February 08, 2012

Testimony: State Budget for Health and Medicaid

Source: NYSUT Legislative Department


Testimony of Andrew Pallotta, Executive Vice President, New York State United Teachers, to the Senate Finance Committee, John DeFrancisco, Chair, and Assembly Ways and Means Committee, Herman D. Farrell, Jr., Chair on the Proposed 2012 - 2013 Executive Budget for Health and Medicaid

February 8, 2012

Good afternoon, Chairman DeFrancisco, Chairman Farrell, and honorable members of the Senate Finance Committee and Assembly Ways and Means Committee.

I am Andrew Pallotta, Executive Vice President of New York State United Teachers (NYSUT). NYSUT represents more than 600,000 education and health care workers statewide. NYSUT's Health Care Professionals Council (HCPC) consists of representatives of NYSUT's 14,000 professional registered nurses and other health care professionals working in public and private health care settings. Our members work in hospitals, clinics and through home health care agencies. Our members also include physicians, visiting nurses, therapists, lab personnel, school psychologists, and registered professional school-based nurses throughout New York state. In addition, NYSUT represents over 160,000 retirees, many of whom use the state's health care system. On behalf of the HCPC and NYSUT, thank you for the opportunity to submit testimony today on the 2012-2013 Executive Budget Proposal.

First, we are greatly appreciative of your decisive actions, over past few years, as you have aided our health care professionals in their workplace by enacting relevant and meaningful legislation: from laws that eliminate the unsafe practice of mandatory overtime to heightening the penalties for assaults committed against a nurse acting in her or his professional capacity. You understand the complex and, often, difficult environment that our health care professionals must work in. Therefore, we trust that you will continue to enact legislation that considers the safety and well-being of both patients and workers, namely: Safe-Patient Handling, School Nurse in Every School Building and Safe-Staffing Ratios.

Second, we also appreciate that the Executive recognized the importance of school psychologists and neither reduced nor eliminated their role on the Committee on Special Education (CSE). The professional expertise of the school psychologist as part of the CSE is critical for the identification and implementation of appropriate programs and services for students with disabilities. Diminishing the participation of the school psychologist compromises the effectiveness of the CSE in addressing the individual needs of students. We trust you will preserve the Executive's decision.

I am sure we can all agree that the key to providing critically needed health care services in a high-quality manner is having appropriately trained and knowledgeable health care professionals at every level of the health care delivery system. Having said this, I would like to discuss, more specifically, how the Executive budget affects our health care professionals and the New York state citizens who rely on their skills. My hope is that you will seriously consider our input as you begin the very difficult task of deliberating and negotiating the 2012-2013 Executive New York state budget.

To that end, NYSUT is mainly concerned about the Executive's proposal to continue most of the SFY 2011-12 budgetary reductions to our state's health system for SFY 2012-13 and for SFY 2013-14, under the current Global Spending Cap on Medicaid. As you are aware from last year, the enacted budget created a two-year cap on Medicaid spending that limits growth to 4% (= to the ten-year rolling average of the medical component of the Consumer Price Index) for Department of Health's state share of spending. For the SFY 2012-13, this reduction means our health care facilities are capped at approximately $54 billion, a reduction of approximately $136 million or 0.3 % from SFY 2011-12 spending levels. This year, the Executive proposes to extend the Global Spending Cap to SFY 2013-14 (and thereby making SFY 2012-13 the start of a new two-year Medicaid cycle. NYSUT is concerned about how this perpetual trend in spending reductions will impact the delivery of health care services and programs by health care providers to our neediest New York state citizens.


We strongly oppose the complete elimination of the Medicaid trend factor reimbursement rates to hospitals, home care providers and nursing homes. This action, unfortunately, requires these health care facilities to absorb all inflationary increases without any cost-of-living adjustments. Such a harsh approach ignores the heightened costs and the mix of services that providers offer and fails to distinguish between high and low occupancy facilities.

A large portion of the Executive's cuts to the Medicaid program also mean an equal loss of matching federal funds. If enacted in its current form, the Executive's budget proposal would amounts to decreased revenue to hospitals, home care providers, and nursing homes. The consequence of the Executive's continued cuts to health care professionals working in these facilities may be: massive layoffs; elimination and sacrifice of high quality services; and, most likely, more facility closings. Clearly, cutbacks of this magnitude to the health care community are unacceptable to NYSUT and to New York state citizens, who would be adversely affected by either an elimination or compromise of health care services. We ask that you work closely with the Executive on alternatives to his budget proposals.

School Nurses and Tier VI

New York state's school nurse population is part of the New York state public retirement system. The Executive budget includes the creation of a new pension tier, Tier VI, which establishes an optional defined contribution/401(k)-style retirement account for all new hires, allowing them the choice of either the new 401(k) system or a greatly reduced defined benefit pension. NYSUT finds the Tier VI proposal to be a threat to members as it will only create long-term consequences as the stability and security of their pension benefit system is systematically eroded.

Health Care Reform Act (HCRA)

NYSUT is always concerned about preserving funding for the Health Care Reform Act (HCRA) as it serves as the centerpiece for a myriad of health care initiatives upon which New York state's health system rely. One major component of HCRA is the recruitment, retention and professional development of nurses and other health care professionals. The nursing shortage in New York state shows no sign of improving. It is imperative for health care institutions to have the means to recruit and retain those who are willing to work in a broad range of settings. Therefore, we were pleased to see that not only was HCRA extended through SFY 2016-17 but that it will gradually be increased each year.

New York State Health Insurance Benefit Exchange

NYSUT strongly supports the establishment of a New York Health Benefit Exchange for the purpose of providing lower cost health insurance for over a million New Yorkers, and enabling New York to comply with the federal Affordable Care Act (ACA), passed in 2010.

While we acknowledge that this legislation makes a compromised advance towards establishing a Health Benefit Exchange program that responds to the needs of New Yorkers, we also feel that the Executive's budget language lacks some vital and comprehensive provisions that will provide fairness in the Exchanges operation. The provisions we strongly support, include:

Union representation on the Board and/or the Regional Advisory Committees. The Executive's budget does not guarantee labor representation on the Advisory Committees as it was in the provisions of the original Governor's program bill #12;

The creation of a Capital District/Hudson Valley Regional Advisory Committee. We feel that creation of this committee is logical step in the operation of New York State Health Insurance Benefit Exchange since the Capital District is host to the Headquarters of a number of large insurers (CDPHP, BSNENY and MVP), regional offices for United Health Care, GHI, Empire BCBS and trade organizations representing health care providers; and

Much stronger conflict-of-interest restrictions regarding who can be appointed to the Exchange's governing board. We are adamant about prohibiting entities (i.e. brokers and agents) who stand to potentially make a profit from being appointed to the board. Other states have prohibited members from serving on the board if they are affiliated with an insurance carrier, third-party administrator, agent or broker, health provider, facility or clinic, or trade association for these entities.

NYSUT hopes that these provisions are seriously considered by the New York state legislature so that New York state can provide an exchange that will meet the unique needs of state residents. If the state does not pass exchange legislation and have it operational in accordance with the provisions of the federal ACA, New York state would be ineligible for over $100 million dollars of federal funding and a federally-operated exchange will be established in the state by the U.S. Department of Health and Human Services, making it much less likely that the needs of New York state individuals and businesses will be taken into account.

Senior Citizens and Prescription Drugs

Promoting affordable and accessible prescription drug coverage for New York residents and union members is a long-term goal of NYSUT's HCPC and the New York State AFL-CIO. Our organization continues to lead an on-going, labor task force to review and study ways New York state government can realize savings by controlling the escalating costs of prescription medications; especially for our seniors and retired members. It seems, unfortunately, that the Executive budget is silent on this issues Therefore, we strongly advocate for budgetary provisions that address this issue.

NYSUT has always had a long-standing commitment to provide for our retired members who have dedicated many years to the health care or the education fields. Advocating for affordable prescription drug programs for these members, both nationally and state-wide, is part of NYSUT's commitment.

Medicaid Redesign Team's Health Reform Initiatives

NYSUT applauds some of the proposals of the Medicaid Redesign Team in the Executive budget that address the various and often-sensitive health care needs of our New York state citizens. Proposals such as:

  • Breast feeding support via payments for lactation consultants;
  • Tobacco cessation counseling by dentists;
  • Increased interpretation services for Limited English Proficient (LEP) and hard of hearing patients;
  • Translation and interpretation services in chain pharmacies for Limited English Proficient (LEP) patients;
  • Expanded services to promote maternal and child health;
  • Improved fair hearing process (i.e. mandatory enrollment into managed long-term care);
  • Enhanced Medicaid enrollment services for the disabled and elderly population; and
  • Primary Care Service Corps that provides tuition repayment for nurse practitioners who work in underserved areas.


NYSUT's Health Care Professional Council appreciates certain reforms to the health care system proposed in the Executive budget; however, we oppose any cuts that adversely affect the health care professional workforce and its ability to provide direct quality care to New York state residents, particularly the indigent. Such cuts to essential health care services serve only to compromise our health care professionals' ability to maintain and help the people of New York state. The state should not: continue capping spending on Medicaid, completely eliminate the trend factors for these entities, enact a Tier VI benefit plan or ignore a plan for senior's to pay for prescription drugs.

The NYSUT Health Care Professional Council, as well as all NYSUT members, look forward to working with the legislature and the Executive to ensure that all New Yorkers have the resources necessary to insure that they receive the highest quality of care possible.

Thank you for your consideration.


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