The state has delayed a contentious payment reform for school-based health centers until next month, offering clinics a glimmer of hope that lawmakers will abandon the overhaul entirely.
The Department of Health is spearheading a plan to reimburse the state’s roughly 250 school-based health centers through the Medicaid managed care program, which will require the on-campus medical clinics to contract with an insurance company tasked with coordinating care for patients. The new model, which was supposed to go into effect on April 1, introduces a middleman into the equation – a shift from the current pay structure that allows clinics, which are operated by hospitals and other medical providers, to bill the state directly for each service they render.
Though the state has pushed to execute the transition by the April 1 deadline, officials announced a 30-day postponement because of “stakeholder requests for additional time to prepare for the implementation” and other managed care initiatives, the Health Department said in a Monday notice to providers. The delay was welcomed by the clinics, which have long opposed the move for fear that it will put them out of business.
The state is now tracking for a May 1 implementation date – an extension that gives clinics a month-long window to push lawmakers to rescind the plan entirely, as they’ve advocated for in years past. Gov. Kathy Hochul and the state legislatures are at odds over the payment structure for school-based health centers, with lawmakers including language in their one-house budget proposals to scrap the transition entirely.
“We see this as an opportunity,” said Sarah Murphy, executive director of the advocacy group New York School-Based Health Alliance. “It doesn’t work now, and it’s never going to work.”
The state’s Medicaid Redesign Team, a Cuomo-era effort to lower high Medicaid costs, first announced the plan to move school-based health centers into managed care by 2014, saying it would improve the quality of services and reduce unnecessary treatments. The centers mounted an opposition movement that staved off the change for the last 10 years, because they said that the likely uptick in insurance claims denials and lower reimbursement rates would decimate their finances.
Health officials notified the centers about the April 1 implementation date in September, an abrupt communication that came as a surprise to the clinics, Murphy said. Since then, health centers have advocated to cancel the transition, lobbying elected officials to prevent funding cuts and preserve access to care for students who use their services – many of whom are low-income and enrolled in the Medicaid program.
Legislative health chairs Sen. Gustavo Rivera and Assemblywoman Amy Paulin have pushed a bill that supports the current payment arrangement for the clinics. Both legislative houses restored $3.8 million for school-based health centers in their one-house budget proposals and included language to keep them out of managed care permanently, according to an analysis by the lobbying group Greater New York Hospital Association, which supports the measure.
Lawmakers are considering the changes to school-based health centers as they negotiate the budget, which was due on Tuesday but is stalled. Hochul vetoed a bill last year that would have cancelled the transition.
“Ultimately, what it means is lack of access for poor, working class kids, and specifically kids of color,” Rivera told Crain’s. “This needs to be a permanent thing.”
The extension will allow the health centers and managed care plans to “work through the final issues related to contracting and network participation in an effort to support a seamless transition,” said Health Department spokeswoman Marissa Crary. She did not answer a question about what types of technical challenges centers and plans have encountered prior to the transition.
Eric Linzer, president of the New York Health Plan Association, which represents managed care companies, said that the delay provides the “additional time needed for plans and school-based health centers to continue working through the operational components,” adding that the plans appreciate the delay.
