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SENATOR RANKING MINORITY MEMBER

GUSTAVO RIVERA
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NEW YORK HEALTH
DISTRICT mm COMMIflEES:
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SENATE CORRECTION
ETHICS
ALBANY, NEW YORK 12247 FINANCE
HIGHER EDUCATION
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LABOR
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March 29, 2017
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DEVELOPMENTAL DISABILITIES

Hon. John 1. Flanagan, Majority Leader
New York State Senate
State Capitol Building, Room 330
Albany, NY 12247

Dear Leader Flanagan,

As you continue to finalize negotiations on this year’s budget proposal, we urge you to
aggressively advocate for more funding for safety-net hospitals to be included in this year’s
budget. In light of the latest news from Washington, additional funding to support
supplemental reimbursements for safety-net hospitals is more critical than ever.

As you know, safety-net hospitals are an integral part of our healthcare system, providing a
disproportionate share of vital healthcare services to the uninsured and underinsured, and
sparing other hospitals and providers of the burdens and costs of providing these services
in their emergency rooms and clinics. These safety net hospitals provide services in both
rural and urban areas of the state, and often are the only providers of health services in
many rural counties, small towns and city neighborhoods. Because of the unique role they
play, many safety net hospitals are in dire financial condition. The State must ensure that
these important healthcare providers, the backbone of our healthcare system, will survive
and continue to provide necessary services for the most vulnerable New Yorkers.

Current Medicaid payments do not cover the costs associated with providing necessary
health services to the most vulnerable New Yorkers. Most of the safety net hospitals are
losing money, not because of inefficiency or bad management, but because our system does
not reimburse them adequately for the services they provide. Safety-net providers are
heavily dependent on state and federal funding specifically Disproportionate Share
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Hospital (DSH) and Indigent Care Pool (ICPJ funding. The current methodology used by
New York State to allocate DSH and ICP funding to safety-net providers is overly broad and
does not directly correspond to the numbers of Medicaid and uninsured patients a hospital
serves. In many instances, more financially viable hospitals with low Medicaid caseloads

ALBANY OFFIcE ROOM 408, LEGISLATIVE OFFICE BUILDING, ALBANY, NEW YORK 12247(518) 455-3395 • FAX (518) 426-6858
DISTRICT OFFICE; 2432 GRANDCONCOURSE, SUITE 506, BRONX, NEWYORK 10458 (718) 933-2034 • FAX (718) 933-2825
grivera@nysenate.gov

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who serve small numbers of uninsured patients receive DSH and ICP funding they do not
deserve, to the detriment of the neediest safety-net providers.

Fixing the current funding mechanism will bring fairness and stability back to the entire
healthcare delivery system. The inadequacy of the funding for safety net providers is even
more important for New Yorkers in the face of continuing uncertainty coming out of
Washington over health care and budget policy changes that could further impact safety net
hospitals and the communities they serve.

Last year’s unanimous approval by both houses of the legislature of the Enhanced Safety
Net Hospital bill (A9476/S6948A) demonstrated the commitment of all parties to provide
the assistance that these hospitals need to survive. It is now up to all of us in the legislature
and the Governor to demonstrate that preserving these vital hospitals is truly a priority.

We urge you to include in the final state budget a provision to provide supplemental
reimbursement rates for enhanced safety net hospitals to make up for the losses that result
from treating a disproportionate share of Medicaid and uninsured patients. As the
Governor has repeatedly noted, we must ensure that New York is prepared for whatever
comes out of Washington. There is no better way than to make sure that our safety-net
hospitals have the appropriate resources and funding to continue to provide healthcare to
New Yorkers that need it the most.

erely()

Senator Gustavo Rivera
Ranking Member
NYS Senate Health Committee

Senator Andrea Stewart-Cousins Senator Michael Gianaris
Senator Josiph Addabbo Seq4’/or Jarnaal

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John Brooks Senator Neil Breslin

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Senator Ruben Diaz Senator Leroy Comrie

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Senator Daniel Squadron S&’nator Jose Serrano

Senator Thby Stavisky