WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Finance Committee that oversees national health policy, today announced that a key provision he fought for that will permanently unlock millions annually in Medicare dollars for New Jersey’s hospitals was included in the final COVID relief package passed by the Senate.  The funding boost comes at a critical time as New Jersey grapples with the coronavirus pandemic.

The Menendez-authored provision in the American Rescue Plan permanently restores the so-called imputed rural floor policy that was eliminated by the Trump Administration, costing New Jersey hospitals millions of dollars annually.  As a result, hospitals in New Jersey have been left at a competitive disadvantage due to depressed Medicare wage payments. 

“This is about leveling the playing field and restoring fairness and equity for New Jersey’s hospitals at a time when their doctors, nurses and staff are on the frontlines courageously fighting the pandemic and saving lives, and need all the help they can get,” said Sen. Menendez.  “The challenges our hospitals face, even in good times, to attract the best talent and continue to serve their patients are no less than their counterparts in other parts of our country.  Permanently restoring the imputed rural floor will inject millions in annual federal funding into New Jersey’s hospitals to pay doctors and staff and continue to provide excellent medical care.”

At 7:00 a.m. Saturday, in the midst of an around-the-clock voting session to pass the American Rescue Plan, Sen. Menendez stood on the Senate floor to successfully defend an effort by Sen. Marsha Blackburn (R-Tenn.) to strike the imputed rural floor provision from the final bill.




The Centers for Medicare and Medicaid Services (CMS) first established the imputed rural floor in FY2005 in order to ensure equitable payment policies for rural hospitals located in states designated as “all-urban” by CMS.  The Menendez-authored provision in the COVID relief bill permanently restores the imputed rural floor without impacting any funding for rural hospitals located in other states. 

New Jersey is currently one of only three states, along with Delaware and Rhode Island, designated by CMS as “all-urban” based upon geographic size and statewide population, but that designation ignores the realities that there are rural areas within those densely populated states and hospitals operating in those communities that face the same challenges as rural hospitals located in other states.  The imputed rural floor allows New Jersey’s hospitals to effectively compete for the highest quality health care talent available by providing parity with neighboring states.

Sen. Menendez has for years successfully led the bipartisan fight to extend the imputed rural floor.  It was last extended in 2017, but the Trump Administration allowed it to lapse at the end of FY 2018, costing rural New Jersey hospitals millions annually. 

“The New Jersey Hospital Association applauds Senator Menendez for his leadership in the permanent reinstatement of the imputed rural floor for Medicare payments,” said Cathy Bennett, president and CEO of the New Jersey Hospital Association.  “Senator Menendez's work creates a fairer and more equitable payment system to New Jersey hospitals for the treatment of our most vulnerable patients—our low-income and senior residents. This is critically important, as our hospitals and healthcare heroes lead our state through this pandemic, while also navigating the financial burdens that it places on our healthcare system."
“This amendment recognizes the higher cost of providing healthcare in urban states like New Jersey,’’ said Robert C. Garrett, FACHE, CEO of Hackensack Meridian Health.  “We are grateful to Senator Menendez for his commitment to Hackensack Meridian Health and other New Jersey hospitals so we can continue to deliver the high quality, compassionate, convenient and affordable health care our communities expect of us.’’
“Senator Menendez’s unwavering dedication to New Jersey’s hospitals, including safety net hospitals like ours, should be commended,” said Al Maghazehe, Ph.D. FACHE, president and CEO of Capital Health System.  “The Senator has become a national leader and advocate for the delivery of quality health care to our most vulnerable populations.  Now, more than ever, I am appreciative of his work, not only on behalf of Capital Health, but on behalf of our frontline health care workers who are fighting COVID19 in our communities.”
"Everyone has the right to accessible, quality health care, and so it is critical that health systems are well-positioned to deliver on that promise,” said Dennis W. Pullin, president and CEO of Virtua Health.  “I thank Senator Menendez and the New Jersey congressional delegation for being champions of health care providers, hospitals, and the people they serve."