Federal cuts of $827 million in Medicaid Disproportionate Share Hospital funds between fiscal year 2017 and fiscal year 2019 could jeopardize New York City's public hospitals, according to a report released Monday morning from Scott M. Stringer, the city's comptroller.
The government is cutting Medicaid DSH funds based on the assumption that the Patient Protection and Affordable Care Act will greatly reduce the number of uninsured patients seeking care. The cuts are national, but the state of New York receives 14.7 percent of national DSH funds, making the reduction more profound at New York hospitals, especially at New York City's 11-hospital system, the Health and Hospital Corporation.
Last year alone HHC served a population of uninsured patients larger than the total population living in Miami, according to the report. In the first year of the PPACA, HHC's uninsured patients dropped just 1.3 percent. While the system expects an additional decline of 7.2 percent by 2019 — which could absorb a 24 percent reduction in DSH funds — this may be an overly optimistic estimate based on first year enrollment, Mr. Stringer says.
Cash on hand will drop from $1 billion at the end of FY 2015 to $44 million in FY 2019 given the cuts, according to the report. Part of the issue is the system's private health insurance plan, which has not been successful on the state's exchange. Another part is the system's large population of undocumented immigrants who did not receive coverage under the PPACA.
"At the end of the day, this is about more than dollars and cents," Mr. Stringer said in a statement. "It's about honoring our history as a city of immigrants and our promise to care for all those in need — regardless of their status or ability to pay."
In the report, Mr. Stringer calls for a series of actions to help remedy the looming financial issue, which include a delay of the DSH cuts until hospitals and health systems are able to more fully assess its impact, the extension of coverage for undocumented immigrants, a state-funded insurance program for the undocumented or otherwise uninsured, more equitable allotment of DSH funds and the collection of information on the costs of uninsured care to help policy makers pinpoint the financial burden.
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