Should a lame duck session occur as expected the week of November 17, Congress is likely to take up a second economic stimulus package, providing an opportunity to address key issues important to hospitals around the country. Remaining under serious consideration is the inclusion of significant Medicaid relief for states in the form of a temporary increase in the Medicaid matching rate, or “FMAP.” GNYHA has long advocated for FMAP relief, and has urged that any moving legislation should also include moratoria on two damaging Administration policies promulgated by the Centers for Medicare & Medicaid Services (CMS). The moratoria would stop Medicare cuts to teaching hospitals, and would prevent the implementation of Medicaid cuts to public hospitals and outpatient clinics around the country. 
     
Responding to House Speaker Nancy Pelosi’s (D-CA) call to address “Main Street” issues resulting from the economic downturn, House committee chairmen have scheduled a dozen hearings over the next month to determine key provisions of a “fiscally responsible recovery package.” At the first of these hearings, Federal Reserve Chairman Ben Bernanke testified before a House Budget hearing and urged Congress to pass another stimulus package. The White House had opposed the $61 billion stimulus package passed by the House last month, of which $15 billion had been designated for FMAP relief. Democratic leaders are currently discussing a broader stimulus package that would provide significantly more assistance in the range of $150-$300 billion. GNYHA is working with its State and national partners to ensure that FMAP, along with regulation moratoria, are part of this broader package.
     
With New York State facing as much as a $10 billion budget deficit for the upcoming budget year, an FMAP increase is essential to lessen the State’s financial burden and, in turn, to provide protection for hospitals from deep State Medicaid cuts—particularly since when the economy declines, more individuals become Medicaid eligible. A temporary increase in New York’s FMAP of 4% for 14 months, as proposed in the House of Representative’s previous stimulus package (H.R. 7110) and passed on September 26, is expected to yield about $1.9 billion in savings to New York State. The Center on Budget and Policy Priorities has projected that the tiered relief bill would save New Jersey almost $400 million. 
     
GNYHA reiterated in letters to the delegation this week that the stimulus package must also include moratoria on damaging Administration policies affecting public hospitals, as well as certain hospital outpatient clinics across the nation. Specifically, the moratoria include stopping Medicare cuts to teaching hospitals that went into effect on October 1, 2008 (Medicare capital indirect medical education payments have been reduced by half for FY 2009 and will be eliminated starting in FY 2010). When fully phased in, these cuts will total more than $375 million nationally (annually), of which $60 million will be cut from New York’s teaching hospitals and $14 million from New Jersey teaching hospitals. GNYHA also urged the delegation to include a second moratorium that would prevent CMS from finalizing a devastating Medicaid regulation affecting public hospitals and outpatient clinics (known as the Medicaid outpatient regulation). If implemented as proposed, this rule would result in nearly $500 million in losses annually for New York providers. The American Hospital Association and the Association of American Medical Colleges have underscored their support on blocking both these policies and, as such, have endorsed legislation (H.R. 7241/S. 3656), spearheaded by members of the New York delegation, that would protect hospitals from these devastating cuts.