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Release: Budget Division Mid-Year Update report for 2019-20 budget, with information on Medicaid spending. Report attached as a PDF, 415 pages.
NYSNYS News


Text of November 22, 2019 report.

FY 2020 Mid-Year Update

Summary (Excerpt):

DOB estimates that the General Fund will remain in balance in the current year, based on a review of operating results through the first half of FY 2020 and updated data on State programs and activities. This estimate depends on the successful implementation of measures to address an imbalance that has formed in the Medicaid Global Cap, as described below.

The General Fund budget gaps are currently estimated at $6.1 billion in FY 2021, $7.5 billion in FY 2022, and $8.5 billion in FY 2023. The gaps, excluding the imbalances in the Medicaid Global Cap, are now estimated at $4.1 billion in FY 2021, $4.7 billion in FY 2022, and $5.5 billion in FY 2023. The growth in the gaps in comparison to the First Quarterly Update is due to an increase in minimum wage costs for health care providers, which is funded entirely outside of the Global Cap and thus not subject to the indexed spending limit. The increased minimum wage costs are entirely offset in FY 2020 and partly offset in subsequent years by savings in other areas.

In addition to these routine General Fund budget gaps, the Medicaid Global Cap has a structural imbalance. Absent savings measures, DOB estimates that State-share Medicaid spending subject to the Global Cap would exceed the indexed growth amount by $4.0 billion in FY 2020 (including the FY 2019 deferral of $1.7 billion), $3.1 billion in FY 2021, $3.5 billion in FY 2022, and $3.9 billion in FY 2023. Factors that are placing upward pressure on State-share Medicaid spending (which includes spending under and outside the Global Cap) include but are not limited to: reimbursement to providers for the cost of the increase in the minimum wage; the phase-out of enhanced Federal funding; increased enrollment and costs in managed long-term care; and payments to financially distressed hospitals.

For the current fiscal year, DOB is developing a savings plan (the “FY 2020 savings plan”) intended to maintain a balanced General Fund and working with the Department of Health (DOH) to avoid, to the extent practicable, piercing the Medicaid Global Cap. At a minimum, the FY 2020 savings plan is expected to consist of a permanent adjustment to the timing of certain health care payments, consistent with contractual terms and past practice, and a range of cost containment measures.

Savings may include across the board reductions in rates paid to providers and health plans, reductions in discretionary payments, and other actions that can be executed administratively in the current fiscal year. The Mid-Year projections assume that roughly half of the measures identified in the FY 2020 savings plan will provide recurring savings. The FY 2021 Executive Budget, which is due in January 2020, will describe the specific elements of the FY 2020 savings plan and the proposals that will be advanced to eliminate the General Fund budget gap, including the Medicaid Global Cap imbalance, in FY 2021.

Table of contents

Introduction.............1
Significant Budgetary/Accounting Practices. 2
Overview of the Updated Financial Plan........ 7
FinancialPlanAt-A-Glance: KeyMeasures.......7
Summary........... 8
Operating Results Through September 2019 ............. 10
Annual Spending Growth................11
State Operating Funds – Summary of Annual Spending Change.......... 12
General Fund Financial Plan.............................. 19
General Fund Cash-Basis Financial Plan...... 19
Multi-Year Financial Plan Revisions.................... 25
Other Matters Affecting the Financial Plan..................31
State Financial Plan Multi-Year Projections. 65
April Through September 2019 Operating Results .................. 129
Financial Plan Accompanying Notes......................139
Glossary of Acronyms..........165
Financial Plan Tables....... 171

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