New York's Senator
CHARLES E. SCHUMER

FOR IMMEDIATE RELEASE October 2, 2000

SCHUMER UNVEILS PLAN TO FIGHT MEDICARE CUTS AT NEW YORK CITY HOSPITALS

Steepest Cuts Will Kick In Over the Next Two Years

Plan Would Restore $586 Million to New York City Hospitals

In the wake of the harsh blow dealt to New York hospitals by the 1997 Balanced Budget Act (BBA), US Senator Charles E. Schumer today unveiled a plan to remedy the financial challenges facing New York City hospitals. "Our hospitals have been on life support for the last three years. This bill will take them out of intensive care and allow them to begin to recover," Schumer said.

Although the BBA made important changes to Medicare payment policy and helped create today's federal budget surpluses, some of the policies enacted in the landmark law cut payments to health providers more than expected. The BBA contained spending cuts of nearly $216 billion dollars over 5 years to hospitals nationwide, $104 billion more than the Congressional Budget office originally estimated. While the 1999 Balanced Budget Refinement Act took a small step towards softening the blow of the cuts, it did not go far enough. As a result, many hospitals face serious budget shortfalls and some may be forced to close.

In New York City, the Healthcare Association of New York State (HANYS) estimates that area hospitals will lose nearly $2.4 billion by 2002. The six largest systems are expected to lose a combined $1.487 billion, with the New York and Presbyterian Health System losing $522 million, Mt. Sinai-NYU Medical Center and Health System losing $285 million, Continuum Health Partners losing $271 million, the New York City Health and Hospitals Corporation losing $177 million, Montefiore Medical Center losing $160 million, and the Catholic Medical Center of Brooklyn and Queens losing $72 million. Individual New York City hospitals will also lose significant funding. For example, North General Hospital will lose an expected $11.7 million.

In each case, the cuts were about twice the level estimated when the 1997 budget law passed, with the most severe cuts affecting hospital teaching programs and inpatient payments. "Somewhere along the road, these cuts went seriously awry. They were intended to help balance the budget but went far beyond what anyone could have ever imagined," Schumer said.

Schumer said that he and other Senators, under the leadership of Senator Daniel Patrick Moynihan, have crafted a proposal that will help area hospitals recoup some of the losses incurred by the BBA's spending cuts. This proposal is estimated to cost about $80 billion over 10 years and was introduced in the Senate this month.

"The BBA's harshest cuts are going to kick in over the next two years. If hospitals are struggling today, they could falter tomorrow," Schumer said. "If action is not taken to restore these cuts this year, hospitals in New York City and all over New York State are going to have to sacrifice quality. No one wants that - not here, not in New York, not anywhere."

Schumer estimates that New York City hospitals will receive approximately $586 million to counter losses in teaching and inpatient payments like Medicare reimbursement for surgery, to help hospitals keep up with rising costs. Under the plan, the New York and Presbyterian Health System will receive $120.1 million; Mt. Sinai-NYU Medical Center and Health System will receive $78.1 million; Continuum Health Partners will receive $68.7 million; the New York City Health and Hospitals Corporation will receive $48.3 million; Montefiore Medical Center will receive $44.6 million; and the Catholic Medical Center of Brooklyn and Queens will receive $15.9 million.

"This plan will make hospitals whole again," Schumer said.

Peter Kelly, Executive Vice President and Chief Operating Officer of Continuum Health Partners; Ken Raske, President of the Greater New York Hospital Association; and 50 of New York City's top doctors joined Schumer at a news conference to announce the legislation.

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