On August 11, New York Governor David Paterson proposed $1 billion in State savings and revenue measures, including $505 million in health care savings and new taxes on health care providers, in an effort to get a “jump start” on next year’s budget deficit. The Governor has asked the State Legislature to enact $600 million of the $1 billion he proposed when it convenes for the Special Economic Session in Albany tomorrow. GNYHA and its allies—1199 SEIU United Healthcare Workers East, as well as the Healthcare Association of New York State (HANYS)—strongly oppose the proposed cuts to hospitals, nursing homes, and home care providers.
The Governor’s Proposals: GNYHA estimates that the proposed cuts will cost hospitals and nursing homes in New York State nearly $2 billion in lost Medicaid revenue and in new taxes through the end of the next State fiscal year. The Medicaid hospital cuts include the elimination of the 2008 and 2009 inflation or “trend” factors, as well as a 7.2% across-the-board cut in Medicaid reimbursement rates for the rest of the State fiscal year and a 3.6% across-the-board cut for the next fiscal year. A 0.7% tax on hospital revenues would also be imposed. For nursing homes, the Medicaid cuts include the elimination of the 2008 and 2009 trend factors, as well as a 4% across the board reimbursement rate cut for the remainder of this fiscal year and a 2% cut next year. Nursing home rebasing would also be postponed until April 1, 2009, and transition payments would be eliminated. Home care agencies would likewise suffer the elimination of the 2008 and 2009 trend factors and a 1% across-the-board cut, as well as new caps on administrative expenses.
GNYHA Action Plan: Shortly after the Governor announced the cuts, the Healthcare Education Project, a joint project of GNYHA and 1199 SEIU (see story, page 4), released a statement that was picked up by news outlets Statewide and called on the State Legislature to reject the cuts. “A hospital reimbursement rate reduction of 7%, plus an assessment on hospital revenues, would seriously disrupt health care services for all New Yorkers and push some hospitals to the brink of closure,” said GNYHA president Kenneth E. Raske. “Is there a counter plan to reduce hospitals’ cost of doing business by 7%? It is unacceptable that hospitals and nursing homes are being asked to shoulder a vastly disproportionate share of proposed funding cuts—especially considering the enormous sacrifices hospitals have already made as a result of the Berger Commission, which is in the final stages of closing and consolidating hospital services.”
On August 13, the Project provided each State legislator with the specific impact of the cuts for each hospital in his or her district. The hospital-specific impacts, on which GNYHA collaborated with HANYS, were also released to the press. On August 14, a Project-sponsored radio advertisement in opposition to the cuts began airing on all major radio stations Statewide. In addition, a print ad appeared in newspapers across the State, asking Legislators to hold off on the cuts until Congress has had the chance to act on an economic stimulus package, which could bring as much as $1.8 billion in new Federal Medicaid funding to New York State (see FMAP story, page 1). GNYHA will be working with the Governor and the State Legislature to protect its members from the proposed cuts throughout the Special Session on August 19 and beyond.