Andrew Cuomo. | AP Photo Cuomo threatens to reject $6.7B in federal aid in favor of Medicaid redesign

ALBANY — Despite a $6 billion budget gap and new revenue losses posed by New York’s coronavirus outbreak, Gov. Andrew Cuomo is threatening to forgo more than $6 billion in federal aid he says would force him to adjust his Medicaid redesign strategy.

The governor this week reiterated that he will not accept the $6.7 billion in enhanced federal Medicaid matching rate (FMAP) funds approved earlier this month because it would prevent him from modifying the state’s Medicaid program as proposed in his executive budget.


“No, [New York’s congressional delegation] never fixed that bill,” he told reporters while leaving a Thursday news conference. “They never fixed it. They said they would, they never did.”

But state budget officials have suggested New York will use “a portion of those FMAP dollars to otherwise change, or delay, or round out the edges” of proposed modifications to its Medicaid program while also seeking “a fix to legislation regarding implementation of [Medicaid Redesign Team] reforms.”

Cuomo had planned to close his fiscal year 2021 budget shortfall, which had primarily been attributed to Medicaid spending, by adjusting the local share paid by New York City and counties and adopting recommendations put forth by the Medicaid Redesign Team II.

Without such Medicaid changes, Cuomo has said, New York cannot pass the fiscal year 2021 budget due Tuesday.

He doubled down on that position Friday, telling WAMC’s Alan Chartock that New York won’t be eligible for the funds with his assumed changes, which are not yet in effect and must first be approved by legislators.

“This state, not only did it take a beating in this bill, but the previous bill that had $6 billion for New York state allocated in Medicaid money, we don't even qualify for because they put in a provision in the bill that you can't make any changes to your Medicaid program,” he said.

The federal package, which President Donald Trump signed into law on March 18, set aside $6.7 billion in Federal Medical Assistance Percentages for New York. That amount included $5.3 billion for the state, $1 billion for New York City and $436 million for counties, according to Senate Majority Leader Chuck Schumer's office .

The state Division of Budget, however, projects the enhanced FMAP rate would only amount to $3.4 billion annually, spokesperson Freeman Klopott said.

“I can’t speak to their numbers,” he said when asked about the discrepancy.

Local officials have called on Cuomo to accept the enhanced FMAP dollars, noting that they cannot pull down their share of the funding without the governor’s approval.

“The governor needs to weigh, is it in the state’s best interest to receive $6.7 billion versus what he was projecting to reform the Medicaid program about?” Stephen Acquario, executive director of the New York State Association of Counties, told POLITICO. “The MRT was slated to address $2.5 billion. He has to make a policy decision: Is it in the best interest? Or is it in the state’s best interest to accept the money and defer the MRT II until after the Covid-19 crisis is over with?”

Robert Mujica, Cuomo’s budget director, told MRT members on March 19 that the state intended to use a portion of the enhanced federal Medicaid matching rate dollars it is set to receive under the congressional spending package to “soften the edges” and delay some of the panel’s recommendations that should not be implemented immediately because of the coronavirus outbreak.

“We’re going to use the FMAP dollars to soften the edges of these recommendations, delay the recommendations, but when we get to the other side of this, we want a Medicaid program that actually works,” Klopott said this week. “And these recommendations help to inform how we move forward with the Medicaid program beyond the one-time revenues that we may be getting from the federal government.”

The MRT II has proposed a redefined Medicaid global cap, a 60-month look-back period for home- and community-based care eligibility and increased across-the-board reductions, among other things.