Faso Sends Comments to CMS Urging Reconsideration of Medicare Repayment Rate for Kingston Hospital

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Washington, July 6, 2018 | comments

Washington D.C. – Congressman John Faso (R-Kinderhook) sent official comments to the Center for Medicare and Medicaid Services (CMS) advocating for the agency to reassess the wage index disparity faced by the hospital in Kingston run by Health Alliance of the Hudson Valley (HAHV). The Medicare wage index disparity has long been an adverse factor affecting the ability of the Kingston hospital to recruit and retain staff.  CMS is now considering new rules regarding the wage index, and in his official comments, Congressman Faso requests the agency to devise a new formula which will smooth out the wage index for hospitals located in the same labor market, but classified in a different statistical area for Medicare reimbursement purposes.

From the official comments sent to CMS:

“HAHV’s closest competitor is a mere eight miles away, across the Hudson River in Dutchess County, but is located in a different Core-Based Statistical Area (CBSA). Given their proximity, these two hospitals naturally compete for the same labor talent pool. However, the wage index gap between them is roughly forty percent, a differential which places major pressures on the Kingston hospital. For example, a nurse with five years of experience at HAHV can expect an income of $28.50 per hour, but would receive $40.12 per hour at the hospital just eight miles away. HAHV is the only hospital among the New York City outer suburban counties that is not currently paid at the New York City wage index rate. Because of this sizable wage gap, HAHV is unable to meet the current requirements for CBSA reclassification even though the current wage index creates obvious competitive issues in attracting and keeping critical healthcare employees.”

“This disparity has long been unfair to the Kingston hospital, which is in the same labor market as Dutchess County hospitals, but is paid at a significantly lower rate for the same services reimbursed under the Medicare program,” said Faso. “Current CMS reimbursements undermine finances of the Kingston Hospital and make it more difficult for the hospital to attract and retain professional staff, particularly nurses. My hope is that CMS can ensure that hospitals in this type situation can receive reimbursements equal to or closer to payments made to neighboring hospitals within the same labor market,” concluded Faso.

“As the only hospitals in the New York metropolitan area that remain unequally classified by being placed in a separate Core-Based Statistical Area from its competitors, HealthAlliance Hospitals have had to compete for many years at a great disadvantage. We at HealthAlliance are grateful that our congressman has taken leadership on behalf of HealthAlliance Hospitals to create a Medicare payment structure that promotes improved fairness and payment equity between and among all hospitals serving Hudson Valley residents, who deserve our continued commitment to providing the highest quality care and service when and where they need us most.” – David Scarpino, CEO of Health Alliance of the Hudson Valley

A PDF of the letter can be found here. Full comments are also included below:

Seema Verma
Administrator
Centers for Medicare and Medicaid Services
200 Independence Avenue, SW, Room 445-G
Washington, DC 20201

Re: Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2019 Rates; etc.

Dear Administrator Verma,

Thank you for this opportunity to provide public comments as part of docket number CMS-2018-0046, regulatory identifier number 0938-AT27, related to wage index disparities. I greatly appreciate your interest in this matter.

As you know, existing statistical boundaries can lead to large imbalances under the current wage index system. The current structure directly and adversely impacts the Health Alliance of the Hudson Valley (HAHV), which operates a hospital located in Kingston, (Ulster County NY), within my congressional district. HAHV was cited in a 2011 Institute of Medicine (IOM) report for the large disparity in its Medicare repayment rates when compared to its local competitors. This has been a long-standing issue among health professionals and hospital administrators in Ulster County and has contributed to significant financial pressures being borne by this institution; pressures that are almost entirely caused by anomalies in how CMS rules govern the wage index system.

HAHV’s closest competitor is a mere eight miles away, across the Hudson River in Dutchess County, but is located in a different Core-Based Statistical Area (CBSA). Given their proximity, these two hospitals naturally compete for the same labor talent pool. However, the wage index gap between them is roughly forty percent, a differential which places major pressures on the Kingston hospital. For example, a nurse with five years of experience at HAHV can expect an income of $28.50 per hour, but would receive $40.12 per hour at the hospital just eight miles away. HAHV is the only hospital among the New York City outer suburban counties that is not currently paid at the New York City wage index rate. Because of this sizable wage gap, HAHV is unable to meet the current requirements for CBSA reclassification even though the current wage index creates obvious competitive issues in attracting and keeping critical healthcare employees.

I recognize the need to create rules which govern the wage index matter; however, CMS rules to govern wage index should not inadvertently penalize critical care facilities within the same labor market, just because they happen to be located in an adjoining statistical area. Surely, a reasonable disparity measure can be determined to avoid such adverse consequences in situations like that faced by the Kingston facility.

When promulgating the final version of this proposed rule, I urge you to make changes to the reclassification process to better smooth disparities caused by existing CMS regulations. Such changes are necessary to insure the future financial stability of critical hospitals such as that in Kingston.

Sincerely,

John J. Faso
Member of Congress

 

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