WASHINGTON, DC- In their continued effort to ensure New Jersey hospitals and healthcare facilities are properly reimbursed for services, today U.S. Senator Bob Menendez (D-NJ), U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), and U.S. Rep. Jon Runyan (R-NJ-03) announced that the Center for Medicare and Medicaid Services (CMS) will extend the imputed wage index floor for New Jersey hospitals for one year, bringing $33.6 million in Medicare funds to 12 N.J. hospitals.
"I was encouraged CMS chose to do the right thing by proposing to extend New Jersey's imputed rural floor, which is a critical policy that provides equity to New Jersey hospitals," said Menendez. "This extension provides another year of payment stability to ensure hospitals in our state are able to continue providing the world-class care we've come to expect. As a member of the Senate Finance Committee, I will continue to fight to make this policy permanent and ensure that hospitals in New Jersey have the longterm stability needed to continue implementing the historic health care reforms called for in the Affordable Care Act."
"I am pleased CMS has listened to the bipartisan call from the New Jersey delegation to extend the imputed floor," said Pascrell. "The imputed floor provides necessary protections to New Jersey's hospitals and ensures they are treated fairly after years of being disadvantaged because of New Jersey's status as an all-urban state. Although this proposed rule is welcome news, I strongly urge CMS to address this issue permanently, so New Jersey hospitals aren't left in limbo year after year." "I applaud CMS for doing the right thing by leveling the playing field for New Jersey hospitals," said Runyan. "While we still have a lot to do to address the imputed floor in the long term, the annual extension is an important step in the right direction." "This is an important provision for ensuring that New Jersey receives its appropriate share of federal dollars," said Betsy Ryan, president and CEO of the New Jersey Hospital Association. "It puts New Jersey hospitals on a level playing field with other states that benefit from a rural floor provision. We appreciate the diligence of Congressman Pascrell, Sen. Bob Menendez and Congressman Runyan, along with the rest of the Garden State delegation, for working to secure this critical funding for our hospitals and their patients and communities."
This policy, which was announced as part of the Fiscal Year (FY) 2015 Medicare hospital inpatient prospective payment (IPPS) proposed rule, corrected years of unequal treatment for New Jersey's hospitals by providing them with benefits similar to those granted to hospitals in 48 other states through the longstanding application of a rural hospital wage index. The proposed rule would extend the imputed floor through September 30, 2015. The Centers for Medicare and Medicare Services (CMS) is required to adjust Medicare hospital wage reimbursements (known as the wage index) to reflect the geographic area where services are delivered. In 2004, through the FY 2005 IPPS rule, CMS created the imputed floor wage index 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 floor ensures that New Jersey hospitals are not unfairly disadvantaged by the state's all-urban status. Should this proposed rule be finalized, this would be the fourth time that the imputed floor has been extended to continue providing the appropriate reimbursement to New Jersey hospitals. Earlier this year, Rep. Pascrell, Senator Menendez and Rep. Runyan led a bipartisan letter from the New Jersey delegation to CMS outlining the importance of the imputed floor to New Jersey hospitals and their patients, and urging CMS to extend the policy.
The full text of the letter is as follows: February 28, 2014 Ms. Marilyn Tavenner
Centers for Medicare & Medicaid Services
U.S. Department of Health and Human Services
Hubert H. Humphrey Building, Room 445-G
200 Independence Avenue, SW
Washington, DC 20201 Dear Administrator Tavenner:
We write to strongly urge the Center for Medicare and Medicaid Servicers (CMS) to make the Medicare imputed floor wage index provision permanent in the Fiscal Year (FY) 2015 inpatient prospective payment system (IPPS) rule. As you are aware, the imputed wage index floor was established in the FY2005 IPPS rule to provide equitable wage index protections to all-urban states, such as New Jersey, like those protections that currently exist for states with rural areas. We are grateful that CMS has consistently recognized the need to provide a fair and equitable payment to New Jersey hospitals, as well as ensure uniformity throughout the Medicare hospital wage index system nationwide, by keeping this policy in effect continuously since 2005. However, as determined in the FY2014 IPPS rule, the imputed wage index floor is set to expire on September 30, 2014. New Jersey, situated in close proximity to some of the most competitive labor markets in the country, competes with hospitals in both the New York City and Philadelphia metropolitan areas to recruit the best health care talent available. Additionally, our state is also the most densely populated in the country, with approximately 1,200 residents per square mile. This population density places a disproportionate toll on the state's health care infrastructure, especially our hospitals. As such, it is imperative that our state's hospitals, and their patients, are not artificially disadvantaged simply because of geography and population. The continuation of the imputed rural floor is a simple and vital step towards ensuring our state's hospitals are able to achieve our shared goals of providing high-quality, accessible health care to those who need it most. This is a critical year for health care in our nation, as the Health Insurance Marketplaces open for enrollment and millions of previously uninsured Americans are able to enroll in high-quality, affordable coverage. Hospitals in New Jersey are also leading the charge in health care delivery system reforms, participating in numerous demonstration and pilot programs designed to streamline care, improve quality and lower costs. New Jersey hospitals are innovative, forward thinking and willing to contribute to the goal of better health care delivery system. The discontinuation of the imputed wage index floor could have a devastating impact on access to hospital services in New Jersey. In recent years there has been significant discussion about undertaking a comprehensive reform of the Medicare hospital wage index system. We could not agree more that the only way to address the myriad of issues with the current system is in a comprehensive manner. However, absent large-scale reform, and consistent with the rationale CMS used to extend the imputed floor in the FY 2014 IPPS Final Rule, it is imperative that our state's hospitals continue to receive the stability and equity provided under the current payment system. Simply put, the imputed floor provides for equitable treatment for New Jersey's hospitals, and provides them with nothing more than what healthcare institutions in 48 other states receive without question or the anxiety of yearly renewal. Therefore we encourage CMS to make the imputed wage index floor permanent up to and until comprehensive payment reform is accomplished. We sincerely appreciate your consideration of this important issue as you work to finalize the FY2015 IPPS proposed rule. Should you have any questions or need any additional information about this policy's impact on our state, please do not hesitate to contact us. Sincerely, Signatories of the letter include U.S. Senators Robert Menendez and Cory Booker, Congressmen Frank LoBiondo (02), Jon Runyan (03), Chris Smith (04), Frank Pallone (06), Leonard Lance (07), Albio Sires (08), Bill Pascrell (09), Donald Payne Jr (10), Rodney Frelinghuysen (11), and Rush Holt (12).