Elder Law Resources:

New York’s No. 2 Official Calls for Reexamination of State’s Generous Long-Term Care Rules

In a new report on strategies for cutting the cost of New York State’s expensive Medicaid program, Lt. Gov. Richard Ravitch is calling for a reexamination of rules for qualifying for long-term care, among other changes.

“It is widely known that some of New York’s Medicaid rules, including its ‘spend-down’ rules and its doctrine of ‘spousal refusal,’ are vulnerable to abuses that divert resources from Medicaid’s legitimate purpose — serving as a safety net for the needy — and turn the program into an entitlement for the less needy,” the report states. “The State should re-examine these rules to re-balance the competing equities.”

Terming the state’s long-term care program “one area of opportunity” for cutting costs, the report notes that New York State has “relatively generous long term care policies . . . [f]or example, the State has one of the most liberal policies in the country in providing personal care services to Medicaid beneficiaries.” (In New York, normal Medicaid asset transfer restrictions do not apply to those seeking Medicaid coverage for home care.)

The report also claims that great cost savings could be achieved by shifting “dual eligibles” — those eligible for both Medicare and Medicaid — into managed care programs. Ravitch says that while dual eligibles make up just 15 percent of Medicaid enrollees, they account for 40 percent of Medicaid spending, all of which is paid on a fee-for-service basis.

“This must change,” Ravitch writes, and he calls for “mandatory delivery” of care to dually eligible beneficiaries through managed care organizations. The report acknowledges that such delivery would require a change in statutory Medicare “freedom of choice” provisions and certain federal waivers of Medicaid “freedom of choice” provisions. “[The State] should seek federal changes because it can no longer afford Medicaid without them,” Ravitch says.

New York’s Medicaid program consumes one-third of state spending at a time when the state is facing an enormous deficit. When help from the federal stimulus program ends in June 2011, New York and other states will “fall off a cliff,” Ravitch told The New York Times.

“It is unclear how much weight Mr. Ravitchs recommendations will carry,” the Times writes, “since he is not running for re-election and the State Legislature is notoriously protective of its own power. But in releasing his report now, he is putting a sensitive issue out for public consideration in the middle of a governor’s campaign, one of many national races in which the role and the responsibility of government are being debated.”

To read the Ravitch report, click here.