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New York Legislature Approves 2010 – 2011 Budget

Federal FMAP assistance remains uncertain; hospitals could be forced to absorb more cuts

After a delay of 125 days, the New York State legislature passed the revenue portion of the budget, the last component needed to keep the state government operational. However, the $1.5 billion in enhanced Federal Medical Assistance Percentage (FMAP) money the state hopes to receive from Washington may not be forthcoming, and even if it is, it will be reduced from what was originally proposed and sought. The legislature passed a contingency plan in the event that Congress does not extend the FMAP increase. This plan currently would reduce Medicaid funding by millions.

Long Island’s hospitals have absorbed Medicaid reimbursement cuts and taxes seven times since April 2008.

Just two months ago, 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, exceed $166 million. These frequent disruptions in revenue affect staffing and services.

Long Island’s hospital administrators say these cuts and uncertainty about FMAP money make the daily operation of a hospital more difficult. FMAP money expires December 31, 2010, yet New York State has factored an extension of this money into its 2010 – 2011 budget. That is why the legislature has drafted a contingency plan, which includes additional Medicaid cuts to hospitals, should any additional amount of FMAP not make its way to New York. If the fate of FMAP is not known by mid-September, New York State’s contingency plan calls for cuts in Medicaid payments, educational funding, and other areas.

"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."

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