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FOR IMMEDIATE RELEASE: February 23, 2012


House Had Passed Bill To Cut $494 Million In Medicare Funds From Upstate Hospitals – Schumer Called For House To Remove Provision Before Sending Final Bill To President

The Cuts Were Not Included In Payroll-Medicare Agreement Announced This Week, Saving Hudson Valley Hospitals $77M, Western NY $51M, Rochester $57M, Cap Region $76M

Schumer: This Is A Great Victory For Hospitals & Patients


Today, U.S. Senator Charles E. Schumer announced that Congress has rejected plans that would have cut Medicare funding for Upstate NY hospital clinics by $494 million over the next ten years. The previously considered plan would have severely restricted 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. When the legislation, part of the larger payroll tax cut bill, was considered by a joint committee of House and Senate members, Schumer urged the conference committee members to remove the provision that could be devastating to upstate hospitals. Today, Schumer revealed that the final agreement on the legislation expected to clear both the House and Senate does not contain these devastating cuts to Medicare payments, saving Upstate hospitals nearly $500 million over the next 10 years.


“This is a huge victory for upstate New York hospitals and clinics which provide life-saving services every single day,” said Schumer. “These cuts would have put a serious damper on patient care, potentially forcing seniors to drive hours more to see their physician, or cutting off doctor-access altogether. Hospitals are a key stitch in the fabric of our rural communities, and this news ensures that they’ll have the resources they need to continue providing top-notch medical care.”

Daniel Sisto, President and CEO of the Healthcare Association of New York State (HANYS) said, “On behalf of HANYS member hospitals across New York State we are grateful to Senator Schumer’s consistent and strong leadership in protecting patient access to physician services provided in hospital outpatient clinics – often the only source of patient access to physician services in rural and urban areas alike.  The Senator’s high profile efforts ensured hospitals and the patients they serve were protected from proposed cuts to clinics during the deliberations on the Medicare physician fee schedule fix.”

Dr. William Streck, President and CEO of Bassett Health Network said, “We thank Senator Schumer for his extraordinary leadership; not everyone recognized the importance of this issue for patients – he did.  He was tireless in his support to the benefit of the integrated health care systems in the country and the entire hospital industry in New York State.

David Kruczlnicki, President and CEO of Glens Falls Hospital in Glens Falls, NY touted the Senator’s work to protect patient access saying, “The 20 Glens Falls Hospital physician practices and clinics providing nearly 200,000 patient visits throughout a three-county rural region, ensuring patient access to vital physicians services.  Without the Senator’s leadership this access would have been restricted.”

The payroll tax agreement would, among other provisions, also temporarily fix Medicare's physician payment Sustainable Growth Rate (SGR) formula for the remainder of 2012, but it would do so without cutting payments for hospital outpatient clinic evaluation and management (E&M) services by $6.8 billion nationwide. The cuts in New York, which would have taken effect immediately, would have totaled $988 million across the state in the next decade. The House proposal used 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. Instead of the cut to hospital clinics, the bill offsets the cost of fixing the SGR by fixing technical errors and reducing spending on providers and corporations to ensure Medicare patients continue to have access to their doctors.  The agreement preserves Americans’ access to health care and does not include a single cut to Medicare beneficiaries.


The Medicare clinic funding that was 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. During the debate over the legislation, Schumer fought 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 have worsened 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.


Thanks to Schumer’s push, hospitals across the state will keep millions of Medicare investments they could have lost

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

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

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

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

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

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

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


In announcing his opposition to the plan, Schumer noted that these cuts could have seriously harmed 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 have lost more than $77 million over 10 years because of this provision. The cuts could have hampered 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 would also have been 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 have lost $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 would have lost $21,651,000 if the House plan with the cuts had passed.


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