Rural healthcare program promises relief, Adirondack hospitals wary of Medicaid cuts

Healthcare leaders weigh whether Senate-amended transformation program in the “Big, Beautiful Bill” Act can make up for $1 trillion slash in Medicaid spending

By Brenne Sheehan

On July 4, President Donald Trump signed the final version of Congress’ budget reconciliation bill — nicknamed the “One Big, Beautiful Bill” by House Republicans — into law.

But for rural Adirondack hospitals, the sweeping measure leaves lingering questions about the future of healthcare providers inside the Blue Line.

Now officially titled the One Big, Beautiful Bill Act, the new law will implement $1 trillion cuts to federal Medicaid spending and increase the number of uninsured people by 11.6 million over the next 10 years, according to the Congressional Budget Office’s latest cost estimate. 

About 215,000 people — 28% of the population — in New York’s 21st Congressional District, which includes the Adirondack Park, receive Medicaid, according to a report by the Healthcare Coalition of the North Country.

Aimed at decreasing federal spending, the law increases current eligibility requirements for Medicaid enrollment, prohibits states from establishing new provider taxes to fund state-covered Medicaid and reduces the current 90% expansion match rate to 80% for states that  supplement health coverage for immigrants who do not have a qualified Medicaid status. 

A report by the Kaiser Family Foundation predicts federal Medicaid spending in rural areas will decrease by $155 billion over the next 10 years. 

Kevin Kerwin, president of the Iroquois Healthcare Association, a nonprofit upstate New York healthcare trade organization representing more than 50 hospitals and health systems, said the Medicaid cuts will leave uninsured people without preventive care and push hospitals further into the red to cover the cost of emergency services without federal Medicaid reimbursements. 

“Hospitals have a legal, moral and missionary obligation to treat,” Kerwin said. “Whether you have insurance or don’t have insurance — it makes no difference. If you don’t have insurance, that means the hospital won’t be paid for those services.” 

Elizabethtown Community Hospital CEO Bob Ortmeyer said the new law raises “serious concerns” for rural communities like Essex county. 

“We’ve been actively advocating against this legislation and will continue to work with our partners and government leaders to protect access to care for the patients and families we serve,” Ortmeyer said in a statement to Adirondack Explorer. “We’ll share more as we better understand what this law means for our community and our health system.”

But the final bill also includes a $50 billion Rural Healthcare Transformation Program (RHTP), which will distribute $10 billion annually to states over the next five years to provide additional funding for rural hospitals.

States must submit “rural transformation plans” to the Centers for Medicare and Medicaid by Dec. 31 this year. Once states receive RHTP funding, they will likely distribute it to hospitals via grants or partnerships. 

Clifton-Fine Hospital CEO Dierdra Sorrell said the RHTP will help offset Medicaid cuts she previously warned would devastate the federally-designated Rural Emergency Hospital headquartered in Star Lake. 

“The $50 billion rural hospital relief fund has sparked renewed hope for Clifton-Fine Hospital,” Sorrell wrote in an email. “I am very hopeful that as a designated Rural Emergency Hospital we will be included in some of that funding.” 

The RHTP will allocate half of its funding evenly among all 50 states, with the other 50% distributed at the discretion of the Centers for Medicare and Medicaid Services based on factors such as rural census tracts, facility counts, and hospital financial health.

While New York is guaranteed $100 million per year from the RHTP, hospitals in the region remain uncertain how much of the remaining $25 billion will ultimately reach them as it’s distributed nationwide.

Adirondack Health CEO Aaron Kramer believes that as a federally-designated Sole Community Hospital located in a rural area like Saranac Lake, Adirondack Health will be able to pursue RHTP funding.

However, Kramer believes the $50 billion 5-year budget falls short of the estimated $155 billion of lost Medicaid funding over the next 10 years. “This is not great news for an organization like ours, with our tight margins,” Kramer said in an email. “We obviously prefer predictability, broad-based access to affordable health insurance coverage, and reimbursement rates that actually cover the cost of the care we provide.”

A June 12 letter from four U.S. senators, including New York Sen. Chuck Schumer, warned Trump, Speaker Mike Johnson, and Senate Majority Leader John Thune that 11 rural New York hospitals — such as Clifton-Fine and Lewis County General Hospital in Lowville, which both serve the Adirondack Park — are “at risk” of closure with Medicaid cuts. 

Lewis County Health System CEO Jerry Cayer criticized the senators’ letter, saying that the criteria that it used to designate at-risk hospitals were “narrow.” He said that when it comes to the cuts to the budget bill, he prefers to “see the glass half-full.” 

While Cayer says the cuts will have a “tremendous impact” on local access to healthcare, he believes there is enough time before the law’s implementation for the hospital to adapt to the changes. He said the hospital is corresponding with the Lewis County Board of Legislators, New York Department of Health and Healthcare Association of New York to understand the new law and how it will affect its patients. 

“This isn’t a tomorrow issue. It isn’t next week, it isn’t next month,” Cayer said. “Today, I’m not in an emotional or afraid state. We’re starting to get some clarity, and we have dates that will guide where we put our focus.” 

While Cayer says he’s also hopeful the RHTP will offset the potential effects of the Medicaid cuts, other rural Adirondack hospital officials and healthcare advocates are feeling less hopeful about the program.
In an email to Adirondack Explorer, New York Sen. Kirsten Gillibrand said the RHTP is “like putting a band-aid on an amputation,” calling the program’s $50 billion budget and five-year timeline “grossly insufficient.” 

“Republicans recognized the threat posed to rural health care providers by the severe Medicaid cuts included in their bill and offered this shortsighted, inadequate patch to try to cover themselves and conceal the harm this bill will cause to rural communities in our state and around the country,” Gillibrand wrote. 

U.S. Rep. Elise Stefanik, who represents the North Country in New York’s 21st Congressional District, voted in favor of the “One Big, Beautiful Bill” when it passed by a narrow margin in the House of Representatives on May 22. 

On July 3, Stefanik celebrated the bill’s delivery to Trump for signing in a Facebook post, where she said the bill “strengthens Medicaid for New Yorkers.” 

In a Thursday statement to the Explorer, a spokesperson for Stefanik said about $20 billion is lost to Medicaid fraud annually, and Emergency Medicaid costs in New York — which can be used by undocumented immigrants — have surged over 1,200% since 2014, citing Empire Center data.

“Republicans want to strengthen and secure Medicaid for eligible citizens as it is an indispensable lifeline for our nation’s most vulnerable. However, Far Left Democrats continue to fear monger because they know that President Trump is delivering results for the American people,” the statement reads. “This spending is unsustainable and in order to continue protecting and preserving benefits for America’s most vulnerable, waste, fraud, and abuse must be rooted out.” 

The spokesperson for Stefanik emailed the Adirondack Explorer shortly after issuing the first statement Thursday and said it was not updated. In an updated Thursday statement, the spokesperson said New York Gov. Kathy Hochul has “overseen the biggest disaster in New York State’s history.”
“There are no cuts to Medicaid and the fact is that the bill actually increases Medicaid by eliminating billions in waste, fraud and abuse. All New Yorkers support ending waste, fraud, and abuse in Medicaid,” the updated statement reads. “Far Left NY Democrats like Kathy Hochul continue to fearmonger because they know that President Trump and Elise Stefanik are delivering results for the American people.”

After the Healthcare Coalition of the North Country spent months working with local advocates, lawmakers and legislators to repeal the bill’s proposed cuts to Medicaid, coalition president John Rugge says he’s waiting to learn more about the RHTP before the organization takes its next steps, and is hosting a steering committee Thursday. 

“It’s not going to happen immediately, so there’ll be time to scratch our heads and learn more about it,” Rugge said. “But compared to the level of reductions, it is a pretty small number.” 

Related Reading: Learn more about how proposed federal Medicaid cuts could impact rural healthcare in this recent Explorer article: Budget bill raises alarm for rural hospitals in Adirondacks

This article was updated twice on Thursday, July 11, to include statements by a spokesperson for U.S. Rep. Elise Stefanik. A previous version also incorrectly identified Adirondack Health CEO Aaron Krame as COO.