A reality check on Medicare changes

by Bill Hammond |  | NY Torch

A technical change in how Medicare compensates hospitals for treating the poor and uninsured has drawn a heated response from Governor Andrew Cuomo that demands clarification.

Cuomo said the change in Medicare’s Disproportionate Share Hospital program, finalized on Wednesday, would cost New York hospitals $200 million next year, rising to $600 million annually when fully in effect.

The reckless health care bill failed in Congress, but the federal government is still trying to decimate our healthcare system. …

These changes are designed to penalize New York and other states that expanded their Medicaid programs. Instead of compensating hospitals based on low-income patients served, the rule shifts funding away from states that expanded Medicaid to states that refused to expand coverage. … These cuts will wreak havoc on our health care providers, jeopardizing a critical driver of our economy and threatening New Yorkers’ access to care.

In New York, we believe healthcare is a right, not a luxury, which is why we expanded coverage to so many New Yorkers who previously were uninsured. I demand that the federal government reconsider this cruel decision, on behalf of the millions of people that this policy will affect.

New York and its hospitals may have legitimate beef with the details of how federal officials are implementing this complex reform. But Cuomo’s statement is misleading in several respects.

First, the final decisions announced Wednesday by the U.S. Centers for Medicare & Medicaid Services have nothing to do with Republican efforts to repeal and replace Obamacare.

To the contrary, the reforms in question were mandated by President Obama’s Affordable Care Act – and follow through on a CMS rulemaking process that began long before President Trump took office.

Second, CMS is not “penalizing” New York for expanding Medicaid or any other reason. The agency is trying to direct more “disproportionate share” funding to hospitals treating the largest share of indigent, uninsured patients – a legitimate goal.

By the way, CMS says it is increasing nationwide Medicare funding for uncompensated care, to $6.8 billion from $6 billion.

The fundamental reason that New York hospitals stand to get less money is because the state’s uninsured population has been cut in half under Obamacare, from about 10 percent in 2013 to 5 percent last year.

Third, if Cuomo is concerned about the financial health of safety-net hospitals, he should look closer to home. The state’s own Indigent Care Pool, financed by hundreds of millions in regressive insurance taxes under New York’s Health Care Reform Act, is notoriously dysfunctional – sending millions to hospitals in prosperous communities that provide relatively little charity care while shortchanging the true safety-net institutions.

This is not say the CMS rule is beyond reproach, or that it will be easy for affected hospitals to absorb the loss of revenue. But this change has been a long time coming, and no one should pretend that it’s all about Trump or Republicans or punishing blue states.