New York Safety Net Hospital Coalition Calls on Governor Hochul to End New York’s Two-Tiered System of Care
The State’s current Medicaid reimbursement system shortchanges safety net hospitals by only paying a fraction of every $1 spent to provide care
Brooklyn, NY – Today, members of the New York Safety Net Hospital Coalition – comprised of 19 safety net hospitals – and their hospital staff rallied at Wyckoff Heights Medical Center to call on Governor Hochul to fully fund safety net hospitals in the SFY 2024 budget and fix New York’s outdated Medicaid reimbursement system. The Coalition urged the Governor to support the Health Equity Stabilization and Transformation Act, legislation designed to advance health equity and provide safety net hospitals with the permanent financial stability needed to continue providing care for underserved New Yorkers.
“Safety net hospitals are lifelines to millions of New Yorkers, but we are not paid adequately for providing the same care as non-safety net hospitals,” said Ramon Rodriguez, President and CEO of Wyckoff Heights Medical Center and New York Safety Net Hospital Coalition member. “The State’s outdated Medicaid reimbursement system forces safety net hospitals to operate on shoestring budgets – an unsustainable practice that undermines the communities we serve. Governor Hochul can right this wrong by enacting structural payment reform to eradicate the glaring inequities in New York’s health care system and financially stabilize safety net hospitals.”
“The time is now to implement much-needed changes to how the State reimburses safety net hospitals through Medicaid,” said Dr. David Perlstein, President and CEO of SBH Health System and New York Safety Net Hospital Coalition member. “Our doctors, nurses, and staff are doing everything they can to provide the best care possible, but it is becoming impossible to run our hospitals. Year after year, we are forced to make tough choices about services and capacity that adversely affect our communities. The State can solve this problem by passing the Health Equity Stabilization and Transformation Act and help us get on a solid financial footing in order to keep serving our communities.”
“Safety net hospitals throughout New York City deliver lifesaving care in poor and vulnerable communities that face significant barriers to quality health services,” said Senate Health Committee Chair Gustavo Rivera. “In the absence of essential funding and structural payment reform, safety net providers face financial uncertainty and cannot invest in the resources needed to maintain, improve, and modernize their health services. I’m calling on Governor Hochul and my colleagues in the legislature to support my Healthy Equity Stabilization and Transformation Act to ensure that our safety net hospitals can continue to provide equitable, quality care in communities like mine for years to come.”
"Our safety net hospitals serve the communities most in need of affordable, quality healthcare-- but because their patients largely rely on Medicaid or are uninsured, they suffer from a systemic revenue shortfall, “said State Senator and Health Committee member Zellnor Myrie. “I'm proud the Senate added $1 billion for safety net hospitals in our one-house budget, but we must ensure these institutions have an ongoing, sustainable funding stream. That's why I'm sponsoring legislation to permanently increase reimbursement rates and end our two-tiered standard of care once and for all."
“For far too long, New York’s safety net hospitals have been underfunded and forced to operate at unsustainable margins, while providing essential care to already disadvantaged communities,” said Assemblymember Michaelle Solages, chair of the Black, Puerto Rican, Hispanic & Asian Legislative Caucus. “This has left doctors, nurses, and staff with limited resources to deliver safe, effective health services to the communities they serve. That is why the Black, Puerto Rican, Hispanic & Asian Legislative Caucus is supporting the Health Equity Stabilization and Transformation Act so New York can begin to correct and address decades-old disparities and improve health outcomes for underserved New Yorkers.”
“With the Health Equity Stabilization and Transformation Act, we are investing in the quality of care and addressing the urgent financial burden imposed on safety net hospitals,” said State Senator Iwen Chu. “Safety Net Hospitals like Maimonides Medical Center in my district are essential to New Yorkers, and it is time we pay them what’s owed so they can continue to serve New Yorkers with the greatest needs but the fewest resources. By making reimbursement rates competitive, we are making a commitment to new Yorkers that they will receive a high quality of care.”
The Governor’s proposed SFY 2024 budget cut $700 million in emergency funding allocated in last year’s budget. In response, the Assembly and State Senate restored it in their proposed one-house bills; however, even those funding levels fail to meet the full scope of the financial challenge facing safety net hospitals, especially in light of rising medical cost inflation.
Safety net hospitals primarily serve low-income patients, most of whom rely on Medicaid or are uninsured. Since the State hasn’t meaningfully increased Medicaid rates since 2008, safety net hospitals have been forced to run deep and unsustainable negative operating margins and make cuts to programs that adversely impact the communities they serve. The Coalition is urging the Governor to avoid the dire consequences of continued funding inadequacy by ensuring the enacted SFY 2024 Budget fully funds long-overdue structural Medicaid payment reform for public and non-profit safety net hospitals serving the highest volumes of Medicaid patients throughout the state.
To reform the Medicaid reimbursement system, State Senator Gustavo Rivera (D-33) yesterday introduced the Health Equity Stabilization and Transformation Act (S.5810), which would allow the State to leverage a larger share of federal Medicaid funds and ensure that safety net hospitals receive adequate reimbursement rates to finally address the decades-long underinvestment in hospitals serving lower-income New Yorkers.
Specifically, this legislation aims to:
Expand the State’s existing Directed Payment Program for safety net hospitals by extending eligibility to public hospitals serving high volumes of Medicaid and uninsured patients. Under the Coalition’s proposal, the program would expand from 18 to over 30 eligible safety net hospitals and the communities they serve across the state.
Align Medicaid rates for safety net hospitals to regional average commercial reimbursement rates to ensure access to equitable funding for both inpatient and outpatient services. Equitable rates will also enable hospitals to stabilize their operations, make necessary infrastructure expenditures, and invest in programs and services throughout the communities they serve.
Maximize the use of federal funding by enabling the State to shift away from programs that rely on lower federal matching rates (i.e., Disproportionate Share Hospital funding) and State-only funding (e.g., Vital Access Provider Assurance Program) and provide enhanced Medicaid rates through the Directed Payment Program, which has a higher federal match.
With both increased funding and Medicaid reform for safety net hospitals, New York can move toward a more equitable health care system where zip code no longer determines access to care.
To learn more about New York’s two-tiered health care system, please visit: https://www.nysafetynets.org/
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About the New York Safety Net Hospital Coalition
The New York Safety Net Hospital Coalition was formed in 2021 in response to the urgent need for significant, structural reforms for safety net hospitals in New York which serve high volumes of Medicaid and uninsured patients. The Coalition includes One Brooklyn Health (Kingsbrook Jewish Medical Center, Brookdale Hospital Medical Center and Interfaith Medical Center), Maimonides Medical Center, Jamaica Hospital Medical Center, Flushing Hospital Medical Center, SBH Health System, St. John’s Episcopal, Wyckoff Heights Medical Center, and NYC’s Health + Hospitals System. Learn more and join our movement at: https://www.nysafetynets.org/