State budget bill cuts health care funding

PHOTOGRAPHER: The Associated Press

Gov. David Paterson has submitted short-term funding legislation that cuts $775 million from state health care programs for the year, forcing lawmakers next week to either accept cuts or risk shutting down the state government altogether.

The cuts could force Capital Region hospitals to lay off staff and curtail services effective June 9, according to an advocacy group.

The cuts would actually grow to more than $1 billion when the lost federal share of Medicaid is added in, said the Healthcare Association of New York State.

HANYS said the cuts would result in the following losses to local hospitals:

* Ellis Medicine, Schenectady: $1.8 million.

* Sunnyview Rehabilitation Hospital, Schenectady: $210,000.

* St. Peter’s Hospital, Albany: $2.7 million.

* Albany Medical Center: $4.6 million.

* Nathan Littauer Hospital, Gloversville: $515,000.

* Saratoga Hospital: $678,000.

* St. Mary’s Hospital, Amsterdam: $558,000.

The budget for the fiscal year is two months late as legislators grapple with a deficit estimated at more than $9 billion. Legislative leaders say they’ve agreed to about $6 billion in proposed savings. Paterson says they need to cut $2.5 billion more.

The bill Friday differs from previous one-week funding extensions. Those contained only required payments for things like Medicaid, payroll and school aid and delayed most other spending. The new measure will start cutting program budgets through the entire fiscal year that ends next March 31.

State Sen. Hugh Farley, R-Niskayuna, called the proposed cuts devastating to hospitals. “At first blush that sounds outrageous. Most hospitals would be on the verge of bankruptcy, particularly upstate hospitals,” he said.

Assembly Majority Leader Ron Canestrari, D-Cohoes, said the proposed cuts are a serious concern. The Legislature can only approve the governor’s extender without modification or reject it. Rejecting the extender would shut down the state government, he said.

“We are between a rock and a hard place and the governor has the upper hand. The governor is attempting to do a budget through these extenders,” Canestrari said.

Canestrari said legislative staff will continue budget negotiations over the weekend. If negotiations progress well enough, the governor may modify his budget extender and perhaps restore the health care cuts, he said.

“We had a good week and discussions are going well. It is possible if things continue over the weekend, this extender could be configured differently,” he said. But as of Friday, “this is out there.”

Hospital officials deferred comment to HANYS on the impact of the proposed cuts to their facilities.

HANYS President Daniel Sisto said the governor’s proposal unfairly targets health care services. “By singling out health care services as the only area to face significant cuts, Gov. Paterson has made clear that he intends to hold our patients and the entire health care system ransom to coerce the Legislature to do his bidding,” he said.

Sisto called Paterson’s proposal “an incredibly reckless game of brinkmanship that puts patient lives at risk in every community across the state.”

State Budget Director Robert Megna said, “I think if an emergency bill does not pass that gradually the gears of government will shut down.” He said he thought most of these measures would be acceptable to the Legislature.

They include about $385 million, or roughly 1 percent to 1.5 percent, in actual funding cuts to the health care industry, plus $300 million in savings from Medicaid fraud auditing, Megna said.

Other proposed administration savings include $99 million from eliminating the so-called trend factor for hospitals, nursing homes and personal care providers; $72 million from reducing indigent care reimbursement; $70 million from reinstituting the requirement for prior approval of health insurance premiums; and about 40 other smaller cuts.

Gazette reporter Michael Lamendola contributed to this article.