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Budget cuts implemented by Democratic Gov. Tom Wolf's line-item veto are set to affect at least one York-area hospital.

The cuts to the hospitals amount to $17.5 million — and also jeopardize another $18.5 million in federal matching funds, according to an Associated Press report.

The money would go to 13 critical access hospitals in rural counties, 66 hospitals with obstetrics and neonatal services — which refer to care given to at-risk newborns and infants — and six statewide burn care centers, according to the report.

Katie Byrnes, spokeswoman for the Hospital & Healthsystem Association of Pennsylvania (HAP), wrote in an email that WellSpan's York Hospital and Memorial Hospital had received obstetrics and neonatal services supplemental payments during the 2014-15 fiscal year.

WellSpan spokesman Brett Marcy said budget cuts will affect the company's hospitals in Ephrata and York, with the York Hospital funding amounting to about $300,000.

Missing out on that funding will have no impact on the hospital's ability to serve its patients, Marcy said, but it will create a need to find that revenue through other sources. WellSpan is hopeful the program will be quickly refunded, he said.

Memorial spokesman Jason McSherry wrote that his organization is still reviewing information related to the potential funding cuts.

State Rep. Kristin Phillips-Hill, R-York Township, said she's still trying to figure out what's going to happen with the hospitals' funding.

Phillips-Hill, who serves on the House Health Committee, said some members of the committee have expressed concerns that these cuts may have a "huge adverse impact."

"People think it's just the uninsured (patients) who would be affected by these cuts, but it's everybody," she said.

Paula Bussard, HAP's chief strategy officer, said the impact of these cuts varies based on the hospital.

WellSpan is a larger health organization that may be better suited to deal with less funding, Bussard said, but with the critical access hospitals — among the smallest hospitals in the state — the funding could be the difference between positive and negative net income.

The supplemental funding, which was enacted more than a decade ago, is intended to reimburse hospitals for treating patients on Medicaid, which Bussard said pays for nearly half of births in the state. Hospitals often lose money when they treat patients on Medicaid, she said.

"In the early 2000s, we were seeing hospitals close their obstetrics units (because of Medicaid)," Bussard said.

She pointed out that additional funding issues are related to the state's Quality Care Assessment program, which Marcy included in WellSpan's $300,000 figure.

The program refers to a tax levied on certain hospitals by the state that is intended to increase federal reimbursement funds for treating patients on Medicaid. Part of the program involves hospitals contributing to the state's General Fund, which can be used for anything, Bussard said.

Wolf had wanted to increase that contribution from $140 million in 2014-15 to $270 million in 2015-16, but hospital officials worked with legislators to compromise at $220 million, she said.

"But that (compromise) was before this line-item vetoed budget," Bussard added.

— Reach David Weissman at dweissman@yorkdispatch.com.

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