READER’S VIEW: Robbed of funding by pending Cuomo carve-out, safety-net providers mull layoffs - The Saratogian

By Perry Junjulas

Albany’s failure to repeal a pre-pandemic cash grab has left community-based health and human services centers like mine in precarious financial limbo, threatening both jobs and the care we provide to New York’s most vulnerable residents, the majority of whom are from Black and brown communities.

The Medicaid pharmacy benefit carve-out proposed by former Governor Andrew Cuomo, which diverts money away from safety-net providers and into state coffers, won’t take effect until April 2023. But the reality is that providers such as mine operate with very tight margins and desperately need predictability.

This 30-year-old federal drug pricing program known as 340B allows safety-net providers to buy discounted drugs and use the savings to finance services for our clients that aren’t covered by Medicaid, like food, housing assistance, transportation, mental health counseling, medical care, and medication adherence assistance.

In April 2021, implementation of the carve-out was delayed by the Legislature until 2023 after an outcry by advocates. We hoped the carve-out plan would be repealed for good after Governor Hochul took office and pledged to shore up the state’s pandemic-ravaged health care system.

But the governor and legislative leaders missed the chance to permanently end the carve-out in the 2022-23 state budget. They can still act before the session ends next month by passing and signing into law proposed repeal legislation. Failing to do so will undoubtedly hurt the 2.3 million New Yorkers who depend on our services, 71% of whom are people of color and 89% low income.

The Cuomo carve-out will deny safety-net clinics access to more than $250 million in funding. Those of us with calendar-year budgets will start working on year’s budget shortly. Without knowing whether we can count on this critical funding stream, we will be forced to consider across-the-board program cuts and staff reductions to make ends meet.

The Damien Center alone would lose 20% of our annual budget. Overall, it is estimated that nearly 80% of health centers would dismiss or lay off staff, and at least 32 community clinics would be forced to close entirely, according to a survey by the according to a survey by the Community Health Care Association of New York.

In the fall of 2020, the Damien Center was faced with the same dilemma as we prepared our 2021 budget. The proposed carve-out loomed large, with no repeal in sight. By December, we reduced our staff by 20%, cutting eight staff positions out of 40, and enacted service cuts to all programming.

The carve-out was extended months later, but the damage was already done. For the first time in 34 years, the Damien Center was forced to complete a mid-year revision of its budget. But we could not, in good conscience, fully restore all the eradicated jobs and services as a delay in implementation is not full repeal. We were still in limbo.

The entire process was extremely disruptive for staff and clients alike. And we will need to repeat this painful exercise again unless the governor and the Legislature act now.

The state maintains the carve-out will generate significant savings. But based on how Medicaid is funded in New York, the state would be required to transfer to the federal government more than 70% of the funding derived by dismantling the safety-net system, moving resources away from communities in need. That doesn’t make sense.

The world has turned upside down since this ill-conceived plan was advanced. The budget deficit is gone, thanks largely to an unprecedented influx of federal pandemic aid. And the need for our services has only grown as a result of the COVID crisis and worsening economic conditions amplifying health inequities.

Governor Hochul and state lawmakers are playing a game of chicken with our community health centers, punting on a decision while we plan our budgets. They need to stop torturing safety-net facilities with indecision and repeal the Cuomo carve-out immediately so we can continue to keep vulnerable New Yorkers safe and healthy.

— Perry Junjulas is executive director of The Albany Damien Center, a nonprofit HIV/AIDS service organization and a person living with AIDS.

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READER’S VIEW: Robbed of funding by pending Cuomo carve-out, safety-net providers mull layoffs - The Saratogian
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