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Congressman John Duncan

Representing the 2nd District of Tennessee

CONGRESSMAN DUNCAN'S STATEMENT ON THE MEDICARE AREA WAGE INDEX

July 16, 2018
Press Release

 

 

FOR IMMEDIATE RELEASE                                                                                         

July 13, 2018    CONTACT: Don Walker   (202) 225-5435  

                                                                                                                                 

Duncan Calls for Relief for Hospitals

WASHINGTON – Congressman John J. Duncan joined colleagues Representatives Diane Black, Bradley Byrne, and Terri Sewell in leading a letter sent to the Department of Health and Human Services, calling for the Administration to provide relief for the Nation’s hospitals.  A total of 46 Members from all over the Country signed the letter.

The Medicare Area Wage Index (AWI) significantly affects hospitals’ cash flow because it influences how much hospitals are reimbursed for Medicare services. 

It is a very complicated, convoluted, and outdated system including mathematical formulas, disjointed geographic specifications, and fragmented statutory and regulatory “fixes.”  The AWI is required to be budget neutral, meaning that if one hospital’s wage index increases, another hospital’s must decrease.

Congressman Duncan said:

 “In the past decade, every state has faced a hospital closure, including over 120 rural hospitals, and a number of states have no rural hospitals at all.  This wage index is one of the key culprits behind these hospital closures that are causing this alarming, restricted access to care.”

Congressman Diane Black stated:

“As a registered nurse, I know that protecting our quality of life and public health in Tennessee goes hand-in-hand with ensuring that our hospitals get a fair deal from Washington. The current area wage index formula discriminates against rural hospitals like those across my district while letting hospitals in the wealthiest neighborhoods of California and Massachusetts cash in on this flawed payment model. Tennessee’s healthcare providers bring lifesaving care to neighbors across the state every day. It isn’t asking too much to insist that they receive a proper reimbursement for the services they perform, and I am grateful that Secretary Azar has given us the opportunity to address this flawed system."

Congressman Bradley Byrne stated:

"We are facing a medical crisis in rural America. For too long, the Medicare Area Wage Index has been gamed by hospitals in very affluent parts of the country at the expense of rural America.  Congress granted CMS wide authority to administer the Wage Index, and it is time the system be reformed in order to ensure continued access to hospital care for those in rural Alabama and rural areas throughout the United States."

Congresswoman Terri Sewell stated:

 “Rural hospitals are facing a crisis, and in Congress, we need to work across the aisle to find solutions that improve health care access.  In Alabama’s rural Black Belt, hospitals have struggled to keep their doors open for decades, and constituents are facing decreasing access to care as a result of inadequate reimbursements for hospitals. Today’s letter calls on this Administration to provide relief for rural hospitals in the most underserved areas across the country by ensuring they receive fair reimbursement for the vital services they provide.”

HHS Secretary Azar and the Centers for Medicare and Medicaid Services (CMS) have requested Congressional involvement to address this urgent situation. 

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