New York Hospital Associations Predict Healthcare Spending Cuts May Harm Providers

The New York State Legislature has approved about $775 million in spending cuts for healthcare as part of a budget “extender” package on June 7, 2010. The legislation, in addition to requiring the State to save $300 million in Medicaid fraud costs, also presents considerable financial challenges for healthcare providers in the state. Facilities across the state stand to lose millions of dollars not only in state funding, but in federal matching funds as well.

The Greater New York Hospital Association (GNYHA) projects that hospitals in the State may lose approximately $250 million in federal matching subsidies as a result of the cuts, with some facilities estimated to lose more than ten million dollars. GNYHA President Kenneth E. Raske told the New York Times, “We feel like we have a gun to our head.” He worries that the state’s healthcare system is “on the precipice of a major disaster.”

The Healthcare Association of New York State (HANYS) has produced facility-by-facility estimates of the new cuts’ impacts in detailed analyses available on the Association’s website. HANYS predicts that the legislation’s impacts on state hospitals will total over $256 million. The Association notes that the June 7 action is the latest in several recent cuts for New York’s health care providers, totaling more than $5 billion in reduced spending over the last two years. Daniel Sisto, President of HANYS, warns that “any additional cuts and taxes will translate directly into more layoffs, loss of critical health care services, and the closure of health care institutions.”
The New York Legislature is still attempting to close the gaps in the state budget, now two months overdue, in order to prevent a government shutdown.

For more information, please contact Carey Kalmowitz, Adrienne Dresevic, or Abby Pendleton at (212) 734-0128.

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