Healthcare Business News
N.Y. Gov. Andrew Cuomo

N.Y. state budget devotes $1.2B to realigning healthcare system

By Melanie Evans
Posted: January 21, 2014 - 7:30 pm ET

New York state would spend $1.2 billion to restructure hospitals, long-term care and other healthcare services and invest an additional $75 million in health information technology, under Gov. Andrew Cuomo's newly released capital budget.

Cuomo's budget calls for grants to “improve the financial viability and efficiency” of the state's hospitals, nursing homes and other healthcare operators. New financing would promote mergers and consolidation; an increase in primary care and care coordination; and efforts that better match supply and demand for hospital and nursing home beds.

Hospitals in New York City's borough of Brooklyn are facing financial distress and a state-commissioned 2011 panel called for consolidation of Brooklyn's troubled hospitals.

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The budget plan would also increase spending by $55 million for New York's health information network. Development of a database to house medical bill records from all public and private health plans would receive another $10 million. Capital spending would increase by $10 million for other health information technology initiatives.

The budget would be partially financed by $10 billion that New York is seeking from the CMS, according to the budget documents. New York has a pending request with the CMS to retain $10 billion of $17 billion in projected federal savings from the state's Medicaid overhaul efforts.

The proposal won praise from the Greater New York Hospital Association for its plan to eliminate a prior 2% cut to Medicaid reimbursement and plans by the state to share Medicaid savings with providers.

“We especially appreciate his call for the federal government to approve New York’s Medicaid waiver and his proposed$1.2 billion capital program for healthcare providers. Both are essential to the long-term viability of New York," GNYHA President Kenneth Raske said in a statement.

Dennis Whalen, president of the Healthcare Association of New York State, praised the governor's budget for including “important, positive and much needed investments” and called the $10 billion from the CMS “critical” for the state's healthcare providers. “Many hospitals and healthcare systems are financially fragile and lack the resources needed as they embrace reform and improve delivery of care for our patients,” Whalen said in a statement.

Follow Melanie Evans on Twitter: @MHmevans

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