New York's Medicaid program, which has become an annual target for spending reductions, could lose $185 million under Gov. Mario Cuomo's fiscal 1994 budget.
The savings would be achieved by lowering cost-of-living adjustments in hospital rates, reducing payments to hospitals for non-acute-care patients who seek treatment in emergency departments, and trimming payments to nursing homes and home-care agencies.
The proposed cuts would trigger reductions in federal and local government contributions to Medicaid. And because New York hospital rates are tied to Medicaid spending, the rates that private insurers pay also would decline. Total Medicaid spending would fall to $5.7 billion.
The budget "takes away with one hand what the other hand just gave us one month ago," said Daniel Sisto, president of the Healthcare Association of New York State. In December, the state Legislature passed a bill that extended the state's rate-setting system for two years and gave hospitals an additional $160 million (Jan. 3, p. 20).
"By this proposal, the governor is effectively reneging on the additional funds he and the Legislature agreed hospitals need to expand primary care, cope with the tuberculosis and AIDS epidemics, and adequately compensate the thousands of healthcare workers in our institutions," Mr. Sisto said.
In recent years, however, the Legislature has restored most Medicaid funding that the governor proposed to eliminate.
Separately, the New York City Health and Hospitals Corp. submitted a preliminary plan to the city for slashing a $160 million shortfall for fiscal 1994. The gap would be closed through spending reductions. The plan must be approved by HHC's board of trustees. HHC operates 11 acute-care and five long-term-care hospitals, numerous clinics and the city ambulance service.-Karen Pallarito