A $500 million hole has opened in Gov. Andrew M. Cuomo's proposed state budget because of changes in how Washington plans to reimburse the state for the care of people with developmental disabilities, the governor said on Wednesday.
The state has been negotiating with the federal government for several months over the state's billing practices; federal officials have said that the state has overbilled Medicaid for the institutional care of people with disabilities.
At a news briefing to announce changes to his proposed budget, the governor said, "The federal government takes the position the state has been overbilling, so to speak, for many, many years, going back over a decade, and the budget is going to be adjusted to reflect that new rate."
To offset the new shortfall, Mr. Cuomo said that he was proposing that the state cut $120 million from the budget of the Office for People with Development Disabilities, and an additional $380 million from Medicaid programs.
That could lead to more contentious budget negotiations. The governor introduced his budget plan last month. The state's fiscal year ends on March 31, but the governor and lawmakers had hoped to finish their negotiations early. The $500 million cut covers only the coming fiscal year, but the federal government's new reimbursement formula will have multiyear consequences.
Assemblyman Harvey Weisenberg, a Long Island Democrat who is the leading advocate in the Legislature for people with developmental disabilities, said he would fight the cuts.
"We're underfunded as it is," he said. "They're taking away the resources that help the people who are the most needy in our population."
The state drew scrutiny after revelations that it was billing Medicaid about $4,500 per person, per day, for people with developmental disabilities in institutional care. The state's care, however, has been largely deinstitutionalized, and much of the federal funding was being redirected.
A report in The Poughkeepsie Journal in 2010 shed light on the overbilling issue.
A series of articles in The New York Times in 2011 on abuse, neglect and corruption in the system led the governor to overhaul the monitoring and oversight of people with developmental disabilities in the state. But the changes have yet to take effect, and advocates are frustrated with what they see as the Cuomo administration's slow pace of change. Budget cuts are likely to arouse fresh concerns.
The governor made several other announcements at a news conference Wednesday to discuss amendments to his budget. He said that he would lower the cost of hunting and fishing licenses, a move that may mollify some hunters angered by the gun control legislation that the governor pushed through last month. And he said he was taking steps within the budget to bolster the state's fuel supply during emergencies, like Hurricane Sandy. Under the proposal, the governor would require some gas stations to have plans for a backup power system, and would provide aid to help make the necessary upgrades.
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