BILL NUMBER: S3338

SPONSOR: CARLUCCI
 
TITLE OF BILL:

An act to amend the public health law, in relation to funding early
intervention services; and to repeal certain provisions of the public
health law and the insurance law relating thereto

 
PURPOSE OR GENERAL IDEA OF BILL:

To provide a system that streamlines the process by which funds are
distributed to municipalities to finance early intervention programs,
thereby providing vital relief to the municipalities across the state,
and to improve their ability to more effectively administer early inter-
vention services to children who need such services.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one amends the public health law by adding a new section 2807-0
that provides definitions for terms used in this section of law. Section
              

one also provides that the commissioner of health shall make grants to
municipalities for the delivery of early intervention services. Such
grants shall be deemed reimbursements from third party payers to the
municipalities and the State and shall be a share of grants equal to the
proportionate share of the municipality and the State, as the case may
be, of the total approved statewide dollars not reimbursable, by the
medical assistance program paid by municipalities and the State to
providers of early intervention services in the last complete state
fiscal year for which such data is available.

Section two amends subdivision 6 of section 2807-s of the public health
law by adding two new paragraphs (g) and (h). Paragraph (g) provides
that a further gross statewide amount for two thousand seventeen shall
be one hundred fifteen million dollars. Paragraph (h) provides that the
one hundred fifteen million dollars specified in paragraph (g) shall be
allocated among the municipalities and the State based on the share of
each municipality and the State of early intervention program expendi-
tures not reimbursable by the medical assistance program for the latest
twelve month period for which such data is available.

Section three amends subdivision 7 of section 2807-s of the public
health law by adding a new paragraph (d) that provides that funds shall
be added to the funds collected by the commissioner for distribution in
accordance with section 2807-o, in the amount of one hundred fifteen
million dollars for the period January 1, 2017 through December 31,
2017.

Section four amends subdivision 1 of section 2557 of the public health
law, subdivision 1 as amended by section 4 of part C of chapter 1 of the
laws of 2002, to delete the reference to a plan of insurance so that
benefits under this title shall be considered secondary only to any
state government benefit program under which an eligible child may have
coverage, and to delete the provision that nothing in this section shall
increase or enhance coverages provided for within an insurance contract
subject to the provisions of this title.

Section five amends section 2557 of the public health law by adding a
new subdivision 4 to require the commissioner to collect data, by muni-
cipality, on the early intervention program for purposes of improving
the efficiency, cost effectiveness and quality of the program. Data to
be collected shall include the number of children enrolled in the
program, the number of state-approved agencies and organizations provid-
ing early intervention services by service specialty and the number of
state-approved independent providers of early intervention services by
service specialty, the number of state-approved evaluators, the number
of children covered by the medical assistance program, the number of
claims submitted to the medical assistance program by municipality, the
percentage claims denied by medical assistance and the reasons for the
denials. The commissioner shall report for the period July 1, 2017 to
December 31, 2017 and for each calendar year thereafter, to the Governor
and the Legislature by March 1 of each year the information and analysis
required by this section.

Section six amends subdivision 2 of section 2557 of the public health
law, as amended by section 9-a of part A of chapter 56 of the laws of
2012, to provide that the department shall reimburse the approved costs
paid by a municipality other than those reimbursable by the medical
assistance program, eliminating the exclusion of costs reimbursable by
third party payers.

Section seven amends the section heading of section 2559 of the public
health law, as added by chapter 428 of the laws of 1992, to eliminate
the reference to third party insurance.

Section eight amends subdivision 3 of section 2559 of the public health
law, as added by chapter 428 of the laws of 1992, paragraphs (a), (c)
and (d) as amended by section 11 of part A of chapter 56 of the laws of
2012 and paragraph b as further amended by section 104 of Part A of
chapter 62 of the laws of 2011, to provide that providers shall first
seek payment from the medical assistance program rather than third party
payers including governmental agencies, prior to claiming payment from a
municipality for services rendered, though not when the insured is not
eligible for medical assistance pursuant to the social services law.

Section eight also deletes paragraphs (b) requiring the commissioner to
promulgate regulations providing public reimbursement for deductibles
and copayments imposed under an insurance policy or health benefit plan
to the extent that such deductibles and copayments are applicable to
early intervention services and (c) requiring that payments made for
early intervention services under an insurance policy or health benefit
plan provided as part of an IFSF shall not be applied against any maxi-
mum lifetime or annual limits specified in the policy or health benefit
plan. In addition, section eight provides that a municipality shall be
subrogated to the extent of its expenditures for early intervention
services furnished to eligible persons to the rights such person may
have from the medical assistance program rather than from third party
reimbursement. Except as provided in this article, no third party payor
other than the medical assistance program shall be required to reimburse
for early intervention services.

Section nine provides the effective date.

 
JUSTIFICATION:

The early intervention program was established under the Public Health
Law and the federal Individuals with Disabilities Education Act (IDEA)
to enhance the development of infants and toddlers from birth to age
three who have a significant developmental delay or disability, as well
as enhance the capacity of families to meet their children's special
needs. The program seeks to identify and evaluate as early as possible
those infants and toddlers whose healthy development is compromised and
to provide for appropriate therapeutic and supportive services. With
early intervention, we can reduce the number of children with disabili-
ties or reduce the severity of their disabling conditions.

All early intervention (EI) services must be provided to eligible chil-
dren at no cost to their families. The EI program is financed through a
combination of state and county funds, Medicaid and commercial insur-
ance. Although Public Health Law and IDEA mandate that public and
private commercial insurance be maximized in financing EI services,
reimbursement from third party payers, other than Medicaid, has been
minimal, leaving the cost of this entitlement to be paid by state and
municipal tax dollars.

In 2005 an aggregate 893,000 claims were submitted to commercial insur-
ers; 70% of the claims were denied. Further, according to a survey by
the New York State Association of County Health Officials, for the peri-
od July 2003 to June 2004, $75.5 million in claims for EI services were
filed with commercial insurers, of which $10.6 million, or 14%, was
paid. Counties, which are required by the State to finance and adminis-
ter the EI program, are entitled to be reimbursed by the State for 50%
of their unreimbursed costs for EI services (36% for administration
costs). Counties have billed private insurers approximately $100
million, overshadowing the aggregate costs billed to Medicaid. The
partial funding by the State, combined with the low rate of recoupment
from third party insurers, has required municipalities to bear an esti-
mated 43% of the costs of providing EI services.

To require municipalities to bear such a significant portion of the
costs of the program where the number of children served as well as the
level of services provided continues to increase imposes a significant
strain on local budgets. In New York City alone, for the last six months
of 2005, an estimated $213.1 million was incurred for EI services, of
which $800,000 was paid by commercial insurance.  Whereas in 1993 to
1994, the first year the EI program became effective, the costs of EI
services for the entire State was $40 million. Since a substantial
portion of municipal budgets must be spent on EI services, munici-
palities must face a shrinking balance of available funds, forcing them
to decrease or eliminate altogether other needed services.

Recognizing that the current structure of financing EI costs is inade-
quate, this bill provides a different approach to funding. The bill
would set up a statewide pool from which municipalities and the State
would be allocated funds to pay RI costs. For the first year, an amount
of $115M would be paid into the pool. This amount is based on the
approximate percentage commercial insurers pay of total EI program costs
(utilizing data from the 2012-13 program year) increased by the esti-
mated amount paid by commercial insurers related to mandated coverage
for autism spectrum disorder.

By allowing for the direct allocation of funds to municipalities from
the statewide pool, we will eliminate the unwieldy and inefficient step
of requiring municipalities (in the case where the insured is not eligi-
ble for medical assistance) to seek reimbursement of EI costs first from
third party insurers and then, only upon denial or other disposition of
the claim, from the State. In cases where the insured is eligible for
medical assistance, municipalities will remain obligated to seek
reimbursement first from the medical assistance program.

Making funds readily available and streamlining the process by which the
funds are distributed to municipalities and the State will provide vital
relief to the State and the municipalities across the state that have
been struggling to finance the EI program and thereby improve their
ability to more effectively administer EI services to children who need
those services.

 
LEGISLATIVE HISTORY:

S1727A/A2569A: 2017-18 AMEND (T) AND RECOMMIT TO HEALTH/ amend (t) and
recommit to ways and means
S4372A/A273A, 2015-16 referred to Health/ways and means A.6517-A, 2013
and 2014 referred to health.
A.812, 2011 and 2012 reported referred to ways and means.
A.4058-A, 2009 reported referred to ways and means and 2010 held for
consideration in ways and means.
A.6814-A, 2007 reported referred to ways and means and 2008 amended and
recommitted to ways and means.

 
FISCAL IMPLICATIONS:

This bill will have no fiscal impact to the State and will in fact
generate revenue to the State. The State currently bears approximately
97% of the total EI program costs, with commercial insurers paying 3%.
The bill contemplates that commercial insurers will pay into a fund 15%
of the program costs with the State and municipalities sharing such
funded amount.

 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall become a
law; provided, however the amendments to section 2807-s of the public
health law made by sections two and three of this act shall not affect
the expiration of such section and shall be deemed to expire therewith.