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FOR IMMEDIATE RELEASE: September 10, 2008

SCHUMER REVEALS: DEVASTATING HEALTH REGULATION WILL SLASH $65 MILLION FROM UPSTATE NY HEALTH CLINICS AND HOSPITALS - LOOMING FED RULE COULD FORCE MUCH-NEEDED CLINICS TO CLOSE

Hundreds of Thousands of New Yorkers Who Rely on Health Clinics Across Upstate New York Could Have the Rug Pulled Out From Under Them

As CMS Hems & Haws Over Proposed Rule, Health Clinics Are Left in the Dark on If & When They Will Have to Cut Services or Close their Doors to Patients

Schumer Demands Immediate Suspension of Proposed Draconian Rule in Personal Ca

U.S. Senator Charles E. Schumer today revealed that health centers across Upstate New York stand to lose a devastating $65 million in critical funding due to a new federal plan that reduces federal Medicaid reimbursements to health clinics and hospital outpatient departments. The proposed changes would severely endanger a wide range of health care providers, such as hospital outpatient clinics, dialysis centers, school-based health centers, health centers that provide dental care, childrens’ hospitals, family planning clinics, substance abuse counseling and mental health clinics. Hundreds of thousands of Upstate New Yorkers who rely on the clinics in Upstate New York could lose access to necessary health services if the funding cuts are implemented.

In an effort to ensure that Upstate New York residents continue to have access to essential health care services, Senator Schumer personally called CMS Administrator Kerry Weems late last night and also wrote a letter with U.S. Senator Hillary R. Clinton to President Bush to demand the immediate suspension of the proposed rule.

“Another day, and another misguided health regulation by the Bush Administration. This proposed payment change will slash millions of dollars from hundreds of health clinics across the state, endangering the health of hundreds of thousands of New Yorkers who rely on these clinics’ crucial services,” Schumer said. “I demand that the Administration immediately suspend implementation of this rule so that patients can continue to access much-needed services. I will fight the Administration to the end on this ill-advised rule.”

Last year, the Centers for Medicare and Medicaid Services (CMS) proposed a new regulation, the “Medicaid Outpatient Clinic and Hospital Services Rule” that would reduce federal Medicaid funding to states for freestanding health clinics and hospital outpatient departments – such as school-based health centers, children’s hospitals, and clinics that provide dental care, physical therapy, renal dialysis, family planning, mental health and addiction counseling. This rule would drastically change the definition of what outpatient medical services Medicaid will pay for. These changes mean lower or no payment for care like pediatric dental check ups, dialysis for patients with kidney disease, prenatal care and family planning services and preventative care and vaccinations for children.

The proposed rule would reduce the Medicaid payments to New York State by capping them at the Medicare payment amount, which is substantially less (for most services) than outpatient facilities currently receive from Medicaid.  It also prohibits states from paying more than Medicare pays, even for services that Medicare doesn’t cover. As a result, the rule will lower federal Medicaid funding for New York State and will eliminate federal funding altogether for many important services performed in these clinics, such as dialysis services, psychiatric rehabilitation, family planning services, primary care for children, vision services, dental services and vaccinations.

If implemented, the rule would slash $65 million from over 120 Upstate New York health clinics who rely on the funding to continue services for children, seniors, the disabled, dialysis patients, families struggling with rising costs and more. The cuts could force many of the health clinics and hospitals to cut services and, in some cases, shut their doors. Furthermore, CMS has yet to clarify the rule and its timeline for implementation, leaving the clinics in the dark on when and if they will stop receiving this critical funding.

Below is a region-by-region breakdown of the projected impact of the proposed rule (See attached report).

·        In the Capital Region, the rule would slash $10.3 million from 13 clinics.

·        In Central New York, the rule would slash $9.6 million from 17 clinics.

·        In the Hudson Valley, the rule would slash $20.9 million from 31 clinics.

·        In the North Country, the rule would slash $3.7 million from 14 clinics.

·        In the Rochester-Finger Lakes, the rule would slash $10.3 million from 25 clinics.

·        In the Southern Tier, the rule would slash $1.2 million from 8 clinics.

·        In Western New York, the rule would slash $8.6 million from 18 clinics.

The impact of this rule could be far reaching. For example, data collected by Governor Paterson and the New York State Health Department estimates that the North County Children’s Clinic in Watertown, may lose up to $566,000, which could force them to stop serving its Medicaid population and severely cut back on services for other patients. In 2007, this clinic provided key health care services to over 32,000 children and young adults. Without this crucial funding, North County Children’s clinic will be unable to continue to provide the quality care that so many upstate residents have come to rely on.

The impact on New York State patients will be significant.  For Karen Gillette, who suffers from cerebral palsy, the clinical services that she receives from Enable, a clinic for disabled children and adults in Syracuse, allows her to receive the physical therapy and critical care she needs to remain an independent member of society. Enable has been providing these crucial services for Karen for over 40 years; however the proposed rule would jeopardize Enable’s ability to provide this care for Karen and hundreds of others in Central New York.

This rule also jeopardizes health services to children. New York State currently has a health program for children’s day treatment services, which provides essential care to elementary and high school students in need of mental health services. Medicaid reimburses $76 per day, but if the rule is implemented, it is likely that Medicaid will no longer pay for these services, leaving students and families with nowhere to turn. 

To ensure Upstate New York health clinics continue to receive this necessary funding and are not forced to slash critical patient services, Schumer personally called CMS Director Kerry Weems and demanded an immediate suspension of the proposed rule. Additionally, Senators Schumer and Clinton wrote a letter to President Bush last week to urge his delay of the proposed regulation.

“I spoke with Administrator Weems yesterday and strongly urged him not to finalize this rule because of its devastating effect on health clinics and hospitals across upstate New York.” Schumer said.  “I hope that Mr. Weems will reverse course, suspend implementation of this plan, and stop dangling the sword of Damocles over clinics and patients.”

In their letter to President Bush, Schumer and Clinton wrote: “This rule would have an unacceptable impact on care and treatment for the low-income families that are in greatest need of specialized health care services, and it would devastate the safety net of care in New York State.  In this time of increasing economic uncertainty, we cannot afford to abandon those who rely on these services.  We would urge you to suspend implementation of this rule.”

Below is a full copy of the letter:

The Honorable George W. Bush

The White House

Washington, D.C. 20500

Dear Mr. President:

We are writing to express our grave concern over the Centers for Medicare and Medicaid Services’ Proposed Rule regarding Clarification of Outpatient Clinic and Hospital Facility Services definition and Upper Payment Limit.  If this rule were to be implemented, it would have a devastating impact on multiple health care facilities across New York State.  We would urge you to suspend implementation of this rule in order to preserve critically needed health care access for low-income families in our state and across the nation.

The proposed rule would drastically revise the upper payment limit (UPL) for freestanding health clinics – such as school-based health centers, adult day health centers, family planning clinics, and substance abuse counseling and mental health clinics – to bring them into alignment with Medicare payments.  This revision would have the impact of lowering the reimbursement of such clinics.  Many of the services provided by these clinics are not covered by the Medicare program, and are meant to address the needs of populations that are different from those served by Medicare.  We fail to understand why Medicare reimbursement was arbitrarily chosen to replace a payment system that has allowed many of these clinics to serve the needs of the most vulnerable Americans.

There are more than 400,000 patients in New York that rely on these clinics, and we are concerned that implementation of this rule will severely restrict their access to essential health care services.  Overall, clinics based in New York are expected to lose more than $350 million – including $25 million in estimated losses for clinics that serve individuals with developmental disabilities, $41 million in estimated losses for renal dialysis clinics, and $25 million in estimated losses for substance abuse treatment clinics.  In addition, the rule is expected to impact the provision of specialized day treatment services for almost 30,000 seriously ill adults and children.

This rule would have an unacceptable impact on care and treatment for the low-income families that are in greatest need of specialized health care services, and it would devastate the safety net of care in New York State.  In this time of increasing economic uncertainty, we cannot afford to abandon those who rely on these services.  We would urge you to suspend implementation of this rule.

Sincerely,

Hillary Rodham Clinton                                      Charles E. Schumer

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