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  • State Update

    On February 14, 2019, Governor Cuomo released the 30-day amendments to his 2019 - 2020 proposed state budget, calling for approximately $1.1 billion in Medicaid cuts statewide - $225 million regionally.

    One of the proposed cuts specifically targets hospitals in the suburban regions. The revised budget nearly eliminates funding from the Indigent Care Pool (ICP) for hospitals in Nassau, Suffolk and Westchester Counties, as well as in New York City, that meet certain financial criteria. Eighteen Suburban Hospital Alliance members would see their ICP distributions capped at $10,000 per year, a reduction of $57 million. These are hospitals that meet the existing criteria for ICP funding, which partially reimburses providers for the uncompensated care they provide. Targeting such a specific group of providers for cuts sets an extremely dangerous precedent.

    The ICP cut would be in addition to a roll back of the two percent increase in the Medicaid rate, originally promised to hospitals by the governor in November 2018, and an additional 0.8 percent across-the-board cut to Medicaid rates that are also included in the governor's revised budget. These cuts will reduce Medicaid reimbursements to all hospitals in the suburban regions by a total of $168 million over two years.

    Mandated Staffing Ratios and Single Payer Remain in Play

    As we fight the proposed cuts to Medicaid, concerns about single-payer legislation and nurse staffing ratio legislation remain.

    Nurse Staffing Ratios. The governor asked the Department of Health to study nurse staffing. The Suburban Alliance and other associations oppose this effort, which could be the first step on the way to mandated nurse staffing ratios. Mandated nurse staffing ratios set unrealistic expectations, in terms of financial and human capital commitment, on hospitals. All evidence concludes that staffing is best handled on an individual hospital-by-hospital basis, which accounts for patient complexity, surge capacity, and other local situations.

    Single Payer Plan. Senator Gustavo Rivera and Assemblyman Richard Gottfried introduced an expanded version of their New York Health Act earlier this month. The plan now includes provisions for long term care and home care, adding about $20 billion to the plan's current projected price tag of $139 billion. The plan's sponsors say waste from the system would be removed; this will be one way to help pay for universal health insurance. Higher taxes on employers and employees would also be needed. The plan calls for all New Yorkers, including those on Medicare, to switch to the New York Health Plan. No commercial insurance would remain. The governor is instead asking for a universal access commission to advise the Departments of Health and Financial Services on how to achieve universal access to healthcare. Hospitals welcome the governor's approach but continue to vehemently oppose the single-payer legislation under consideration. The Suburban Hospital Alliance has joined the Realities of Single Payer, a coalition of business organizations, hospitals, and other providers offering information about the ramifications of single payer in New York.


    Federal Update

    Debt Ceiling. The latest debt limit suspension is set to expire on March 1. The Treasury Department said earlier this month it can use extraordinary measures to assure the United States does not pierce the debt ceiling. Some forecasters project the extraordinary measures will last through the summer, though it's too early to know exactly how long borrowing can be extended. Legislation to deal with the debt limit is often a vehicle for other pieces of legislation, including healthcare legislation supported by the hospital industry. However, healthcare is always vulnerable as a “pay-for” for other legislative priorities.

    Medicaid Cuts. More massive Medicaid cuts are on the horizon for hospitals come October 1, 2019. That is when Disproportionate Share Hospital (DSH) payment reductions take effect. Known as DSH cuts, these are funds that help cover costs incurred by hospitals that serve a disproportionate number of Medicaid and uninsured patients. In 2010, the hospital field agreed to these cuts in return for an influx of insured patients due to the Affordable Care Act's insurance expansion provisions. Since its enactment, the law's strength has been diluted both by congressional action and executive order. Only about half of the then 46 million uninsured are insured today. The DSH cuts would cost New York State's hospitals more than $7 billion over the next decade. Many hospitals in the state operate on very thin or negative margins - a situation set to become worse when these federal Medicaid cut kicks in on October 1, 2019. Implementation of the federal DSH cuts have been delayed six times; the hospital industry is fighting for another delay.