WASHINGTON — A coalition of 20 state hospital associations submitted a letter to President Obama this week asking him to remedy a provision in the national health reform law that allows Massachusetts hospitals to reap an annual bonus of between $256.6 million and $367 million in Medicare reimbursements at the expense of most other states.
A lobbyist for the coalition hand delivered the letter to the White House, along with a copy of a Boston Globe story published on Sunday about Nantucket Cottage Hospital’s outsized impact on national Medicare reimbursements.
The coalition, which also includes the National Rural Health Association, targeted an obscure Medicare reimbursement rule that allows Nantucket Cottage, Massachusetts’ sole rural hospital, to set the floor for how much the government reimburses the state’s 81 other hospitals.
Under Medicare regulations, a state’s urban hospitals must be reimbursed for wages at least as much as rural hospitals. And because wages on Nantucket are high due to its remote location and expensive cost of living, it inflates the amount the rest of Massachusetts hospitals are paid.
An amendment to the federal health reform law that was cosponsored by Senator John Kerry, a Bay State Democrat, and Senator Robert Menendez, a New Jersey Democrat, required that Medicare reimbursements for hospital wages come from a national pool of money rather than a state pool. That means any gains for Massachusetts results in a decrease for other states.
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