Advocacy Update – Spring 2024 Newsletter

With the budget finalized the end of the 2024 legislative session is upon us. However, in addition to substantive legislation that will become the focus of the legislature’s attention, we remain focused on the budget to ensure that the financial assistance included in the budget is equitably distributed to Upstate and rural hospitals.

After expressing our disappointment in the Executive budget proposal, which would have hit the healthcare sector with $1.2 billion in cuts, IHA pushed hard to improve funding for hospitals in Upstate. That call was answered in the One-House budgets, which proposed Medicaid rate increases and the creation of a managed care organization tax (MCO). In the end the final budget restored most cuts, allocated Medicaid funding increases in the amount of $525 million for hospitals and $285 million for nursing homes. Still far less than what is needed. Moreover, it is unclear how, when and to whom this funding will be distributed. IHA has been calling for significant increases in Medicaid rates since last year when we were urging a 25% rate increase, citing that the magnitude of the increase must match the magnitude of the problem. This year that call was mirrored by many other healthcare advocacy groups asking for a 30% increase to close the Medicaid gap over the coming years.

For further details of the final budget please see the “FY 2025 Budget” section below.

In addition to its grassroots and staff-driven advocacy, this Spring IHA partnered with others in the healthcare and long-term care sectors to develop a multimedia ad campaign urging state policymakers to reverse the proposed cuts to Medicaid and invest in care. Compelling video, radio and billboard ads highlighted the long stretch of time since Medicaid rates have been meaningfully increased, resulting in disinvestment and inequity.

In February IHA hosted its annual Advocacy Day where we met with several influential lawmakers including the Senate Majority Leader Andrea Stewart-Cousins, the Health chairs from both houses, Senator Gustavo Rivera and Assemblywoman Amy Paulin, as well as many members that represent IHA hospitals and key staff members. In these meetings the IHA Executive Committee described the stark realities that Upstate health care is faced with urging action to improve the industry. These productive conversations were reflected in both the Senate’s and Assembly’s One-House Budgets.

In late February Change/Optum/UnitedHealth was the subject of a major cybersecurity breach resulting in weeks of uncertainty. Many IHA members were impacted to some degree, and the finances of a handful were put in significant danger. For several years IHA has warned the State that Upstate healthcare is one crisis away from total collapse, this event showed how easily it can happen. Since February IHA has continued to bang the drum to lawmakers – citing the attack as evidence that support is sorely needed before yet another unexpected catastrophe strikes.

Now that the budget is locked down IHA will turn its attention to legislative priorities, working with state lawmakers to advance bills in the interest of our members and defend against those that would be harmful.

Political Landscape

With 2024 being a legislative election year, there has been a slew of retirement announcements during the first part of 2024, with many long-term career legislators announcing their departures at the end of this session. Among them are Senators Neil Breslin and Tim Kennedy, Members of Assembly Weinstein, Aubry, and Goodell. These exits will cause several shake-ups in highly desired committee chair seats including Assembly Ways and Means, which Assemblywoman Weinstein has chaired since 2018, the first woman to do so. These retirements will also mean an influx of fresh faces at the Capitol next year.

FY 2025 Budget

The final budget bill was voted on at 4:15pm on Saturday, April 20 – nearly three weeks after the March 31 deadline. This is a slight improvement on last year’s budget, which did not get passed until the beginning of May.

Items of note within the FY25 final budget:

  • Hospital Rate Increases: The final budget adds $525 million in aggregate Medicaid payments to hospitals. The language does not differentiate between inpatient and outpatient service payments and authorizes payments to be made as rate adjustments, lump sum payments, managed care payments or state directed payments.
  • Nursing Home Rate Increases: The final budget adds $285 million in aggregate Medicaid payments to nursing homes. Payments are authorized to be made as rate adjustments, lump sum payments, managed care payments or state directed payments.
  • MCO Tax: The final budget authorizes an application to the CMS for a Medicaid waiver to create an MCO tax on Medicaid managed care to draw down increased federal funding. Revenue from the tax will be deposited into a Healthcare Stability Fund. The Healthcare Stability Fund could be used to fund the non-federal share of increased Medicaid managed care capitation payments, the non-federal share of the Medicaid program, for reimbursement to the general fund for expenditures incurred for the Medicaid program, and to transfer to the capital projects fund or any other capital projects fund to support the delivery of health care services.
  • Hospital Budgeted Capital Related Expense Add-On Reduction: The final budget accepts the Executive proposal to increase, from 10 percent to 20 percent, the current cut to the capital related expenses on October 1, 2024.
  • Nursing Home Case Mix Rate Freeze: The final budget accepts the Executive proposal to freeze the case mix adjustment of the operating component of the rates for Nursing Homes to the rates in effect as of July 1, 2023.
  • Nursing Home Capital Rate Reduction: The final budget modifies the Executive proposal to reduce the Nursing Home capital component by an additional 10 percent for periods on and after April 1, 2024.
  • Nursing Home Vital Access Provider Assistance Program (“VAPAP”): The final budget accepts the Executive proposal to reduce the Nursing Home VAPAP program by $75 million state share, $150 million gross spending.
  • Doctors Across New York (“DANY”): The final budget accepts the Executive proposal to provide level funding of $15.9 million for the Doctors Across New York physician loan repayment program.
  • Nurses Across New York (“NANY”): The final budget accepts the Executive proposal to provide level funding of $3 million for the Nurses Across New York loan repayment program.
  • Diversity in Medicine: The final budget modifies the Executive proposal to provide $1.2 million for the program by providing an additional $1.25 million for total program funding of $2.45 million.
  • Healthcare Safety Net Transformation Program: The final budget modifies the Executive proposal to authorize DOH to spend $300 million for the purposes of establishing the Healthcare Safety Net Transformation Program.
  • Sunset of COVID-19 Sick Leave Law: The Enacted Budget sunsets the COVID-19 Sick Leave Law on July 31, 2025, one year later than initially proposed in the Executive Budget. The original law, enacted in 2020, requires employers to provide sick leave benefits, paid family leave, and benefits due to disability for employees subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19.
  • Paid Prenatal Leave: The final budget provides paid prenatal leave to eligible pregnant employees for prenatal medical appointments by shifting the requirement from a Paid Family Leave benefit to a Sick Leave benefit 20 hours, within a 52-week period. The paid prenatal leave is to be provided in addition to existing sick leave benefits and the current 12 weeks of Paid Family Leave or 26 weeks of disability leave, available for eligible employees. Such leave for prenatal visits may be taken, and must be paid for, in hourly installments. This law will take effect on January 1, 2025.
  • Hospital Medical Debt Protections: The final budget modifies the Executive proposal to amend the Hospital Financial Assistance Law to require participating hospitals to extend assistance to both uninsured and underinsured persons, offer assistance to individuals with incomes up to 400 percent of the federal poverty level (“FPL”), and notify patients of potential assistance in writing by including language that prohibits “immigration status” from being a criterion for determining eligibility for financial assistance.
  • Patient Billing Protections: The final budget accepts the Executive proposal to require that a patient’s consent for treatment be obtained separately from consent for payment; and to prohibit providers from requiring that a patient pre-authorize their credit card, or have a card on file, prior to treatment.
  • Physician’s Excess Medical Malpractice: The final budget modifies the Executive proposal to extend the Hospital Liability Pool and the Excess Medical Malpractice Insurance Program through June 30, 2025, by rejecting proposals to reform payment timing and increase physician contribution to payments for excess medical malpractice coverage. It also restores funding to last year’s level of $78.5 million.
Legislative Priorities

There are several bills that IHA has an eye on during this session, many of them are workforce proposals that were cut out of the budget. We hope to advance legislation to alleviate staffing pressures such as a more robust version of a bill that would temporarily allow out of state nurses to practice while awaiting permanent licensure, several other scope of practice bills, as well as a bill that would felonize assaults on a wide array of healthcare workers as a measure to prevent workplace violence in health care settings. There are also a number of bills that IHA has taken a position of opposition on, including legislation to prolong the unit closure process and wrongful death legislation which continues to be an issue of focus, despite being twice vetoed.

We thank you for your continued engagement and participation in crucial events like Advocacy Day. The contributions made by our members enhance advocacy efforts and allow IHA to effectively carry the message that hospitals in Upstate and rural New York need more support.