Medicaid Rate Reduction Begins August 1

Date Issued: 5/28/2020


Across-the-Board Cuts - (ATB) Medicaid Payment Reductions


In 2020, the New York State Department of Health (DOH) announced that all non-exempt Department of Health state funded Medicaid payments would be uniformly reduced across the board (ATB) by 1% effective January 1, 2020 through March 31, 2020, with an additional 0.5% reduction effective April 1, 2020 and each State Fiscal Year thereafter.


For services subject to the 1.5% reduction (see below for services), all fee-for service payments will receive a decrease to Medicaid checks and/or Electronic Funds Transfers for dates of service on or after January 1, 2020.  Conversely, managed care payments to health plans will be reduced through a 1.5% reduction to premium rates effective January 1, 2020.


The provision in your EmblemHealth contract about reimbursement changes related to State regulations covers the 1.5% reduction for Medicaid services that are paid based on their reimbursement methodology. EmblemHealth has fully absorbed the cost of this rate reduction over the first half of the year but this rate reduction will go into effect for non-exempt EmblemHealth providers for dates of service no earlier than August 1, 2020.


The table below reflects the services that have been subject to the 1.5% Across-the-Board Medicaid payment reduction:



Program or Service Area

Inpatient Services

·       Hospital Inpatient Reimbursement;

·       Indigent Care Pool payments;

·       Graduate Medical Education payments for Medicaid Managed Care patients;

·       Hospital Disproportionate Share payments and Indigent Care Adjustments made to governmental hospitals operated by the State of New York or the State University of New York; and

·       Supplemental Medicaid payments and Hospital Disproportionate Share payments made to voluntary hospitals.


Nursing Homes

·       In State Nursing Homes; and

·       Out of State Nursing Homes.

Non-Institutional Long-Term Care Services

·       Assisted Living programs;

·       Home Health; and

·       Personal Care.

Managed Care

·       Managed Long-Term Care; and

·       Managed Care (including HIV SNP).


Other Services

·       Freestanding Clinics;

·       Hospital Based Outpatient;

·       Pharmacy;

·       Physicians both office-based and other places of service;

·       Dental, Eye, X-ray, etc.; and

·       Supplemental Payments.




Medicaid payments that will be exempted from the uniform reduction include:


  1. Payments whereby Federal law precludes such reduction, including:


§  Federally Qualified Health Center services and Residential Health Clinics;


§  Indian Health Services and services provided to Native Americans;


§  Supplemental Medical Insurance – Part A and Part B;


§  State Contribution for Prescription Drug Benefit (aka Medicare Part D payments);


§  Any local share cap payment required by the Federal Medical Assistance Percentage (FMAP) increase legislation;


§  Services provided to American citizen repatriates; and


§  Hospice Services.




  1. Payments funded exclusively with federal and/or local funds include, but are not limited to, the following:


§  Upper payment limit payments to non-state owned or operated governmental providers certified under Article 28 of the NYS Public Health Law;


§  Certified public expenditure payments to the NYC Health and Hospital Corporation;


§  Certain disproportionate share payments to non-state operated or owned governmental hospitals;


§  Services provided to inmates of local correctional facilities.




  1. Payments where applying the reduction would result in a lower FMAP as determined by the Commissioner of Health and the Director of the Budget will also be exempt.




  1. Other Payments that are not subject to the reduction include:


§  Payments pursuant to Article 32, Article 31 and Article 16 of the Mental Hygiene Law are exempt from the 1.5% reduction;


§  Required payments related to the School Supportive Health Services Program and Preschool Supportive Health Services Program;


§  Early Intervention;


§  Traumatic Brain Injury Waiver (TBI);


§  Nursing Home Transition and Diversion Waiver (NHTD);


§  Payments pursuant to the mental hygiene law;


§  Payments for services provided by Other State Agencies including Office of Children and Family Services, State Education Department, and the Department of Corrections and Community Supervision.


§  Value Based Payment Quality Improvement Program;


§  Vital Access Providers and Vital Access Provider Assurance Program;


§  Physician Administered Drugs;


§  Court orders and judgments; and


§  Family Planning services.




For further detail on services subject to the 1.5% ATB reduction please refer to the SPA pages posted here: