Cayuga Medical Center in Ithaca. Credit: Photo provided

ITHACA, N.Y.—Upstate New York hospitals are slated to receive over $1 billion more per year thanks to a new federal Medicare wage reimbursement rule, detailed Wednesday in a press conference with Senator Charles Schumer (D-NY). 

The overall Ithaca area will experience a 12.5 percent increase in Medicare wages coming in, led by $6.4 million per year more to Cayuga Medical Center, according to estimates from the New York Hospital Association. Overall, in the Southern Tier region of the state, it is projected hospitals will receive $111 million more per year. 

“The Medicare system has now shifted in upstate New York’s favor,” Schumer said during a teleconference call with media members Wednesday. 

The rule change in question dealt with how reimbursements are determined for hospitals seeing Medicare-eligible patients in rural areas. Those hospitals would traditionally receive less reimbursement than the average for true Medicare labor costs which are paid, in part, by the U.S. government. Those hospitals, instead of encountering different reimbursement rules as non-rural hospitals, will now be treated similarly, meaning the floor for Medicare reimbursement at rural hospitals has been raised substantially. 

Schumer said he had been rallying support to maintain the rule changes, which had been proposed earlier this year by the federal agency that oversees Medicare payments before recently being finalized. 

“Any hospital can tell you that the payment rate hasn’t reflected the true cost of doing business, and it’s been that way for decades,” Schumer said. 

The list of financial impacts hospitals in the Southern Tier of New York can expect per year, according to projections by the New York Hospital Association.

He detailed how the changes will impact certain specific hospitals in New York, focusing particularly on Albany-area hospitals that reported losing doctors and nurses for other hospitals that had been receiving higher reimbursements for Medicare work, meaning they could offer better salaries. 

“Cayuga Medical Center is pleased to be included in the updated payment system from CMS. Rural hospitals provide critical services to underserved and underinsured populations,” said Dr. Martin Stallone, president and CEO of Cayuga Health System. “The additional funding better covers hospital costs and will help ensure that vulnerable community members can continue to receive high-quality health care. We are grateful for Senator Schumer’s determined pursuit to keep Upstate New York hospitals and our communities strong.”

A press release from Schumer’s office estimated at least $967 million more going to hospitals throughout upstate New York. The rule change, finalized now by the federal Centers for Medicare and Medicaid Services, takes effect Oct. 1, 2023. 

The goal, Schumer said, is for people seeking healthcare in rural areas to avoid some of the pitfalls they have encountered previously, including lack of specialists or long wait times to receive necessary care. While hospitals are free to do what they want with the money, Schumer said the hopeful result of the extra funding is that it will lead to more staff hires which will induce “smoother operations, decreased wait times, [increased] telemedicine” and more. 

“This is going to mean more jobs for upstate New York, and more healthcare, better healthcare,” Schumer said. “Our hospitals will be able to hire more people, whether it be administrators or nurses or doctors. […] And it’s great for everyone because it means better healthcare.”

Other than the Southern Tier, Western New York hospitals are projected for $170 million more per year; $192 million more in the Capital Region; $121 million more in the Central New York region; $41 million more in the North Country and $87 million more in the Mohawk Valley region. 

“It’s just great news,” Schumer said. “Years from now, people are going to look back on this as a pivotal moment that upgraded New York healthcare, and when you upgrade our healthcare, it helps us attract jobs. […] It’s one of the biggest shots in the arm for federal funding that we have ever seen in upstate New York.”

Matt Butler is the Editor in Chief of The Ithaca Voice. He can be reached by email at