Closed-door negotiations by New York lawmakers have yielded a deal to overhaul the state's $2.7 billion system of subsidies to the state's 250 hospitals. The system is set to expire Dec. 31.
As part of the bargain, Medicaid would be spared new cuts for three years, cigarette taxes would be doubled to help fund health coverage for the uninsured, and the state would set aside more money for charity care.
"This is a spectacular outcome for all those who are concerned about healthcare in New York," said Kenneth Raske, president of the Greater New York Hospital Association. He predicted the package would serve as a model for other states.
The tentative legislation was unveiled Friday as the current law, the 1996 Health Care Reform Act, neared its sunset. That law scrapped hospital rate controls.
The state Legislature is expected to pass the reform package by year-end, and Republican Gov. George Pataki is expected to sign it.
Details of the last-minute deal will decide the fate of surcharges on hospital bills in New York. The surcharges have funded graduate medical education, charity care and children's health insurance.