OGDENSBURG, New York (WWNY) – Congresswoman Elise Stefanik (R – NY21) says North Star Health Alliance is still owed Medicaid money by New York State after a 2024 cyberattack and wants U.S. Attorney General Pam Bondi to get involved to find out if Albany is mismanaging the federal money it gets to run Medicaid on a state level.
The cyberattack, one of the largest healthcare breaches ever, hit United Healthcare’s subsidiary Change Healthcare on February 21, 2024, crippling payments to providers.
In a letter to the U.S. Justice Department, Stefanik says the state pays out Medicaid claims once they are processed by a Medicaid managed care plan but any interruption in claim submissions can result in loss revenue for hospitals.
Shortly after the cyberattack, Stefanik says Washington gave states the ok to still make payments to Medicaid providers because the attack created significant claims-processing outages.
Stefanik argues there’s no plan in place for hospitals to be able to recover the loss revenue in a situation like this and believes there’s no public evidence that the state directed payments to happen retroactively.
Stefanik is asking the Department of Justice to find out how much this affected North Star Health Alliance and if the state has tried to resolve it saying, “Investigating these questions in detail should reveal the amount owed to North Star Health Alliance by the state that has potentially not been paid and potential greater structural issues within the New York State Department of Health around management of federal funds that need to be addressed.”
Stefanik says, “In order to prevent a regional healthcare collapse, I respectfully request the federal government to intervene and require the state to pay what is owed to North Star’s hospitals. I further request that the Department of Justice launch an investigation into potential mismanagement of federal Medicaid funds by the NYS government.”
Tuesday, the state called the claims baseless and that it is not withholding Medicaid money from hospitals. The Governor Office’s full statement is later in this story.
North Star Health Alliance runs Carthage Area Hospital, Claxton Medical Campus (Ogdensburg) and Meadowbrook Terrance (Town of Champion) and has stopped getting state funding due to a breakdown in communication as the Ogdensburg medical campus changes its business model to run more efficiently and become self-sustaining. To do so, it was expecting to get $84 million in state help.
Earlier this month, the funding cut-off left North Star needing to find creative ways to meet its payroll of $5.5 million dollars (every 2 weeks) for its 1700 employees.
It did, but the next payroll challenge is next week and as of Tuesday state funding hasn’t returned.
Stefanik, who is running for NYS Governor, writes in her letter to the AG, “As a result of Governor Hochul’s political games, the state refuses to pay out Medicaid funds owed to North Star Health Alliance’s safety net hospitals for healthcare provided years ago. Those hospitals are now on the brink of closure.”
A spokesperson for the Governor says, “These claims are baseless. New York State is not withholding federal Medicaid funding. Thanks to Elise Stefanik, more than 57,000 North Country residents will lose their health insurance, healthcare providers will incur an additional $96 million in uncompensated care cost and critical funding programs for safety net hospitals will be cut. Since 2024, Governor Hochul has provided more than $9.5 billion in supplementary funding to safety net hospitals statewide, including $142 million for Carthage and Claxton-Hepburn. If Elise Stefanik cared about patient care in her community, she would join us in fighting to restore the health care access and funding to hospitals that she and her Republican colleagues brazenly cut.”
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