New York Gov. Andrew Cuomo delivers his State of the...

New York Gov. Andrew Cuomo delivers his State of the State address at the Empire State Plaza Convention Center, in Albany, N.Y. Credit: AP/Hans Pennink

ALBANY — The federal government has denied $625 million in grants that were to help move more Medicaid patients from expensive emergency room care to clinics and smaller medical facilities across the state, Gov. Andrew M. Cuomo said Monday.

Cuomo said the state was notified on Friday by the Trump administration that it won’t continue the $8 billion grant awarded in 2014. Most of the $7.4 billion received so far was spent by hospitals to transition health care from emergency rooms to more efficient community-based care in neighborhood facilities.

“It’s a very big deal for the state,” Cuomo said. “It is counterproductive and hurtful to the state.”

Two of the affected institutions are on Long Island. The federal decision means Nassau University Medical Center will not get $52.5 million it had expected and Stony Brook University Hospital will not receive $21.2 million. The grants would have paid for projects that were planned, but not yet started. In all, 25 facilities statewide will not get grants they had expected.

Robert Detor, chairman of NuHealth, the public benefit corporation that runs NUMC, said: “We won’t be able to as robustly continue the expansion of an ambulatory [care] network, which reduces hospital stays and reduces costs.”

Cuomo said the decision is part of a pattern of political retribution by the Trump administration on New York, a state dominated by Democrats. He said the grant decision joins other actions against New York including the capping of state and local taxes for deductibility on federal income taxes and the banning of New Yorkers from “trusted traveler” programs that help prequalified citizens to speed through airports. 

“This health care denial is really obnoxious,” Cuomo said. “If there's one area that you'd think should be beyond politics, it's health care. And what the federal government is doing is hurting Democrats and Republicans, it's not whether you're blue or you're red. These are needy New Yorkers, they're primarily senior citizens, who are hurt ... We're going to fight this cut. I'm going to contact our congressional delegation. We're going to marshal all our allies because it's unconscionable.”

The federal Centers for Medicare and Medicaid Services denied it is ending the grants early. The federal agency said that it had alerted the state as long ago as 2016 that the program, called the Delivery System Reform Incentive Payments Program, would be “phased down through March 31, 2020.” That letter also states the federal staff will continue to provide technical assistance to continue transitioning more emergency room care to community-based care.

Detor said the funding helped health systems to put resources into ambulatory care centers and outpatient clinics, which provide care to patients outside of hospital settings. The goal has been to reduce admissions to hospitals, and NuHealth had been using the money to cover income losses and help to restructure operations by investing in the community-based, ambulatory clinics.

NuHealth said if the hospital had continued access to the funds, it would continue the enhancement of its Long Island Federally Qualified Health Center clinics, as well as other community-based programs it partners with, in low-income communities that are underserved.

The decision doesn’t cost the state money directly. Cuomo said the lost grant money won’t add to the $2.5 billion that his appointed Medicaid Redesign Team is trying to cut from the state budget due April 1. The cuts are needed because of a $4 billion overrun in Medicaid spending by the state.

Cuomo said the Trump administration on Friday also rejected the state Health Department’s request for an additional $8 billion in funding to achieve the cost-saving transition to community-based care.

The federal grant “has been an important tool in the state’s efforts to transition away from the fee-for-service payment system, which emphasizes volume over value, to a system that rewards high-quality and cost-effective health care,” said Eric Linzer, CEO of the New York Health Plan Association.

Brian Conway of the Greater New York Hospital Association said losing the funding will “severely harm” several areas, including services for seriously mentally ill patients as well addressing social behavior that hurts health and housing needs for Medicaid patients.

The Trump administration’s action wasn’t a surprise.

“They put the writing on the wall that they were not likely to approve this,” said David Friedfel of the independent Citizens Budget Commission. “This was not for operations, so it shouldn’t be a problem to operate the facilities … this was supposed to be for brand-new investments.”

In January, Seema Verma, administrator of the U.S. Centers for Medicare and Medicaid Services, said the federal government was moving away from the block grant model of funding. She said recent audits found states weren’t stringent enough in verifying patients for Medicaid services.

With Scott Eidler 

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