07.06.20

SCHUMER REVEALS: AS PANDEMIC LEAVES CNY HOSPITALS STRAPPED FOR CASH & LAYOFFS ON THE HORIZON, THEY MISS OUT ON FEDERAL RECOVERY $$$ DUE TO BUREAUCRATIC GUIDELINES; SCHUMER CALLS ON FEDS TO IMMEDIATELY GIVE FINANCIALLY-DEVASTATED NY HOSPITALS – LIKE CROUSE & ST. JOE’S – THEIR FAIR SHARE

Cancellation Of Elective Procedures Left Hospitals Strapped For Cash; Even After 5 Rounds Of Schumer-Secured Emergency Funding, Crouse & St. Joseph’s Hospitals Have Received Less Funding Compared To Other NY Providers

~$60B Of Emergency Funding Schumer Negotiated For Hospitals in CARES Act & ‘Corona 3.5’ Remains Unspent By HHS; Yet, Administration Says Hospitals Must Only Be Hotspot Or Rural To Qualify, Putting CNY Hospitals and Thousands of Jobs In Limbo

Schumer To HHS: CNY Healthcare Workers Were Fighting On The Frontlines, They Shouldn’t Have To Fight To Now Stay Afloat Too 

Standing with officials from Crouse Hospital and St. Joseph’s Hospital, U.S. Senator Charles Schumer today urged the Department of Health and Human Services (HHS) to develop and distribute a new tranche of funding from the Public Health and Social Services Emergency fund (PHSSEF) which would provide critical support to hospitals and providers that have been left behind in recent HHS COVID-19 emergency funding rounds. Schumer said that despite successfully negotiating for necessary hospital funding in the CARES (acronym) Act for hotspot and rural hospitals, Crouse and St. Joseph’s did not receive any funding from these targeted tranches, though they experienced just as much revenue loss as relative to other providers and throughout New York State.

Specifically, Schumer explained that two-dozen hospitals in New York, including Crouse Hospital and St. Joseph’s Hospital in Syracuse, did not receive any COVID-related emergency funding during HHS’s last several rounds of targeted funding, despite suffering devastating financial losses after complying with all federal and state protocols to cease all elective procedures. The senator also emphasized that no additional legislation is needed for the funding allocation, with roughly $60 billion remaining in the PHSSEF. Schumer referred to Crouse and St. Joseph’s Hospitals as part of a group of nearly two dozen New York hospitals that have been left behind in recent HHS funding rounds. Specifically, after the initial $50 billion disbursement of PHSSEF by HHS to all providers, the agency designed funding tranches targeted towards hospitals in “hotspots” with a high number of COVID-19 cases, to hospitals in rural areas and to safety net providers.

“Central New York’s hospitals have made incredible sacrifices during the COVID-19 pandemic, putting public health above profit and working ceaselessly to help New York State beat back the virus and flatten the curve,” said Senator Schumer. “Unfortunately, despite their incredible sacrifices that helped bring New York back from the brink, some hospitals, like Crouse and St. Joseph’s, have not seen nearly their fair share of the federal emergency aid that I specifically negotiated into the CARES Act and Interim ‘Corona 3.5’ package for them. HHS must create and disburse another round of already congressionally-appropriated funding to support every single hospital that was there for New York in her darkest hour. Central New York’s healthcare workers were nothing short of heroes as they fought on the frontlines, they shouldn’t also have to fight now to keep their jobs, stay afloat, and keep hospitals open.”

As one of the top Perinatal Care providers across 14 counties in Central New York, Crouse Hospital currently only has 43 days of cash on hand and is expected to lose about $20 million by the end of the year. During the height of the pandemic, the hospital was losing $300,000 per day. To date, Crouse Hospital has received $8 million from HHS, but much more funding is needed to fill the remaining $10 million budget gap. Similarly, Schumer noted, St. Joseph’s Hospital has received $11 million from HHS, but with projected losses of $40 million, the provider has been forced to lay off staff and close some facilities.

Schumer was the lead author and architect of the ‘Marshall Plan for Healthcare’, in the CARES Act and Paycheck Protection Program and Health Care Enactment Act, securing in negotiations $175 billion in support and relief for the health care system. Of the $175 billion total, HHS has so far distributed over $100 billion in 5 separate tranches, including funding targeted at hospitals in COVID-19 hotspot areas, rural hospitals, and safety net hospitals, with more expected imminently. The Senator said he is calling on HHS to use the remaining funds in the PHSSEF to ensure that every hospital in New York State receives sufficient funding.

Senator Schumer’s letter to HHS Secretary Azar appears below:

Dear Honorable Sec. Azar,

I write to request that the Department of Health and Human Services develop and distribute a new tranche from the Public Health and Social Services Emergency Fund (PHSSEF) for providers that would support those hospitals in New York State that were not aided by the previous specialized tranches targeted at hospitals in COVID-19 hotspot areas, rural hospitals and safety net hospitals with all due speed.

As you know, New York State has and continues to suffer enormously during the coronavirus pandemic. For months, New York was the global epicenter of the crisis with new cases hitting over 10,000 a day at one point. Though making large strides onto the road to recovery, New York still has the highest recorded number of coronavirus cases at over 400,000 and it’s over 30,000 COVID-related deaths over double the number of any other state (NYT Cite). As a result of this incredible suffering, New York now faces one of the most challenging public health and economic crises in recent history.

In April 2020, Congress included $100 billion in the Coronavirus Aid, Relief, and Economic Security (CARES Act) and an additional $75 billion in the Paycheck Protection Program and Health Care Enactment Act for the PHSSEF to support providers throughout the country during the COVID-19 pandemic. This appropriation in both pieces of legislation was intended to reimburse providers for “health care related expenses or lost revenues that are attributable to coronavirus.”

To date your Department has distributed $92 billion across five separate tranches. The Department employed a formula to allocate the first $50 billion to Medicare providers based on available data of the providers’ previous year revenue. In this first distribution New York State’s hospitals received over $1.45 billion dollars. Your Department then delivered subsequent tranches that delivered money to hospitals with eligibility and funding levels based on whether they were located in areas with high levels of COVID-19 cases, rural designations and whether they had safety-net status.  In all, 182 hospitals across New York State, hospitals in the state hardest hit by the coronavirus pandemic, received additional support through these targeted tranches from the provider fund.

However, these distribution formulas and eligibility standards excluded roughly two dozen hospitals across New York State that suffered enormous financial losses. These hospitals complied with all federal and state protocols and recommendations by forgoing elective procedures and investing heavily in preparation for the COVID-19 pandemic. These sacrifices and proactive measures resulted in tens of millions of dollars in lost revenue and high coronavirus-related expenses. While these losses mirror those incurred by the 182 hospitals captured by the specialized distributions from the provider fund, the two dozen hospitals left out of these distributions suffered these losses without further assistance from the fund.

For example, Crouse Hospital in Syracuse, New York is expected to lose nearly $20 million dollars by December 2020 and currently only has 43 days cash on hand. In addition to the impact on cash, COVID-19 has significantly decreased Crouse’s income and debt service coverage ratio, which could cause the hospital to be in default on its debt, including significant penalties. To this date, Crouse has received $8M from the PHSSEF, leaving over a $10 million budget hole remaining. Similarly, St. Joseph’s Hospital in Syracuse is projecting a $40 million loss through the year and has already announced layoffs and permanent facility closures, but has received $11 million dollars from the PHSSEF.

I ask that your Department craft a new distribution formula from the PHSSEF provider fund that captures Crouse and St. Joseph’s Hospital and the other 23 hospitals that have not been adequately supported by the Department amid this crisis.

I thank you and your Department for your service during this crisis.

Sincerely,

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