The Medicaid system in New York state has received a great deal of attention over the past few months – pinpointed as cause for over $2 billion of New York State’s staggering $6 billion deficit. While Governor Cuomo blamed the deficit on Medicaid and vowed to remedy it through system reforms, details as to how he planned to accomplish this were few and far between.

This made last week’s publication of Cuomo’s 2021 Budget all the more important for local governments and municipalities -- as they finally have some insight as to how the Governor plans to go about reforming Medicaid.

As shown by our analysis of the budget, it is clear that New York state is increasing Medicaid oversight and focusing on local district Medicaid spending.

Under the Budget, $50 million has been requested for funding and staff increases for the Office of Medicaid Inspector General (“OMIG”) and a new Medicaid Redesign Team (or “MRT II”) will be created to reform Medicaid and identify $2.5 billion in industry efficiencies. Additionally, while the state will commit to paying the entire increase in Medicaid costs for local governments, it will do so only so long as the local government stays within the 2% property tax cap and controls Medicaid costs to 3% growth per year.

While the Budget has yet to be introduced in the state legislature, the information provided in it is invaluable in anticipating and preparing for upcoming changes to the Medicaid system and municipal landscape in general. Stay tuned to the MuniBlog for further updates.