Cuomo and de Blasio grasp at an uncertain waiver solution

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ALBANY—Gov. Andrew Cuomo and Mayor Bill de Blasio on Monday called for Washington to approve a $10 billion Medicaid waiver to help save struggling Brooklyn hospitals, even as federal officials said that's not how the money should be spent.

And if the money were to come through, both Interfaith Medical Center and Long Island College Hospital would have to “transform,” said state Medicaid director Jason Helgerson, who envisions fewer inpatient beds in Brooklyn and more primary care facilities.

During the press conference, the governor struck a note of urgency, saying if the waiver is not granted by February it is unlikely the state will be able to continue to prop up LICH and Interfaith.

“If [Health and Human Services] does nothing, we cannot continue to hold up these hospitals,” Cuomo told reporters and a bipartisan delegation of lawmakers in the Red Room in the Capitol, citing the example of the two Brooklyn hospitals whose deteriorating financial condition has led to threats of potential closure and in the case of Interfaith, more than a year of tumultuous bankruptcy proceedings. The state has been funding those hospitals at a loss “for months,” Cuomo said.

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“The problem is beyond the scope of the state alone," said Cuomo, who pointed out that the state submitted its waiver application more than 18 months ago.

H.H.S. officials said the delay is the result of a disagreement over what the money can be used for. The two sides have spent months haggling, with Cuomo vying for more control over the money and the federal government insisting on a narrow mandate.

In a letter to state officials written last week, H.H.S. Secretary Kathleen Sebelius said the state’s waiver application could not be used to save hospitals.

"The proposal before us is broadly aimed at improving the health and health care of Medicaid beneficiaries and low-income New Yorkers and lowering system costs through those improvements. It will not, nor should it, determine the future path for particular New York hospitals; those are decisions properly left to state and local officials and affected communities."

Helgerson told Capital the state’s plan would fund hospitals to stay operational while the state finds ways to “transform” the health care delivery system with $1.2 billion in capital funding Cuomo proposed as part of his budget address last week. But that plan could also put the state at odds with de Blasio, health care unions and community groups who have fought to keep LICH and Interfaith running as full service hospitals.

Cuomo, Helgerson and state health commissioner Nirav Shah have said that the problem with Brooklyn hospitals is that there are too many beds. What is needed, the state argues, is fewer old-fashioned hospitals and more clinics and primary care facilities.

This is a point community groups (who have sued the state government in court to keep LICH open) have refused to concede.

“We'd be happy to give Governor Cuomo a guided tour of Brooklyn hospitals to show him he is mistaken when he says we need fewer beds now or as our population grows,” said Jeff Strabone, speaking on behalf of the Cobble Hill Association. “LICH was averaging 237 occupied beds out of 260 staffed beds a year ago. Interfaith was at 104% capacity last week.”

Helgerson’s figures are misleading, said Eliza Bates, spokeswoman for the New York State Nurses’ Association. Hospitals are often licensed to carry more beds than they operate. LICH, for example, is licensed to carry 400 beds but operates only 250, which meant the facility is often about 90 percent full.

“When you’re looking at number of beds that are actually operational, the number is vastly different,” Bates said.

Helgerson said some existing services could be maintained under the state's plan.

"What we said all along is we need to convert the facilities into alternative uses and in some cases you’re going to see services that are maintained,” Helgerson said. “So you can have a standalone emergency room that doesn’t have hospital beds upstairs but has other services. You sometimes call it a medical village.”

That configuration sounds similar to the two plans proposed for the takeover of LICH, plans vigorously opposed by de Blasio and community groups who want more of the current hospital facilities to be used for health care in any new configuration.

One such proposal would have Brooklyn Hospital assuming management of the facility’s emergency room, with excess hospital space turned into 1,000 residential housing units, 350 of them affordable. Another bid by NYU’s Langone Medical center would partner with developer Fortis Property Group to build condominiums on the site.

SUNY’s board of Trustees voted to table that proposal in December, following criticism from de Blasio and other elected officials. Earlier this month, a coalition of six Brooklyn community groups launched a campaign to stop both proposals, claiming that SUNY, the hospital’s current owner, embellished its estimates of LICH’s debt and operating costs in order to discourage operators’ bids to create full-service hospitals.

The debate over LICH’s future has even exposed a rift between the newly-elected mayor and the governor. Cuomo’s top aide Larry Schwartz told the Daily News last week that the mayor should select a proposal quickly because SUNY is $100 million in debt and paying $13 million to keep the hospital operational.

On Monday, both de Blasio and Cuomo agreed on one thing—a deadline for the federal government to approve the waiver before the state will cut off funding. Asked how long the state could continue to fund those institutions pending the waiver, de Blasio responded, “I would say February is a really good month for the federal government to resolve this problem.”

Cuomo agreed.

“February is the last period that I can do a modification to our budget,” he said. “It’s not in our budget now. There are no funds to continue this."