October 13, 2017

Michael D. Israel
President/Chief Executive Officer
Westchester Medical Center
100 Woods Road, Taylor Pavilion
Valhalla, NY 11554
Dear Mr. Israel:
As you know, we have passed the October 1, 2017 deadline for Congress to fully
reinstate the Medicaid Disproportionate Share Hospital Payments (DSH) which has resulted in a
federal funding cut of $2.6 billion to our state’s public hospitals.
For months, Governor Cuomo has repeatedly and publicly warned of the devastating
impact these federal cuts will have on New York’s hospitals. These cuts directly impact your
institutions – the public and safety-net hospitals that provide critical care to millions of our most
vulnerable citizens. In an effort to reverse these cuts, the Governor has launched an aggressive
statewide coalition and New York continues to call on the federal government to restore this
critical funding.
The Federal DSH program’s current funding level was cut on October 1, of this
year. Some in Congress hope to restore the program, but the state must operate on the current
law.
The state’s immediate objectives on managing federal cuts to the DSH program are to
provide each participating hospital a fair allocation and to assure each hospital’s financial
stability. Therefore, all payments to all public hospitals were paused to reconcile their accounts
before additional disbursements exhausted all funds.
The State Division of the Budget (DOB) and the Department of Health (DOH), working
with outside financial consultants, have completed a preliminary analysis of the program. This
final review of hospitals which are heavily dependent on DSH is expected to be completed
by December 1, 2017.
Funding under DSH is complex. The program operates on a lag basis whereby
hospitals would submit their prior years’ expenses for reimbursement. The program also
allowed a hospital to request funding as an advance against future DSH payments. There was
no set schedule for either submission of bills or payments for these DSH funds by the state, but
rather the program was administered on a rolling basis.
Upon the implementation of the federal cuts, it was necessary to justify each hospital’s
fair allocation, regardless of the timing of the invoices they had submitted to date.

 We have determined the annualized payment to each hospital and seek to fund each
hospital to their full annualized allocation by December 31st. This will be done in three monthly
payments: October, November and December.
To the extent hospitals have requested payments based on future estimates of DSH,
subsequent allocations will be determined once we are informed of any Congressional action to
restore DSH funding.
Our initial review of each hospital’s finances suggests there is no imminent threat of
insolvency, however, the state is proceeding with independent financial reviews of each hospital
in the program.
The state has established a reserve fund in the event a hospital is on the brink of
insolvency.
The DSH payments to these hospitals are not the exclusive payments made by the
state. There are additional Medicaid funds and supplemental Medicaid payments that are
provided.
Our priorities are fair allocations to all hospitals involved in the program, stability of the
workforce and preservation of the highest levels of patient care.
Applying the above analysis to participating hospitals, Westchester Medical Center is
being informed as follows:
Westchester Medical Center requested $110 million in unscheduled DSH
payments. The state will distribute $27 million for services rendered in
prior years. In addition, the state will distribute $9 million in scheduled
DSH funding for a total of $36 million.
Sincerely,

Jason A. Helgerson
Medicaid Director
Office of Health Insurance Programs