Medicaid: US vs. NYC

Welcome to Politics Bites, where every afternoon at It's a Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on The Brian Lehrer Show, New York Times reporter Anemona Hartocollis looked at the federal government's accusation that New York City is keeping too many Medicaid patients at home as a way to cut expenses.

The federal government has charged that New York City over-billed Medicaid by improperly approving 24-hour home care for thousands of patients, rather than assigning them to nursing homes and other long-term care facilities.

If the early reports are any indication, we are in for a long bout of he-said-she-said between Washington and New York. Anemona Hartocollis, who has been following this story for the New York Times, said that the lawsuit takes issue with the city's management of Medicaid funds and practices following a technical rule change in 2006. 

There's some dispute over the meaning of this change. The US attorney says that as of 2006, personal care in the home—feeding, grooming, toileting—was paid for by the federal and state governments. Before 2006 the city had to make a contribution. The implication of the lawsuit is that the motivation of the city in running this Medicaid mill and defrauding the feds, allegedly, was that if it put people in personal care the city didn't have to pay.

The city is pushing back. According to Hartocollis, the mayor's office and health advocates have expressed satisfaction with the way patient care is assigned in New York, making the point that it's better and cheaper to keep people in their homes than move them to facilities permanently.

The US attorney's office stepped into a hornet's nest they weren't expecting here. Not only Mayor Bloomberg, but advocates for the disabled as well have come out and said, "Gee, we want  people to stay at home; that's the optimal thing and in general it's less expensive." Although the US attorney alleges in this case that the personal care, because it was around the clock, was approximating nursing home care. Even the federal government, the advocates are saying, has a policy which it has pursued of keeping the disabled in the community, so why are they doing this? Their answer of course is, we're not taking sides on policy, this is just out-and-out fraud.

If this isn't going to be a policy debate, then the only questions are whether or not the city allocated Medicaid funds inappropriately, and whether or not the city benefited from doing so. The lawsuit would in effect settle confusion about what the 2006 rule change mandated, whether the city was indeed given a pass on contributing to home care costs, and if it then abused that privilege. Hortocollis said that city advocates are standing their ground, rebuffing the federal government and charging that the rule change is being mischaracterized.

Although the US attorney makes this stark distinction between personal care and other programs, he doesn't say what other programs he's referrring to. It's strongly implied that if you need something more intensive than 24-hour home care, it has to be a nursing home, but the city actually pays the same for nursing homes that it does for personal care. The advocates say that what happened wasn't that the city no longer had to pay anything, but that the city's contribution was capped, both for personal care and nursing homes, so essentially they're saying there's no benefit to the city of sending people to the nursing homes. This has gotten a little opaque.

Opaque is right. Not only do the city and the federal government disagree about the fundamental terms of the 2006 rule change—whether the city's home care contributions were nixed or capped—they can't seem to find common ground on how much the allegedly excessive home care costs, and who's had to foot most of the bill. What's more, the city recently released statistics showing that the number of patients entering the home care program had actually declined over the past decade. Hartocollis has reported that in the federal government's original complaint, they cited no such statistic about home care enrollment rising or falling since the rule change.

The city released those statistics because they seem to undermine the motivational aspect of the lawsuit. What you've got here is a lawsuit based perhaps on technical rule violations that inadvertently raised certain broader policy issues.

Although this debate is shaping up to be a lot of finger-pointing and prolonged bureaucratic confusion, Hartocollis said that there may be a silver lining to the unfortunate spotlight New York City now finds itself in.

For years there have been rumblings that home health care and aides and those kinds of programs are sort of handed out like candy, often done when they don't need to be done. In a way this falls into that background, but on the other hand, for a state like New York, which has the highest rate of Mediacaid spending in the country and that has budget problems, cracking down on a very expensive program may help control those costs.