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August 02, 2019

Senator Doug Jones: Final Medicare Wage Index Rule Will Provide Long-Overdue Relief for Struggling Alabama Hospitals

New Final Rule from the Centers for Medicare and Medicaid Services Updates Reimbursement Formula That Has Put Alabama Hospitals at a Disadvantage for Decades

Birmingham, Ala. – U.S. Senator Doug Jones (D-Ala.) today applauded a final rule released by the Centers for Medicare and Medicaid Services (CMS) that will update the Medicare Wage Index reimbursement formula. The formula has disadvantaged hospitals in Alabama for decades and left them to cover significant costs for uncompensated care.

Last fall, Senator Jones met with CMS Administrator Seema Verma, Senator Richard Shelby (R-Ala.), and Congresswoman Terri Sewell (D-Ala.) to share his serious concerns about the unfair rate and to ask for CMS to take steps to address it. This spring, he also joined the full Alabama congressional delegation in sending a bipartisan letter to Administrator Verma urging her agency to provide relief for Alabama hospitals by increasing the reimbursement rate.

“Today’s final rule will provide much-needed relief for Alabama’s struggling hospitals by fixing the Medicare Wage Index formula. For two decades, Alabama has been fighting the unfair Medicare reimbursements and today receives a rate that is just 67 percent of the national average,” said Senator Doug Jones, a member of the Senate Health, Education, Labor and Pensions Committee. “I am grateful that after meeting with Administrator Verma, Senator Shelby, and Congresswoman Sewell last year, CMS finally heard our concerns and took action to find a solution that better serves our hospitals and rural communities. This was a top priority for me when I came to the Senate last year, and I am proud that we were able to make this long-overdue change a reality.”

Alabama currently has the lowest wage index according to the Alabama Hospital Association, and approximately 88 percent of Alabama hospitals are currently operating in the red and cannot cover the cost of delivering care. Thirteen hospitals in Alabama have closed their doors since 2011, seven of which were in rural areas.

Senator Jones has been a vocal advocate in favor of reforming the Medicare Wage Index formula as well as expanding Medicaid, both of which would help shore up Alabama hospitals that are facing serious financial challenges. Medicaid expansion would bring an estimated $2 billion of Alabamians’ tax dollars back to the state in just the first year after expanding and provide health coverage to 326,000 Alabamians.

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