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LI Hospitals Endure Endless Medicaid Cuts

Long Island’s hospitals have absorbed Medicaid reimbursement cuts and taxes seven times since April 2008 and the 2010 – 2011 state budget is still technically unfinished as we head into the middle of summer.

Yet, despite the lack of a truly legislated budget, Medicaid cuts were included in one of Governor Paterson’s numerous emergency spending bills. That extender bill, enacted in early June, imposed an additional $21 million in Long Island hospital Medicaid cuts, mainly through indigent care fund reductions, elimination of the Medicaid trend factor (a previously legislated payment adjustment tied to inflation), and cuts to payments for preventable readmissions.

The cumulative losses to the hospitals in this region, since 2008, now register in the billions.

Long Island’s hospital administrators say these cuts and this continuing budget uncertainty make the daily operation of a hospital more difficult. These frequent disruptions in revenue affect staffing and services.

"In recent years, hospitals have been forced to reduce services, close units and significantly decrease health screenings, educational programs, and related services that communities rely upon,” said Dahill. “Little by little, Albany has eroded the foundation of hospital-based health care services on Long Island."

Hospital administrators remain very concerned about the imposition of any gross receipts tax (GRT) on inpatient services and the fate of FMAP money (Federal Medical Assistant Percentage) that hangs in limbo in Washington DC. FMAP money expires December 31, 2010, yet New York State has factored an extension of this money into its 2010 – 2011 budget. The legislature and governor are at odds concerning the development of a contingency plan should the FMAP money not be forthcoming. The FMAP money is worth about $2 billion to New York State and without it the state’s budget hole will grow that much wider.

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