NYS Medicaid Implements 1% Across the Board Payment Reduction

Beginning with dates of services of January 1, 2020, all non-exempt New York State Medicaid payments to providers will be uniformly reduced by 1%.

The recently signed budget legislation permits the New York State Medicaid Program to begin across the board 1% payment reductions for dates of service January 1, 2020, through March 31, 2020, and each State Fiscal Year thereafter.

According to the provider notice, “for services subject to the 1% reduction, all fee-for service payments will receive a decrease to Medicaid checks and/or Electronic Funds Transfers for dates of services on or after January 1, 2020. Conversely, managed care payments to health plans will be reduced through a 1% reduction to premium rates effective January 1, 2020.”

Certain payment categories are exempt from the 1% payment reduction. For example, payments based on federal law prohibitions (e.g., Federally Qualified Health Center services, Supplemental Medical Insurance – Part A and Part B, hospice services, among others) as well as payments funded exclusively with federal and/or local funds (e.g., services provided to inmates of local correctional facilities, certified public expenditure payments to the NYC Health and Hospital Corporation, among others) are excluded from the cuts.

Providers and services impacted by the payment reduction include:

  • physician, dental and pharmacy providers;
  • nursing homes
  • certain managed care programs
  • certain inpatient hospital programs
  • Non-Institutional Long-Term Care Services (e.g., home health, personal care, assisted living).

The cuts impact many providers who may not have been aware of the proposed reductions now enacted.

If you have questions regarding the proposed cuts or have other health law related questions, please contact our office.