Legislation helps rural hospitals recruit and retain staff by establishing a minimum Medicare reimbursement level
Mar 16 2023
WASHINGTON – U.S. Senators John Boozman (R-AR), Mark R. Warner (D-VA) and Marsha Blackburn (R-TN), joined by Sens. Tim Kaine (D-VA), John Cornyn (R-TX), Rev. Raphael Warnock (D-GA), Cindy Hyde-Smith (R-MS) and Roger Wicker (R-MS), introduced the Save Rural Hospitals Act - legislation to help curb the trend of hospital closures in rural communities by making sure hospitals are fairly reimbursed for their services by the federal government.
The Save Rural Hospitals Act would amend the flawed Medicare Area Wage Index formula that has disproportionately harmed rural and low-income hospitals. Currently, many hospitals in rural areas lack the resources available to those in more populated areas to offer competitive salaries. Due to those salary differences, rural hospitals receive lower reimbursements from the federal government, which contributes to their lack of resources and perpetuates a harmful staffing crisis.
The legislation would establish a national minimum of 0.85 for the Medicare Area Wage Index, which is used to adjust a hospital’s overall payment from the Medicare program on the basis of geographic differences in labor costs, to ensure rural hospitals receive fair payment for the care they provide.
“Arkansans deserve access to quality and affordable health care no matter where they live. This legislation will help rural hospitals better support the needs of the local community and deliver dependable health care well into the future,” Boozman said.
“Rural hospitals across the country and the Commonwealth of Virginia are struggling to recruit and retain quality health care professionals,” said Warner. “This legislation aims to ensure that all hospitals are able to deliver appropriate care by attracting employees and compensating them fairly for their lifesaving work – regardless of where they are located.”
“As I speak with Tennessee leaders and medical professionals, rural health care is a top priority. By establishing an appropriate national minimum to the Medicare hospital Area Wage Index, we can help ensure rural hospitals have the resources to recruit and retain quality health care professionals,” said Blackburn.
The Save Rural Hospitals Act would offer a permanent fix to Medicare’s unfair Wage Index, which is harming rural and low-income hospitals. Earlier this year, Boozman and a bipartisan group of senators sent a letter to CMS Administrator Chiquita Brooks-LaSure requesting a four-year extension of the current Low Wage Index Hospital Policy, which serves as a temporary fix, raising the payments of hospitals in the bottom wage index quartile.
This legislation builds upon Boozman’s efforts to improve health care in Arkansas. Earlier this month, the senator introduced the Physicians for Underserved Areas Act, legislation that would update the Graduate Medical Education (GME) distribution process to allow medical residency programs in areas with physician shortages a greater chance of gaining available residency slots following a hospital closure elsewhere in the country. Additionally, Boozman sponsored the Resident Education Deferred Interest Act to help incentivize students to join the medical field by pausing their student loan interest accrual and principal loan repayment while serving in residencies or internships.
A copy of the bill text is available here.