N.Y., lawmakers slash $775M in healthcare spending, forego up to $250M in federal subsidies

New York lawmakers approved $775 million in cuts and other savings from the state's healthcare budget on Monday as part of an emergency extenders bill to keep the state government from shutting down. Two months past the deadline to settle the state's annual budget, the legislation also requires the state to save an additional $300 million a year by cracking down on Medicaid fraud, waste and abuse, reports the New York Times.

Although the emergency budget bill passed in the Senate along party lines, with all 32 Democrats voting for it, slashing the state's spending could result in a further loss of up to $250 million in federal matching subsidies, as estimated by the Greater New York Hospital Association.

"We feel like we have a gun to our head," Kenneth E. Raske, the association's president, told the newspaper. "We're on the precipice of a major disaster for the healthcare community."

Although the cuts approved Monday night were not as deep as the $1 billion reduction in healthcare spending Gov. David Paterson originally sought, hospitals and healthcare workers have protested vehemently. Hours before the vote took place, about 30 protesters from healthcare workers union 1199/SEIU gathered outside the Senate alternately chanting "No more cuts," "Enough is enough," and "We say, fight back," according to the New York Daily News. The Health Care Association of New York State (HANYS) said the cuts will harm patients and healthcare workers, and that no community can assume their local hospital will survive, reports WNYT.com.

"This budget extender is not just a one-week extender to pay bills, it's 40 percent of the budget," said Senator John DeFrancisco (R - Syracuse). "All of a sudden it miraculously happened between last Monday and this Monday without anything being made public, let alone conference committees where debate took place."

Among other major provisions, the legislation cuts $72.2 million in healthcare for the poor and $37.4 million in subsidies for graduate medical education. The revised proposal also cuts $6 million in state financing for stem cell research.

Despite the intense reaction, lawmakers say the package should not come as a surprise. "Most of the healthcare budget is the Assembly budget that we passed in March, so that's where the governor takes most of it from," said Sheldon Silver, the Assembly speaker.

To learn more:
- read this article in the New York Times
- see this piece on WNYT.com
- check out this story in the New York Daily News