A panel appointed by Gov. Andrew Cuomo backed a plan that would slash Medicaid spending to New York’s hospitals by almost $400 million as the facilities scramble to address the coronavirus epidemic.
The Medicaid Redesign Team overwhelmingly backed the slate of proposals at its Thursday meeting, which aim to slash spending on NYC Health & Hospitals — the Big Apple’s public hospital system — by $186 million in the fiscal year beginning April 1.
The vote was unanimous with three abstentions. It will be forwarded to state lawmakers and Cuomo for consideration.
The governor’s budget director, Robert Mujica, told the commission beforehand that implementation of some of the proposed cuts could be delayed thanks to federal aid for coronavirus.
These are the latest in a two-decade-long pattern of budget cuts and insurance overhauls that played a key role in the Empire State losing 20,000 now-badly needed hospital beds to fight the coronavirus.
However, the panel claimed that its plan would actually “strengthen” the public hospitals and result in long-term savings.
It would pay the city’s public hospital system a fixed amount per patient instead of allowing doctors there to bill for each service delivered. That would shift the costs of providing health care to high-needs individuals — like the homeless and seriously mentally ill — onto the city’s books, saving the state $186 million.
The plan also would slash charity and indigent care spending for the city’s wealthier private hospitals by $157 million.
Health care advocates have long complained that too many state dollars go to the wealthier hospitals that serve far fewer Medicaid patients or those without insurance than public hospitals.
The commission also calls for trimming unspecified spending on hospitals across the Empire State by another $56 million in the state’s budget for 2021 and another $109 million in 2022.
All told, the commission would slice an estimated $399 million a year in spending for hospitals in New York state in the 2021 budget, which would increase to $459 million in 2022.
Cuomo set up the commission in January and ordered it to come up with $2.5 billion in recommended savings after cost overruns in the public health program for poorer New Yorkers, Medicaid, left a $4 billion hole in the state’s budget.
The governor also controversially proposed a slew of changes in Medicaid’s funding structure that city officials say would stick them with up to $1 billion in new costs every year.
It’s unclear whether the Legislature or even the governor, who must approve the changes as part of the state budget, have the stomach to cut spending to medical facilities grappling with an expected wave of COVID-19 patients and a potential health catastrophe, as well as rolling back Medicaid services to patients.
“It’s never a good time to cut health care, especially when the only rationale is to fit into an artificial limit. It’s even more wrong in the midst of a growing epidemic,” said Assembly Health Committee Chairman Richard Gottfried (D-Manhattan).
Cuomo’s panel also recommended cutting $22 million in spending on home and long-term care services for patients from more well-to-do families.
It calls on officials to examine five years of family income data for long-term care applicants and to include spousal income in eligibility calculations for the program.
The plan also seeks to save money limiting access to the personal care and assistance programs to more severely disabled New Yorkers, which could save $154 million in the next fiscal year and $360 million when fully implemented the following year.
Long-term and home care services have skyrocketed by an unsustainable 13 percent a year, the panel said.
“Make statutory changes to eliminate the ability of spouses living together in the community, and parents living with their child, to refuse to make their income and resources available during the determination of an applicant’s eligibility for Medicaid,” the panel’s proposal claims.
