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Schumer Vows to Fight Fed Attempts to Take Back Critical Funds That Support Small, Rural Hospitals That Serve Vulnerable Senior Citizens

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"Our Sole Community and Medicare Dependent hospitals are critical life lines for rural communities, particularly ones with large senior citizen populations, throughout New York State. These hospitals serve a vital public need, but are often under serious financial pressure because they serve fewer patients than their urban and suburban counterparts and receive a high percentage of Medicare beneficiaries," said Senator Schumer. "They deserve our support in their continuous efforts to provide the highest level of care to residents. That's exactly why I'm demanding CMS immediately reverse course on its attempts to claw back the federal funding it provided to these hospitals years ago so they could stay afloat and ensure critical healthcare access for rural communities and seniors. CMS should not come after these funds, after the fact. So I'm going to be fighting for tooth and nail for the justice our hospitals deserve just as our upstate hospitals fight for their patients every day."

Recently, CMS decided to change a calculation used to determine certain funding for SCHs and MDHs. 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 these funding determinations were made. The retroactive recalculations affect 16 New York SCHs and MDHs with repayments that could total $15-20 million. Lewis County General Hospital, for example, will soon receive a notice that is owes hundreds of thousands of dollars and will only have 15 days to pay. Lewis County General estimates this amount will be at minimum $300,000.

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 (Ogdensburg) are all North Country hospitals that are a part of this group of 16 New York SCHs and MDHs that could face having 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. Schumer said this is completely unfair, and is therefore demanding CMS immediately reverse course on this action, which could leave these North Country hospitals in the lurch and unable to provide the services patients depend upon.

Schumer explained that there are two federal programs, the SCH Program and the MDH Program, that provide hospitals, particularly in rural areas, with the funding they need to continue essential healthcare services in communities that would otherwise not have options. When these hospitals experience 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, they receive this adjustment payment to cover some of the costs needed to maintain necessary core staff and services.

Rural hospitals face many challenges to their bottom line due to serving a population that has a high percentage of Medicare beneficiaries, providing care to more isolated communities where it is harder to achieve economies of scale, and attending to a smaller volume of patients compared to urban and suburban hospitals. As a result, these rural hospitals are often financially strained, making it difficult to provide the same, high-quality care as other hospitals and medical centers. Schumer said these VDA payments help make these hospitals viable and capable of providing the emergency services residents in rural areas depend upon.

Schumer explained that CMS recently revised the calculations it uses to determine how much funding hospitals should receive through their VDA payment. Schumer said that while this is something hospitals can account for going forward, CMS has also decided to try and recoup past payments to hospitals based on the new formula. Just last month, National Government Services (NGS), the Medicare Administrative Contractor for New York on behalf of CMS, began notifying the 16 New York SCHs and MDHs that they must make immediate repayment for funds received in previous years due to these new calculations, and amount that could total $15-20 million statewide. Schumer called going after hospitals -- and more than three years later -- for funds they received when the funding formula was different is completely unfair. In particular, Lewis County General Hospital will have 15 days to pay back at least $300,000 it received in previous years.

On top of this, Schumer said this revision could call additional years of VDA payments into question and lead to more letters of remand from CMS to hospitals. Schumer said this attempt to claw back money from previous years could eventually lead CMS to try and collect on years following, and therefore lead to even more financial strain and bureaucratic hurdles for these hospitals. Most importantly, Schumer said CMS' continued pursuit of hospitals like Massena Memorial Hospital, Carthage Area Hospital, EJ Noble Hospital (now Gouverneur Hospital), Champlain Valley Physicians Hospital, Adirondack Medical Center and Claxton-Hepburn Medical Center (Ogdensburg) could impact their ability to provide the quality care residents in the region rely on. Schumer said this is unconscionable, as the funds provided to this hospital two years ago were already used to ensure critical healthcare access for rural communities. Schumer therefore urged CMS to immediately reverse course on going after small, rural hospitals in order to remand these funds.


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