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April 24, 2019

Senator Jones: Alabama Hospitals Are Long Overdue for Relief from Unfair Reimbursement Rates

Birmingham, Ala. – U.S. Senator Doug Jones today applauded the Centers for Medicare and Medicaid Services (CMS) for a move that could provide badly needed relief for Alabama hospitals. CMS last night proposed a new rule that could help address the unfair Medicare Wage Index reimbursement formula, which has disadvantaged hospitals in Alabama for decades and left them to cover significant costs for uncompensated care. Following up on a meeting that he held with the CMS Administrator Seema Verma, Senator Jones joined the full Alabama congressional delegation last month in sending a bipartisan letter to her urging her agency to provide relief for Alabama hospitals by increasing the reimbursement rate.

Alabama 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.

“As I have traveled across Alabama meeting with health care leaders in both rural and urban communities, I have heard two refrains consistently: fix the Medicare Wage Index formula and expand Medicaid. The decision by CMS to propose a new reimbursement formula is welcome news and a great first step for the health care providers across our state who have struggled for years with an inexplicably low reimbursement rate. These hospitals provide care to all Alabamians, regardless of their insurance status, and they have to absorb the costs when that care isn’t reimbursed. That puts the entire system on slippery financial footing and can hurt the broader community if a hospital is forced to close its doors,” said Senator Doug Jones, a member of the Senate Health, Education, Labor and Pensions Committee.

Senator Jones continued, “After meeting with Administrator Verma, Senator Shelby, and Congresswoman Sewell last September about this issue, I was very hopeful about the prospects of getting this long-overdue change made. I look forward to continuing to work with CMS to make sure that its final rule reflects what is in the best interests of Alabama, as well as advocating for Alabama to take the next step by finally expanding Medicaid.”

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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