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New York Medicaid Plan Would Streamline State's Health System

March 16, 2005—New York Gov. George Pataki introduced a plan on Wednesday to "right-size" his state's health care system that includes many of the innovations the Bush administration hopes to foster with its proposal to give states greater control over Medicaid.

With HHS Secretary Michael O. Leavitt by his side, Pataki discussed his plan to eliminate underused hospital and nursing home beds, spend $1 billion on health care information technology, and rely more on home-based care rather than nursing home care.

The plan, which requires approval by HHS, would also turn over control of New York's Medicaid program from its cities and counties to the state, Pataki told a press conference in Washington.
Leavitt said the plan would ensure continued medical coverage to millions of New York residents.

Leavitt has warned in recent weeks that states need flexibility over Medicaid benefits to avoid dropping coverage entirely for large categories of the Medicaid population. "Is it better to give everyone a Chevrolet or few a Cadillac?" he asked Wednesday.

Pataki said the plan, which also would have to be approved by the state legislature, would provide significant savings to the state, but declined to estimate how big the savings would be.

Asked what the impact would be on benefits for existing Medicaid patients, Pataki said there would be "some changes" for New York's "Family Health Plus" program, which extended Medicaid coverage to low-income adults in the state who otherwise did not qualify. But Pataki did not say how benefits would change.

New York received approval eight years ago from HHS for its "Partnership Plan," which relied on managed care plans. The program saved $6 billion over eight years, while expanding coverage to more than 400,000 New Yorkers, HHS said. Family Health Plus was an expansion of the Partnership Plan.

The new plan, called the "Federal-State Health Reform Partnership Program," would "reinvest" $1.5 billion of the $6 billion saved, HHS said. New York said it would use the $1 billion in infotech money for electronic prescribing, electronic health records, and regional health information networks.

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