Healthcare Business News
Rep. Kevin Brady (R-Texas)

Bill takes aim at reform law's rural-floor provision

By Jessica Zigmond
Posted: May 21, 2013 - 5:45 pm ET

New legislation from Rep. Kevin Brady (R-Texas) is welcome news to 20 state hospital associations working to eliminate a contentious hospital wage-index provision in the Patient Protection and Affordable Care Act.

Brady's bill—the Medicare Hospital Wage Index Equity Act of 2013—relates to the rural floor component of Medicare's hospital wage index, which guarantees the wage index for rural hospitals is not more than the index for urban hospitals. Before the 2010 healthcare overhaul, federal law required that payments for hospital wage-index adjustments be budget-neutral within a state so that only hospitals in that state would be affected by the changes.

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The Affordable Care Act changed this state budget-neutrality provision so that it would apply nationally, which results in some hospitals benefitting from higher payments at the cost of lower payments to other facilities.

In its proposed hospital inpatient prospective payment rule last month, the CMS responded to public comments about the rural-floor component of the wage index when it included a chart listing all 50 states and whether they stand to gain—or lose—millions in Medicare payments next year. The CMS also noted that urban hospitals in New England can expect a 4.4% increase in payments mostly because of the application of the proposed rural floor in Massachusetts and Connecticut. Brady's legislation would convert any changes to Medicare hospital wage-index floors back to a state budget-neutral calculation.

“The Senate already passed a bipartisan amendment to repeal this earmark as part of its 2014 budget,” Brady, the chairman of the House Ways and Means Health Subcommittee, said in a statement. “It is my hope that Congress will act this year to repeal this misguided policy. It's time to stop rewarding one state at the expense of all the others.”

But because the Senate-passed budget is not federal law, the upper chamber would either need to vote again on Sen. Claire McCaskill's (D-Mo.) companion bill, or have a concurrent budget resolution with the House of Representatives.

Dan Boston, executive vice president and principal at consulting firm Health Policy Source, works with the Coalition of American Hospitals, a group of 20 state hospital associations and the National Rural Health Association that are working overturn this provision in the reform law. Boston said he expects to see a substantial amount of co-sponsors added to the bill's roster of eight, which includes Reps. Peter Roskam (R-Ill.), Mike Kelly (R-Pa.) and Pat Tiberi (R-Ohio).

Boston said he's heard the House might vote on Brady's bill after Congress' weeklong Memorial Day recess, but it could hold the legislation until the lower chamber introduces a larger bill—such as legislation related to Medicare's sustainable growth-rate formula or the nation's debt ceiling—later this year. At deadline, House Majority Leader Eric Cantor's (R-Va.) office had not responded to a question about a timeline for a House vote on Brady's bill.

“There are a number of issues on members' plates,” Boston told Modern Healthcare. “And it's just keeping this issue front and center.”

Follow Jessica Zigmond on Twitter: @MHjzigmond

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