N.Y. Gov. Cuomo says special session might be necessary to allocate public hospital funding
Gov. Andrew Cuomo said Tuesday the state would be holding onto federal funding that helps offset uncompensated care until it can determine an equitable way to distribute the money. Those funds include money that was expected to be distributed last year and those allocated for the current fiscal year.
The governor said that if Congress doesn't the restore the funding by the end of the year, a special session of the state Legislature might be necessary. The funding is tied to the Disproportionate Share Hospital program, which covers hospitals' losses for treating Medicaid and uninsured patients.
Cuts to the DSH program went into effect Oct. 1 and will total $330 million in the current fiscal year and $1.1 billion in the next 18 months, according to the state. The funding reduction is especially harmful to public hospitals, such as the 11-hospital NYC Health & Hospitals and SUNY Downstate Medical Center in Brooklyn. Cuomo has called on local governments, including New York City, to contribute to their associated hospitals.
"The question is how do you allocate that shortage," Cuomo said. "That's the plan the Legislature wants to approve."
Such a process was outlined in the most recent state budget, passed in April, which specified that if federal support were to fall by $850 million or more, the state budget director must will develop a plan to make uniform spending reductions. The legislature then has 90 days to pass its own plan, or the budget director's goes into effect.
But the matter is urgent for NYC Health + Hospitals. Interim Chief Executive Stanley Brezenoff told his board last week that the health system is still owed $380 million in funding that it expected to be paid during the last fiscal year. It now has about 18 days' cash on hand.
Mayor Bill de Blasio lashed out at Cuomo at an unrelated press conference Tuesday morning, asserting the state's decision to withhold the funding was a part of a pattern of behavior from the governor "detrimental to the people of the city and this state." He accused his rival of turning the matter into "a political football."
"This is not normal, and there's no excuse for it," the mayor insisted. "This is money that is owed to New York City; it's owed to our public hospitals that serve over a million New Yorkers. It's federal money earmarked for New York City."
Cuomo said that other local governments with a public hospital, including Nassau and Westchester counties as well as the SUNY system, have also not received funding for the previous year but all wanted to be paid. The state has hired KPMG as an adviser to help assess the finances of the public hospitals.
"Rather than doing it politically, or arbitrarily, [you find out] how much is the gap, get a qualified accounting firm, and get a new law that authorizes you to make funding on that basis," the governor said.
The mayor warned of dire consequences should Cuomo's administration fail to disburse the funds, but he refused to answer a question about the possibility of layoffs.
"It's a dangerous action by the state. We can maintain stability for a period of time," he said. "But if the state deprives the city of federal funds on an ongoing basis, it will undermine health care in this city, and we'll have to take very substantial measures to address it."
De Blasio also scoffed at the governor's suggestion that withholding the money would help the public hospital system brace for the loss of Disproportionate Share Hospital payments from the federal government. He expressed hope that Senate Minority Leader Charles Schumer could negotiate an extension of DSH outlays, and he argued that Cuomo should direct his energy solely to that effort.
The pair clashed earlier this year when the governor, who controls the Metropolitan Transportation Authority, sought unsuccessfully to wring funds from the city for repairs to the train system.
The issue could be resolved if Congress delays the cuts. A bill to reauthorize the Children's Health Insurance Program that includes a one-year delay to the cuts will be marked up Wednesday by the House Energy and Commerce Committee.
"Cuomo says special session might be necessary to allocate public hospital funding" originally appeared in Crain's New York Business.
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