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Cuomo trims Medicaid spending increases to hospitals, health care providers

Gov. Andrew M. Cuomo in Baldwin on Aug.

Gov. Andrew M. Cuomo in Baldwin on Aug. 13, 2019. Credit: Howard Schnapp

ALBANY — Gov. Andrew M. Cuomo is trimming hundreds of millions of dollars in Medicaid spending to hospitals and health care programs that serve 6 million New Yorkers as he addresses a budget deficit.

The plan would cut the projected Medicaid increase by half, to 1 percent, and would save $124 million in state and federal funding during the current 2019-20 fiscal year. That savings would be $496 million for each subsequent year. The change was noted in the Cuomo administration’s statement in the Dec. 31 New York State Register of proposed regulation and rule changes, which gets little public attention, and surprised some health care providers.

The rate reductions were within the range authorized by the Legislature in the state budget adopted April 1, 2019, the start of the state’s fiscal year. The change begins this month and will continue through March, the current fiscal year’s fourth quarter, said Jill Montag, spokeswoman for the state Health Department. During this period, she said the Cuomo administration will work with hospitals, unions and other groups “to develop an overall plan to manage Medicaid spending growth.”

Medicaid is government health care for low-income families and individuals as well as for income-qualified disabled and elderly New Yorkers. Medicaid pays for hospital care, nursing homes, physician visits, prescription drugs and home- and school-based health programs. Medicaid spending is one of the single biggest pieces of the state budget, and its cost has risen as Cuomo and the Democrat-led Legislature have sought to make sure more New Yorkers are covered by health insurance.

Cuomo is scheduled to propose his budget to the Legislature in January. He pledges to keep overall spending increases to 2 percent and to address a $6.1 billion deficit, in part by moving a $2.2 billion Medicaid bill into future years to adhere to an annual cap set in law.

“Cuts of this magnitude will dramatically limit New Yorkers’ access to care,” said Bea Grause, president of the Healthcare Association of New York State, which represents hospitals and health care facilities.

Health care analyst Bill Hammond of the fiscally conservative Empire Center think tank said hospitals may be able to bear the funding change after years of increases more easily than smaller groups and physicians.

“They will be hit harder,” Hammond said. “That’s the downside of an across-the-board reduction as opposed to more targeted cuts.”

Physicians who treat patients through Medicaid, which avoids more expensive emergency room care, are “confounded by the announced cuts to their payments for care delivered to their patients insured by Medicaid,” said Dr. Art Fougner, president of the state Medical Society that lobbies for medical doctors.

Kenneth E. Raske, president of the Greater New York Hospital Association that lobbies for hospital statewide, said there is a “strong likelihood of additional Medicaid cuts in the near future.”

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