Sweeping Medicaid Changes Included in New York State Budget

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While taking swift action to address the fallout from the COVID-19 pandemic, the New York State Legislature also passed the annual budget. A substantial portion of the budget bill details comprehensive changes to the structure and services offered by New York’s Medicaid program. The amendments were drafted in consultation with the Medicaid Redesign Team II, tasked with addressing the rising costs of Medicaid and ensuring financial stability of the state program.

Notably, the budget bill drastically changes Medicaid coverage for “personal care services,” such as those provided by home healthcare aids. The bill requires personal care services covered under the program’s standard coverage to be prescribed by a “qualified independent physician selected or approved by the Department of Health” – not the recipient’s treating physician. Additionally, the bill provides that personal care services shall only be available to individuals needing “at least limited assistance” with more than two activities of daily living, like eating, bathing and getting dressed, a standard more onerous than private long-term care insurance policies. The only exception is for recipients diagnosed with Alzheimer’s or dementia, for which only one activity of daily living is required for coverage. The budget bill sets the same eligibility requirements for participation in the Consumer Directed Personal Assistance Program, a program permitting chronically ill recipients who would otherwise medically qualify to receive care in a nursing home to receive coverage at home in the community from certified aides of their choosing. The budget bill charges the Department of Health with developing an assessment tool that can be used to determine who meets the eligibility requirements.

Additionally, the budget bill sets a 30-month look-back period for individuals seeking coverage for non-institutionalized long-term care services, like home health services, private nursing services and assisted living care. In other words, any gift to anyone other than a spouse considered an asset transfer for less than fair market value and made in the two-and-a-half year period preceding the patient’s application for Medicaid benefits will create a penalty period during which Medicaid will not be provided. Applications for nursing home level Medicaid benefits require a five-year look, so this review period is significantly shorter.

However, just as with the nursing home penalty periods for gifts within the applicable look-back period, the penalty will be based on the value of the total assets transferred during the look-back and will not begin until the applicant is “otherwise eligible.” In the context of community Medicaid, this means that the applicant must meet the disability standard imposed and have assets of less than $15,750 with the exception of a few exempt assets, including a prepaid, irrevocable burial account. The imposition of the 30-month look-back and corresponding penalty period for transfers may have the effect of forcing individuals into nursing homes against their wishes and against hard-fought disability rights cases for receiving care in the least-restrictive setting possible.

The bill sets October 1, 2020 as the effective date for these changes, but affords the New York State Budget Director discretion to delay the effective date depending on the progression of the COVID-19 pandemic.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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