New York Medicaid Redesign Team Saves State $2.3 Billion

The New York Medicaid Redesign Team (MRT) saved the state Medicaid program $2.3 billion in fiscal year 2012.  The MRT implemented almost eighty cost-saving initiatives to reduce the state's expenditures.  Additionally, the initiatives helped New York to spend $14 million less than projected in the Medicaid Global Spending Cap, the state's yearly global budget.

New York has an expansive Medicaid program.  In fact, it is the nation’s largest.  To help alleviate the growing financial strain on the state’s budget, Governor Andrew Cuomo commissioned the New York Medicaid Redesign Team to restructure and refinance the program.  In its first year, the MRT has experienced some notable savings.

The Medicaid Redesign Team estimates that its numerous cost-containing initiatives saved the state approximately $2.3 billion in fiscal year 2012.  Ultimately, the seventy-eight initiatives brought per-recipient spending down to 2006 levels.  Overall, the MRT estimates the initiatives will save – between state and federal spending – $34.3 billion over the next five years.[1]  Without the MRT, state share of Medicaid of spending may have reached an annual growth of 13%, primarily driven by fee-for-service spending.[2]  While the savings may seem small in comparison to the state’s overall Medicaid expenditures, they do provide evidence of successful cost-containment strategies and the ability of states to pragmatically reduce expenditures.

For fiscal year 2012, the Medicaid Redesign Team was able to spend $14 million less than projected in the Medicaid Global Spending Cap, the state’s yearly Medicaid global budget.[3]  New York achieved these spending reductions without reducing benefits and simultaneously expanding coverage to an additional 140,000 low-income individuals.  For fiscal year 2012, the state set the Medicaid Global Spending Cap at $15.3 billion.  For fiscal year 2013, the state will increase the Global Spending Cap to $15.9 billion.[4]

Governor Cuomo is already looking ahead and planning for further improvements.  New York will request a Medicaid 1115 waiver to reinvest up to $10 billion of the estimated $17.1 billion federal savings generated by the MRT initiatives over the next five years.[5]

For fiscal year 2010, New York’s Medicaid program was $52.1 billion.  The state financed $20.4 billion, with the federal government having financed the remaining $31.7 billion.[6]

The Medicaid Redesign Team achieved its savings through numerous initiatives, some of which have yet to be fully implemented.  The MRT seeks to expand primary care and increase primary care reimbursement rates; expand the network of fully-integrated managed care; increase the number of medical homes; emphasize cost-effective preventive care and fund evidence-based public health interventions; and increase funding for supportive housing.  The MRT’s overall goal is to improve the quality of care, improve individual health, and reduce expenditures.[7]

Governor Cuomo commissioned the Medicaid Redesign Team in January 2011 through executive order.[8]  Jason Helgerson, New York State Medicaid Director, serves as the executive director of the MRT.  Michael Dowling, President and CEO of North Shore-Long Island Jewish Health System, and Dennis Rivera, former Chair of Service Employees International Union (SEIU) Healthcare and current Senior Advisor to the International President of SEIU, are co-chairs of the MRT.  Ken Raske, team member and President of the Greater New York Hospital Association, stated, "The MRT came together in the spirit of cooperation to identify ways to reform the Medicaid Program in New York.  Through the dedication and diligent efforts of the MRT members, this action plan concludes real change is needed in New York and presents a strategy for moving forward."[9]  Daniel Sisto, team member and President of the Hospital Association of New York State, claims, "This MRT action plan is the final work product of an innovative effort to accomplish a compromise between the state's budget concerns and the charge to redesign the Medicaid program.  The efforts of all of the members on the team have led to an effective and thoughtful set of recommendations to meet that challenge."[10]  The Medicaid Redesign Team has thirty-two members, consisting primarily of provider organization representatives, policymakers, and state legislators.




[1] “Governor Cuomo Announces Medicaid Spending Finishes Year $14 Million Under Global Medicaid Cap.”  May 1, 2012.  (available at http://www.governor.ny.gov/press/05012012Medicaid)

[2] “Medicaid Waiver: Tool To Fully Implement The MRT Action Plan.”  (available at http://www.health.ny.gov/health_care/medicaid/redesign/docs/2012-05-14_mrt_waiver.pdf)

[3] “Governor Cuomo Announces Medicaid Spending Finishes Year $14 Million Under Global Medicaid Cap.”  May 1, 2012.  (available at http://www.governor.ny.gov/press/05012012Medicaid)

[4] “Monthly and Regional Global Cap Updates.”  New York Department of Health.  (available at http://www.health.ny.gov/health_care/medicaid/regulations/global_cap/)

[5] “Governor Cuomo Announces that New York Will Request a Federal Waiver to Invest $10 Billion in Medicaid Redesign Team Savings to Transform the State’s Health Care System.”  June 4, 2012.  (available at http://www.governor.ny.gov/press/06042012-new-federal-waiver-to-request)

[6] “Federal and State Share of Medicaid Spending, FY2010.”  Kaiser Family Foundation.  (available at http://www.statehealthfacts.org/comparemaptable.jsp?ind=636&cat=4)

[7] Medicaid Waiver: Tool To Fully Implement The MRT Action Plan.”  (available at http://www.health.ny.gov/health_care/medicaid/redesign/docs/2012-05-14_mrt_waiver.pdf)

[8] “Governor Issues Executive Order Creating Medicaid Redesign Team.”  January 5, 2011.  (available at http://www.governor.ny.gov/press/01052011medicaid)

[9] “Governor Cuomo Announces Medicaid Spending Finishes Year $14 Million Under Global Medicaid Cap.”  May 1, 2012.  (available at http://www.governor.ny.gov/press/05012012Medicaid)

[10] Ibid.