Complex subject of Medicare reimbursement calls for comment, careful review

The article From ‘rural’ Nantucket, a golden harvest for Mass.” (Page A1, Jan. 13) addresses the Medicare reimbursement formula, a complex subject of critical importance to Massachusetts hospitals that requires comment.

Nantucket Cottage Hospital has always been a rural hospital for as long as rural hospitals have been defined by the Centers for Medicare and Medicaid Services. Further, any implication that the “rural floor” adjustment to hospitals’ Medicare reimbursement is somehow unique in coming from “a national pool of money” is untrue. In fact, national budget neutrality is the norm, and has been since 1997. There are myriad other reimbursement adjustments under the Medicare program, which, all told, benefit about a third of all hospitals in the country. These Medicare adjustments are paid for — and have always been paid for — using a national allocation to which all hospitals contribute. Thus, there have always been winners and losers, and Massachusetts has been on both sides of that equation.

In 2008, the rural-floor adjustment was singled out for different treatment under budget neutrality. What the federal health reform law did was reinstate the payment model to its original form, which is the same for every other Medicare adjustment in existence. There was nothing in the Affordable Care Act that treated Massachusetts differently from any other state, nor did it change any other criteria for reimbursement.


Medicare rules governing hospital payments are complex and arcane, and Massachusetts hospitals support a comprehensive review and overhaul. But any changes that are made should be based on a thorough review, not narrowly directed tweaks designed to please disgruntled entities.

Lynn Nicholas

President and CEO

Massachusetts Hospital