2017 APG Updates/Policy Changes

January 9, 2017

Dear Administrator/Controller

The New York State Department of Health (Department) has been working with the Centers for Medicare and Medicaid Services (CMS) regarding the Clinic Upper Payment Limit (UPL) calculation and pending Clinic State Plan Amendments (SPA). This is to inform you that after the inclusion of all Ambulatory Patient Group SPAs, CMS has concluded that there will be no UPL room for the years 2012 through 2017. In accordance with the settlement agreement, the SPAs listed below will not be approved by CMS. Since CMS will not be approving these SPAs, there will not be any Federal Finance Participation (FFP) funding provided to clinics. However, the Department will continue to provide the State only funding for the SPAs listed.

      #11-0026B: Assist Preservation of Essential Safety Net
      #13-0016: 2012 D&TC UPL Payments (HHC & non-HHC)
      #13-0073: Safety Net/VAP- NI (Clinic)
      #14-0007: 2014 D & TC UPL Payments (HHC & non-HHC)
      #14-0019: Safety Net/VAP NI(Clinic) Phase 2
      #14-0030: 2% Across the Board Increase (Clinics removed, continues for Hospital OPD)
      #15-0025: 2015 Clinic UPL
      #15-0062: Article 31 OMH Clinics Safety Net/VAP
      #16-0010: Article 31 OMH Clinics (VAP)
      #16-0023: Article 31 OMH Clinics (VAP)
      #16-0039: 2016 Clinic UPL Payments
      #16-0047: Medicaid Safety Net Add-on Payment (non-FQHC)

CMS has cited several data deficiencies which New York State needs to address before the next Clinic UPL submission. As an example, Medicaid claim counts in the eMedNY payment system were greater than the total visits that were reported in a clinic's cost report. The Department has committed to CMS corrective action towards the completion of accurate cost reports. The cost reports under review are the Ambulatory Health Care Facility (AHCF) and the Consolidated Fiscal Report (CFR). If deficiencies are corrected with the submission of the 2105/16 and 2016 cost reports, the Department will be permitted to submit a UPL demonstration for 2017. If the Department can demonstrate room within the UPL, this may permit the state to leverage a Federal share for these programs going forward.

In the past, CMS would allow New York State to use proxy cost data in the absense of cost reports. This practice is no longer acceptable to CMS. Hence, CMS will continue to count the Medicaid payments, but there would no longer be any costs to balance such payments. Therefore a recoupment would be generated. For UPL demonstrations going forward, if a provider fails to submit a cost report for a base year used in the calculation, proxy cost data will not be used. Accordingly, this adversely impacts the state's UPL because all Medicaid payments must be included in the calculations without any corresponding costs.

Over the next few months, the Department and the Mental Hygiene agencies will be reviewing the cost report to incorporate changes either to the data collected or instructions to address the deficiencies. In addition, as the 2016 AHCF cost report will not be released until July of 2017, a training webinar will be provided during March/April. Additional information will be provided at a later date regarding registration. Further, providers and enouraged to participate in the CFR training that is provided for the 2016/17 and 2017 cost reports. As the training has already been completed for the 2015/16 and 2016 cost reports, you may be asked to modify your 2015/16 or 2016 CFR or provide supplemental documentation correcting the deficiences with Chief Executive Officer certification.

Thank you for your attention on this matter. We look forward to working with you to correct the data deficiencies.


John E. Ulberg, Jr.
Medicaid Cheif Financial Officer
Division of Finance and Rate Setting
Office of Health Insurance Programs

Cc: Emil Slane, Office of Mental Health
Pat Lincourt, Office of Alcoholism and Substance Abuse Services
Kevin Valenchis, Office of People With Developmental Disabilities
Donna Cater, Department of Health
Ann Foster, Department of Health
Michael Ogborn, Department of Health