Gnyha Memo

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    October Ml-111Twenty-Nine2 0 0 9

    TO: Chief Executive Officers (New York State)

    FROM: Kenneth E. Raske, President

    RE: Key Senators Oppose Health Care Cuts; More Member Advocacy Needed

    Three key New York State SenatorsDemocratic Conference Leader John Sampson (D-Brooklyn), Senate Health Committee Chairman Tom Duane (D-Manhattan), and Senate FinanceCommittee Chairman Carl Kruger (D-Brooklyn)have now publicly opposed enactingGovernor David Patersons proposed mid-year health care cuts, which include 10% Medicaidreimbursement rate cuts beginning on November 15. Attached is a press release GNYHA and1199 SEIU released last night in response to Senator Krugers statement yesterday, in which hesaid, The Governors Medicaid and health care cuts place disproportionate pain on hospitals andnursing homes given they have weathered a number of cuts already. We have to do better andthose who do not recognize that responsibility lack the imagination or inclination to come upwith new answers to old problems." As we have reported to you in the past, Senator Sampsonhas stated in public leaders meetings that he and his conference oppose the health care cuts, andSenator Duane as early as August sent a letter to the Governor and the legislative leaders sayinghe would oppose new health care reductions. We are extremely grateful for the strong support ofthese three influential senators.Despite this, we are still in deep trouble. Many legislators have not made the commitments thesesenators have. Many of you have reported back to us that your legislators have spoken about thecuts as if they were inevitable. Some legislators have said that they believe the State will run outof cash in Decemberpotentially threatening the ability of the State to disburse fundsandhave asked you if you would prefer the cuts to no Medicaid check at all.

    I believe this is a false choice. First, we have no real way of knowing if the States cash flowposition is as dire as advertised. Second, if it is, it is incumbent upon the Statebefore evenconsidering cutting or taxing you for the seventh time since April 2007to closely analyze andscrub every single accountboth on-budget and offto identify excess funding to eithersweep or borrow against. I have told the Governor and the legislative leaders that GNYHA isready to help with this analysis, even going so far as to retain outside budget experts. It isunconscionable to cut or tax our financially fragile health care providers yet again, particularlywhen reforms that will reduce Medicaid inpatient payments for the vast majority of hospitals willbegin on December 1.

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    It is extremely important that you continue to meet with your legislators, including yourAssembly members. Ask them to stand with Senators Sampson, Duane, and Kruger againstthe health care cuts. Ask them to immediately contact their legislative leaders to express

    opposition. If they say no, ask them Why not? Particularly when these Senators have done so?

    I have attached for your use the slides I used in my testimony on Monday before Senator Krugerand the rest of the Senate Finance Committee. The slides outline the following points:

    The Governors Medicaid fee-for-service cuts to health care providers are not $287million, but actually $746 million with the loss of Federal funds. Due to the Federalstimulus bill, New York now receives $1.60 for every Medicaid dollar it spendsandloses $1.60 for every Medicaid dollar it cuts. This is by far the largest cut asked of anysector.

    Health care providers have been cut or taxed six times since April 2007. The recurringannual loss is $2.2 billion. We cannot possibly sustain further cuts.

    Myriad Medicaid reimbursement rate reforms are scheduled to take effect in the next sixmonths, including Medicaid inpatient reform on December 1. These reforms alone willmean major payment reductions for many providers, even without new cuts. New cuts ontop of these reforms will mean more layoffs, service reductions, and even closures.

    What is needed to help hospitals cope with the loss of revenue from the past cuts, letalone new ones, is medical malpractice reform. Medical malpractice reform, particularlywhen it comes to obstetrics, is a true Medicaid issue, given that Medicaid covers 50% ofall deliveries in the State, 60% in New York City, and over 70% in the Bronx andBrooklyn.

    We need each legislator to oppose the cuts, like Senators Sampson, Duane, and Kruger;we need identification of funding both in the budget and off budget that can be used to

    stave off the States potential cash flow crisis; and we need to postpone the nursing homeregional pricing system, scheduled to take effect on April 1, 2010, which will devastatenot-for-profit and public homes.

    I have also attached an analysis of the impact of the six rounds of cuts, taxes, and reforms oneach hospital in the State.

    If you have any questions, please call David Rich, Lloyd Bishop, or Bridgette Roberts atGNYHA.

    Attachments

    cc: Government Affairs RepresentativesChief Financial Officers

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    GNYHA/1199 SEIU Healthcare Education Project

    Statement on Senator Carl Krugers Call to Protect Health Care

    Kenneth E. Raske, President, Greater New York Hospital Association

    George Gresham, President, 1199 SEIU United Healthcare Workers East

    October 28, 2009

    Today, Senate Finance Committee Chairman Carl Kruger said in a statement:

    the Governors Medicaid and healthcare cuts place disproportionate pain on

    hospitals and nursing homes given they have weathered a number of cuts already. We

    have to do better and those who do not recognize that responsibility lack the imagination

    or inclination to come up with new answers to old problems."

    GNYHA and 1199 SEIU applaud Senator Kruger for strongly opposing highly

    inequitable health care cuts that will lead to layoffs, elimination of services and

    departments, and closures of entire facilities.

    Like Senate Democratic Conference Leader John Sampson and Senate Health Committee

    Chairman Thomas Duane, who have already expressed deep concern about additional

    Medicaid cuts after six rounds of cuts and taxes since April 2007, Senator Kruger

    recognizes that Albany has trained its budget scalpel on health care providers once too

    often.

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    $1 CUTIN STATE FUNDING

    TOTAL IMPACT WITHLOSS OF ENHANCED

    FEDERAL MEDICAID MATCH

    Enhanced Federal Medicaid MatchMeans Cuts are 2.6 Times Larger

    Proposed Cuts State Share Full Impact

    Hospitals $89 million $232 million

    Nusing Homes $95 million $247 million

    Home Cae $53 million $137 million

    Othe Povide Cuts $50 million $130 million

    TOTAL $287 million $746 million

    Full Impact of GovenosDrP Cuts to Healthcae Povides

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    Health Care Cuts = $287M

    With Federal Medicaid match

    $1 State = $1.60 Federal

    So . . .actual cuts = 2.6 x proposed cuts

    or

    = $746M

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    Health care cut 6 times in 3 years;

    Total net recurring loss of$2.2 Billion

    $(376) $(359)

    $(233) $(190)

    $(932)

    $(85)

    $(1,200)

    $(1,000)

    $(800)

    $(600)

    $(400)

    $(200)

    $-

    April2007

    April2008

    August2008

    Feburary2009

    April2009

    May2009

    $inMillions

    Annual Value of Recurring Cuts Based on Date of Enactment

    Hospitals = ($1B) Nursing Homes = ($1B) Home Care = ($200M) Total

    Source: GNYHA and Continuing Care Leadership Coalition (CCLC) analysis of fiscal impact data from the New York State Department of Health (DOH) and

    Division of the Budget (DOB).

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    Malpractice costs area Medicaid issueMedicaid Covers:

    50 % of all deliveries in the State

    60 % of all deliveries in NYC

    Over 70% of all deliveries in

    Brooklyn and the Bronx

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    Payment reforms taking effect

    in the next6 months . . .New acute care payment

    methodology

    New burn, epilepsy, & HIV

    payment methodology

    New inpatient psychiatry

    payment methodology

    New detox payment

    methodology

    Rebased medical

    rehab rates

    Rebased alcohol & drug

    rehab rates

    Rebased critical access

    hospital rates

    Elimination of R&R, 200

    pools, & GME enhanceme

    Compliance with transition

    funding criteria

    State P4P for adverse

    events, complications,

    & readmissions

    New payment methods

    for emergency services,

    ambulatory, surgery, & clinics

    Compliance with medica

    home funding criteria

    Elimination of GME PoolCompliance with grant

    requirements for major

    academic centers of excellence

    New bad debt and charity

    care formula based on

    unisured service units

    New BDCC pools for teach

    hospitals, high-Medicai

    hospitals

    New nursing home case-mix

    and pricing methodsHome care payment reform

    . . . We cant take more funding changes!

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    What is Needed

    Opposition to the cuts

    Offset with other sources of revenue

    External to the current budget

    Internal to the current budget

    Relief on medical malpractice costs to

    cushion the blow of past cuts

    Postpone an already-legislated Medicaid

    reimbursement reform

    Nursing home regional pricing

    (scheduled for April 1, 2010)

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