Governor David A. Paterson today announced that New York is joining a number of other states in suing the federal government over a newly implemented federal Medicaid rule. The new Centers for Medicare and Medicaid Services (CMS) rule will sharply limit New York’s ability to provide case management to vulnerable populations throughout the state.

The new rule revises existing regulations concerning case management services that assist disabled and chronically ill beneficiaries in accessing medical, social, and educational services. It threatens to eliminate federal funding now available for certain case management services, places additional limitations on other case management services, and requires states to make substantial and costly changes in their billing and reimbursement systems.
The state Medicaid agencies in Maine, Maryland, New Jersey and Oklahoma were the original plaintiffs in the lawsuit, filed several weeks ago in federal court in the District of Columbia. Papers filed today with the court name the New York State Department of Health as an additional plaintiff, together with the Medicaid agencies for Kentucky and Tennessee.

“The new CMS rule will make it difficult and in some cases impossible for New York State to provide critical support to medically needy patients. We recognize the federal government’s interest in controlling Medicaid spending, but these drastic changes could severely jeopardize the health and safety of Medicaid beneficiaries,” said Governor Paterson. “While New York recently enacted various reforms to curb the rate of Medicaid growth in our 2008-2009 budget, our reforms are designed to make Medicaid spending more rational, without sacrificing the availability of critical services that many New Yorkers need.”

New York State Health Commissioner Richard F. Daines, M.D., said: “Case management services are a crucial component of care provided to individuals with complex health conditions, including mental illness, developmental disabilities, and HIV/AIDS. The new CMS rule will sharply limit New York’s ability to provide case management to these vulnerable populations, and we are asking the court to overturn this ill-advised rule.”

In New York, case management services are made available to Medicaid beneficiaries through providers that are licensed or otherwise regulated by the Department of Health, the Office of Mental Retardation and Developmental Disabilities, the Office of Mental Health, and the Office of Children and Family Services.

Case management services facilitate access to and receipt of appropriate services, including accompaniment to appointments, counseling assistance, and educational awareness. Case management services also assist people who required admission in institutions such as nursing homes or psychiatric hospitals to plan for discharge into the community, provide crucial assistance to certain individuals to enable them to remain in community-based settings as opposed to institutions, and help coordinate early intervention services for children experiencing delays in their development.

The lawsuit asserts that the new rule is inconsistent with the federal statutes governing the Medicaid program and amendments made by the Deficit Reduction Act of 2005 (DRA). While the DRA clarified the definition of case management services which may be reimbursed under the Medicaid program, the new rule places unauthorized limitations on the ability of states to provide such services. In addition, CMS implemented the rule without affording states a sufficient opportunity to comment as required under federal law.