Lankford, Colleagues Stand Up Against Medicare’s Planned Reimbursement Cuts for Rural Hospitals

OKLAHOMA CITY, OK– Senators James Lankford (R-OK), Mark R. Warner (D-VA), and Marsha Blackburn (R-TN) led more than a dozen Senators to push for an extension of a policy that allows rural hospitals to continue delivering quality care to their communities. In a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, the Senators formally requested a four-year extension of the Low Wage Index Hospital Policy, which allows hospitals in rural areas to compete for and retain high-quality staff by increasing reimbursements to hospitals in rural areas with lower overall wages. Without action, Medicare payments to these hospitals will reduce after September 30, 2023.

In their letter, the Senators pointed out that extenuating circumstances, including the COVID-19 pandemic, have not allowed for adequate evaluation of the Low Wage Index Hospital Policy. They argue that extending the policy will allow CMS to better assess its impact on the benefiting hospitals ability to recruit and retain health care staff.

“Unfortunately, due to disruptions in the marketplace caused by the COVID-19 pandemic, we have not had the opportunity to see the true impact of the Low Wage Index Hospital Policy envisioned by CMS,” the Senators wrote. “Extending the Low Wage Index Hospital Policy for four additional years will allow hospitals and the agency to better understand the policy’s true impact in a more normal environment.”

Lankford and his colleagues are joined in sending their letter by Senators Tim Kaine (D-VA), Tommy Tuberville (R-AL), Joe Manchin (D-WV), John Boozman (R-AR), Shelley Moore Capito (R-WV), Roger Wicker (R-MS), Cindy Hyde-Smith (R-MS), Bill Hagerty (R-TN), Tim Scott (R-SC), Tom Cotton (R-AR), and Katie Boyd Britt (R-AL).

Lankford continues to lead the charge on standing up for rural hospital access in Oklahoma and around the nation. This week, Lankford announced the reintroduction of the Patient Access to Higher Quality Health Care Act, which removes the Affordable Care Act’s (ACA) ban on the creation and expansion of new physician-owned hospitals (POHs) and allows POHs to participate in Medicare and Medicaid. Lankford and Dr. Brian J. Miller published an opinion piece in the Wall Street Journal about the importance of including physician-owned hospitals in the litany of quality nonprofit and community-based health care options available to Oklahomans and people around the nation.

Lankford recently announced a huge win for rural hospital access when CMS announced its Rural Emergency Hospital (REH) rule, which among other things redefined a “primary” road for purposes of establishing the distance a hospital must be from another hospital to receive CMS’ Critical Access Hospital (CAH)—or now a Rural Emergency Hospital (REH) status.

Lankford previously introduced the Rural Hospital Closure Relief Act, which supports financially vulnerable rural hospitals facing risk of closure. Lankford penned an op-ed in The Hill in 2020 to discuss the big need for access to hospitals in rural parts of our nation and the critical need our CAHs serve.

A copy of the letter can be found HERE and below.

Dear Administrator Brooks-LaSure:

Thank you for your continued commitment to ensuring all health care providers have the resources they critically need to provide quality health care to Medicare beneficiaries. We write to you regarding the Medicare hospital area wage index (AWI) in the Inpatient Prospective Payment System (IPPS). Specifically, we urge you to include a four-year extension of the Low Wage Index Hospital Policy, also known as the Lowest Quartile Adjustment (LQA) policy, in the upcoming Fiscal Year (FY) 2024 IPPS rule.

In August 2019, the Centers for Medicare and Medicaid Services (CMS) first included a four-year AWI adjustment to bottom quartile hospitals as part of the FY2020 IPPS (CMS-1716-F). At the time, CMS stated that the policy “reflected a common concern that the current wage index system perpetuates and exacerbates the disparities between high and low wage index hospitals.”[1] To address this concern, CMS increased the wage index for hospitals with a wage index value below the 25th percentile. The additional assistance has been a valuable lifeline for more than 800 hospitals in 23 states throughout FY2020, FY2021, FY2022, and now FY2023.

Unfortunately, due to disruptions in the marketplace caused by the COVID-19 pandemic, we have not had the opportunity to see the true impact of the Low Wage Index Hospital Policy envisioned by CMS. Extending the Low Wage Index Hospital Policy for four additional years will allow hospitals and the agency to better understand the policy’s true impact in a more normal environment. In its original August 2019 rule, CMS appeared to acknowledge that more time may be needed to implement the policy when it stated, “this policy will be effective for at least 4 years.” We applaud CMS for that foresight and encourage it to extend the policy for four additional years.

The continuation of this critical policy will allow hospitals to recruit and retain health care staff and protect access to care for millions of Americans.

Sincerely,

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