Looming cuts to federal hospital funding has led to more financial uncertainty for the city's struggling hospital system, and increasing tension between the Cuomo and de Blasio administrations.
Hospital officials are urging the state to release $380 million in funding known as disproportionate share hospital or DSH payments.
The program reimburses hospitals for care provided to poor and uninsured patients.
But the Cuomo administration Friday said it cannot give those funds to the city until it completes a full analysis of the impact future cuts to the DSH program will have on the state's budget.
City officials say wihtholding the funds makes no sense, and hinted that the hospital may have to consider additional cuts to staffing.
"I do anticipate, if we do not get this money, a much more intense attrition approach, in other words, reduced rehiring of positions," said Stanley Brezenoff, president and CEO of NYC Health and Hospitals.
"Before we go forward with any more payments to them, I think it makes sense for us to do this due diligence to better understand why they have such significant needs," said NYS Medicaid Director Jason Helgerson. "As we think about DSH as a program moving forward with fewer funds form the federal government, how best to use the funds that are in fact available."
In a later statement, the governor said, "The situation is clear, the first source of financial assistance for these hospitals must be their associated local governments and SUNY. There is no passing the buck. But make no mistake, if our federal delegation fails in stopping these cuts, they will hurt."