A federal decision is a credit positive for New York's nonprofit hospitals, said Moody's Investors Service.
The decision made in mid-April will result in up to $8 billion in projected incentive payments to the hospitals over five years.
The hospitals most likely to gain are hospitals with substantial safety-net operations. If the federal government designates them this way, they will be eligible for the Delivery System Reform Incentive Payment program. The state hopes the DSRIP program will reduce hospitalizations by 25% over the next five years, said Moody's analyst Sarah Vennekotter.
In mid-April the federal government said the state could keep up to $8 billion of $17.1 billion in Medicaid savings anticipated from Medicaid reforms. Of this $8 billion, $6.4 billion will be used as DSRIP incentive payments. An additional $500 million will be used fund to help hospitals until DSRIP is implemented. A final $1.1 billion will be used for the development of home health, long-term care, and behavioral health services. The hospitals and health care systems may be the developers.
New York's nonprofit hospital financial medians show them to be in worse shape than nonprofit hospitals nation-wide, Vennekotter said.
Among the hospitals and health systems most likely to benefit from the DSRIP payments are Westchester County Health Care Corporation, Mount Sinai Hospital, and New York Methodist Hospital, Vennekotter indicated.
