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Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207
www.bcnys.org

BILL:

S. 2809/A. 4009, Part A, Section 11 (Health Article VII Budget Bill)

Support

SUBJECT:

Cost Shifting Early Intervention Costs To Private-Pay Health Insurance Without Regard to Terms of Policy Coverage

 

DATE:

February 28, 2011

 

The Business Council of New York State is opposed to budget language included in the Health Article VII bill which prohibits insurance companies from denying claims for medical services normally covered under the terms of a policy based on prior authorization requirements, the location where services are provided, the duration of the condition, the likelihood of significant improvement, or the network status of the service provider.   

This proposed budget language is similar to language introduced over the last decade by different administrations, all seeking to simply shift the costs of the Early Intervention program, rather than proposing structural reforms to a program whose utilization and costs continue to explode. Since its inception in 1993, the Early Intervention program has been administered by the Department of Health, with limited program design and no income eligibility test for services.  Counties, which carry out this unfunded mandate from the State, are billing more than ever before and in amounts exceeding the amounts billed to Medicaid for EI services.

Mandating that commercial health insurers cover all costs, regardless of the terms of the insured’s coverage, translates into direct increases on employers’ health insurance premiums – and adds to the growing list of over 50 mandates on New York’s employer-sponsored health insurance policies. This proposed cost shift will hit small businesses the hardest, who are already experiencing high double digit annual premium increases.

The Business Council appreciates the State’s need to identify areas where spending can be contained.  As this is a state-initiated, state-administered program with no means test and ill-defined program parameters, the 16 different program reforms recommended by NYSAC in their February 2011 Mandate Relief Recommendations are a much better place to find early intervention cost savings while maintaining the program’s integrity.  Some of those proposed reforms which we support include means testing and required parental contributions; coordination of transportation services with other health and human services programs; banning evaluators from also being the service provider; and requiring screening as opposed to evaluation for all children referred to early intervention who are suspected of having a disability and have no diagnosis.

For these reasons, The Business Council opposes the budget language in Part A, Section 11, of Senate Bill 2809 /A. 4009.  We urge the Legislature to give strong consideration to the recommendations advanced by NYSAC that offer meaningful ways to put in place structural EI program reforms, which will ultimately be a better test on the program’s affordability – before any broad-based insurance mandate cost shifts are imposed on New York’s employers.