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4 Hospitals to Receive Additional $7.1 Million in Medicare Payments

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In an effort to help ensure patients have access to quality health care services at Rhode Island hospitals, as well as support sustainable sources of jobs in the state, U.S. Senators Jack Reed and Sheldon Whitehouse and Representatives James Langevin and David Cicilline today joined hospital executives and representatives from Kent, Newport, South County, and Westerly Hospitals to announce an additional $7.1 million in Medicare payments to these four hospitals as a result of a new regulation issued by the Centers for Medicare and Medicaid Services (CMS).

"This is a victory for Rhode Island hospitals that is long overdue. It will help ensure greater certainty for the hospitals and level the playing field for hospital staff so they are fairly paid for providing care to patients," said Reed who has been urging CMS to increase these reimbursement rates. "I have had many conversations with CMS over the years, and I am pleased the agency has finally responded to the delegation's efforts to address the Medicare reimbursement disparity among hospitals in Rhode Island."

"Today's announcement is long overdue, but it marks a big win for Rhode Island hospitals -- and ultimately, Rhode Island patients," said Whitehouse. "The new formula will bring parity to Rhode Island hospitals, so that they can continue the important work of keeping Rhode Islanders healthy."

"Attracting and maintaining a skilled workforce in Rhode Island is vital to providing quality healthcare, but these hospitals have long been at a disadvantage by receiving lower Medicare payments to compensate their health care workforce compared to neighboring states," said Langevin. "The change announced today as a result of our collaboration with state health care leaders will ensure all of Rhode Island's hospitals are fairly reimbursed."

"I thank the Centers for Medicare and Medicaid Services for recognizing the need and answering our delegation's call to establish payment reimbursement parity for Rhode Island hospitals. These important resources will help level the playing field for hospitals in Rhode Island, providing predictability so that all hospitals can best plan how to continue providing quality, safe, and affordable health care to Rhode Island patients," said Cicilline.

"This proposed change will level the playing field for Newport Hospital and other community hospitals in Rhode Island. It will help Newport Hospital remain viable, enabling us to continue to meet the health care needs of all the residents of Newport County for years to come. On their behalf we sincerely thank Senator Reed and the delegation for their foresight and their efforts," said August Cordeiro, president and CEO of Newport Hospital.

"In real dollars and cents, this change increases the area wage index component of Medicare payment rates resulting in an estimated annual increase of $3.3 million in reimbursement for Kent Hospital. This is no small sum, given the economics currently facing the health care industry. I would like to commend Senator Reed and the delegation for their leadership on this very important issue," said Sandra Coletta, president and CEO of Kent Hospital.

"We are pleased to see that our voice - and the voices of other hospitals in Rhode Island - has been heard," said Lou Giancola, President and CEO of South County Hospital. "Creating equity in reimbursement for Medicare patients will allow South County Hospital to continue offering the highest level of care to our community. We are very grateful to Senator Reed and the entire delegation for championing this issue."

"This change will help level the playing field for TWH and other community hospitals in Rhode Island. It comes at a crucial time for us as we are working to return the hospital to financial stability," said Westerly Hospital Special Master Mark Russo. "On behalf of the Westerly community we sincerely thank Senator Reed and the delegation for their foresight, efforts, and continued diligence in this matter. We believe that TWH will receive some $1.2 million in additional Medicare reimbursement because of this regulation."

"Hospitals in Rhode Island face mounting challenges to their mission - rising uninsured and uncompensated care, low reimbursement, and continued payment reductions - but their commitment to Rhode Island is unwavering," said Edward J. Quinlan, president of Hospital Association of Rhode Island. "This payment adjustment will provide significant assistance as they care for Rhode Island's patients. We thank Senator Reed and the delegation for their steadfast support of hospitals in our state."

"Hospitals in Rhode Island face mounting challenges to their mission - rising uninsured and uncompensated care, low reimbursement, and continued payment reductions - but their commitment to Rhode Island is unwavering," said Edward J. Quinlan, president of Hospital Association of Rhode Island. "This payment adjustment will provide significant assistance as they care for Rhode Island's patients. We thank Senator Reed for his steadfast support of hospitals in our state."

In April, CMS released the Hospital Inpatient and Outpatient Prospective Payment System (IPPS) proposed rules for fiscal year (FY) 2013 to increase the Medicare wage index payments to four hospitals in Rhode Island. In June, the delegation sent a letter to CMS urging finalization of the proposals to address the hospital wage index disparity and provide hospitals in Rhode Island with predictability in their future budgeting, resource planning, and workforce recruitment and retention efforts.

The final regulation, issued on August 1, 2012, establishes a new hospital wage index for the Newport, Kent, South County, and Westerly Hospitals, which have consistently been reimbursed based on a lower wage index than every other hospital in the state. Due to Rhode Island's size, this has resulted in a severe payment disparity among hospitals located in close proximity to each other. This new wage index will help ensure that patients in Kent, Newport, and Washington counties continue to have access to high quality health care services and that these hospitals remain a source of sustainable jobs in the state.

The new wage index is estimated to increase the Medicare reimbursements made to each of these four hospitals by the following amounts:

Newport Hospital is estimated to receive an additional $1.32 million in Medicare reimbursement in FY13.

Kent Hospital is estimated to receive an additional $3.26 million in Medicare reimbursement in FY13.

South County Hospital is estimated to receive an additional $1.31 million in Medicare reimbursement in FY13.

Westerly Hospital is estimated to receive an additional $1.19 million in Medicare reimbursement in FY13. (Prior to the new wage index, Westerly Hospital anticipated $800,000 less in Medicare reimbursement in 2013. Instead, Westerly is estimated receive an additional $400,000 in reimbursement, a $1.19 million improvement to the Hospital's FY2013 budget projection.)


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