Warner, Kaine Introduce Bill to Aid Rural Virginia Hospitals

Press Release

Today, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) introduced bipartisan, budget-neutral legislation to ensure hospitals are fairly reimbursed for their services by the federal government so they are able to remain open and functioning, especially in underserved and economically struggling regions of Virginia. The Fair Medicare Hospital Payments Act of 2016 would correct a flawed formula that results in disproportionately low Medicare reimbursement payments to hospitals in rural and low-wage areas.

"Rural hospitals are a lifeline to hundreds of thousands of Virginians, and are at the heart of many of our communities. However, hospitals in rural areas face unique challenges, and many struggle to stay afloat -- challenges that are exacerbated by the federal government's skewed payment system for services provided to Medicare beneficiaries at these hospitals," Sen. Warner said. "The bipartisan Fair Medicare Hospital Payments Act would do much to help keep Virginia's rural hospitals financially viable, by ensuring that the Medicare funding they receive is reflective of their costs of providing care. Under this bill, hospitals in five of Virginia's 11 statistical areas would receive fairer reimbursements that more accurately reflect their operating costs."

"Rural hospitals are vital to the communities they provide care for, but they are faced with difficult financial challenges that affect access to care and long-term viability," Kaine said. "The bipartisan Fair Medicare Hospital Payments Act aims to reform the way hospitals are reimbursed by Medicare for services by establishing a national standard, as opposed to the status quo which places an undue burden on rural hospitals in economically disadvantaged areas."

The five Virginia areas receiving reimbursements:

Kingsport-Bristol-Bristol, TN-VA
Blacksburg-Christiansburg-Radford, VA
Staunton-Waynesboro, VA
Harrisonburg, VA
Lynchburg, VA

The Fair Medicare Hospital Payments Act of 2016 would establish a national minimum "area wage index" of 0.874. The area wage index is based on the relative hospital wage level in the hospital's geographic area compared to the national average. Over the past three decades, legislative and regulatory changes have combined with broader economic trends to create an uneven playing field that has resulted in hospitals losing out on millions of dollars in Medicare payments annually.

According to the Virginia Hospital Association, there are 21 hospitals in Virginia that would benefit from a minimum area wage index that currently have an index below 0.874. This legislation has been endorsed by the Virginia Hospital Association and the National Rural Health Association.

List of 21 hospitals:

Norton Community Hospital

NORTON CITY

Russell County Medical Center

RUSSELL

Sentara Rockingham Memorial Hospital

HARRISONBURG CITY

Augusta Health

AUGUSTA

Wellmont Mountain View Regional Medical Center

NORTON CITY

Riverside Shore Memorial Hospital

NORTHAMPTON

Smyth County Community Hospital

SMYTH

Johnston Memorial Hospital

WASHINGTON

Clinch Valley Medical Center

TAZEWELL

Memorial Hospital of Martinsville & Henry County

MARTINSVILLE CITY

Riverside Tappahannock Hospital

ESSEX

Southampton Memorial Hospital

FRANKLIN CITY

Southern Virginia Regional Medical Center

EMPORIA CITY

VCU Community Memorial Hospital

MECKLENBURG

LewisGale Hospital Montgomery

MONTGOMERY

Wythe County Community Hospital

WYTHE

Wellmont Lonesome Pine Hospital

WISE

Twin County Regional Hospital

GALAX CITY

LewisGale Hospital Pulaski

PULASKI

Carilion Tazewell Community Hospital

TAZEWELL

Buchanan General Hospital

BUCHANAN

Source