Care Package in State Budget

The New York state Senate on Tuesday approved legislation that would allocate about $59.2 billion -- or nearly half of the $124 billion state budget proposed for fiscal year 2009 -- for health care, the New York Times reports (Peters, New York Times, 4/2). The bill would expand SCHIP eligibility to children in families with incomes up to 400% of the federal poverty level, up from 250% of the poverty level. The expansion would cost $25 million annually and be paid entirely by the state because of to Bush administration regulations tightening eligibility in SCHIP (Matthews, Rochester Democrat and Chronicle, 4/2).

The legislation also includes a provision that would recalculate the state Medicaid hospital payment formula. However, under the plan, the new reimbursement rates would expire after the first year and require authorization from the state Legislature. According to estimates, the new rates would save the state $57 million in the first year (New York Times, 4/2). The savings would be used to increase spending for hospital clinics, emergency departments and ambulatory care. The state also would allocate $45 million for community clinics, medical services and additional payments for providers who have evening and weekend hours, state budget officials said.

According to Deborah Bachrach of the state Department of Health, the legislation would change the payment system for outpatient care that is based on the type of care provided, rather than a flat fee. She said the physician fees would increase by 35% annually under the plan.

The bill also includes $17 million in proposed cuts to nursing homes, compared with $117 million in cuts proposed by Gov. David Paterson (D), and restores $37 million of a proposed $43 million reduction in home care. In addition, state lawmakers approved a $15.6 million loan-forgiveness program, called "Doctors Across New York," under which physicians could receive up to $150,000 for loans if they make a five-year commitment to practice in areas where there are shortages. Two-year grants totaling $100,000 would be available for physicians who establish or join practices or clinics in medically underserved areas. The program would provide up to $5 million to support resident training in community-based areas and funds also would be distributed to minority and low-income students enrolled in medical school programs (Rochester Democrat and Chronicle, 4/2).