Res. No. 170

Resolution calling on the New York State Legislature to pass, and the Governor to sign, legislation to fully fund the Medicaid program to cover 100% of the cost of care at New York State public, not-for-profit, and safety net hospitals by Fiscal Year 2028, including a significant down payment in the Fiscal Year 2025 State budget.

By Council Members Narcisse, Lee, Schulman, Farías, Rivera and Salaam

Whereas, New York City’s (“NYC” or “City”) public, not-for-profit, and safety net hospitals care for millions of patients across the five boroughs, including Medicaid beneficiaries and the uninsured, serving as an essential safety net for all New Yorkers and giving them a choice of provider and services; and

Whereas, While public, not-for-profit, and safety net hospitals are essential healthcare providers to low-income New Yorkers of color, many struggle due to longstanding structural inequities in how they are reimbursed and supported by New York State (“NYS” or “State”); and

Whereas, Medicaid currently reimburses hospitals 30% less than the cost of delivering care to Medicaid beneficiaries, contributing to a reimbursement gap between the cost of delivering care for Medicaid patients and the payments hospitals receive; and

Whereas, Medicaid reimbursement rates have not kept pace with increases in medical costs, inflation, and market challenges, leaving many public, not-for-profit, and safety net hospitals to operate at a perpetual loss and unable to reinvest in their facilities or communities; and

Whereas, This chronic underfunding of public, not-for-profit, and safety net hospitals has contributed to health disparities in largely Black and Brown communities; and

Whereas, Together, the City’s public, not-for-profit, and safety net hospitals have more than $3 billion in outstanding infrastructure investment needs, including deferred facility upgrades such as HVAC, and investments in programs, like primary care; and

Whereas, The COVID-19 pandemic exacerbated the financial challenges faced by the City’s public, not-for-profit, and safety net hospitals and exposed the significant inequities that persist across low-income communities of color, which are an extension of decades of historical community disinvestment; and

Whereas, Relatedly, communities of color experienced significantly higher rates of COVID hospitalizations and deaths, higher rates of poverty and being uninsured, and worse health outcomes compared to wealthier NYC neighborhoods; and

Whereas, Without sufficient funding, many hospitals are forced to reduce services or close their doors, and

Whereas, NYS hospitals have among the lowest margins in the United States, with a 2022 median operating margin of -2.5%; and

Whereas, Potential funding sources to close this reimbursement gap include the State’s historic high of $43 billion in reserves; and

Whereas, There is an urgent need to structurally reform the outdated Medicaid reimbursement rates, which threaten New Yorkers’ access to care, and to achieve health care justice for all by reducing health care disparities and improving health outcomes for low-income, predominantly Black and Brown communities; now, therefore, be it,

Resolved, That the Council of the City of New York calls on the New York State Legislature to pass, and the Governor to sign, legislation to fully fund the Medicaid program to cover 100% of the cost of care at New York State public, not for profit, and safety net hospitals by Fiscal Year 2028, including a significant down payment in the Fiscal Year 2025 State budget.

LS #15819

02/23/2024

CGR