Arnot Health files lawsuit, claiming N.Y. Medicaid reimbursement is not enough to treat substance abuse

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ELMIRA, N.Y. (WETM) – Update June 9: The New York Department of Health replied to 18 News’ request for comment saying, “The New York State Department of Health does not comment on pending litigation.” 

Earlier this year, Arnot Health, Montefiore Nyack Hospital, and St. Charles Hospital filed a lawsuit against the New York State Department of Health regarding a lack of Medicaid reimbursement funding for their respective Chemical Dependency Units.

The plaintiffs say the base reimbursement was set in 2005 and in the more than 15 years since the treatment for chemical dependency has changed significantly.

“Arnot is asking for more money from the state for treatment of chemical dependency,” Michael Donlon, Esq., attorney at Welch, Donlon, and Czarples, PLLC, added.

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 the provider 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.

“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

The healthcare 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 not sufficient. This is a challenge because the state has a reasonable argument, claiming their numbers were based on national trends.

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

With the advent of designer drugs, like Fentanyl and Oxycodone, by Big Pharma, the problem has worsened. 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 & Johnson about the sale of opioids.

“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.

Arnot Health replied to 18 News’ request for comment saying, “Arnot Health joined the other hospitals in filing this lawsuit because the rates we are paid for treating patients with chemical dependency were established in 2005.  As such, these more than 15-year-old reimbursement rates do not reflect the true cost or complexity of services needed to support the large community of people coping with the serious challenges of chemical dependency.”

The New York State Department of Health has not replied to the request for comment.

The case is being heard by a Chemung County New York State Supreme Court justice. There is no word on a trial date. The full court documents can be found here.

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