New York's Senator
CHARLES E. SCHUMER

FOR IMMEDIATE RELEASE September 10, 2000

SCHUMER UNVEILS PLAN TO FIGHT MEDICARE CUTS AT LONG ISLAND HOSPITALS

Steepest Cuts Will Kick In Over the Next Two Years

Plan Would Restore About $167 Million In Inpatient and Teaching Hospital Payments to Long Island Hospitals

In the wake of the harsh blow dealt to New York hospitals by the 1997 Balanced Budget Act (BBA), US Senator Charles E. Schumer today unveiled a plan to remedy the financial challenges facing Long Island hospitals. "Our hospitals have been on life support for the last three years. This bill will take them out of intensive care and allow them to begin to recover," Schumer said.

Although the BBA made important changes to Medicare payment policy and helped create today's federal budget surpluses, some of the policies enacted in the landmark law cut payments to health providers more than expected. The BBA contained spending cuts of nearly $216 billion dollars over 5 years to hospitals nationwide, $104 billion more than the Congressional Budget office originally estimated. While the 1999 Balanced Budget Refinement Act took a small step towards softening the blow of the cuts, it did not go far enough. As a result, many hospitals face serious budget shortfalls and some may be forced to close.

On Long Island, the Healthcare Association of New York State (HANYS) estimates that area hospitals will lose about $607.8 million by 2002. Franklin Hospital is expected to lose $14.5 million; Huntington Hospital is expected to lose $15.8 million; the North Shore University Hospitals in Forest Hills, Glen Cove, Manhasset, Plainview, and Syosset are expected to lose a combined $159.8 million; Long Island Jewish Medical Center is expected to lose $102.3 million; Southside Hospital is expected to lose $17.1 million; Staten Island University Hospital is expected to lose $73.4 million; Good Samaritan Hospital Medical Center is expected to lose $25.1 million; Mercy Medical Center is expected to lose $23.2 million; New Island Hospital is expected to lose $6.8 million; St. Charles Hospital and Rehabilitation Center is expected to lose $9.5 million; St. Francis Hospital is expected to lose $60.7 million; South Nassau Communities Hospital is expected to lose $21.6 million; and Winthrop University Hospital is expected to lose $78.0 million.

In each case, the cuts were about twice the level estimated when the 1997 budget law passed, with the most severe cuts affecting hospital teaching programs and inpatient payments.

"Somewhere along the road, these cuts went seriously awry. They were intended to help balance the budget but went far beyond what anyone could have ever imagined," Schumer said.

Schumer said that he and other Senators, under the leadership of Senator Daniel Patrick Moynihan, have crafted a proposal that will help area hospitals recoup some of the losses incurred by the BBA's spending cuts. This proposal is estimated to cost about $80 billion over 10 years and will be introduced in the Senate this month.

The plan will help Long Island hospitals by adjusting inpatient payments, like Medicare reimbursement for surgery, to help hospitals keep up with rising costs. The plan will also prevent further reductions in payment rates for vital teaching hospitals like Long Island Jewish Medical Center, North Shore University Hospitals and Winthrop University Hospital, which are on the cutting edge of medical
research.

"The BBA's harshest cuts are going to kick in over the next two years. If hospitals are struggling today, they could falter tomorrow," Schumer said. "If action is not taken to restore these cuts this year, hospitals on Long Island and all over New York State are going to have to sacrifice quality. No one wants that - not here, not in New York, not anywhere."

Schumer estimates that Long Island hospitals will receive about $167 million under the plan to counter losses in teaching and inpatient payments -- areas of major concern to these hospitals. The plan also targets additional relief to rural hospitals to make it easier for them to qualify for disproportionate share hospital payments under Medicare and provides support for rural hospitals with a disproportionate share of indigent patients.

"This plan will make hospitals whole again," Schumer said.

# # #