Senators introduced legislation April 21 aimed at ensuring rural and critical access hospitals are fairly reimbursed for their services by the federal government so they are able to remain open, reports News Leader.
The Fair Medicare Hospital Payments Act of 2016 would do this by establishing a national minimum area wage index of 0.874.
A hospital's area wage index is used in part by the federal government to determine hospitals' prospective reimbursement rates. The wage index is based on a relative hospital wage level for a hospital's geographic area compared with the national average, according to a congressional press release.
Hospitals and physicians in areas where the ratio is 1:1 are reimbursed close to the national average. In regions with higher average wages, hospitals and physicians get larger reimbursements, and regions with lower wages are reimbursed at lower rates.
By creating a minimum AWI, the legislation aims to correct for disproportionately low Medicare reimbursement payments to hospitals in rural and low-wage areas.
In a prepared statement about the legislation, Sen. Mark Warner (R-Ga.) said, "Establishing a national minimum level for hospital payments will help to prevent future closures of hospitals in these medically underserved areas and ensure patients have access to emergency and needed care."