Published April 26, 2016
By the Editorial Board
Often prohibitive cost to patients isn’t the only health care crisis in the United States, as many people in this region know all too well. In rural areas, mostly poor ones, the crisis isn’t just about the affordability of medical care, but about having access to it at all.
In emergencies, that can be literally a life-or-death issue. Yet all across the country, rural hospitals are finding it hard, and sometimes impossible, to stay open.
U.S. Sen. Johnny Isakson, R-Ga., is one of four principal sponsors of a bipartisan Senate bill that would revise what its supporters say is an ill-conceived system of Medicare support.
The Fair Medicare Hospital Payment Act of 2016 (S.2832), according to a Senate news release, would adjust “disproportionately low Medicare reimbursement payments to hospitals in rural and low-wage areas.”
Isakson, a member of the Senate Finance Committee, and co-sponsor Lamar Alexander, R-Tenn., both call it a “flawed formula”; another co-sponsor, Mark Warner, D-Va., calls it a “skewed payment system” that exacerbates the challenges of hospitals in poor rural areas. “Under the current system,” said Sen. Sherrod Brown of Ohio, the other Democrat among the four principal sponsors of the legislation, “many hospitals … are paid less for the same lifesaving care they provide as their counterparts in other states across the country.”
The bill would create a national “area wage index” based on the relative wage level in a hospital’s geographic region as compared to the national average, and adjust Medicare reimbursements accordingly.
William T. Richardson, President of Tift Regional Health System, told the Albany Herald that Medicare “uses a wage index to calculate the costs of labor associated with hospital services for Medicare patients — so hospitals in areas with a low cost of living get less than the hospitals in areas with a high cost of living. This hits hospitals serving rural areas the hardest.”
This issue hits close to home, and not just figuratively. Brian Church, CFO for Phoebe Putney Health System in Albany, told the Herald that the system is frequently strained as a “safety net” for other coverage areas in southwest Georgia when hospitals close.
“Over the past three decades,” notes the sponsoring senators’ news release, “legislative and regulatory changes have combined with broader economic trends to create an uneven playing field that has resulted in hospitals losing out on millions of dollars in Medicare payments annually.”
Probably the cruelest irony of all in this formula is the self-reinforcing damage it does. One of the organizations endorsing the bill is the National Rural Health Association; as its CEO Alan Morgan wrote in a letter to Isakson, the existing reimbursement formula penalizes doctors who practice in underserved communities. One sure way make a rural health crisis self-perpetuating is a built-in reason for medical professionals not to go where they’re needed most.
Every now and then, something comes to Washington’s attention that actually transcends partisan politics. This bill is a welcome result.