Tobias Marcus

The dire forecast, courtesy of the state’s Division of Budget in its mid-year budget report, came late – weeks, in fact, after it was required to have been by state law.

According to state officials, two-thirds of that shortfall, or $4 billion, stems from a precipitous jump in the cost of Medicaid. Some in Albany say they want to cut payments made to hospitals and nursing facilities both this year and next.

“Savings may include across the board reductions in rates paid to providers and health plans, reductions in discretionary payments, and other actions that can be executed administratively in the current fiscal year,” according to the report.

“This is the toughest budget that Cuomo has faced partly because he had bigger gaps when he took office, but he also had more political capital,” Bill Hammond of the Empire Center, told the New York Post. “He kind of owns this crisis because it’s not driven by the economy, it’s driven by the shortcomings of his own management of the Medicaid program in particular.”

The report outlines “increases in the minimum wage, a phase out of added funding by the federal government and an increase in enrollment and costs for managed long-term care and payments to cash-distressed hospitals,” according to spectrumlocalnews.com. It also “indicates the Cuomo administration is developing a savings plan with the Department of Health to avoid piercing the global cap for Medicaid.

“Savings may include across the board reductions in rates paid to providers and health plans, reductions in discretionary payments, and other actions that can be executed administratively in the current fiscal year,” the report reads.

Legislators are already braced for the fallout. “What we expect to be dealing with in the coming fiscal year is on the scale of billions,” Assemblyman Richard Gottfried, a Democrat from Manhattan who chairs the chamber’s health committee, told the Wall Street Journal. “Paying for health care in New York is expensive. So when you talk about a 5 or 10% cut in the program, you really can’t do that without causing serious damage.”

Once he was elected in 2011, Cuomo “established a cap on the allowable growth in the Medicaid program and won legislative approval for the state Department of Health to reduce spending if outlays exceeded the set limit,” the Journal added. “According to Bill Hammond, health-policy director for the fiscally conservative Empire Center for Public Policy, this year’s cost overruns were first disclosed in a May fiscal plan update.”

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