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NY State Early Intervention Program Changes Proposed in 2011-2012 Budget

Posted Feb 01 2011 11:23pm
Here is information from Governor Cuomo's 2011-2012 proposed budget. You can find supporting documents and presentation at http://publications.budget.state.ny.us/eBudget1112/fy1112littlebook/index.html

I have BOLDED the proposed budget information and italicized my own comments
Several changes are suggested for the early intervention program that provides services to children aged 0-3 who have qualifying conditions or developmental delays.

• Recalibrate Early Intervention Rates. To make the cost of Early Intervention more affordable, a variety of changes will be made to payments for Early Intervention providers. These include the following
- Rate Reductions of 10 percent for Early Intervention. A 10 percent across the board rate reduction will be applied to all Early Intervention service rates. (2011-12 Value: $11.1 million; 2012-13 Value: $24.3 million)

n.b. a 10% rate cut was enacted LAST YEAR. It will be interesting to see if the lower reimbursement rate drives providers out of the program. That may be the actual intent. Fewer providers means fewer reimbursements.

- Restructure Early Intervention Billing Practices. Providers of Early Intervention that receive more than $500,000 in Medicaid revenue annually will be required to directly seek reimbursement from Medicaid and private insurance prior to seeking payment from municipalities for these services. (2011-12 Value: $0.5 million; 2012-13 Value: $1.9 million)

This is a cost shifting technique that has significant implications for large providers. Many are not equipped to handle Medicaid or private insurance billing and have no experience in this area. There will be a steep learning curve for agencies who will have to learn how to navigate these systems. Furthermore, there are delays associated with getting reimbursements from these systems and that may have a significant impact on the cash flow and financial health of the larger agencies.

- Maximize Commercial Insurance Reimbursement for Early Intervention. Insurance companies will be required to pay legitimate claims for Early Intervention Services. Currently, only $13 million, or 2 percent of total gross program costs are paid by private insurance companies, although over 40 percent of children enrolled in the program are covered by private insurance. (2011-12 Value: $0 million; 2012-13 Value: $24.6 million)

This is another cost shifting technique, which has merit but there are significant problems in implementing this. Some municipalities are encouraging providers to become 'approved providers' with local insurance companies so as to allow for recouping costs from the private insurance - but the municipalities have absolutely no experience in knowing how to negotiate fair and reasonable rates with the insurance companies. In one County where we work we were asked to become an EI provider with an insurance company and the proposed reimbusement rate sheet was less than half of the prevailing rate that the same insurance company pays me to see people privately in my office. I refused to sign the contract because of my concern that a day would come where I would have to bill the insurer directly for EI services (as stated above!) and I would be 'locked in' to a substandard reimbursement structure. After refusing to sign a contract for well over a year and after many attempts at educating the municipality on the prevailing wage for therapy sessions, the insurance company finally adjusted the reimbursement for EI to appropriate community standards. The problem here is that the municipality does not know anything about prevailing reimbursement standards and the insurance company was quite adroitly trying to pull a fast one on the municipality. I am still waiting for a thank you letter from that municipality - I believe that I saved them several hundred thousand dollars annually by educating them on prevailing reimbursement rates and by holding out on the contract until the insurance company adjusted the rates accordingly.

- Recover Early Intervention Overpayment for Medicaid Transportation. Achieve savings due to recoupment of $6.2 million in the State’s overpayment for Medicaid transportation costs. This proposal will recover the overpayment from counties. (2011-12 Value: $6.2 million; 2012-13 Value: $0 million)

- Modify Early Intervention Service Coordination Rates to Use Capitation. In order to achieve programmatic efficiencies, capitated rates will replace the current methodology of billing in 15 minute increments for service coordination. Service coordination will be paid at a single rate per event or per month regardless of the amount of time spent managing the child’s case. (2011-12 Value: $0.3 million; 2012- 13 Value: $0.9 million)

- Bill Early Intervention Services in 15-Minute Increments. Fifteen minute increment rates will replace variable unit increment rates (basic and extended). Currently, basic visits are for up to 59 minutes of contact time with a child and an extended visit is for 60 minutes or more. (2011-12 Value: $1.6 million; 2012-13 Value: $6.2 million)

This has already been implemented in 2010-2011. This allows them to be on an encounter-based billing methodology that is consistent with third party payers, but there is a rather steep learning curve for all of the providers - most of which are not accustomed to operating in a medical billing context. They have not yet started reimbursing providers on this encounter based system - perhaps that is next?

- Revise Early Intervention Rates to Update Wage Equalization and Transportation Factors. Rates for home and community-based visits will be revised to reflect updated wage equalization factors that account for salary differences across the State. In addition, other changes to the prices will be made to adjust travel time assumptions which are assumed in the rates. (2011-12 Value: $0.9 million; 2012-13 Value: $1.4 million)

It will be interesting to see what this actually means. You can be sure that upstate people will cry foul if their rates are cut more than downstate - based on cost of living factors. The rates are already geographically adjusted so new adjustment formulas may be suggested.

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The sounds that you are hearing are the beginning cries of special interest groups who will do anything to avoid these cuts. The need to cut is real - and some of these suggestions are helpful. I am disappointed that more was not suggested about implementing better utilization management and setting entrance and exit criteria for the program. There is cost savings that will be realized by across the board slashing - but this is not a particularly thoughtful way to enact reforms. You can be more precise with a scalpel than you can with a hatchet, but perhaps the fiscal crisis is so severe that the Governor does not care much about making nuanced decisions and adjustments.
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