Local hospitals amp up pressure on Schumer to increase federal funding

WASHINGTON — The CEO of Ellis Medicine has directed his over 3,000 employees to “load up” the email inbox of Senate Majority Leader Charles E. Schumer, Sen. Kirsten Gillibrand and Rep. Paul Tonko to demand they change the federal funding formula for Capital Region hospitals in the COVID-19 relief bill expected to pass Congress this week.

A small tweak in a Medicare formula could mean a $100 million annual increase in federal funding for five Capital Region hospital systems, many of which have been hit hard by the coronavirus pandemic.

Paul Milton of Ellis and the leaders of Albany Medical Center, St. Peter’s Health Partners, Saratoga Hospital and St. Mary’s Healthcare have been fighting for this change for over a decade and now that Schumer is majority leader, with a health-related bill on the verge of passage, they’re amping up their pressure campaign.

“[Schumer] has a lot of demands on him,” Milton said. “I don’t think he’s folding, but I want to make sure he doesn’t fold.”

The quest to change Albany’s Medicare Wage Index appears unlikely to succeed with this bill. The narrow provision cannot fit in the legislation because of the strict requirements of reconciliation, the complicated budget process that Democrats are using to pass the bill so they can approve it with a simply majority and no Republican votes, a Democratic aide said.

Medicare Wage Index changes that affect hospitals in Delaware, New Jersey and Rhode Island are included in the legislation at this time, the aide said.

“Sen. Schumer remains committed to getting the Medicare Wage Index done for Capital Region hospitals,” Schumer’s spokeswoman Allison Biasotti said. “While he’s disappointed that the rules of reconciliation did not allow for this provision to be included in the bill, he will continue to work with Republicans to get this done knowing that bipartisan support is required to pass this policy.”

The Medicare Wage Index rate is used to determine how much money the U.S. government pays hospitals for labor costs when they treat Medicare patients. Each metro area is assigned a rate that dictates whether they receive a little more or a little less than the national average for health care labor costs.

Since the 1980s, hospitals in the Albany area have received 86 cents on the dollar in reimbursement for labor; the change the hospitals are seeking would bump Capital Region hospitals up to $1.08 on the dollar, which is what hospitals in the Hartford, Conn., region receive. They’ve been fighting to change this law for more than a decade.

If passed, the change is expected to mean an extra $15 to $20 million a year for Ellis Medicine, $45 million a year for St. Peter’s Health Partners and an extra $5 million a year for St. Mary’s Healthcare, according to interviews with hospital CEOs.

“I can’t think of anything that would have a bigger impact on health care in the Capital Region than this Medicare Wage Index,” said James Reed, CEO of St. Peter’s Health Partners. “Our desire to be finding more nurses and paying more — we’re handicapped because the Wage Index does not reflect the local Bureau of Statistics cost index.”

During the pandemic, hospitals had to cancel elective surgeries for a few months, and emergency department and patient visits dropped, sending most hospitals’ revenues crashing while they faced new costs of treating acute COVID-19 patients, buying personal protective equipment and testing. Congress allocated $178 billion to support hospitals in its first coronavirus relief bill.

Some hospitals like Ellis have let their staffing levels decrease due to attrition to save money. Milton estimated his staffing levels were down 10 percent compared to last year. The Ellis system also took out a loan for $30 million to help them get by. St. Peter’s Health Partners furloughed staff and then brought them back when patient volumes increased.

“While COVID funding packages to date have been essential to address our short term and significant losses due to COVID-19, the wage index revision would provide long-term, durable support for our region’s healthcare sector that would address a vital disparity in reimbursement rates for our region’s hospitals,” said Dennis P. McKenna, President and Chief Executive Officer of Albany Medical Center. “Including this provision in the COVID-19 relief bill would allow our hospitals to continue operations to protect the many doctors, nurses, administrative, maintenance and numerous other staff positions who have worked so hard throughout the pandemic to care for our communities.”

Without the increase, local hospitals said they’re putting off capital projects, not offering new services and not paying competitive wages.

The CEOs of Capital Region hospitals sent New York senators a joint statement on the issue and have met with the senators and Tonko, D-Amsterdam, and their staffs. Reed said they’re trying to push this issue “high on their radar screen” for this legislation or the next bill.

“We have been supportive, we’ve encouraged it and we’ve included it in several iterations on covid,” said Tonko. “You run into the awkwardness of guidelines that govern the Senate process… I’m just going to remain hopeful that we can get things done.”