Our health care providers continue to face difficult financial challenges for reasons magnified but not created by the pandemic. Decades of government underinvestment in Medicaid, the inability to offset rising employment costs coupled with a generational workforce cliff and the growing market influence of for-profit insurers all contribute. This year’s New York state budget offers some opportunity to address these issues.
We need a ‘real’ increase in the Medicaid reimbursement rate
Everyone has a stake in what public insurance programs pay providers — even those who do not use those programs. About two-thirds of inpatient care in our area is covered by Medicare and Medicaid, but both reimburse providers at less than the cost of the care. In fact, Medicaid only pays hospitals about 60 cents on the dollar. The rest is offset through the private insurance market. Therefore, the lower the Medicaid reimbursement rate, the higher your insurance premiums. Medicaid rates have only increased a total of 1% over the past dozen years. Meanwhile, inflation in 2022 alone rose by more than 7%. The Medicaid reimbursement gap costs New York’s suburban hospitals over $1 billion each year and is getting worse.
Gov. Kathy Hochul’s executive budget proposes an insufficient 5% increase in reimbursement for Medicaid inpatients. Moreover, this increase is offset by healthcare cuts elsewhere in the budget. The result is status quo. We advocate for a true increase in Medicaid rates of no less than 10%. This will help prevent the further depletion of hospital finances and lower the burden of private insurance premiums for our businesses.
We need to address the health care talent shortage
Hospitals are struggling to fill open positions across the gamut — from nurses to med techs. The jobs are there but the pipeline of talent isn’t. As a result, a third of New York’s hospitals have been forced to reduce or eliminate services in order to ensure that the most critical services, like emergency rooms and ICUs, are safely staffed.
During the pandemic, the governor granted providers with scope of practice flexibility through a series of ongoing emergency executive orders. Under these temporary orders, for example, nurses, EMTs and other trained professionals have been authorized to take actions such as performing flu or COVID-19 tests, administering vaccines, testing blood or ordering EKGs without waiting for a specific order from a physician. Scope of practice flexibility should be permanent and should allow many clinicians to continue to perform the tasks they have been doing routinely — and safely — during the pandemic. In addition, New York should finally join with neighboring states as part of the interstate medical and nurse licensure compacts, so that New York can attract the best and brightest clinicians and readily access out-of-state help in a crisis.
We need to pass ‘pay-and-review’
For profit health plans continue to wield enormous market power over the state’s healthcare system. One example is the practice of delaying payment for care, even covered care, already provided. In fact, according to the state Department of Financial Services, insurance companies denied one quarter of New York healthcare insurance claims in just the first three months of 2022. The denial rate for some insurers reached as much as 40% of their enrollees’ claims.
The governor’s budget proposes a “pay-and-review” system that flips the presumption that payment needs to be withheld and requires immediate payment for covered services with review to follow. If the care is covered under an insurance plan then it should be reimbursed. This ensures that patients receive the treatment they need without delay and prevents insurers from “floating” their balance sheets on the backs of hospitals.
Michael Romita is president and CEO of the Westchester County Association.
Wendy Darwell is president and CEO of the Suburban Hospital Alliance of New York State.