Tag Archives: State Budget Reductions

New York City Health+Hospitals to sue state over $380 million in withheld DSH payments

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http://www.healthcarefinancenews.com/news/new-york-city-healthhospitals-sue-state-over-380-million-withheld-dsh-payments?mkt_tok=eyJpIjoiWXpabVkyVTNNR1U1WVdFeiIsInQiOiJHQWw3aVJJbjVuT2JhM3NsUW1Ub0M5Yk5iSXVxSVNuc0lKSE1oa0F3MmhzU2gwaVE4MkJZTExVSHd6OE90VEFIZ3ZUOVhSUllXenBnZGtiK0QzRVpYbHVKRjFUZG1ZUzJjR3FnM3pOZ2R6bENFaFJKZndoTzVMMnlweHhOUTdFciJ9

System is already cutting hiring, using attrition to conserve cash and will end the week with only 13 days cash on hand.

NYC H+H plans to sue New York state over the $380 million in disproportionate share hospital payments they claim should have been delivered to them by Sept. 30, NYC H+H interim CEO Stan Brezenoff said on Friday.

City spokeswoman Freddie Goldstein said the suit would be filed sometime next week, though she couldn’t specify whether it would be filed in state or federal court. She also couldn’t specify exactly what state entities would be named as respondents or whether it would include the federal government.

More details will be forthcoming in the coming days, but regarding the purpose of the lawsuit, she said the payments in question were allocated by the federal government for the purpose of reimbursing the city for services already rendered in fiscal 2017. She said the state has no role other than to be a vessel for this funding.

“They can’t change the purpose of the funding once it’s been allocated by the feds.”

Dean Fuleihan, director of the NYC Office of Management and Budget said pursuant to state law it’s clear the $380 million has to go H+H. While he recognizes that there are reconciliations after every fiscal year, he said the $380 million in DSH payments has nothing to do with that.

“That can not turn into we are not giving you the $380 million that you expected, that we knew you expected, that we never objected to and that had to be paid in the prior federal fiscal year.”

The state has argued that the impending massive federal cuts to the DSH program are the reason for not releasing the funds, and that the state will be conducting detailed financial analysis of each hospital that receives funds from the program to assess their situation and need. Gov. Andrew Cuomo said the $1.1 billion cut that will unfold over the next 18 months will mean the state can’t fund any public hospital 100 percent, and they have not made any DSH payments since Oct. 1, when the law went into effect. The cuts are a caveat of the Affordable Care Act.

Fuleihan also conceded that there is no actual statute stipulating the Sept. 30 deadline. Rather, the past pattern of payment dictated it, and the payments are for expenses incurred in fiscal 2017, which ended Sept.30. He said the state’s decision to withhold the funds is a first.
And there was no federal cut to DSH funding in fiscal 2017, so the money should come.

“Is there anyone in the state of New York that does not recognize that NYC H+H is the major provider of care to Medicaid recipients and the uninsured. One-third of our patients are uninsured and we don’t get any of the FY17 DSH money? The voluntaries got their money. We’re not getting anything,” said Brezenoff.

About a third of the system’s patients are uninsured and large number of them are not eligible for insurance.

Brezenoff has already told staff that they will using attrition and drastic cuts to hiring to try and conserve cash. He said by the end of Friday they’ll have only $255 million, equal to 13 days of cash on hand.

“You can see just how precarious our situation is…We have begun painful process of adjusting our operations in ways that will almost certainly impact services to patients and put additional strain on our hard working employees.”

He said they will now be looking closely at each position that becomes open and deciding whether or not to fill it, and that those decisions could ultimately impact clinical staff and patient care.

“It is definitely conceivable that some physician positions will not be filled,” Brezenoff said.

They are also slowing down payments to vendors, which could impact future pricing and maintaining of supplies.

“The longer this goes on, it will require more and more difficult things to conserve cash. That’s the mode NYC H+H is in.”

Between last fiscal year and this one, NYC H+H is looking at a more than $700 million gap, including the currently withheld DSH funds as well as a possible $330 million cut for fiscal 2018 if Congress does not repeal the cuts.

Brezenoff said they have no plans to ask the city for more funds, as the traditional amount that comes from the city to NYC H+H is between $1 billion and $1.3 billion. The city is currently slated to contribute $1.8 billion, with commitment for $2 billion in their financial plan. NYC is facing their own $3.5 billion budget gap for fiscal 2019.

Patients, Health Insurers Challenge Iowa’s Effort To Privatize Medicaid

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http://www.npr.org/sections/health-shots/2017/10/07/555591770/patients-health-insurers-challenge-iowas-effort-to-privatize-medicaid

Iowa is one of 38 states that radically changed the way it runs Medicaid over the past few years. The state moved about 600,000 people on the government-run health program into care that is managed by for-profit insurance companies.

The idea is that the private companies would save the state money, but it has been a rocky transition in Iowa, especially for people like Neal Siegel.

Siegel is one of six disabled Iowans suing the state, alleging that Medicaid managed care, as it is known, deprives thousands of Iowans with disabilities the right to live safely in their homes.

Medicaid serves people with disabilities, low-income people and people in nursing homes. A combination of federal and state funds pays for the program. It covers 74 million people across the country these days, about half of whom are in Medicaid managed care.

Siegel, a former financial consultant, was in a hit-and-run bicycle crash four years ago that left him with a severe brain injury. He uses a wheelchair and can barely speak.

“I would probably put Neal at about 98 percent cognitive of what’s going on around him, but unfortunately not able to articulate it,” says Siegel’s girlfriend, Beth Wargo. “So it’s being trapped inside your own body.”

After the accident, Siegel qualified for Medicaid. He lived in a rehabilitation center for a while, and the lawsuit, filed in U.S. district court in June, says he was the victim of abuse and neglect while living there.

Eventually, he moved home with Wargo, where he is reliant on caregivers to assist him with all activities of daily life.

Then last year, Wargo says, they got a letter in the mail from AmeriHealth Caritas, the company that manages his care. Siegel’s budget for home help had been slashed by 50 percent, Wargo says. Siegel’s face lights up as Wargo talks about the lawsuit, and he manages to say, “Oh yeah,” when she mentions how happy they were that they could be part of it.

Cyndy Miller is the legal director with Disability Rights Iowa, the advocacy group that spearheaded the lawsuit.

“The system is too stressed right now with the way it’s being managed, and it’s not healthy for individuals with chronic or serious disabilities,” says Miller.

According to the lawsuit, the company claimed that spending on Siegel’s case was cut because it had exceeded a limit set in state policy. A spokesman for AmeriHealth Caritas said the company could not comment on ongoing litigation. The state has asked for the lawsuit to be dropped.

In addition to the suit, complaints about Medicaid from hospitals, doctors and patients have spiked in Iowa.

Iowa Department of Human Services Director Jerry Foxhoven defends moving the entire Medicaid population to managed care. He says more taxpayer dollars will be saved under private management.

But he says his agency is willing to make changes, especially for people like Neal, who have serious disabilities.

“Everything’s always on the table. We’re always looking at everything to say how do we best serve the people we’re trying to serve and be the best stewards of taxpayer dollars,” Foxhoven says.

For their part, the three companies with contracts in Iowa say in statements that the first 18 months have been successful. But they also have said to state officials that reimbursement rates were based on deeply flawed cost estimates provided to them before the project began.

They are now negotiating to get millions of dollars more in state funding.

So where is the savings? So far, no state has actually done a comprehensive review of whether private companies actually save Medicaid dollars, says Kelly Whitener, an associate professor with Georgetown University who studies managed care.

“You’d really need to be able to see are you saving money overall or not, and if you are spending less money, are you suppressing services that are needed? Or are you really finding efficiencies and only delivering care that families really need?” says Whitener.

For the moment, those questions don’t have definitive answers.

Meanwhile, Iowa has to balance its books. Republican Gov. Kim Reynolds had to tap more than $260 million of the state’s reserve fund this year, and officials expect next year’s budget will be even tougher to negotiate. Medicaid funding will likely be a large part of the discussion.