New York's Senator
CHARLES E. SCHUMER

FOR IMMEDIATE RELEASE December 22, 2000

SCHUMER ANNOUNCES $22.4 MILLION RELIEF PACKAGE FOR DUTCHESS, ORANGE, SULLIVAN, ULSTER HOSPITALS

Hospital Funding is part of $1.6 billion in new funding NY will receive for hospitals, children's health insurance and Medicare programs

US Senator Charles E. Schumer today announced that the Medicare, Medicaid and SCHIP Benefits Improvement Act of 2000 (BIPA) passed by Congress last week includes about $22.4 million to help hospitals in Dutchess, Orange, Sullivan and Ulster Counties deal with federal spending cuts previously scheduled to go into effect this year.

These spending cuts were included in the landmark Balanced Budget Act of 1997 (BBA) that reformed Medicare payment policies in an effort to get rid of the government's accumulated deficits. While these cost-cutting measures helped create today's federal budget surpluses, some of them cut payments to health providers more than expected, including $104 billion unintended cuts to hospitals and hospital-based providers nationwide. BIPA restores $35 billion of this funding over five years nationwide.

"Some strong medicine was administered to get the government's books in order and it's time to decrease the dosage," Schumer said. "These cuts were threatening to put hospitals on permanent life support."

New York hospitals will receive more than $751 million over five years which, on top of the $630 million they got in last year's Balanced Budget Refinement Act (BBRA), will make up a sizeable portion of the unintended 1997 cuts. The final version of the bill contains an additional $25 million for New York that Schumer fought for in last-minute, behind-the-scenes negotiations. It also has $800 million for children's health insurance, an estimated $116 million in additional managed care reimbursements, and more. Schumer played a critical role in winning this funding for New York's health programs and helped stave off millions in potential cuts to the State's Medicaid programs.

Hospitals in Dutchess, Orange, Sullivan and Ulster Counties stand to gain about $22.4 million from the bill, including $5.6 million for Kingston Hospital; $3.9 million for Ulster County's Benedictine Hospital; $2.1 million for Orange County's Horton Medical Center; $1.8 million for St. Luke's Hospital in Newburgh; $2.3 million for St. Francis Hospital in Poughkeepsie; and $1.8 million for Vassar Brothers Hospital. Combined with funding included in last year's BBRA, this bill restores much of the unintentional cuts to New York's hospitals.

"This bill funds hospitals that need the most help," Schumer said. "Teaching hospitals, small community and rural hospitals, skilled nursing facilities, and hospitals that disproportionately care for the uninsured will benefit. It's not a cure-all but it will keep many needed health services available."

Overall, New York teaching hospitals will get $168 million under BIPA, part of which comes from an increase in the Medicare "add on" rate which helps hospitals cover the costs of their teaching responsibilities. Under the 1997 BBA, this "add-on" rate was slated to be reduced to 6.375% next year. Schumer successfully delayed this reduction, keeping the rate at 6.5% for the next two years.

New York hospitals will also receive $411 million because of an improvement to the "marketbasket update," the amount home health, hospice and skilled nursing facilities receive as an inflation adjustment to their Medicare payments. Under current law, this reimbursement was scheduled to be at just 2% this year and next. Under BIPA, it will stay at the original 3.1 % this year and 2.55% for the two years after that.

New York hospitals who offer care to a disproportionate share (DSH) of low-income and uninsured patients will receive $14 million in restored DSH Payments. Rural and small community hospitals in New York will receive an additional $29 million through increased eligibility for Medicare DSH dollars, $7 million of which were secured by Schumer in last-minute negotiations. New York home health agencies will recoup $27 million in funding cuts slated to take place this year. Schumer successfully pushed to delay this cut for at least a year. Finally, New York hospital-based hospices will receive $6 million in new funding, thanks to a 5% increase in the hospice rate.

In addition to the hospital funding, the bill will send an additional $812 million to New York though federal Children's Health Insurance Program (CHIP) dollars. The new money is due to a change in CHIP funding distribution which provides nine states - including New York - that have best used CHIP dollars to set up health programs for children with additional funding for their programs.

New York managed care providers will also receive an estimated increase of $116 million under BIPA. One of the managed care provisions will especially benefit counties in Upstate New York which have the lowest Medicare reimbursement rates in the state by raising the floor for reimbursement rates. Managed Care providers serving Dutchess, Orange, Sullivan and Ulster Counties will receive close to $2.5 million in additional reimbursements before demographic and risk adjustments are factored in.

Lastly, BIPA keeps $475 million going to New York that would have been cut by a new Health Care Financing Administration (HCFA) regulation aimed at cracking down on Medicaid funding abuses. While the rule was initially slated to be implemented immediately, Schumer negotiated a delay for four years to ensure that states like New York who depend on federal matching funds for important health programs have time to adjust and are able to maintain these services.

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