Cuomo warns of fiscal ‘missile’ slamming NY safety-net hospitals

ALBANY — Gov. Andrew M. Cuomo said a fiscal “missile” from Washington hits New York beginning Sunday and will slam the finances of major safety-net hospitals statewide, including those in Nassau County, for years to come.

Cuomo said that without congressional intervention, the hospitals that serve some of the state’s most needy patients, including Nassau University Medical Center, will face the scheduled loss of $2.6 billion in federal aid.

Cuomo said that would foist huge costs on state taxpayers and Nassau County to help make up the difference for hospitals. He said New York City will also have to provide millions to make up the loss of federal aid to its hospitals.

Erie County, the State University of New York and Westchester County would also be among those that would have to compensate for the loss of aid, but Cuomo said most hospitals statewide would eventually feel the cut.

“The Trump administration will cut health care aid to our most needy patient populations and struggling hospitals, reducing funding by $2.6 billion,” Cuomo said Friday. “The irony and mean-spirited nature of the cuts is breathtaking.”

The cut in federal Disproportionate Share Hospital payments, or DSH, will be felt keenest at SUNY Upstate Medical Center in Syracuse, SUNY Downstate Medical Center in Brooklyn, Westchester County Medical Center, Erie County Medical Center and Nassau University Medical Center, Cuomo said.

“If the missile hits, we will try to manage the cuts the best we can and smooth cuts over this year and next,” Cuomo said in urging action by the New York congressional delegation. “We are also seeking aid from the governments associated with their public hospitals to reduce the pain. Nassau needs to help their public hospitals.”

Cuomo added that the state already faces a projected $4 billion deficit and “is not in a position to make up funding.”

“I think it’s a well-founded concern,” state Comptroller Thomas DiNapoli said. “There is an overarching concern of what’s happening in Washington. Potentially, it makes a big hole and a challenge for us.”

Cuomo is aiming his unusually dire warning at New York’s Republicans and Democrats in Congress, and telling them to “do everything possible to stop this tragedy from occurring.”

But the impact may not be as bad as billed.

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The $2.6 billion in lost federal Medicaid funding would be spread over several years, and not reach $2.6 billion in lost aid annually until 2025, according to state records and interviews with independent analysts.

The independent Citizens Budget Commission said the impact on the 2018-19 state budget now being crafted will be only about $329 million. Earlier last week, Cuomo said the cut could be so dire that it would force a special session of the Legislature before January to find ways to help fund the losses to hospitals.

“While there is definitely cause for concern, it should not necessitate a special session as this issue could be dealt with during next year’s regularly scheduled session,” said David Friedfel of the commission,

The potentially lost aid also isn’t a new creation of the Trump administration but is a planned part of the Obama administration’s Affordable Care Act, said Bill Hammond, health care analyst for the Empire Center for Public Policy. Congress has postponed this federal aid that helps pay for uninsured and poor patients three times, he said.

“To frame it as some kind of out-of-left-field crisis that requires a special session is confusing,” Hammond said. He said the state and hospitals should have been forming contingency plans for when Congress stops postponing the impact, although “there’s still a good chance Congress will postpone the cuts again.”

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Cuomo underscored the potential pain to the state, saying the 2018-19 budget due in January must contend with a $4 billion deficit projected for 2019.

“If we lose Medicaid funding, everything crumbles,” Cuomo told the state Business Council on Monday. “It’s a dagger at the heart of New York,” Cuomo told reporters two days later. “There is no way the state can pick up this cost.”

Cuomo’s budget, however, also projects that the $4 billion deficit will be $791 million if the state continues the discipline of keeping spending increases at about 2 percent per year.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.