New York SNF Providers Secure Preliminary Injunction Against $246M in Medicaid Cuts

A judge in New York threw a roadblock in front of a proposed change to Medicaid reimbursement calculations, one that skilled nursing providers argued could set them back millions.

Acting Supreme Court Justice Kimberly O’Connor issued a preliminary injunction on November 7 that prevents the state of New York from implementing a change in how it calculates Medicaid reimbursement for nursing facilities, pending a final determination of the lawsuit filed in October by a coalition of providers.

The order keeps the Department of Health (DOH) from implementing that new case mix adjustment methodology and directs them to use the method that was in effect as of June 30 of this year.

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Nursing homes in the state had been awaiting the fate of a projected $246 million in cuts, as projected in savings by the state of New York.

“We are gratified by the Court’s decision to put New York State’s drastic cuts to Medicaid on pause,” Jeffrey Farber, president and CEO of The New Jewish Home in New York, said in a statement. “We urge both the State Department of Health and state lawmakers to take this much needed time to reconsider the impact these cuts will have on New Yorkers all around the state.”

New York’s DOH moved to change its calculation for SNF reimbursement for Medicaid residents earlier this year. The old system drew from Minimum Data Sets (MDS) for Medicaid residents around two snapshot dates; the proposed model would use all MDS assessments submitted from August 8, 2018 through March 31, 2019.

The providers in the lawsuit argued that the new methodology violated the law because the DOH did not provide the industry stakeholder group with recent case mix data and analyses that the DOH conducted for the July 1 change in methodology.

The provider coalition also argued that the language of the workgroup mandate in the state budget, and the timeframe for the workgroup to report findings, makes it clear that the Legislature intended it to review the methodology and offer recommendations before a final determination was made by the DOH.

The DOH, for its part, argued the Legislature did not establish veto power for the workgroup on the department’s calculation, or require the workgroup’s approval in any way before moving forward with implementing the case mix calculation. It also argued that the legislative workgroup mandate “expressly acknowledges that the July 1, 2019 implementation of the new case mix calculation was already done, and that the workgroup was tasked with reviewing data after the change took place,” according to O’Connor’s order.

O’Connor sided with the provider coalition, which had sought the injunction. According to the order, the providers made the case that they were in “danger of irreparable injury in the absence of injunctive relief” and that they would likely succeed based on the merits of the underlying action.

Specifically, reading the mandate that authorized the workgroup, alongside letters to the state governor and director of budget, supports the providers’ claims, O’Connor’s order said.

“I am thankful that the Court in this matter halted the State’s devastating cuts and protect nursing home residents, providers and their staff throughout New York,” NYS Health Facilities Association president and CEO Stephen Hanse said in a statement.

The New York DOH said in a statement to SNN that it is reviewing the decision, and added that the methodology has not yet changed.

“The previous case mix calculation based rates for nursing homes on their reports of acuity levels on only 2 specific days each year,” the DOH said. “The new calculation uses an average of all available data from the prior case mix period to create a more fair and accurate picture.”

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