House GOP probes Kathy Hochul over hoarding Medicaid funds to plug billion-dollar budget hole

House Republicans have initiated an investigation into New York Governor Kathy Hochul for allegedly withholding Medicaid funding from localities to address a billion-dollar budget deficit. The lawmakers, including House Oversight Committee Chairman James Comer and New York GOP Representatives Mike Lawler and Nick Langworthy, have requested records from Governor Hochul regarding the misuse of federal taxpayer funds.

According to the Republicans, the withholding of Medicaid funding has led to an increase in property taxes and a reduction in local services, particularly affecting small and mid-sized counties like Broome and Erie. In Nassau County, one hospital experienced a “hostile takeover” by the governor, resulting in the appointment of new members to its board of directors.

Governor Hochul’s administration began phasing out federal funding for Medicaid services in May 2023, with the goal of ending the Federal Medical Assistance Percentage (FMAP) by April 2026. Despite claims of saving $37.9 billion in Medicaid costs since 2015, New York has failed to adjust the amount of federal funding retained for Medicaid expansion, resulting in the state assuming nearly $1 billion in annual costs that would otherwise be borne by localities.

Last year, Nassau University Medical Center filed a lawsuit against the state, alleging that it had been denied $1.06 billion in federal Medicaid funding. The hospital was required to cover New York’s share of FMAP funding for over two decades. As part of a budget agreement, Governor Hochul agreed to establish a state-run board at NUMC, displacing local officials from the hospital’s leadership.

NUMC, the only public hospital in Nassau County, serves around 275,000 patients, 80% of whom are uninsured. House Republicans have criticized Governor Hochul for using federal funds meant to support vulnerable populations to address the state’s budget shortfall.

Governor Hochul’s office has been given until July 16 to provide records related to NUMC, the Medicaid funding withholding provision, and the Medicaid Disproportionate Share Hospital payments program.

The investigation into Governor Hochul’s handling of Medicaid funding underscores the importance of transparency and accountability in the allocation of federal taxpayer funds for healthcare services. It is essential to ensure that funding intended for vulnerable populations is not misused to address budget shortfalls at the expense of essential healthcare services.