Federal and State Actions Address New York’s Budget Delay

New York’s state legislature passed the revenue portion of the 2010 - 2011 budget the first week in August, the last component needed to keep the state government operational. This action was followed a week later by the House’s passage of a Medicaid and education assistance bill that extends to states an enhanced Federal Medical Assistance Percentage (FMAP) for six months beyond December 31, 2010. Passage of some level of FMAP funding was critical for New York, because the state legislature had also passed an FMAP contingency plan in the event the federal government did not complete work on FMAP by September 16, 2010.

Although health providers will see some reductions in Medicaid funding due to the reduced FMAP package, the cuts will not be as severe as originally projected. The value of the percentage increase nationally is $16 billion, with about $1.4 billion of that going to New York State for the remainder of this fiscal year and for the first six months of fiscal year 2011 – 2012. Funding for school districts will come from this $1.4 billion.

The state’s FMAP contingency plan called for $450 million in Medicaid cuts to hospitals, nursing homes, home care, physicians, other providers, and Medicaid managed care. The reductions will now total approximately $125 million, including the federal match dollars.

As we enter 2011 the enhanced FMAP percentage will be 3.2 percent for the first quarter (January 2011 through March 2011) and 1.2 percent for the second quarter (April 2011 through June 2011). States with high unemployment will receive an additional offset for this six-month period. The U.S. Department of Labor determines the threshold unemployment rate. New York should qualify.

“We’re thankful to Senators Charles Schumer and Kirsten Gillibrand for their diligence in this effort,” said Kevin Dahill, president/CEO of the Nassau-Suffolk Hospital Council, the association that represents Long Island’s hospitals. “This funding will save some hospital jobs in our local communities and keep some hospital programs and services running that were previously vulnerable to closure.”

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