Schumer: Change in federal-funding formula hurts rural hospitals in upstate New York

LOWVILLE, N.Y. — U.S. Senator Charles Schumer (D–N.Y.) on Friday said he’d fight attempts to “claw back critical” federal funds that allow small hospitals, such as those in the North Country, to provide “necessary” services to senior citizens and “underserved” populations in rural areas.

Schumer outlined his concern during a visit to Lewis County General Hospital (LCGH) in Lowville.

The federal Centers for Medicare and Medicaid Services (CMS) has changed a funding formula and pursuing millions in retroactive payments from some New York hospitals benefiting from two federal programs. 

The programs
Schumer explained that Sole Community Hospitals (SCH) and Medicare-Dependent Hospitals (MDH) are often the “only sources” of emergency care for miles in rural areas. 

SCH and MDH are federal programs that provide hospitals, particularly in rural areas, with funding they need to continue “essential” health-care services in communities “that would otherwise not have options,” Schumer explained in a news release posted Friday on his website. 

At the same time, they often “suffer” from declining patient volumes. 

As a result, CMS provides these hospitals with the funding “needed to stay afloat.”

Formula change
CMS recently decided to change a calculation used to determine certain funding for SCHs and MDHs, according to Schumer. 

When these hospitals have a decrease in discharges of more than 5 percent from one cost reporting year to the next, they can apply for a volume-decrease adjustment (VDA) payment. 

Schumer explained that, “due to this circumstance beyond their control,” the federal government provides the adjustment payment to cover some of the costs needed to maintain necessary core staff and services.

However, Schumer said CMS has decided to “go after” hospitals to try and retroactively recoup funds based on the new formula and not the formula in place when it made these funding determinations. 

The retroactive recalculations affect 16 New York facilities in the SCH and MDH with repayments that could total between $15 million and $20 million. 

Lewis County General Hospital, for example, will soon receive a notice that it owes hundreds of thousands of dollars and will only have 15 days to pay. 

LCGH estimates this amount will be “at minimum” $300,000, Schumer’s office said.

In addition, many other North Country hospitals are facing the same situation. 

Massena Memorial Hospital; Carthage Area Hospital; EJ Noble Hospital (now Gouverneur Hospital); Champlain Valley Physicians Hospital; Adirondack Medical Center; and Claxton-Hepburn Medical Center in Ogdensburg are all part of this group of 16 New York SCHs and MDHs that could have to turn over “hundreds of thousands” of dollars. 

For example, Massena Memorial Hospital was recently notified it had to pay back $1.6 million to the Feds. 

Reaction
Michele Prince, interim CEO of Lewis County General Hospital, and officials from other affected North Country hospitals, joined Schumer as he spoke.

“Lewis County General Hospital (LCGH) is one of the hospitals that will be affected by the Medicare low volume cuts. The funds, which are intended to provide support for safety net hospitals, like LCGH, will have a major impact for rural hospitals in the North Country,” Prince said in Schumer’s release. “If the Centers for Medicare and Medicaid Services (CMS) proceeds with its plan to recoup funds that have already been utilized to serve patients, LCGH could potentially lose over $300,000. This burden on our facility and the other safety net hospitals would be significant.”

Prince said she hopes that CMS “will reconsider the retroactive payment.”

Schumer contends it is “completely unfair,” and is “demanding CMS immediately reverse course on this action…” 

Contact Reinhardt at ereinhardt@cnybj.com