Schumer: House-Passed Bill Moving Through Congress Could Cut Over $494 Million from Upstate Hospitals Over the Next Ten Years, Putting Patient Access at Risk - Calls on Congress to Abandon Plans that Could Devastate NY Hospitals

Press Release

Today, U.S. Senator Charles E. Schumer called on Congress to reject legislation that would cut Medicare funding for Upstate NY hospital clinics by $494 million over the next ten years. The plan under consideration would severely restrict patient access to health care services throughout the state. On December 13th, the House of Representatives passed H.R. 3630, which included extremely damaging cuts to hospitals, including a significant Medicare hospital outpatient payment cut. The House passed bill would cut payments for hospital outpatient clinic evaluation and management (E&M) services -- among the most common outpatient services clinics provide -- by just under $1 billion statewide over 10 years. The legislation is currently being considered by a conference committee of House and Senate members, before the bill is finalized and voted on again by both chambers and sent to the President. Schumer urged the conference committee members to remove the provision that could be devastating to upstate hospitals throughout the state.

"Hospitals in rural and urban areas across the state bend over backwards to meet the health care needs of Upstate New York," said Schumer. "These cuts would pull the rug right out from underneath them, and I will do all I can to beat it back. These Medicare funds help our doctors and nurses provide top notch care from the Hudson Valley to the North Country all the way to Western New York. We don't need to rob Peter to pay Paul to ensure that providers are paid appropriately by Medicare. I strongly urge my friends in the House and Senate to abandon these draconian cuts and protect Upstate New York's hospitals."

The House-passed bill would, among other provisions, temporarily fix Medicare's physician payment Sustainable Growth Rate (SGR) formula, but it would do so by cutting payments for hospital outpatient clinic evaluation and management (E&M) services by $6.8 billion nationwide. The cuts in New York, which would take effect immediately, would total $988 million across the state in the next decade. The House proposal uses these funds to prevent a 27.4% cut in the Medicare physician reimbursement rate, replacing it with a 1% payment increase for 2012 and 2013. Rather than financing a short-term solution by severely cutting Medicare funding from New York hospitals, Schumer is urging his colleagues in the House and Senate to permanently fix the Sustainable Growth Formula so that seniors can continue to rely on Medicare and their physicians. Congress has provided temporary relief from the SGR cuts since 2002, but a long-term solution is critical.

The Medicare clinic funding at risk, known as evaluation and management (E&M) services, reimburses services that are among the most common outpatient health care provided, and the cuts would devastate already financially-fragile hospitals and impair access for the patients they care for. Often times, hospital clinics are the only place where Medicare patients can access physicians who accept Medicare or will see uninsured or under-insured patients. In fact, in many rural communities throughout Upstate the only physician services available to any patient are through the hospital clinic. Schumer today announced his opposition to these cuts that could eliminate access to care for some New Yorkers who have no other place to go. If hospitals are not adequately reimbursed for these services, some could be forced to turn away Medicare patients or close altogether.

Medicare reimbursements for outpatient services, including those provided in a clinic or in a physician office, already fail to cover the full cost of providing that important care, reimbursing only 90 cents for every dollar of care provided. Over the course of the last decade, New York hospital outpatient departments have lost money while providing E&M services, and these cuts would worsen an already serious problem. Evidence suggests that hospital-based physicians deliver more cost effective and clinically effective treatment given the opportunities for efficiencies of infrastructure such as health information technology, uniform standards of clinical care, and stricter quality processes. Bassett Healthcare Network and Columbia Memorial Hospital have both stated that the cuts would make it more difficult for patients to access physician services in their clinics.

On the call, Schumer detailed the potential cuts to hospitals across the state. Here is how they break down (the hospital-by-hospital report is attached) according to the Healthcare Association of New York State (HANYS):

· In the Capital Region, 13 hospitals are at risk of losing $76,868,000over the next 10 years

· In the Hudson Valley, 23 hospitals are at risk of losing $77,147,000over the next 10 years

· In the Southern Tier, 10 hospitals are at risk of losing $137,977,000over the next 10 years

· In the Rochester-Finger Lakes Region, 11 hospitals are at risk of losing $57,015,000 over the next 10 years

· In Western New York, 18 hospitals are at risk of losing $51,450,000over the next 10 years

· In Central New York, 12 hospitals are at risk of losing $53,865,000over the next 10 years

· In the North Country, 9 hospitals are at risk of losing $40,654,000 over the next 10 years

Schumer noted on the call that these cuts could seriously harm some of the most important hospital clinics and systems in Upstate New York. Based in Cooperstown, Bassett Healthcare Network is an integrated health care system that provides care and services to people living in an eight-county region covering 5,600 square miles. It includes six corporately-affiliated hospitals; skilled nursing facilities; 40 community- and school-based health centers providing 750,000 annual ambulatory clinic visits, the majority of which are Medicare and Medicaid patients.

Bassett is one of the largest providers of primary care services across the Southern Tier and Central NY, and would lose more than $77 million over 10 years because of this provision. The cuts could hamper services at over 20 freestanding clinics in rural areas and small towns. Eleven of Bassett's approximately 30 patient care facilities are located in health profession shortage areas, and several of the facilities are located in communities where there are no other health care providers. Bassett had approximately 700,000 outpatient visits in the system last year. Medicare accounts for roughly 30% of the total visits.

The cuts could also be a blow to the Granville Family Health, a clinic that is run by Glens Falls Hospital. Granville Family Health was established in 1995 after the closure of the local hospital, Emma Laing Stevens Hospital, and serves a rural farming and slate mining community in central Washington County. It is over twenty five miles to the nearest hospital. Twenty six percent of patient visits are covered by Medicare, and the clinic provides over 21,500 primary care and same-day patient visits per year. Under the House proposal, Glens Falls Hospital would lose $14,060,000 in Medicare funding over the next decade.

The Windham Medical Care clinic in Hensonville, NY is run by Columbia Memorial Hospital. It is a 30 mile drive down occasionally impassible mountain roads to get to the closest ER or alternate care center, and Columbia is slated to lose $21,651,000 if the House plan were to pass.

"These funds are key to making sure hospitals in Upstate's rural, suburban, and urban areas can continue to provide the health care services New Yorkers deserve," continued Schumer. "We need to fix the Medicare reimbursement rate, but we can't do it on the backs of New York hospitals."

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