June 8, 2020
Dear New York Congressional Delegation,
On behalf of the Upstate New York Healthcare Coalition, representing over 60 hospitals spanning nearly 40,000 square miles, we are writing to thank you for your leadership during these unprecedented times. Additionally, we also would like to take this opportunity to request your continued support of our upstate hospitals and health systems via advocacy for equitable distribution of the remaining $100 billion from the CARES Act Provider Relief Fund. Specifically, we request a fair funding formula that allocates twenty-five percent (25%) of the total distribution to New York State to upstate hospitals and health systems, based on net patient revenue.
We believe the next distribution formula from the CARES Act Provider Relief Fund shouldreflect and align with how net patient revenue is allocated in New York State. Collectively, upstate New York’s hospitals receive twenty-five percent (25%) of net patient revenue in any given year*, while downstate hospitals receive seventy-five percent (75%). Yet the much publicized COVID-19 federal funding for New York State did not come close to those percentages, and was woefully inadequate for upstate New York’s hospitals and health systems.
Of the nearly $8 billion New York state received, upstate hospitals received less than 10% of all the federal COVID-19 funding to New York State. It is therefore imperative that a fair methodology is used, based on net patient revenue, for the remaining $100 billion distribution in order to address the financial losses experienced by upstate hospitals and reflects the entire patient population.
Since the pandemic began, upstate New York’s hospitals stood ready. They prepared for an influx of patients by creating surge capacity, expanding operations and infrastructure and acquiring needed supplies. When the surge didn’t happen, upstate hospitals offered to take patients from downstate, to share staff and donate equipment and supplies at a time when costs for masks, isolation gowns, face shields and gloves increased between 300% and 2,000%. In March, all hospitals stopped normal operations in compliance with the state’s mandate that hospitals halt all elective procedures and other routine care. Needed but nonurgent treatment was delayed for some patients and others hesitated to seek care for even urgent problems, such as heart attack or stroke. The halt of services also meant that hospitals stopped receiving revenue and financial losses ensued, forcing hospitals from Buffalo to Albany to layoff or furlough over 6,000 healthcare workers. As you know, our upstate hospitals are the literal lifelines in our communities, serving as the largest employers in mostof our counties.
This pandemic has expanded the definition of loss for our hospitals, exponentially. In New York alone, the loss has been unimaginable. Our state treated more COVID-19 positive patients than any other state in the country. In fact, nearly 45% of total confirmed U.S. cases have been identified here. While hospitals in upstate New York have not seen the influx of COVID patients as compared to their downstate counterparts, they have been equally affected by this pandemic, with losses continuing into April, May and June 2020. Although we are extremely hopeful about the data showing a slowdown of the spread of the virus, that has not simultaneously translated into a financial turnaround in the foreseeable future for upstate hospitals. While some outpatient elective procedures have been allowed to resume in parts of upstate, other emerging, unanticipated financial challenges – such as lab testing capacity, testing availability, paying for testing, patients not presenting for care, and lack of clarity around inpatient elective procedures – are causing more financial losses and pressures.
There is no question that COVID-19 has also had a devastating impact on New York State’s already precarious fiscal health. The state now projects a $13.3 billion budget deficit. Governor Andrew Cuomo has stated that unless federal aid is distributed to state and local governments, New York will need to make drastic cuts in state Medicaid spending of up to 20% to 30%. These cuts are in addition to the $2.5 billion Medicaid reductions adopted in this year’s state budget. Cuts of any kind to health care providers during a public health pandemic are incomprehensible and unacceptable. We urge you to commit to funding equality for our upstate hospitals and health systems and respectfully request that the distribution of the remaining $100 billion CARES Act Provider Relief Fund reflects the entire patient population, as well as the financial losses incurred from COVID-19. Thank you again for your leadership and continued efforts on behalf of our upstate hospitals and health systems. Please feel free to reach out to us directly for continued dialogue on
this issue.
Sincerely,
Gary J. Fitzgerald, President & CEO
Iroquois Healthcare Alliance
Travis Heider, President & CEO
Pandion Optimization Alliance