Health network sues, claims NY Medicaid reimbursement not enough to treat substance abuse

MM Curator summary

Substance abuse treatment providers are suing NY to update their reimbursement rates, which are based on data from 2005.


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ELMIRA, N.Y. (WETM) — Arnot Health, Montefiore Nyack Hospital, and St. Charles Hospital in the Southern Tiered filed a lawsuit against the New York State Department of Health. Their complaint is a lack of Medicaid reimbursement funding for their respective Chemical Dependency Units.

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The plaintiffs say the base reimbursement was set in 2005 and that in the more than 15 years since, the treatment for chemical dependency has changed significantly. They say the reimbursement amount is not enough. “Arnot is asking for more money from the state for treatment of chemical dependency,” said Michael Donlon, an attorney at Welch, Donlon, and Czarples.

“The use of those minimally trended operating costs from so long ago… is not rational, does not reflect the reasonable and adequate costs incurred in the operation of petitioners’ Chemical Dependency Units.”

Supreme Court of New York petition

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The lawsuit is based on New York State Health Law, claiming that the petitioners need state funds to adequately and efficiently run their specialized units that are licensed by New York State. The lack of funds makes it more challenging to keep up with new substance abuse treatments and puts the burden of payments on providers and patients.

“Treating opioid patients is far greater than treating alcohol patients. The basis for reimbursing the healthcare facilities does not align with the realities of who they’re treating now,” Donlon continued.

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The health care providers have to prove the current funds, based on the 2005 Consumer Price Index and relative inflation during the past 15 years, are irrational and insufficient. This is a challenge because the state can reasonably argue that their numbers were based on national trends.

“The Consumer Price Index does, to some extent, reflect health care inflation. However, it doesn’t seem like the Consumer Price Index consideration of health care inflation is properly reflecting what’s actually happening in operation,” Donlon said.

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With the advent of designer drugs like fentanyl and oxycodone, the problem has intensified. The petition also claims that nearly every municipality in the state faces the opioid epidemic head-on.

Amid the settlement by Attorneys General nationwide with Purdue Pharma, local healthcare providers are hoping to see some of that money trickle down to their operations soon. This case was filed prior to the recent settlement, but it comes as New York State recently came to terms with Johnson and Johnson about the sale of opioids.

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“They’re saying, ‘Hey, we are the ones that are shouldering the burden. We’re on the ground, treating individuals who have been affected by the turbocharging of opioid sales in New York State. We need to see some of this money come down here so that people who have been affected will reap the benefits,” Donlon concluded.


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