“On a positive note, CMS modified its proposal to address wage index disparities between low and high wage index areas and will apply a uniform national budget neutrality factor to all hospitals instead of cutting only high wage area hospitals,” wrote Kenneth Raske, president and CEO of the association, in a letter to members.
The area wage index applies to the reimbursement of hospitals and raises or lowers Medicare payments to account for geographic differences in labor costs.
“CMS argues that its proposed changes to the area wage index seek to help rural hospitals, yet not one of New York’s rural hospitals—who face the same fiscal challenges as rural hospitals across the nation—would see a benefit from the policy,” the lawmakers wrote in a letter to CMS administrator Seema Verma. “Rather, states like New York with many hospitals that have legitimately high wages commensurate with market competition will be forced to transfer hundreds of millions in Medicare funding to a small handful of states.”
With the issue of wage index out of the way, state hospitals’ greatest concern may now be the finalized uncompensated care pool proposal. Raske noted the Greater New York Hospital Association has “fiercely opposed” the proposal.
“To mitigate the impact of the data issues and reduce the volatility in the uncompensated care distributions, GNYHA had recommended that CMS continue the fiscal year 2019 policy and base the distribution on a weighted average of low-income days and uncompensated care costs,” Raske wrote. “Instead, CMS finalized its proposal to base the distribution on 100% uncompensated care costs using 2015 data.”
In March the Greater New York Hospital Association called the proposal dangerous and said it would base distributions on bad debt and charity care data and cap the pool’s rate of growth, representing a $98 billion cut over 10 years. —Jennifer Henderson