Letter to Kerry Weems, Administrator of the Centers for Medicare and Medicaid Services, Re: Abandon Idea that Could Cost Connecticut Hospitals $39 Million Next Year

Letter

Connecticut Delegation Asks CMS to Abandon Idea that Could Cost Connecticut Hospitals $39 Million Next Year

The Connecticut delegation sent a letter to the Administrator of the Centers for Medicare and Medicaid Services (CMS) Kerry Weems last week expressing their strong opposition to a proposed rule that would alter a hospital reimbursement formula and could cost Connecticut as much as $39 million next year. CMS is proposing to alter the longstanding practice of applying a national budget neutrality adjustment to their hospital reimbursement formula and replace it with a state-specific budget neutrality adjustment. Senators Chris Dodd (D-CT) and Joe Lieberman (ID-CT), along with Representatives Rosa DeLauro (D-CT), Chris Murphy (D-CT), Joe Courtney (D-CT), John Larson (D-CT), and Christopher Shays (R-CT), wrote to urge the federal agency to leave the current reimbursement structure in place.

The delegation wrote: "The provision places undue and unnecessary harm on hospitals in our state, which will be forced to carry a disproportionate share of the fiscal impact of the new rule. Under the rural floor adjustment, it is estimated that Connecticut hospitals will bear over twenty percent of all funding losses across the country."

The full text of the letter is below.

May 29, 2008

The Honorable Kerry Weems, Administrator
Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Dear Administrator Weems,

We are writing to express our strong opposition to language included in the FY 2009 Inpatient PPS Proposed Rule that would alter the longstanding practice of applying a national budget neutrality adjustment to the rural floor of the wage index and replace it with a state-specific budget neutrality adjustment.

CMS's proposal to apply a statewide neutrality adjustment to the rural floor wage index would have severe adverse financial consequences for hospitals in Connecticut. This change, coupled with the other changes proposed by CMS, would result in Connecticut experiencing a year over year cut in Medicare funding. If this rule stands, this will be the fourth time in the past twelve years that Connecticut has received a year over year cut.

This proposal ultimately hurts all hospitals in Connecticut and negates the benefits Congress intended for the rural floor to the wage index. The provision places undue and unnecessary harm on hospitals in our state, which will be forced to carry a disproportionate share of the fiscal impact of the new rule. Under the rural floor adjustment, it is estimated that Connecticut hospitals will bear over twenty percent of all funding losses across the country.

Budget neutrality must remain a national policy in accordance with current practice in order to retain balance and symmetry within a complex wage index environment.

Again, we urge you to eliminate the proposed state-level budget neutrality adjustment in the final FY 2009 Inpatient PPS Rule and appreciate your consideration of our request.

Sincerely,

Chris Dodd
Senator

Joseph Lieberman
Senator

Christopher Shays
Member of Congress

Rosa DeLauro
Member of Congress

John Larson
Member of Congress

Christopher Murphy
Member of Congress

Joseph Courtney
Member of Congress

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