Schumer, Mchugh Successful in Stopping Devastating Medicaid Regulation

Press Release

SCHUMER, MCHUGH SUCCESSFUL IN STOPPING DEVASTATING MEDICAID REGULATION

Unfair, Onerous Rule Would Have Cost NYS Health Care Providers $450 Million

Senator Charles E. Schumer (D-NY) and Congressman John M. McHugh (R-NY-Pierrepont Manor) announced today that they were successful in their fight to block the permanent implementation of a 2008 Medicaid regulation that would have had a significant negative impact on New York health care providers, including clinics that provide basic essential health care. Since 2008, Senator Schumer and Congressman McHugh have spearheaded efforts in the House and Senate to delay and then stop the regulation, including writing letters to the Centers for Medicare and Medicaid Services (CMS) Acting Administrator, personal phone calls, and the introduction of joint legislation that would have prevented the rule from being implemented .

"This is a tremendous win for every health clinic in New York State," said Senator Schumer. "This inexplicable rule would have devastated hundreds of New York's health and dental clinics and so much more. By blocking the implementation of this rule, we are ensuring that New York's health care facilities have the funding they need to provide the much-needed services that so many New Yorkers rely upon. I applaud CMS for responding to our concerns by rescinding their proposal before it hurt our health system."

"This proposed rule change would have had a devastating impact on local health care providers, an unacceptable scenario in today's already tough economic times. Several constituent health care providers had shared with me that this ill-conceived regulation could literally force them out of business, which would have only served to further limit health care options in the rural communities that make up New York's 23rd Congressional District," said Congressman McHugh. "This was a delegation-wide, bipartisan effort to stop this rule from going into effect, and I am gratified that CMS listened to our concerns and stopped this rule change before health care providers were impacted. My efforts will continue to be focused on increasing health care options for residents of New York, not limiting them as this rule would have done."

Last year, the CMS proposed a new regulation, the "Medicaid Outpatient Clinic and Hospital Services Rule" that would reduce federal Medicaid funding to states for services at freestanding health clinics and hospital outpatient departments - such as school-based health centers and primary care clinics that provide dental care, physical therapy, family planning, mental health and addiction counseling. This rule would have drastically changed the definition of what outpatient medical services Medicaid would pay for and curtailed patient care.

The proposed regulation would have essentially limited the definition and scope of federally reimbursable Medicaid outpatient services provided in a hospital clinic or facility as well as those provided in a rural health clinic. An internal analysis done by the New York State Governor's office estimated that New York health care providers, not including hospitals, would lose over $450 million if this rule change was fully implemented. Such a loss of federal funding would have had a devastating impact upon the State's health care infrastructure. Additionally, the National Association of State Medicaid Directors (NASMD) had reported that the proposed regulation "would significantly affect the Medicaid program in every state." New York's 23rd Congressional District was estimated to lose over $2.6 million in federal funding.

Last year, Senator Schumer and Congressman McHugh introduced legislation in the Senate and House that would have reversed these Medicaid regulations to ensure that Upstate New York health clinics continued to receive this necessary funding and would not be forced to slash critical patient services. They also wrote letters and made personal calls to former CMS Acting Administrator Kerry Weems urging the immediate suspension of the proposed rule.

Today, Senator Schumer and Congressman McHugh announced that they were successful in blocking the implementation of the proposed rule. CMS published a notice in the Federal Register requesting comments on their proposal to rescind the rule.

In addition, CMS announced that a series of other rules that would have resulted in reduced federal support for state Medicaid programs and services will also be rescinded. These include provisions related to the provider tax, school-based health care, and the case management rule.

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