New York to Reduce All Medicaid Payments to Docs by 2%

The final 2011-12 New York State budget (Chapter 59 of the Laws of 2011) requires a 2% across the board reduction to most Medicaid payments for dates of service on or after April 1, 2011. The reduction will remain in effect for dates of service through March 31, 2013. These provisions were enacted to meet the target of the Medicaid Redesign savings initiative authorized by New York Governor Cuomo.

The implementation of the reduction was supposed to start on November 3, 2011.

On November 3, 2011, however, the Department of Health (DOH) notified providers that there was a delay in implementing the reduction. As a result, a reconciliation of paid claims would be performed in order to determine provider liability for the retroactive period from April 1, 2011, effective date, to the implementation date on November 3, 2011.

DOH has stated that the recoupment of each provider’s 2% Across the Board liability will be recovered on a weekly basis commencing in Cycle 1787 (check date 11/21/2011, release date 12/7/2011).

The reconciliation consisted of reviewing paid claims from the previous 31 cycles (back to 4/1/2011) and applying the 2% reduction to all non-exempt claims. The total reduction amount for each provider was then divided by 15 (the number of weeks remaining in State fiscal year 2011-12) to establish a weekly recoupment amount. For low volume providers, a $15.00 minimum weekly reduction amount was set.

Providers will know about the weekly remittance reduction as follows:

paper remittances – ATB – Across the Board Reduction

835 electronic remittances – weekly reduction will be in the PLB segment with qualifier J1

Questions regarding the 2% reduction can be addressed to the following DOH address:

While DOH will not respond to individual inquiries, the agency will, however, post responses to the frequently asked questions on its website at