The interim CEO of NYC Health Hospitals is demanding to know why $380 million in disproportionate share hospital payments that were expected a month ago haven't been disbursed.
The cash-strapped system's Interim President and CEO Stanley Brezenoff fired off a blunt and forceful letter to the State Health Department commissioner Howard Zucker last Friday asking why the payments, which are federal funds matched by the city, were being withheld and making no bones about the ramifications if Gov. Andrew Cuomo's administration continued to withhold them.
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Brezenoff said the funds constitute a third of their already imperiled operating budget and called the failure to pay out the sum "mystifying." He argued the funds that were expected months ago are "languishing, awaiting action by the State Department of Health and the Division of Budget."
"Furthermore, we understand that all the voluntary and major public hospitals save for SUNY and NYC Health+Hospitals have received their allocations," Brezenoff said.
He made no bones about the imminent danger the system's operations could be in without the DSH payments. The system has "barely" 18 days cash on hand, faces a $1.2 billion deficit in its $8 billion operating budget and serves more than a million New Yorkers each year including 400,000 uninsured.
Brezenoff warned that without the payments, they would experience "significant cash flow issues" in just a few weeks, would be unable to pay vendors for goods and services and after a large number of staff cuts already, further financial turmoil could hinder improvement plans and basic system operations including point of service delivery.
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The Department of Health's Medicaid Director Jason Helgerson responded in a separate letter, explaining that in anticipation of the Oc. 1 deadline for impending cuts to federal funding of the DSH program that directly impact public and safety-net hospitals, the DOH would be executing a "detailed financial analysis" of each hospital and its overall condition. He also proposed that a special legislative session might be needed to rework the healthcare budget.
What wasn't in their letter was any direct statement as to when, or if at all, the $380 million would be released to NYC H+H. A statement from a system spokesperson confirmed that no indications have been given.
"We were concerned that Saturday was the end of the federal fiscal year, since half of the DSH dollars are federal dollars. The state now contends that they have another year to distribute those dollars. They have offered no time frame when, or even if, the dollars would be distributed to us, even though such distributions have never carried over from one year to the next before, nor were we notified that this was their intention. We thought this was guaranteed income we could count on--especially given the dollars are half federal and half city -- no state dollars are involved."
Helgerson said the cuts to the state's DSH funding will total $330 million for fiscal 2018, $826 million in fiscal 2019 and balloon as high as $2.6 billion once fully implemented. KPMG will serve as financial advisor for the pending analysis and how the state will absorb the impact of next year's $1.1 billion cuts. The state already is facing down a $4 billion budget deficit.
"We will work with you to help minimize the impact on your ability to continue to provide care to your communities. But make no mistake, we will need the cooperation of the hospitals and affiliated organizations," their letter said.
NYC H+H has cut 4,300 jobs over the past year, either through attrition or restructuring and layoffs, is restructuring major departments like revenue cycle and supply chain operations and boosted health insurance enrollment efforts to increase the number of patients for which they receive some reimbursement for their care.
"As we tackle all these monumental organizational improvements, we also rely on New York State to facilitate timely payment of our supplemental revenues to provide some stability to the system," Brezenoff said.
Twitter: @BethJSanborn
Email the writer: beth.sandborn@himssmedia.com