The CMS denied New York State's request for emergency cash relief for healthcare providers that lost revenue or saw expenses soar as superstorm Sandy forced the evacuation of hospitals and nursing homes.

The state made a request for $427 million under a Medicaid waiver in early November, which would have awarded the greatest relief to hospitals closed by the storm. Hospitals that saw services disrupted by lost power or temporary damage, those that took in evacuated patients, and transportation providers were also included in the relief request.

“CMS notified DOH in late December that while the waiver proposal had merit, it was deemed that the existing channels available to provide assistance, including those through FEMA, Small Business Administration and other Federal programs, were more appropriate,” said Bill Schwarz, a New York State Health Department spokesman said. “The State Health Department is continuing its work to secure sources of federal relief for providers.”

The U.S. House of Representatives on Tuesday approved Sandy relief funds, and the Associated Press reported that officials said action on the $50.5 billion aid package was expected in the Senate early next week.

The lethal storm, which hit on Oct. 29, forced the evacuation of nine New York and New Jersey hospitals. Floodwaters closed five New York hospitals to admissions for several weeks and three remain closed to inpatient care.

The New York City Health and Hospitals Corp. is estimated to lose $183 million in revenue between November and February after floodwaters damaged and closed Bellevue Hospital Center and Coney Island Hospital to inpatient care.

Coney Island Hospital began to admit some psychiatric patients at the end of December. Bellevue Hospital, which has 788 beds, is not expected to admit patients until February. The $427 million relief package was expected to cover half of HHC's lost revenue, said Marlene Zurack, the system's chief financial officer.

Zurack said the system has cobbled together cash to pay bills without the revenue, but will no longer be able to do so after June, when annual debt service and pension payments are due. “We certainly could not afford this unexpected loss of revenue,” she said. Cash expected from the Federal Emergency Management Agency pays for repairs, not operating losses, she said.