ALBANY — Area health care leaders and congressional officials on Wednesday rallied around a proposed change in federal regulations, which could provide Capital Region hospitals an additional $192 million or so each year.
A pending formula adjustment from the U.S. Department of Health and Human Services would collectively boost the region’s reimbursement rate per Medicare labor expenses from 86% to 122%.
Public comment on the proposal ends in early July. It could be finalized as early as August, changing the region’s standing in the federal government’s Medicare Wage Index rate for the first time since the 1980s.
“Addressing this inequity is a necessary step to stabilize our region’s hospitals and puts us on an even playing field — not as an advantage but an even playing field,” said Christopher Jordan, St. Peter’s Health Partners senior vice president, at the press conference. “Addressing this inequity will plug the gap between the actual cost of care and what our hospitals are paid for the care that they provide.”
Jordan also spoke on behalf of ongoing merger partner Ellis Medicine, currently facing critical losses as a result of the COVID-19 pandemic. Ellis per year would receive an additional $30.6 million while St. Peter’s Health Partners would see an increase of $60,934,457.
The region’s largest service provider, Albany Medical Center, would receive $84.7 million more annually. For each hospital in its network, the boost varies: Columbia Memorial Hospital ($8,228,068); Saratoga Hospital ($2,756,504); Glens Falls Hospital ($3,003,082).
Additional reimbursement funds could make up for some of Albany Med’s deficit in regards to workforce spending, said CEO Dennis McKenna. The financially strained group invested in staff retention and recruitment efforts during the COVID-19 pandemic, all the while facing rising costs across the board.
“I think a fair way to say it is it would come close to making us whole on that issue,” said McKenna.
Long before COVID-19 conditions led to exacerbated strains in local hospitals, U.S. Senate Majority Leader Charles Schumer remembers attempting to change the Medicare-reimbursement system through legislation as a congressman as far back as the Clinton administration.
Because health care committees thought the proposal “robs Peter to pay Paul,” Schumer advocated for the Centers for Medicare and Medicaid Services, an agency of DOH, to take up the issue.
“They spent years studying this and looking at the data and came up with this,” Schumer said at the press conference. “So it’s very highly regarded. No one’s arguing with the facts that they used to come up with the solution that they have.”
Health care hubs like Hartford, Connecticut, and Boston, as well as smaller networks in western Massachusetts, have historically had higher rates than Capital Region hospitals, which receive about 86 cents on the dollar. The change will minimize wage returns for hospital systems across the country, which are already “over-reimbursed,” according to the Democratic senator.
It’s seen as a big forward step for U.S. Rep. Paul Tonko, D-Amsterdam, who has spoken on the issue dating back to his decades-long tenure in the state Assembly.
“While we are so close to the finish line, now is not the time to let up,” said Tonko in a prepared statement.
Also in attendance at the Wednesday event was St. Mary’s Healthcare CEO Jeffrey Methven. The Amsterdam-based hospital network would receive an estimated additional $10,640,600 per year in Medicare reimbursements.
Tyler A. McNeil can be reached at 518-395-3047 or [email protected] Follow him on Facebook at Tyler A. McNeil, Daily Gazette or Twitter @TylerAMcNeil.
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