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Oswego Health Waited For Months To Receive Matching Fed Funds; Critical Health Center Needed Fed Approval Of NY State Amendment To Lift Funding Caps – Amendment Will Now Allow Oswego Health To Receive Matching Fed Funding And Prevent Devastating Cuts

After Senators’ Push, Centers for Medicare & Medicaid Services Approves NYS Funding – CMS Approval Means Oswego Health Can Get Critical Federal Investment It Needs

Schumer, Gillibrand: Oswego Health Will No Longer Be Forced To Operate With One Hand Tied Behind Its Back 

U.S. Senators Charles E. Schumer and Kirsten Gillibrand today announced that the federal Centers for Medicare and Medicaid Services (CMS) has approved a New York State plan that would allow Oswego Health to receive the critical federal funding it needs through the Vital Access Provider (VAP) Program, which helps safety net health care providers that are struggling financially. Specifically, Oswego Health will receive $3 million – $1.5 million from the federal government to match funds received from NY State.

Schumer and Gillibrand explained that the amendment, put forth by New York, proposed allowing Oswego Health to receive additional federal funding – which would match the state investment – to cover an increase in inpatient psychiatry rates, Medicaid indigent care pool funds and the removal of the 2 percent across-the-board Medicaid payment reduction. The New York State Department of Health (NYSDOH) had previously approved the amendment. However, in order for Oswego Health to receive this federal funding, the plan needed to be approved by CMS. Schumer and Gillibrand pushed CMS to approve this proposal so Oswego Health would no longer have to operate with one arm tied behind its back.

“Oswego Health provides invaluable services to thousands of Central New York’s most vulnerable each year, but they were forced to do this while operating with one hand tied behind their back. This critical health center is a vital asset on the front lines of providing critical access to medical care for those who need it most, and it was about time this funding was released. I am pleased CMS heeded our call to break through the bureaucratic morass and approved New York’s application, which will ensure Oswego Health has the resources it needs to continue providing high-quality care to its patients,” said Senator Schumer.

“Oswego Health is a lifeline for thousands of families in Central New York,” said Senator Gillibrand. “The medical services it provides saves countless lives and we must do everything we can to help this health center continue to provide first-rate care to the public. This secured funding will help facilitate the necessary resources to keep the doors open and ensure it remains a vital healthcare provider in the community.” 

Schumer and Gillibrand said that, in order for Oswego Health to receive the federal VAP program funding, the state had to fist agree to lift the Upper Payment Limit (UPL), which caps annual federal and state funding allocation for regional health centers. Then, Oswego Health was required to secure CMS approval, which was successfully secured following Schumer and Gillibrand’s push. The Senators announced today that CMS finally made the critical approval necessary that would allow this federal funding to begin flowing to Oswego Health.

Schumer and Gillibrand explained that the NYSDOH and CMS had been in prolonged negotiations regarding a proposed amendment from New York State to lift its UPL. The UPL establishes a cap on the total amount spent on a state’s Medicaid program, particularly providers that include hospitals and nursing homes, such as Oswego Health. In order to receive additional funding – through state and matching federal amounts – a state must first pass an amendment to lift the UPL and then receive approval from CMS. Schumer and Gillibrand said although NYSDOH received state approval for a UPL increase, it had not yet received approval from CMS. This meant that hospitals like Oswego Health were being deprived of hundreds of thousands of dollars in matching federal funds. Schumer and Gillibrand said this lack of federal funding meant Oswego Health was not able to keep up with state increases in inpatient psychiatry rates or remove a 2 percent across-the-board Medicaid payment reduction.

After months of inaction from CMS following the submission of New York’s proposed amendment in February 2015, Schumer and Gillibrand intervened to ensure CMS would approve the plan and increase the UPL. They both penned a letter to CMS Director in July to urge the federal government to make this critical approval that would allow Oswego Health to operate more efficiently and without financial strain. Today, CMS announced they would approve New York’s VAP application and would be lifting the UPL.

Oswego Health is the only inpatient and outpatient facility in Oswego County. Given the rural nature of Oswego County, residents are often forced to travel for extended periods of time to receive quality health care, let alone find a facility that accepts their Medicaid payment. Oswego Health is one of the few facilities that accepts Medicaid insurance in the area. During the period when CMS had not yet approved the UPL increase and VAP changes, Oswego Health was without the funding needed to prevent Medicaid rate increases. According to Oswego Health, if CMS had continued to hold off approving NYSDOH’s VAP application, the critical health center may have had to enact devastating cuts to fix budget shortfalls. These cuts would have impacted Oswego County’s most vulnerable residents, who rely on Oswego Health for exceptional care. In addition, it would have led to the continuation of a 2 percent across-the-board Medicaid cut and the delaying of NYSDOH’s proposed 10 percent increase in inpatient behavioral health payment rates.

Now that CMS has approved the aforementioned amendment, the outstanding funding can be provided to Oswego Health. Resolving the UPL issue will impact six separate payments to Oswego Health, which total more than $3,000,000. Schumer and Gillibrand said they were pleased that NYSDOH and CMS were able to resolve this issue and allocate outstanding payments to Oswego Health. This will ensure that Oswego County’s most vulnerable residents have the quality care, while allowing Oswego Health to keep pace with rising payment rates and removing devastating across-the-board cuts that had been previously enacted.

A copy of Schumer’s and Gillibrand’s original letter to CMS appears below:

Dear Acting Director Slavitt,

I write today on behalf of Oswego Health, a hospital that provides critical behavioral health services to local New York constituents. Specifically, I urge the Centers for Medicare and Medicaid Services to work with New York State Department of Health to approve the pending State Plan Amendments designed to resolve the numerous reimbursement restrictions related to the upper payment limit. The increase of this limit will allow critical funding to flow including: the NYS increase in inpatient psychiatry rates; Medicaid indigent care pool funds; removal of the 2% across-the-board Medicaid payment reduction; but most importantly allow a temporary increase in Medicaid funding to Oswego Health through the state-approved Vital Access Provider (VAP) Program.

Oswego Health has been awaiting receipt of these federal matching funds under VAP, which have been pending CMS approval and were due to the agency nearly one year ago. Oswego Health has not seen increases to rates for Medicaid behavioral health payments for several years. CMS approval and provision of VAP aid are urgently needed.

The Vital Access Provider Program is critical to assisting New York in meeting its goals of transforming the healthcare delivery system by focusing on community service needs, improving the quality of care and increasing health equity for populations at risk. This application has been pending approval at CMS for too long with ongoing communication between CMS and the New York State Department of Health. Oswego Health is the only inpatient and outpatient psychiatry provider caring for vulnerable members of rural Oswego County. While striving to more efficiently and cost effectively continue to provide the only behavioral health care available to patients, the delay in receiving VAP funding is creating unnecessary burden.

As we continue to work together to build an integrated health care system where we are constantly improving quality of care, increasing the capacity to serve our communities, engaging people in primary care and preparing to fully move to payment for value, not volume, our vital providers need your support. Therefore, I ask your immediate assistance to approve these applications and this vital funding. Please do not hesitate to contact me should you have any questions or concerns. Thank you for your assistance on this timely issue.


Charles E. Schumer

United States Senator 

Kirsten Gillibrand

United States Senator