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State Issues Plan for FMAP Contingency Plan Cuts

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Today, the state released its official plan to begin reducing payments, as authorized by the Federal Medical Assistance Percentage (FMAP) contingency plan. The Division of Budget (DOB) issued a technical document outlining the FMAP contingency allocation plan to all state agencies, and the Department of Health (DOH) issued a public notice in the State Register specific to Medicaid. The state plans to submit the plan to the Centers for Medicare and Medicaid Services tomorrow.

Overall, the payment reduction announced by DOB will be a percentage reduction of approximately 1.1% that will begin September 16 and continue through the end of the state fiscal year on March 31, 2011. The cuts apply to a variety of funding, including Medicaid, Health Care Reform Act funds, grants, member items, etc.

The reduction will be effective for Medicaid check cycle 727 (standard check release date of October 13, distressed facilities check release date of September 29). It does not affect next week’s payment.

HANYS continues to seek legislative support for provider relief, and complete repeal of this law. HANYS is urging members to contact their representatives in the Legislature and ask that the FMAP contingency plan law be repealed.

The state established the FMAP contingency to address a $1.085 billion gap in the state budget. However, since that time, the state received $1.4 billion in enhanced FMAP and education funding, and the state just received another $700 million in federal education funding for the Race to the Top program--eliminating the need for the contingency plan. Additionally, these cuts come on top of more than $5 billion in cuts and taxes sustained by health care providers over the last two years and will result in further reduced access to services. Contact: Nicholas Henley

Published September 15, 2010