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HEROES Act would give Capital Region hospitals $100M more per year

HEROES Act would give Capital Region hospitals $100M more per year

Increase in Medicare reimbursement would end inequity but faces tough fight in U.S. Senate
HEROES Act would give Capital Region hospitals $100M more per year
Ellis Hospital
Photographer: File photo

WASHINGTON — Capital Region hospitals have their best chance in years of seeing their Medicare reimbursement rates boosted, with a resulting $100 million a year in additional revenue.

The provision was secured by U.S. Rep. Paul Tonko, D-Amsterdam, in the HEROES Act passed by the House last month but its prospects are still unclear.

The entire package of COVID-19 stimulus spending — and its more-than $3 trillion price tag — faces a stiff fight in the Republican-controlled Senate. Only one Republican voted for it in the House; it passed by a scant 208-199 vote, as 14 Democrats broke ranks and voted against it.

Two area hospital executives told The Daily Gazette they are very aware of the political hurdles the measure must clear before they see any additional funds; they’re excited but not blindly optimistic about the prospects of that happening.

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The Medicare Wage Index for the Albany region is 0.86, meaning reimbursement is 86 percent of expenses incurred. Some nearby regions are similar, others are significantly higher — Springfield, Massachusetts, is 1.02 and Hartford, Connecticut, is 1.08, for example.

The inequity comes from political maneuvering: When somebody wins a higher MWI in one region, the move must be revenue neutral, Tonko explained. So another region’s MWI has to be cut. About 40 percent of hospitals nationwide operate under some modification to the uniform MWI formula.

Tonko said Thursday that he’s been trying for years to address the inequity but never was able to succeed because of the revenue-neutral provision.

“There’s no denying that there’s been some politics in how this has been addressed in the past,” he told The Gazette. But the HEROES Act eliminates that particular barrier by increasing revenue — no other region has to take a cut so that the Capital Region can get an increase.

“Its moment came. It was a battle because there were so many interests that wanted to be in HEROES,” Tonko said.

Ellis Medicine CEO Paul Milton this week said the Schenectady-based healthcare organization would stand to gain $15 million to $20 million per year if its MWI were adjusted to 1.08, as proposed.

Regionwide, the bump up would mean $100 million a year combined for Ellis, Albany Medical Center, St. Peter’s Health Partners, St. Mary’s Healthcare and Saratoga Hospital.

It would be a game-changing boost for Ellis, Milton said, allowing greater investment in facilities, programs and personnel.

He said he’s not declaring victory yet, but feels this is the closest the region has ever come to gaining equity on reimbursement.

St. Mary’s CEO Victor Giulianelli said the change would mean about $5 million a year for the Amsterdam healthcare system, “which is pretty huge for us.”

Above and beyond the direct impact on the hospital, its satellite facilities and their staff, the increase would benefit the region, he said. St. Mary’s is the largest employer in Fulton and Montgomery counties, he said.

The Capital Region’s MWI stands out even in a system with great inequity, Tonko said. “When you look at comparisons, we’re in the top 5 of egregious delta between a region and a contiguous region,” he said.

Giulianelli said the MWI was one of the first issues he tried to tackle upon becoming CEO. Fifteen years later, on the eve of retirement, he’s still wrestling with it. And he finds that nobody in power seems to bat an eye at the imbalance.

“It’s been around so long, no one apologizes anymore,” he said.

Tonko, too, cited the higher MWI as not only helping the Capital Region’s healthcare system but its economy.

“Realtors will tell you people will judge a community by its schools and its healthcare,” he said.

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There’s also the massive decrease in revenues inflicted on hospitals by the COVID-19 pandemic.

He acknowledged the HEROES Act faces a tough battle in the U.S. Senate but said New York has the advantage of being represented by the Senate minority leader — Charles Schumer.

“I’m just hopeful that with the strength of Sen. Schumer and Sen. Gillibrand” and with nationwide pressure for other relief measures contained in HEROES, the Senate will pass a version of the package so that a compromise can be negotiated, Tonko said.

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