Iroquois President and CEO, Gary Fitzgerald, Calls on State Leaders to Ensure Adequate Funding for Upstate Hospitals in Final State Budget

As we head into the final week of NYS budget negotiations, the Iroquois Healthcare Alliance urges the investment and adoption of several policies to bolster the vitality and sustainability of Upstate’s hospitals and health systems.

(Clifton Park, NY) – For the past several months, the Iroquois Healthcare Alliance (IHA) has been meeting with policymakers to convey the needs of Upstate and rural hospitals that should be included in the FY2023 budget. With one more week to go, our advocacy has not ceased. In recognition of the historic budget surplus, New York has to address the various operational, workforce and other systemic issues unique to Upstate hospitals, IHA urges the investment in and adoption of the following key policies.

Upstate Hospital Funding
“As negotiations for the coming fiscal year reach a fevered pitch, with an historic once in a generation budget surplus, IHA calls on Governor Hochul and the Legislature to ensure that Upstate hospitals are provided the relief for which they have long been waiting”, said Gary Fitzgerald President and CEO of IHA. “The importance of clearly and transparently providing for funding to Upstate hospitals cannot be overstated.”

“As the unified regional voice of Upstate hospitals, it is of the utmost importance to IHA and its more than 50 member hospitals across 32 counties in Upstate and rural New York that the need for substantial investment in Upstate and rural hospitals is communicated clearly”, said Fitzgerald. “The need has never been greater as IHA members face significantly increased staff vacancy rates and are actively trying to fill 20,000 open jobs across Upstate, while at the same time adjusting to the realities of a new and forever changed cost structure that remains as COVID-19 recedes.”

Safety Net Funding
The State’s Critical Access Hospitals (CAHs) and Sole Community Hospitals (SCHs), which are a large component of Upstate hospitals, must continue to receive a fair and robust portion of additional funds from the state, because they are often the only sources of medical care for their communities, and provide life-saving emergency and preventative care. IHA urges State policymakers to ensure that CAHs and SCHs receive not less than 30% of safety net funding appropriated in the budget. Without these institutions, rural residents would have to travel a great distance to find care. Safety net funding would ensure the care CAHs and SCHs provide to vulnerable populations is maintained.

“The need for safety net funding support for these hospitals is recognized in law”, said Fitzgerald. “Unlike hospitals in metropolitan areas with several alternatives to choose from, CAHs and SCHs provide the ONLY options for hospital care in their communities. Therefore, this support is critical to ensuring continued access to health care in these Upstate communities. The same can be said for other hospitals among our members that do not fit this definition and serve as a safety net for their communities.”

Medicaid Trend Factor
Governor Hochul provided great hope to the State’s healthcare system with her proposal to increase the Medicaid rate for the first time in more than a dozen years. We were optimistic that as a matter of fairness the Legislature would build on that proposal by significantly adding to the percentage increase in Medicaid rates for all providers. This approach would impact the entirety of the health care continuum, not just one narrow segment. Therefore, IHA recommends a Medicaid rate increase of no less than 7%.

Unfortunately, this is not the approach that was taken by the Legislature. It appears that a large proportion of new state dollars are being directed to a narrow segment of the healthcare continuum to boost pay and reimbursement rates for home care. While laudable, this will have a costly and negative impact on recruitment and retention across the healthcare sector resulting in unreimbursed wage compression and staff migration.

Moreover, the projected growth in home care will lead to unaffordable future year spending that will be unsustainable, resulting a Medicaid crisis for all providers across the board.

Directed Payment Program
The Distressed Hospital Pool also known as the Directed Payment Program has provided access to an important source of funding for Upstate and rural hospitals. As the Legislature makes plans to relieve counties of some of this burden, IHA urges policy makers to preserve access to these funds by such hospitals regardless of the source of funds in the pool by making the Directed Payment Pool permanent and ensuring that Upstate hospitals have access to not less than 30% available in the fund.

“Without serious and transparent investment in Upstate and rural hospitals, the financial burdens they are experiencing will continue to compound”, continued Fitzgerald. “They are hemorrhaging money to keep doors open and are using tactics that are not sustainable as a long-term operating strategy.”

“The Iroquois Healthcare Alliance urges policy makers to recognize the unique struggles that Upstate hospitals face and provide them with the fiscal resources they so desperately need through an increased Medicaid rate, Safety Net Funding and permanent Directed Payment funding”, concluded Fitzgerald. “Failure to do so will lead to worse health outcomes for Upstate communities and worse prospects for Upstate economic development. This cannot be the intention of our State leaders.”

About the Iroquois Healthcare Association: IHA is a regional healthcare trade organization representing more than 50 hospitals and health systems, spanning over 28,000 square miles, across 32 counties of Upstate New York. IHA is the leading resource for facilities and professionals bringing quality health care to the region. IHA represents the unique needs of rural, small community safety-net providers to large, academic medical centers in Upstate New York’s urban areas through advocacy, education and information, cost-savings initiatives and innovative business solutions.