Cuomo Won't Back Down On Medicaid Cuts—Even If It Means Spurning Billions In Coronavirus Aid

On Sunday, amid his regular coronavirus updates, inspirational slides, and Italian family dinner anecdotes, Governor Andrew Cuomo was asked to respond to New York Senator Chuck Schumer’s charge that the governor was rejecting billions in federal funding from emergency federal COVID-19 legislation simply because Cuomo wanted to tinker with the state’s Medicaid system. “It would be nice if he passed a piece of legislation that actually helped the state of New York,” Cuomo shot back.

Cuomo has been feuding with Schumer over the past couple of weeks, accusing the senator of trying to hamper his plans to make changes to Medicaid, the public health program that insures roughly a third of New Yorkers. Cuomo has made it clear that he is determined to cut Medicaid in the midst of a massive public health crisis—even if it means risking federal funds designated to provide relief.

New York stood to gain up to $6.7 billion through the federal legislation Schumer helped pass (that’s if the intervention program lasts a full year) but only under the condition that it didn’t put any new restrictions on Medicaid eligibility.

Asked on Sunday if he will try to access any of the funding, Cuomo said it was out of the question. “We can’t,” he said. “The way they wrote the law, we can’t. You can’t do what you can’t do.”

But the governor’s position has perplexed some lawmakers and public health experts, who say all he would have to do is delay implementation of some of his proposed Medicaid reforms.

Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York, said she didn’t see any reason the state couldn’t delay some Medicaid reforms until after it stopped receiving federal funds. “I’ve seen no evidence that we can’t do that,” Benjamin told Gothamist.

Many of Cuomo’s Medicaid proposals do not appear to conflict with the federal law. Even if they do, legislators are currently considering the proposals under the assumption that anything that would prevent the state from drawing down federal funds would be passed with the caveat that it wouldn’t be implemented until after the federal funds stop flowing, according to State Assemblyman Richard Gottfried,

“Every piece of legislation the governor submitted to us has a clause saying that the budget director can delay implementation of any of these provisions if necessary,” Gottfried told Gothamist last week, “which means that if any of them would interfere with drawing down the federal increased Medicaid dollars we would be able to delay implementation until the federal money stops coming.”

Heading into 2020, New York was facing a $6 billion budget shortfall, with nearly $4 billion of the deficit coming from Medicaid spending. To plug it, Cuomo said that more Medicaid costs would need to be shifted onto cities and counties, and that his specially appointed Medicaid task force would come up with ways to shave off another $2.5 billion.

Coronavirus had yet to start dominating everyone’s attention in January, but even then, state lawmakers expressed concern that the proposals wouldn’t come down until mid-March, giving them little time to consider the impact they would have on patients and health care providers before being pressured to include them in the budget, which is due on April 1st.

Cuomo’s task force, known as the Medicaid Redesign Team (MRT), first met in February and released a wide range of proposals on March 19th, including new restrictions on eligibility for long-term care services for elderly and disabled New Yorkers, an overhaul of pharmaceutical benefits, cuts to funding for safety-net hospitals, and less capital funds for hospitals and nursing homes. The proposals came out a day after the federal Families First Coronavirus Response Act was signed into law, offering to temporarily enhance federal matching dollars for Medicaid.

Schumer was a champion of the federal bill, saying “New York is the national epicenter in the coronavirus fight and this bill will ensure New York and its counties have the tools, the dollars, and the federal resources to go at the virus with full force.”

When Congress reached an agreement on the Families First Coronavirus Response Act, Kenneth Raske, president of the Greater New York Hospital Association, expressed his gratitude for the enhanced funding as hospitals braced themselves for an onslaught of coronavirus patients.

“With our hospitals intensely preparing for COVID-19 while facing a dire budget crisis in Albany, the additional Medicaid funding in the Families First Coronavirus Response Act is extremely welcome news for all New Yorkers,” Raske said. “We know that a COVID-19-related economic downturn will make it very difficult for states to maintain their budgets. This substantial Medicaid increase will help New York cushion that blow.”

But Cuomo implied Saturday that hospitals don’t need the funds he’s putting at risk. “The places getting the most funding now because of what the federal government did are the hospitals,” Cuomo said. “The hospitals receive significant funds, quote unquote, for the coronavirus. But the coronavirus expenses you can basically equate to anything now in the hospital system. So hospitals are getting more money than almost any other area the state budget covers.”

The governor’s office has not responded to our questions. Schumer's office maintains that there is no legal or procedural barrier to New York accepting the federal money, and added that the state could just delay any potential Medicaid changes that may run afoul of the law.

Even if the Medicaid changes Cuomo is seeking don’t prevent the state from receiving the extra federal funds, they may have negative consequences for the most vulnerable New Yorkers.

One of the proposals Cuomo is pushing involves cutting $75 million in state funding for the Indigent Care Pool, a fund that is distributed among hospitals in New York to reimburse them for charity care provided to low-income patients.

For years, state watchdogs have been calling on Cuomo to change the formula for distributing these funds because they were going not only to safety-net hospitals with limited resources (as intended), but also to wealthy hospitals that provide little or no charity care. This proposal would finally change the formula, but instead of just redistributing the money to safety-net hospitals, including the city’s public hospital system, the proposal would cut public hospitals out of the fund entirely.

The MRT has also put forth a host of proposals to contain growth in the state’s Managed Long-Term Care program, which provides in-home care to elderly and disabled New Yorkers. The program has been the single largest source of growth in Medicaid spending in recent years, in part because the population is aging and in part because of the rapid expansion of the Consumer Directed Personal Assistance Program, or CDPAP, which allows people who are disabled to hire relatives to care for them using state funds.

Some of the MRT proposals to contain costs have to do with streamlining the administration of long-term care, reducing fraud, and limiting access to the neediest New Yorkers, while others are designed to simply keep people out at all costs. One of the proposals would increase scrutiny of people’s assets when applying for Medicaid’s long-term care services, for example, while another would simply create an arbitrary cap on enrollment and withhold funds from Medicaid plans that enroll too many people in the program.

State lawmakers also continue to speak out against the governor’s plan to transfer a greater share of Medicaid costs onto localities. New York City alone has said that the shifts could cost this city more than a billion dollars.

In a statement released Monday, upstate legislators urged Cuomo not to move forward with plans to include measures in the budget that would put federal coronavirus funding at risk or strain local governments.

“Now is not the time to add to local burdens when this coronavirus pandemic is already shutting down local economies and leaving in its wake a future of fiscal uncertainty, at best, for county governments and local property taxpayers,” Senator Tom O’Mara, Assemblyman Phil Palmesano, and Assemblyman Chris Friend said.

Assemblyman Gottfried said he would oppose many of the MRT proposals, regardless of their impact on coronavirus funding.

"The legislature is working to defeat a lot of what is in the MRT package just on its own, regardless of the federal COVID money and, frankly, regardless of COVID," Gottfried said. He conceded that more people will likely sign up for Medicaid as they lose employer-sponsored insurance, which could put a greater strain on the Medicaid budget. But, he added, "that's partly why the federal government is giving us increased matching money.”