Increase in Medicare Reimbursements Would Enhance Wages, Improve Quality of Care

WASHINGTON – U.S. Senators John Boozman (R-AR) and Tom Cotton (R-AR) , and Congressmen Rick Crawford (AR-01), French Hill (AR-02), Steve Womack (AR-03) and Bruce Westerman (AR-04), are signaling their support for a proposed rule that would see rural hospitals receive higher levels of reimbursement from Medicare.

In a letter written to Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma, the delegation emphasized how the proposal would address a disadvantage faced by rural hospitals by increasing payments to those below the twenty-fifth percentile on the wage index. Currently, rural hospitals are on the receiving end of some of the lowest reimbursement rates in the country because of structural inequalities built into Medicare’s reimbursement formula.

“Hospitals in rural states have long been disadvantaged by the Medicare Area Wage Index,” the lawmakers wrote. “We commend CMS for recognizing the disadvantages of rural hospitals, and we appreciate the agency’s proposal to provide needed relief to low-wage areas, while not increasing Medicare spending.”

In 2017, more than one-third of Arkansas hospitals had a negative total margin. The proposed rule would provide an estimated $12.3 million increase in total statewide reimbursement, allowing hospital staff wages to rise to more competitive levels to help Arkansas attract and retain skilled health care workers and increase resources available to invest in needed infrastructure and equipment, all of which would improve quality of care and bring more parity between hospitals in urban and rural areas.

The proposed rule is also supported by the Arkansas Hospital Association. The full text of the letter from the delegation to CMS Administrator Verma can be found here.