News Release

HHS Secretary Leavitt and New York Governor Pataki Announce Important Step Towards Medicaid Reform

HHS Secretary Mike Leavitt today announced support for New York Governor George Pataki's efforts to modernize the New York Medicaid program and ensure continued medical coverage to millions of New York residents.

"Medicaid has tremendous potential to provide health care to millions of Americans. Now we need to harness that potential and shape its promise for those Americans in greatest need," Secretary Leavitt said. "I thank Governor Pataki for his leadership and innovation. I look forward to working with more governors and congressional leaders as we continue to find ways to strengthen health care in this nation."

Governor Pataki has proposed the Federal-State Health Reform Partnership (F-SHRP) to reinvest $1.5 billion of federal fund savings that were achieved under New York's section 1115 waiver, the Partnership Plan. The reform focuses on making long-term systemic improvements to the health care delivery system in New York. The Partnership Plan was expanded in June 2001 and it has led to nearly $6 billion in savings over eight years, while expanding coverage to more than 400,000 New Yorkers.

"We want to thank Secretary Leavitt and HHS for giving New York the historic opportunity to fundamentally reform the state's health care system and reinvest those savings back into New York to ensure that our health care system remains the best in the nation," Governor Pataki said.

F-SHRP is an essential part of Governor Pataki's proposal to protect Medicaid that includes cost-containment, reduce excess capacity, modernize facility infrastructure and provide additional long-term care options.

New York will focus its F-SHRP proposal to:

• Shift emphasis for long-term care from institutionalization to community-based settings.
• Consolidate and right-size New York's health care system by the reduction of excess capacity in the acute care system.
• Invest in health IT, including e-prescribing, electronic medical records, and regional health information organizations.

New York will submit an amendment to their section 1115 waiver that will allow federal funds to be claimed for F-SHRP. The amendment will be subject to terms and conditions and final approval by HHS. Serving more than 4 million Medicaid beneficiaries, New York has the largest Medicaid budget in the country. Through Medicaid, Americans help 46 million of our fellow citizens. This includes people with disabilities, the neediest of our elderly and low-income families and children.

"The department will work with the state on measurable benchmarks and achievements," Secretary Leavitt said. "Provided that the necessary framework is in place, we are committed to working with Governor Pataki and New York State to utilize their savings to provide care to New Yorkers who depend on us."