Governor Cuomo’s decision to withhold $380 million that was intended to reimburse NYC Health + Hospitals for medical care it previously provided to the uninsured, due to his concerns about Federal cuts in state health-care funding, prompted H+H Interim President Stanley Brezenoff to order a hiring freeze Oct. 5 under which just one in four positions will be filled as they become vacant.
The following day, Mr. Brezenoff said H+H would sue the Cuomo administration, alleging that it was illegally redirecting Federal money that had already been allocated by Washington for the charity care the city’s public hospitals had rendered before the Oct. 1 Federal cuts took place.
In a conference call Oct. 6, the H+H chief was joined by city Budget Director Dean Fuleihan, who charged Albany was singling out the city’s public hospitals by holding back the money. “This has never happened before,” Mr. Fuleihan told reporters.
Light on Cash
Mr. Brezenoff said H+H had just $250 million cash on hand, roughly enough to operate for 13 days. Its bi-weekly payroll is $114 million.
The Governor had brushed off a Sept. 30 letter from Mr. Brezenoff warning that the city hospital system faced a serious fiscal crunch unless the overdue money was provided. He said then that with the state also feeling the effects of the expected Federal cutbacks, it would be unfair to release the funds to the city system when hospitals throughout the state were also in need of more money.
‘A Shocking Disregard’
Mr. Brezenoff sent a letter to H+H staff stating that Mr. Cuomo’s withholding the funding showed a “shocking disregard” for a system that served “more than one million Medicaid, uninsured and immigrant New Yorkers who relied on our care last year.” He said that it “essentially translates into a large and completely unanticipated cut to our budget.”
Making it particularly galling, he continued, was that the funds involved came from a pool that had already made disbursements to private hospital systems statewide “who bear no burden in comparison to our reality…”
Coming more than three months into the city’s fiscal year, the letter said, it forced H+H to sharply reduce staffing via attrition and “fill only 25 percent of the 250-300 positions that typically become available every month. We will also ask our physician affiliate organizations to implement similar hiring restrictions.”
He predicted the personnel shortages that would result would hurt patient care but said Albany had left him “with no choice.”
State Could Lose $2B
The drastic steps were triggered after the Federal fiscal year began Oct. 1 without steps taken by Congress and the Trump Administration to avert billions of dollars in planned cuts to the Federal program supporting “safety-net” hospitals and networks like H+H while also letting funding authorization for the Children’s Health Insurance Program lapse.
Taken together, those cuts cost the state in excess of $2 billion and end Federal support for the 330,000 New York children now covered by CHIP. Both programs have long enjoyed bipartisan support in Washington, but the scorched-earth battle over the GOP effort to repeal and replace the Affordable Care Act has taken a serious toll.
Federal support for charity care, known as aid to Disproportionate Share Hospitals, dates back to President Ronald Reagan. The CHIP program was initially started as a state initiative by Gov. Mario Cuomo. In 1997 it was adopted nationally by President Clinton and continued over the next two decades by Presidents George W. Bush and Barack Obama.
May Recall Legislature
On Sept. 30, as the cuts were looming, Jason Helgerson, the Medical Director of the state’s Office of Health Insurance, in a letter to Mr. Brezenoff described the cuts from Washington as being “so severe” the Governor was likely to have to convene a Special Session of the Legislature to re-open the state’s health-care budget. He added that the state was already facing a $4-billion deficit headed into next year even before the Federal health-care cuts.
In addition to the city’s public hospitals, Mr. Helgerson wrote, SUNY Upstate Medical Center, SUNY Downstate Medical Center, Westchester County Medical Center, Nassau University Medical Center and Erie County Medical Center, would have to scrub their books and find ways to make up for hundreds of millions of dollars in short-term cuts.
Last week, Mayor de Blasio warned the Governor not to turn the $380 million he said the city was owed into “a political football.” He asserted that Albany sitting on the city’s money from a Federal program was a “deviation from the norm,” adding that it was part of a pattern by the Cuomo administration.
Puts Onus on Cuomo
“There have been a lot of deviations from the norm in Albany,” Mr. de Blasio said to reporters at a press conference called on an unrelated matter. “I would urge all of you to start to look more closely at how what we have considered to be good government and the normal way of doing things in the interest of the public has increasingly changed in recent years in ways that are detrimental to the people of the city and the state.”
At a press conference the same day, Mr. Cuomo rejected the notion that the city was entitled to the money.
“It is not due on any particular date,” he said, adding that these kinds of Federal/local match programs “are reconciled over a period of years.”
But the bottom line, as far as the Governor was concerned, was that the state couldn’t pick favorites in the midst of a deepening fiscal crisis set in motion by Washington. “We know today we don’t have enough money to pay every public hospital 100 percent. We don’t,” he said.
‘Can’t Make It All Up’
He continued, “The current $1.1-billion DSH cut is so drastic that it will not allow us to fund any public hospital 100 percent. What percent can we pay? We are not sure, and how do you distribute the shortage? Nassau’s in trouble, Erie is in trouble, New York State is in trouble, SUNY Downstate, our hospitals, were all expecting to get 100 percent.”
He called the health-care cuts, and the GOP tax proposal to end the Federal income-tax deduction for state and local taxes, a series of direct “assaults” on New York State. “Why would a government want to end health insurance for 330,000 children is beyond me,” he said.
He continued, “I don’t care if you are a Democratic Congressperson or a Republican Congressperson, you represent those 330,000 children. They are in everyone’s district, and I want to see the Congressperson who goes home at a town hall meeting and says ‘yes, I ended health insurance for children under 18 years old. I cast that vote.’ I dare them.”
Urges Letter-Writing Blitz
Mr. Cuomo told reporters the only way to counter the cuts coming from Washington was with a major grass-roots response, not just from the political leadership, but from the people most directly affected by the cuts. “I want the 330,000 children writing letters and the parents writing letters,” Mr. Cuomo said. “I want the public hospitals, Nassau Hospital and Erie Hospital to write a letter saying you are going to put us out of business.”
For now, the state has engaged the accounting firm KPMG to take a fresh look at all of the state’s safety-net hospitals for savings. Under a contingency put in the last state budget, any cut larger than $850 million triggers an opportunity for the Legislature to re-open the budget and reconcile the shortfall. “We now know we can’t give the 100 percent,” he said. “They (the hospitals) will get some number less, which we still have to identify, and then the question becomes how do you allocate that shortfall. And that’s the plan that the Legislature wants to approve.”
In addition to the increasing likelihood of calling a Special Session, the Governor said he would reconvene the Medicaid Redesign Team he created in 2011 to find ways to reduce the costs of the state’s Medicaid system “without compromising care” for New Yorkers.
ACA Home to Roost?
Both Mr. Cuomo and Mr. de Blasio conceded that the DSH cuts were actually part of President Obama’s Affordable Health Care Act. Under the ACA, the working assumption was the safety-net hospitals would need less and less Federal support as the number of patients without health care dropped. For several years since the ACA was enacted, the Obama Administration and the Congress put off pulling the trigger on those cuts that finally kicked in Oct. 1. The ACA also expressly prohibited undocumented adults from participating in the program. As a consequence, in New York City, HHC is the only health-care safety net for the city’s half-a-million undocumented.
Ironically, back in June the city did correctly anticipate the Oct. 1 DSH cuts and estimated it would cost it $300 million. What it didn’t see coming was the uncertain fate of the $380 million it had already billed Albany.