Two of New York State's most visible leaders are butting heads over which government should step in to save already-embattled public health systems after severe cuts to the Disproportionate Hospital Payment program went into effect Oct. 1.
The battle had been brewing before the deadline, when the current CEO of New York City Health+Hospitals, Stanley Brezenoff penned a punchy letter to the state Commissioner of Health Howard Zucker Friday wanting to know why the funds hadn't been released yet. Brezenoff said the money was badly overdue, and the system was in dire straits with barely 18 days cash on hand.
[Also: NYC Health+Hospitals demands $380 million in DSH payments as cash reserves empty]
The Department of Health's Medicaid Director Jason Helgerson responded, saying that the Department was moving ahead with detailed financial analysis of each hospital, but gave no indication of when if at all the system would receive the $380 million in funds it says they were already expecting to cover services rendered in fiscal 2017.
NYC H+H has said these were funds were already earmarked for use well before the October deadline and were expected months ago, and that they were given no warning at all that the money wouldn't be coming. They DSH payments are federal monies with a match in city funds, not state dollars. NYC H+H said the state has inflicted a "surprise $380 million budget hole" that they are not prepared to deal with.
In separate press conferences Tuesday, NYC Mayor Bill DeBlasio and Gov. Andrew Cuomo both traded barbs on who should step up to close the gap and save the system. Cuomo called the DSH cuts one of several "federal assaults" on the state, forecasting a devastating effect on its public hospitals if they aren't reversed. He said the $1.1 billion cut that will unfold over the next 18 months will mean the state can't fund any public hospital 100 percent, and they have not made any DSH payments since Oct. 1, when the law went into effect. The cuts are a caveat of the Affordable Care Act. The way the program works, he said, is that there is no set date to make the payments and public hospitals get them on a rolling basis. Cuomo argued they are not actually withholding funds, but are rather re-examining how they are disbursed in light of the drastic and damaging federal cuts on the horizon.
"You can't distribute funding until you know how much you have to distribute. All hospitals will need to find savings and local governments and state government will need to find ways to work with these hospitals to make ends meet because if this stays in place, again - we won't get to 100 percent funding."
[Also: NYC Health + Hospitals lays off 476 to stem financial bleeding]
He also said in a statement published by the New York Times that it should be the city government, which he alleges is working with a $4 billion surplus, that steps up and fills the enormous gap. "The situation is clear," the governor added, "the first source of financial assistance for these hospitals must be their associated local governments and SUNY."
DeBlasio fired back in a separate unrelated press conference, calling the state's decision to withhold the funds "dangerous" and a "deviation from the norm." He argued that the DSH payments are federal funds, not state money, earmarked for New York City that is matched by City dollars. He said the state's role is pass the money along like they have for years.
"This is not normal and there's no excuse for it. … And, by the way, if the question is, 'Oh, something might happen someday on DSH,' well, you don't penalize our public hospitals now for something that might happen someday. We need the resources to keep our public hospitals going now," DeBlasio said.
Both leaders hinted that efforts are in already in the works to reverse the cuts, saying that some members of the congressional delegation led by long-time Sen. Chuck Schumer are working to restore the funding by Dec. 31, something Cuomo called a Christmas scenario.
DeBlasio said there has already been legislation passed out of committee in the House.
In the meantime, the question remains what are the struggling safety net hospitals, including NYC H+H supposed to do? DeBlasio said they can provide stability for a period of time, but if the funds are withheld on an ongoing basis, they will have to take "substantial measures" to deal with it.
"I don't think the governor is saying he wants to undermine healthcare in New York City, but this action could do that," DeBlasio said.
"We have to get the cuts rolled back, period. Otherwise there's going to be a lot of pain, and the only question is how you allocate the pain," Cuomo said.
Twitter: @BethJSanborn
Email the writer: beth.sandborn@himssmedia.com