Monday, Congressman Rob Andrews announced that South Jersey hospitals will be able to protect hundreds of jobs thanks to an extension of a Medicare policy affecting hospital reimbursement rates. This policy, which was set to expire at the end of September, allows New Jersey hospitals to be fairly compensated for their Medicare services, making it possible for them to maintain their bottom lines and meet their staffing needs. Congressman Andrews joined his colleagues in New Jersey's Congressional delegation to urge the White House to extend the policy so our renowned health care industry does not suffer devastating revenue losses that could lead to hundreds of hospital layoffs and a decrease in quality of care.
In 1997, Congress required The Centers for Medicare & Medicaid Services (CMS) to apply a floor to metropolitan areas' Medicare wage index -- a rate which serves as the primary factor in determining a hospital's Medicare reimbursement. By setting this floor, CMS guaranteed that a state's urban hospitals cannot be paid at a lower rate than their rural hospitals. However, recognizing that as one of the only states in the country without any rural hospitals, New Jersey was at a disadvantage, CMS assigned New Jersey its own floor which was set to expire at the end of this September.
Congressman Andrews advocated for South Jersey hospitals and pushed for an extension of the current reimbursement rate, noting that this disparity could threaten the health care industry that employs thousands throughout our region and serves as an anchor for South Jersey's economic recovery. Following the Congressman's support, CMS announced today that the current imputed wage index floor for New Jersey will be extended for 2 years, ensuring that hospitals throughout the state can expect an estimated $57 million over 2 years for Medicare services, according to the New Jersey Hospital Association. These funds are vital to maintain a hospital's staffing needs.
"I applaud the White House for recognizing the importance of this policy for the State of New Jersey," said Congressman Andrews. "By continuing the current wage index, the jobs of countless New Jersey hospital professionals will be preserved and our region will continue to receive the resources it needs to deliver state-of-art services. I am proud to have joined our Congressional delegation to ensure that this policy remains on the books so our hospitals can continue to thrive and excel in patient care."