Rep. Kelly & Rep. Doyle Introduce Fixing Medicare Hospital Payments Act
Bipartisan bill will increase wages for Western PA hospitals
WASHINGTON — U.S. Representatives Mike Kelly (R-PA) and Mike Doyle (D-PA) issued the following statements today regarding H.R. 6399, the Fixing Medicare Hospital Payments Act of 2016, which they introduced in the House of Representatives earlier this week. The legislation would create a Medicare wage index floor for hospitals in metropolitan areas with populations of two million or more, which would increase Medicare payments to hospitals in the Greater Pittsburgh area.
Statement by Rep. Kelly:
“The current Medicare wage index is an unfair deal for Western Pennsylvania hospitals and their workers. Because the federal government currently assigns hospitals in our area a low wage index, employers throughout the region have to pick up the cost through increased insurance premiums for their employees. With this commonsense bill, a new wage index floor would be created, insurance premiums would decrease, hospital wages would increase, and Western Pennsylvania’s economy would become stronger. Those who provide life-saving care to our neighbors, friends, and loved ones deserve nothing less.”
Statement by Rep. Doyle:
“The current Medicare formula for calculating reimbursements unfairly penalizes hospitals in mid-sized cities like Pittsburgh, and it places unfair pressure on the wages that their hard-working employees receive. This bill would fix that formula to more accurately reflect the actual wages for health care personnel in mid-sized cities. It’s my belief that such a change would make it easier for hospitals in places like Pittsburgh to pay their employees what they deserve.”
BACKGROUND: The Medicare Wage Index is part of the calculation used by the Centers for Medicare and Medicaid Services (CMS) to determine reimbursements for each hospital across the United States. Information on labor costs are submitted to CMS and used to determine a “wage index” for each of the nation’s regions. The Pittsburgh core-based statistical area (CBSA) includes several Western Pennsylvania counties including Butler and Armstrong and consistently has one of the lowest wage indexes in America for major metropolitan areas.
The Medicare Wage Index for Pittsburgh has declined significantly since 1997 and continues to spiral downwards. Because the annual wages paid by hospitals are not as high as other parts of the nation, the Greater Pittsburgh area’s wage index has continually decreased, thus causing hospitals in the region to receive reduced reimbursements from Medicare. This “circularity” in the Pittsburgh CBSA has resulted in the loss of approximately $1 billion to hospitals around Pittsburgh and the region’s economy.
H.R. 6399 would create a metropolitan wage index floor of 0.94 for hospitals in metropolitan areas with a population of two million or more (Pittsburgh’s current wage index is 0.85) and is budget neutral.
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