| NEW YORK, April 14
NEW YORK, April 14 New York State said it
finalized an agreement with the U.S. government on Monday
allowing it to reinvest $8 billion of federal money in its
health insurance system for low income people while avoiding
potentially painful cuts or additional budget strain.
Over the next five years, the state will keep the federal
savings it makes by reforming its existing Medicaid program.
The savings, slated to total more than $17 billion by the end of
the 2014-2015 financial year, were identified by a group
established in 2011 by New York Governor Andrew Cuomo.
New York state spending on Medicaid is among the highest in
the country. The system of medical insurance for people on low
incomes will cost around $58 billion in the coming year. In
2010, New York spent $8,910 per patient compared to a national
average of $5,563, according to data from the Kaiser Family
Foundation non-profit group that focuses on health care policy.
The federal government pays about half of that, meaning the
issue has traction outside New York.
Cuomo hailed the agreement even though the waiver was $2
billion less that the state had originally requested.
"This waiver amendment allows us to invest these savings in
keeping Brooklyn's hospitals open, providing new community based
primary care clinics in neighborhoods that need them and
preserving health care services across our state," Cuomo said.
New York City's new mayor, Bill de Blasio, who campaigned
against hospital closures in the city, called the waiver 'a
major milestone that will help break the vicious cycle of
heedless hospital closures.'
In an era of tighter budgets, the federal government is keen
to cut the amount it reimburses states. Federal spending of
health care totaled about $772 billion in 2013, or a fifth of
the federal budget, according to the Center on Budget and Policy
Priorities. Medicaid accounts for nearly $500 billion of that.
Last year, the federal government cut $1.2 billion from the
Medicaid money it gives to the state after the Center for
Medicaid Services (CMS), the federal agency that administers the
system, found over billing at centers for people with
developmental illnesses in the state.
Fiscal conservatives see New York's Medicaid system as
expensive, wasteful and unaccountable.
A congressional report last year said over billing for the
developmental centers reached $15 billion during the last 20
years. CMS opened an audit of those billing rates last year but
has yet to issue a final report and has not said whether it will
"Today's formal agreement with New York represents a
significant commitment to improve care delivery in Medicaid that
will result in better health outcomes for New Yorkers, improved
efficiency, and lower health care costs for the program," said
CMS spokeswoman Emma Sandoe.
(Reporting by Edward Krudy; Editing by Grant McCool)