Managed care hasn’t lived up to its promise. That’s the pitch undergirding a new proposal by the New York Caring Majority and the union 1199SEIU to largely cut private insurance companies out of the Medicaid long-term care business. Under the proposed “Home Care Savings & Reinvestment Act,” the state’s Medicaid program would save approximately $2.5 billion a year by directly paying for home care services, rather than paying a flat per-member, per-month rate to managed care plans to coordinate services and reimburse providers. That’s because managed care plans have spent $3.1 billion of the state’s money on administrative costs and pocketed $2.4 billion in profits from 2019 through the third quarter of 2022, according to an 1199SEIU analysis of the plans’ most recent available cost reports. In that time the state paid Medicaid managed long-term care plans $52 billion worth of premiums to administer the benefit, according to the union’s analysis. “Privatizing health care has not saved our state money or improved care for New Yorkers; instead it enriches private health insurance companies,” state Sen. Gustavo Rivera, who is sponsoring the bill with Assemblymember Amy Paulin, said in a statement. “I am proud to sponsor this bill because by removing the middleman, we will modernize our health care system to ensure dollars are going to home care providers and not being siphoned off," Rivera added. Managed long-term care was popularized under the state’s Medicaid redesign team, an initiative launched about a decade ago by former Gov. Andrew Cuomo to address the program’s rising costs. Bryan O’Malley, executive director of the Consumer Directed Personal Assistance Association of New York State, supported the move at the time. Now he says it was a mistake and is backing Paulin and Rivera’s bill. “The move to managed care is a failed experiment,” O’Malley said in an interview. “All of the justifications to do this didn’t materialize.” The argument will likely be attractive to Gov. Kathy Hochul as the state grapples with an estimated $4.3 billion budget deficit; Helen Schaub, 1199SEIU’s political director, said “nobody could argue” that managed long-term care plans have saved the state money. But the proposal will face opposition from the New York Health Plan Association, which represents 12 of the state’s managed long-term care plans. The transition to managed long-term care “resulted in a more cost-effective program,” Eric Linzer, the association’s president and CEO, said in a statement. “The proposal’s financial assumptions are seriously flawed as it will fail to generate any savings and reduce the quality of care,” Linzer added. IN OTHER NEWS: — Gov. Kathy Hochul signed a package of health care legislation Friday that will expand the scope of health equity impact assessments, direct the Civil Service Commission to publish data on hospital prices paid by the New York state benefit plan, expand a state hospital-home care-physician collaboration program and promote screenings for sickle cell disease. ON THE AGENDA: — Monday, 8:30 a.m. to 9:30 a.m. The Community Services Board Developmental Disabilities Subcommittee meets at the NYC Department of Health and Mental Hygiene’s Gotham Center in Long Island City. — Tuesday, 2 p.m. to 3:30 p.m. The Community Services Board hosts its quarterly meeting at the NYC Department of Health and Mental Hygiene’s Gotham Center in Long Island City. — Wednesday at 4 p.m. NYC Health and Hospitals/Jacobi hosts a public hearing on a proposed lease to The Fortune Society for the development of “Just Home.” — Thursday, 10 a.m. to 3 p.m. The New York State Traumatic Brain Injury Services Coordinating Council will meet. — Thursday, 10:15 a.m. to 3 p.m. The Early Intervention Coordinating Council convenes its quarterly meeting. GOT TIPS? Send story ideas and feedback to Maya Kaufman at mkaufman@politico.com. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
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