State Senator Donald E. Williams, Jr.
November 4, 2009
Budget Deficit Mitigation Efforts Must Include Follow Through on Cuts Already Included in Budget
Budget numbers show Rell administration ignoring millions of dollars in spending cuts included in budget
Senate President Donald E. Williams, Jr. (D-Brooklyn) says that analysis of OPM’s letter to Comptroller Nancy Wyman on October 20th as well as new budget estimates from Comptroller Wyman show that not only are revenues declining, but spending reductions included in the budget are not being made by the executive branch.
“We know that declining revenues continue to threaten our budget,” said Senator Williams, “and that’s why it’s so important that the Rell administration roll up its sleeves and reduce spending to the levels called for in the budget. Each day that passes without these cost saving measures puts us further behind the eight ball. Any deficit mitigation plan must include a real focus on capturing savings already included in the budget.”
One example of cuts that were included in the budget but have not been implemented is in the Medicare Program. The Rell administration acknowledged in a recent letter to State Comptroller Nancy Wyman that there is a $68.2 million shortfall in the state’s Medicaid line item. The letter claims the deficit is due in part to the administration’s failure to reduce the rate that the state pays to HUSKY managed care organizations. Comptroller Wyman also mentioned this unrealized savings in yesterday’s letter to the governor.
The rate reduction — and resulting estimated savings of $20 million annually — were first proposed by Gov. Rell in May and subsequently included in the final budget. But in the letter to Comptroller Wyman, Office of Policy Management Secretary Robert Genuario explains that the savings can’t be achieved due to, “overly aggressive estimates of savings from Managed Care rate changes.”
A recent audit of the Department of Social Services showed that the state was overpaying the managed care organizations (MCOs) which manage the care of children and their parents in the HUSKY program by as much as 6 percent. In response, the Governor included in her May budget proposal a decrease in the rates paid to MCOs. The governor estimated the savings to be $40 million over the biennium.
“Since the Governor originally proposed this rate cut, it is disappointing that we have seen no evidence that her agencies are carrying it out,” said Senator Williams. “This calls into question if they ever intended to cut the rates paid to the MCOs.”
The state pays three managed care organizations (MCOs) to manage the care of children and their parents in the HUSKY program (which is part of Medicaid). HUSKY enrollees are able to choose which of the three MCOs they want to enroll in. The MCOs are ‘capitated’, meaning they are paid a flat monthly rate for each enrollee that they serve. The contracts were last sent out to bid in early 2008. These contracts included a large (24 percent) increase over the previous ones. Concerned about the unexpectedly large increase, Senate and House Democrats paid for an audit of the rates by the Comptroller’s office. The audit found that the state was overpaying the MCOs by as much as 6 percent.
“The governor determined that we are overpaying managed care organizations and, even though she included a decrease in the rates in her budget, she has refused to address the problem,” said Senator Williams.
|
Senator Williams’ |
Listing of Senator Williams’ recent press releases and a Press Kit with official head shots and bio. |
Press Aide Derek Slap |
