July 4, 2019

New York Congressional delegation condemns proposed Medicare changes

In a rare joint letter that included the entire New York State Senate and House delegation, federal legislators condemned a proposed change to Medicare reimbursements as being detrimental to some New York hospitals while failing to help others.

The letter, shared by Sen. Charles E. Schumer’s office on Monday and headed up in the House by U.S. Reps. Brian Higgins, D-Buffalo, and Lee M. Zeldin, R-Shirley, condemned proposed changes by the Centers for Medicare and Medicaid Services to the Medicare Area Wage Index. The index adjusts Medicare reimbursement to hospitals based on local labor costs, the proposed change would reduce these adjustments for the most expensive hospitals in order to pay out more to the lowest tier of hospitals.

“CMS argues that its proposed changes to AWI seek to help rural hospitals, yet, not one of New York’s rural hospitals — who face the same fiscal challenges as rural hospitals across the nation — would see a benefit from the policy,” the letter reads. “Rather, states like New York with many hospitals that have legitimately high wages commensurate with market competition will be forced to transfer hundreds of millions in Medicare funding to a small handful of states.”

The letter was bipartisan, with everyone from Rep. Elise M. Stefanik, R-Schuylerville, and Chris Collins, R-Clarence, to Alexandria Ocasio-Cortez, D-Bronx, and Hakeem Jeffries, D-Brooklyn, signing on. But Mr. Zeldin and Mr. Higgins’s districts would be hit the hardest by the proposed change, as hospitals in their areas — Long Island and Western New York, respectively — face some of the highest labor costs in the state.

The letter acknowledges that there are shortcomings in the current AWI distribution, but criticizes the proposed solution for ignoring the reason the program was implemented — significant differences in wages depending on location.

“New York can be an expensive place to live and do business, and so we need to ensure that hospitals have the funding they need to attract world-class doctors and health care providers,” Sen. Schumer said in the news release. “That’s why I, along with the entirety of New York’s Congressional delegation, am urging CMS to reverse course on this deeply misguided rule.”

While those hospitals would face reduced revenues, upstate hospitals, including in the north country, would receive no additional funding. Instead, funding would be re-allocated from states like New York and Florida to states like Alabama, according to Cristina Batt, vice president for federal relations at the Healthcare Association of New York State, an advocacy group that has worked on the issue.

“We were at first under the impression that this is something that could help our rural hospitals,” Ms. Batt said. Instead, “our estimates show that on a state-wide basis, New York hospitals will have their wage index suppressed by $83 million.”

Gov. Andrew M. Cuomo does not seem to be happy with the change either.

“This is one more example of the Federal government targeting New York State, and the State will do all it can to ensure our vulnerable residents receive the healthcare they deserve,” said Freeman Klopott, a press officer in the New York State Division of Budget, in a statement to the Watertown Daily Times.

Ms. Batt said that the public comment period on the proposal closed on June 24, and it would typically take CMS about 60 days to come to a final decision. If approved, the policy would be implemented starting Oct. 1.