State Medicaid program halted

ALBANY — The state will not receive the last $625 million of $8 billion in Medicaid funding after the federal government declined to extend a program aimed at changing a hospital-dependent health care system, an angry Gov. Andrew Cuomo said at a press conference Monday.

In April 2014, the federal government approved an $8 billion waiver to fund the Delivery System Reform Incentive Payment program. The program was a result of the state’s Medicaid Redesign Team, and has a primary goal of reducing hospital use by 25% over five years through payouts to hospitals and health care agencies after achieving results in system transformation, clinical management and population health, according to the state Department of Health website.

“This funding has been very important in helping rural communities in particular build responsive and coordinated health services,” Columbia Memorial Hospital spokesman William Van Slyke said Monday. “As with any funding reduction, whether it comes from the federal or state government, it will only steepen the challenge for providers.”

The waiver that funds the initiative expires March 31.

The state applied in September to extend the program for four more years with another $8 billion. The request was denied Friday in a letter from Centers for Medicare and Medicaid services.

“[An extension] would limit the state to just five years of its current budget neutrality savings, making it impossible for CMS staff to adequately assess the state’s proposal,” according to the CMS letter addressed to the health department. “CMS is therefore not in a position to authorize a conceptual agreement that is beyond the current demonstration period.”

Cuomo, at his press conference, assailed the decision.

“This health care denial is really obnoxious,” Cuomo said Monday. “It’s devastating to the hospitals that were counting on it. Health care is a human right. We fought all of these cuts all along.”

The federal government’s decision targets the state and was politically motivated, Cuomo said, going on to talk about the state’s recent progressive policies including bail reform and the Green Light Law, which allows undocumented immigrants to obtain a driver’s license.

“In and of itself, it is very counterproductive and hurtful to this state, but when you view it in the series that are going on, it is even more disturbing,” Cuomo said. “Because this is not just the federal government takes an isolated action that is hurting the state. There is continued pattern and series of these actions.”

The governor plans to contact the state’s congressional delegation in Washington.

“We’re going to marshal all our allies because it’s unconscionable,” Cuomo said. “There has to be a place where you doing play politics. It has to end somewhere. It should end at health care ... Why you would want to play politics with someone’s health care is just beyond me. They have no limits whatsoever.”

The waiver’s program was part of efforts to transition to a more community-based health care system, which is currently based on hospitals, the governor said.

“Emergency rooms versus using a community-based organization that’s better and cheaper ... everybody agrees with that,” Cuomo said. “It’s the doing it that’s the hard part.”

The $625 million was slated to be paid to a few dozen hospitals and health care agencies through the end of next month, including Albany Medical Center, Ellis Hospital in Schenectady and Samaritan Medical Center in Watertown.

Albany Medical Center was expected to receive $15,748,286 and up to $27,865,422 was slated for Ellis Hospital, according to a statement from the governor’s office.

Health care providers are disappointed in the decision.

Not extending the Delivery System Reform Incentive Payment program was shortsighted and does not make sense, according to the Greater New York Hospital Association.

“The decision ... is a major step backwards for New York’s health care providers and the patients they serve,” according to a statement from the association. “By significantly reducing preventable hospital admissions and readmissions, DSRIP dramatically improved care delivery and achieved major savings for the federal government. But rather than build on those gains, CMS has chosen to punish New York. This makes no sense.”

The decision will have an adverse impact on the state’s efforts to restructure its Medicaid program and reduce costs to hospitals, according to the association.

“This terrible decision will severely harm numerous DSRIP focus areas, including expanding medication-assisted treatment into primary care and emergency room settings, targeting seriously mentally ill populations for enhanced supports and addressing housing and other social determinants of health,” according to the statement from the association. “We must not let this happen. The health care of all New Yorkers is much too important.”