Hospital safety net funds need to follow uninsured and Medicaid patients

Safety net hospitals are the backbone of New York’s healthcare system. For the first time, legislation that passed both chambers of the state Legislature unanimously (A.9476A/S.69486A) would provide a more targeted definition of our most vulnerable hospitals and create a more equitable state funding formula for those hospitals that provide a significant level of care for low-income, uninsured and vulnerable patients in both urban and rural areas.

Now, the onus is on Gov. Andrew Cuomo to sign the enhanced safety net hospital legislation this month to ensure that funds will follow the patients and go where resources are needed most.

The historic bill designates hospitals in low-income and high-need communities as “enhanced safety net” facilities, making them eligible for higher Medicaid reimbursement rates, and filling startling gaps in funding that keep our safety net hospitals from meeting the critical needs of communities across New York state.

With the shifting sands at the federal level and new uncertainty over the Affordable Care Act, New York state must be better prepared to focus on the facilities that care for the highest number of Medicaid and uninsured patients, ensuring that resources go where they are needed the most.

Hospitals and medical professionals are having a hard time grasping how the Affordable Care Act can be repealed without a plan to replace or continue coverage for the nearly 20 million Americans who are now insured. With the enhanced safety net hospital bill on Cuomo’s desk, he should take note of where we have been and where we might be headed when it comes to the solvency of our safety net institutions and act accordingly to change the injustice in funding allocations faced by our safety net health care system.

“New York has a special responsibility. We have always been the progressive capital of this country,” Cuomo said a speech November 19 at a Harlem church. “We have always been the social conscience, and it is time that we act that way.” Yes. We agree.

New York state has a long history of using public financing to help hospitals provide care to uninsured and underinsured patients through the Indigent Care Pool. However, the formulas that allocate charity care funds are complex and opaque, and there is no connection between the allocation of money and the actual care provided to uninsured patients and targeted to high-volume Medicaid hospitals.

Unfortunately, hospitals providing the greatest financial assistance to the neediest patients often receive the least amount of funding on a per patient basis. For over 30 years, advocacy efforts have attempted to link the charity care payments to patients so that funding follows uninsured patients and is targeted to hospitals with a large share of Medicaid patients. 

The contrast among New York state’s hospitals is stark. For example, 71 percent of the Medicaid discharges and 76 percent of all uninsured discharges across all New York City City hospitals came from New York City safety net hospitals (Health + Hospitals facilities and other voluntary hospitals). Located physically next to each other, Bellevue Hospital (a Health + Hospitals facility) and NYU Langone Medical Center underscore dramatic differences in populations served. Of Bellevue’s 21,868 hospital discharges in 2013, 55 percent were Medicaid beneficiaries and 8 percent were uninsured, while NYU’s 34,321 hospital discharges included 16 percent Medicaid beneficiaries and only 1.8 percent uninsured. 

For similar services rendered, NYU earned on average $4,000 more for each Medicaid admission than Bellevue.

This is not unique to urban centers. In fact, rural hospitals in New York state – which are often key social and economic drivers in their communities, in addition to being the main or sole providers of care – are faced with declining reimbursement rates and insufficient funding levels that make it challenging to serve their residents. Community access hospitals in rural New York, like Carthage Area Hospital outside of Watertown, would benefit from this bill. Carthage, which struggles financially, is part of a rural New York community that consistently lacks access to healthcare, is demographically older than its urban counterparts and faces myriad healthcare challenges. The closest medical center of note is Samaritan Medical Center, 17 miles away in Watertown.  

The redefinition of safety net facilities means that hospitals that provide care to more low-income patients will get higher Medicaid reimbursements as earned income and not have to rely on subsidies which can be taken away. The time to change that dynamic is now.

Ann Bové, RN, is the president of the New York State Nurses Association NYC H+H Executive Council. Judy Wessler is a community health advocate and former director of the Commission on the Public’s Health System.

Both are members of the Save Our Safety Net Coalition, which includes Anthony Feliciano, Commission on the Public’s Health System; Arthur Cheliotes, president of Local 1180, CWA; Dr. Frank Proscia, Doctors Council SEIU; Henry Garrido, District Council 37; Claudia Calhoon, New York Immigration Coalition; Dr. Swathi Reddy Moylan, Committee of Interns and Residents SEIU.