Southwest Georgia hospital officials encouraged by new federal bill

ALBANY — Health care officials in Southwest Georgia are encouraged by a bill introduced by four United States senators, including one from Georgia, meant to improve reimbursements for financially-strained rural hospitals.

U.S. Sens. Johnny Isakson, R-Ga., Lamar Alexander, R-Tenn., Mark Warner, D-Va., and Sherrod Brown, D-Ohio, introduced legislation last week meant to ensure hospitals are fairly reimbursed for their services by the federal government so they are able to remain open, especially in underserved and economically struggling regions.

The officials say the Fair Medicare Hospital Payments Act of 2016 would correct a flawed formula resulting in disproportionately low Medicare reimbursement payments to hospitals in rural and low-wage areas.

“Rural hospitals are the lifeline of their communities, but too many Georgia hospitals have been forced to close their doors in recent years. These hospitals serve some of the least economically developed areas in Georgia, and unfortunately, as a result, they receive some of the lowest Medicare payments in the country,” said Isakson, the state’s senior senator and a member of the Senate Finance Committee. “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.”

The Fair Medicare Hospital Payments Act, if passed, would establish a national minimum “area wage index” of .874. The area wage index is based on the relative hospital wage level in the hospital’s geographic area compared to the national average, and has established an “uneven playing field” in recent years resulting in rural hospitals losing millions annually in Medicare payments.

Brian Church, chief financial officer for Phoebe Putney Health System, said the current system allows for better adjustments for “super urban” areas, and that Phoebe officials are appreciative of the effort to bring out the bill.

“We want all rural hospitals to stay open,” he said.

Church said Phoebe Sumter Medical Center in Americus would likely benefit from the legislation more than Phoebe’s campuses in Albany, which are often strained when they become safety nets for the coverage areas of hospitals in Southwest Georgia that close when reimbursements are compromised.

“It’s nice that it is drawing attention,” he said. “All rural hospitals are struggling, not just Phoebe.”

Officials at Tift Regional Health System, which includes Tift Regional Medical Center and Cook Medical Center, had a similar mindset on the bill.

“We commend this bipartisan legislation proposed by Sen. Isakson and a group of his fellow policymakers,” said William T. Richardson, President/CEO of TRHS. “Hospitals, especially those serving a rural population, are faced with many challenges in this evolving health care environment, so these efforts are appreciated.

“Medicare uses a wage index to calculate the costs of labor associated with hospital services for Medicare patients — so hospitals in areas with a low cost of living get less than the hospitals in areas with a high cost of living. This hits hospitals serving rural areas the hardest. If enacted, this legislation would establish a higher national floor for the Medicare Area Wage Index, which means many Georgia hospitals would see an increase in their Medicare reimbursements.

“Some rural hospitals in our state are closing because of reduced reimbursements. When it comes to accessing basic health care services, you shouldn’t be penalized because you live in a smaller, rural community. We applaud these efforts by Sen. Isakson and his colleagues and hope the legislation will be enacted into law.”

Archbold Medical Center is another entity in Southwest Georgia that stands to benefit.

“At a time when hospitals across the country are faced with adapting to the most transformative changes seen in health care in over 100 years, it’s critical we remain focused on ensuring patients in rural areas continue to have access to the care they need,” said Archbold President and CEO Perry Mustian. “Under the proposed legislation, 100 hospitals in Georgia, which include Archbold’s Grady General Hospital and John D. Archbold Memorial Hospital, could receive readjusted reimbursements for the services provided to patients. We applaud Senator Isakson for his efforts to promote sufficient reimbursement for rural hospitals, so we can continue to provide high-quality care in a cost-effective manner for our patients.”

Since 2010, five Georgia hospitals have closed that the senators say might have benefited from the legislation, which has been endorsed by the Georgia Hospital Association and the National Rural Health Association.

“This important bill will ensure that rural providers’ compensation reflects the plethora of challenges related to retention and recruitment in rural America,” wrote NRHA CEO Alan Morgan in a letter to Isakson applauding the measure. “The Wage Index unfairly penalizes physicians that practice in underserved communities within rural America, and this bill takes an important step to reduce this discrepancy.”

Earl Rogers, President and CEO of GHA, offered a similar sentiment, noting the cost of implementing the proposed .874 is offset by a requirement in the bill for the Secretary of the Department of Health and Human Services to annually establish a corresponding ceiling on the area wage index formulas, and that it has been ensured the legislation would have an either positive neutral impact on the state’s hospitals.

“On behalf of the Georgia Hospital Association and our more than 170 hospitals members, I would like to express our appreciation and full support for the legislation that you have proposed, the Fair Medicare Hospital Payments Act of 2016, which would help correct a longstanding and worsening problem for hospitals across the State of Georgia,” Rogers wrote to Isakson.

Additional co-sponsors of the legislation are Sens. Jeff Sessions, R-Ala., and Tim Kaine, D-Va.