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March 18, 2019 
STATE UPDATE: Legislature and Gov Negotiate Budget Details
Budget News - Both the Assembly and Senate one-house budget proposals reverse the governor’s $650 million in cuts to hospitals and health systems in the upcoming year. The cuts balloon to $1.3 billion when federal Medicaid matching funds are factored in. For the hospitals in the nine suburban counties just east and north of New York City, the cuts are $116.2 million and increase to $232.4 million with the addition of the loss of federal Medicaid match dollars. However, the Senate and Assembly proposals are not binding. The negotiation process between the governor’s office and the two chambers continues, meaning hospitals and healthcare remain vulnerable to cuts. Both chambers rejected the governor’s reduction to the Indigent Care Pool (ICP). This pool partially reimburses hospitals for caring for the poor and uninsured. The majority of non-public hospitals in New York City, Nassau, Suffolk, and Westchester counties were specifically targeted in the governor’s budget to receive this cut, which alone totals $275 million. “We are very encouraged by the action of the members of the Senate and Assembly to restore the planned cuts to hospitals and healthcare, and we thank them for recognizing the devastating impact these Medicaid cuts would have on hospitals in the suburban regions,” said Kevin Dahill, president/CEO of the Suburban Hospital Alliance. “We continue to urge them to reject any cuts to hospitals and healthcare.” Hospitals are already facing significant federal Medicaid cuts come October 1, 2019. The state budget is due April 1, 2019.

Single Payer Plan - Senator Gustavo Rivera and Assemblyman Richard Gottfried introduced an expanded version of their New York Health Act last month. The plan, which now includes provisions for long term care and home care, would cost about $159 billion. The plan would result in higher taxes on employers and employees, and it calls for all New Yorkers, including those on Medicare, to switch to the New York Health Plan. Commercial insurers would be limited to products that cover services not included in the comprehensive New York Health Plan, essentially wiping out the private insurance market. The Assembly and Senate both reject the governor’s desire for a universal access commission to advise the Departments of Health and Financial Services on how to achieve universal access to healthcare. Hospitals continue to oppose single-payer legislation vehemently. The Suburban Hospital Alliance has joined the Realities of Single Payer, a coalition of business organizations, hospitals, and other providers offering information about the ramifications of single payer in New York. 

Nurse Staffing Ratios - Legislation to mandate staffing remains a threat to New York’s hospitals. The Assembly does not address the issue in its budget proposal. The Senate urges the Department of Health to engage stakeholders in its examination of staffing level enhancements in healthcare facilities and recommends that the state issue a report of its findings to the legislature. Mandated nurse staffing ratios set unrealistic expectations, in terms of financial and human capital commitment, on hospitals. All evidence concludes that staffing is best handled on an individual hospital-by-hospital basis, which accounts for patient complexity, surge capacity, and other local situations.
FEDERAL UPDATE: Trump Budget Slashes Healthcare; More Medicaid Cuts 
Federal Budget Proposal - The Trump administration’s 2020 federal fiscal year budget, released earlier this month, would slash $818 billion from Medicare over 10 years and $1.5 trillion from Medicaid. The cuts are massive and far-reaching. It revives the concept of Medicaid as a block grant program to the states, seeks reductions to the program that partially covers costs for caring for the poor and uninsured, reduces payments to care provided in hospital-based outpatient departments, and cuts money for graduate medical education (GME) at teaching hospitals.
Medicaid Cuts - More massive Medicaid cuts are on the horizon for hospitals come October 1, 2019. That is when Disproportionate Share Hospital (DSH) payment reductions take effect. These are funds that help cover costs incurred by hospitals that serve a disproportionate number of Medicaid and uninsured patients. The DSH cuts would cost New York State’s hospitals more than $7 billion over the next decade. 

Residency Slots - The Senate and House introduced legislation to increase the number of residency slots in teaching hospitals by 3,000 per year (2021 – 2025). Hospitals support this legislation, as it would mitigate the physician shortage. 
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