cuomo_250x-239x300-9931912A 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.

 

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

New Jersey’s Pandemic Report Shines Harsh Light on a New York Scandal

A recently published independent review of New Jersey's pandemic response holds lessons for New York on at least two levels. First, it marked the only serious attempt by any state t Read More

Loss of Patients and Revenue Foreshadowed Downsizing for SUNY Downstate

The SUNY-owned hospital in Brooklyn facing a newly announced downsizing plan has seen its patient volume and revenue plunge over the past decade, according to a review of its financial reports. Read More

How a Medicaid Program To Improve Nursing Home Care Ended Up Paying for Union Benefits

New York State's budget-making process sometimes works like a closed loop, as interest groups on the receiving end of state spending reinvest a portion of their proceeds to lobby Albany for still more money. Read More

How Eliminating the Medicaid ‘Gap’ Would Perpetuate Inequity in Hospital Funding

A change in Medicaid reimbursement currently being pushed by New York's hospital industry appears likely to benefit high-end hospitals proportionally more than safety-net institutions, a review of hospitals' financial repor Read More

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

Despite Lingering Shortages, New York’s Health-Care Workforce Is Bigger Than Ever

The state's health-care workforce is recovering unevenly from the pandemic, with persistently lower employment levels in some areas and robust growth in others. This mixed pattern c Read More

The Wacky Math of New York’s Essential Plan

Thanks to an absurdly wasteful federal law, New York's Essential Plan is expected to continue running billion-dollar surpluses even as state officials more than double its spending over the next several years. Read More

In a Tight Budget Year, New York’s Hospital Lobby Shoots for the Moon

As Governor Hochul calls for spending restraint next year, influential hospital lobbyists are pushing what could be the costliest budget request ever floated in Albany. In a , the G Read More