Menendez Commends HHS on Provision in New Rule Supporting New Jersey Hospitals

Menendez Commends HHS on Provision in New Rule Supporting New Jersey Hospitals

Washington - US Senator Robert Menendez (D-NJ) released the following statement today on the Center for Medicare and Medicaid Services (CMS) rule extending the imputed wage index floor for New Jersey. This imputed floor acknowledges the costs of hospitals operating in urban states and currently, New Jersey is the only state to benefit from this provision.

In 2012, approximately 37 New Jersey hospitals are expected to receive a total of $88 million as a result of the imputed floor. From 2005 to 2012, the imputed floor will have brought New Jersey hospitals more than $430 million.

"I have long recognized how expensive it can be to run a hospital in New Jersey. I championed this issue with the Administration and made extending the imputed wage index floor one of my top priorities. It is gratifying to see that work pay off," said Senator Menendez. "If this floor would have expired, New Jersey would have lost over $88 million next year alone. It would have been devastating to so many hospitals that are on the front lines delivering critical care. I commend Secretary Sebelius for recognizing this and extending these crucial payments to our hospitals."

Senator Menendez has led the New Jersey delegation on this issue. This year, the Senator led two New Jersey delegation letters asking CMS to consider extending the imputed floor. Furthermore, in the new healthcare reform law, Senator Menendez was able to include an amendment to ensure that the cost of those payments be distributed in a budget-neutral fashion across all hospitals nationwide and not on hospitals within a given state.

Background on the Imputed Wage Index Floor from the New Jersey Hospital Association

In 2004, through the FY 2005 IPPS rule, CMS created the imputed wage index floor for states, like New Jersey, that are considered by the federal government to be all-urban states for Medicare payment purposes for three years. The imputed wage index floor corrected years of unequal treatment for New Jersey's hospitals by providing them with benefits similar to those granted to healthcare institutions in 48 other states through the longstanding application of a rural hospital wage index floor. In the final FY 2008 IPPS rule, CMS extended NJ's floor through FY 2008. In the final FY 2009 rule, CMS extended the floor 3 years, through FY 2011. The current policy was scheduled to expire Sept. 30, 2011. New Jersey is currently the only state to benefit from the imputed wage index floor.

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