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Schumer Has Fought For Years To Fix The Medicare Wage Index For Capital Region Hospitals, Which Received Only 86 Cents On The Dollar Compared To The Average Hospital – Contributing To Financial Woes And Worsening Doctor And Nurse Shortages In The Region – And Now Feds Have Finally Proposed Fixing This Problem

New Proposed Rule Would Have A Game Changing Annual $192+M Impact On Cap Region, And Annual ~$1 Billion Impact Across Upstate NY – But Schumer Says With The Proposed Rule Now Under Review It Is Going To Take An All Out Effort To Get It Done; Now Schumer Has Personally Written To The Head of CMS Director Advocating For The Capital Region

Schumer: It Is Time For Capital Region Hospitals To Receive The Full Reimbursements They Have Been Denied For Far Too Long

Doubling down on years of relentless advocacy, U.S. Senate Majority Leader Charles E. Schumer today rallied with major healthcare and hospital leaders from across the Capital Region and revealed his new efforts to call on Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks- LaSure to finalize the recent proposed rules change that would have a massive nearly $200 million yearly impact on hospitals across the Capital Region. In a personal letter to Administrator Brooks-LaSure, Schumer detailed how Capital Region hospital leaders have experienced the brunt of being shortchanged for years. Schumer broke down how changing the Medicare Wage Index payments will be game changing for hospitals in the Capital Region and across Upstate NY which could see nearly $1 billion in additional payments every single year.

“86 cents on the dollar compared to the average hospital. For decades that has been the reality Capital Region hospitals have faced when trying to provide high quality healthcare and hire doctors in the Greater Albany area, but now we finally have an opportunity to get our hospitals the full payments they rightly deserve,” said Senator Schumer. “These low reimbursements leave hospitals in the Capital Region struggling to compete to bring the best doctors and nurses to the region, but under this new CMS proposal our Capital Region hospitals would receive nearly $200 million in additional support every single year. All of Upstate New York in total would benefit BIG with nearly $1 billion more every year for our hospitals in communities big and small to boost healthcare services.”

Schumer added, “That’s why I personally wrote to CMS Administrator Brooks-LaSure to show in no uncertain terms how strongly I support this long overdue change for the Capital Region. I will not stop fighting for CMS to finalize this change and get Capital Region hospitals the full reimbursements they have been denied for too long.”

“After more than a decade working to fix our broken Medicare Wage Index and right this wrong done to our region, I’m thrilled that CMS has heeded our call with a transformative proposal that does right by our local health care providers, hospitals, and patients,” Congressman Tonko said. “This proposed rule would bring more than $180 million dollars annually to Capital Region hospitals. While we are so close to the finish line, now is not the time to let up. I will continue to uplift the needs facing our region and do all in my power to ensure this proposed rule is finalized.”

“Our health care providers keep the heart of our region beating,” said Dennis P. McKenna, MD, president and CEO of the Albany Med Health System. “Despite challenges spurred by the skyrocketing cost of labor and supplies, we continue to make significant investments in our workforce. Only they can provide the critical services that our patients rely on. As non-profit hospitals, every dollar directly supports the health of our communities. Should this proposal pass, it would allow us to stabilize our finances and our long-term vision to sustain quality health care. We are grateful to Senators Schumer and Gillibrand, along with Congressman Tonko, for their continued advocacy.”

“This has been a long-term, monumental fight for fairness in terms of how the federal government reimburses our regional hospitals for care,” said Paul Milton, President & CEO of Ellis Medicine in Schenectady, NY. “We want to thank Senate Majority Leader Schumer and Congressman Tonko for their persistence in keeping this issue front and center and pushing for fair reimbursement for the care we provide.”

Milton added: “The way hospitals are paid via the Medicare Wage Index is broken. The hospitals of the Capital Region—and ultimately our communities—suffer from this inequity. Suppressed reimbursement greatly threatens the financial performance of our hospitals and our ability to invest in the future and provide access to quality care. We can stabilize upstate New York hospitals simply by putting us on an even playing field.”

Dr. Steven Hanks, President and CEO, St. Peter's Health Partners and St. Joseph's Health said, “We are exceptionally grateful to Senate Majority Leader Chuck Schumer for his years of support and for his commitment to ensuring that the Medicare Wage Index proposal is finalized in the weeks ahead. Both he and Congressman Paul Tonko have long been staunch advocates for healthcare in our region and their support of this proposal acknowledges the fact that Capital Region hospitals have been systematically underpaid by the federal government for decades. It is a sign of hope for the future of our health care systems, as the realization of this could go a long way to ensuring our region's hospitals are paid fairly for the services we provide. Our top priority is to ensure we can continue to provide safe, compassionate care to the communities we serve, well into the future.”

Schumer was also joined by Jill VanKuren, President & CEO of Saratoga Hospital, Paul Scimeca, President & CEO of Glens Falls Hospital, and Jeff Methven, President & CEO of St. Mary’s Hospital.

Schumer explained that CMS’s Proposed Rule would amend the Medicare formula to include $192+ million annually in increased federal funding for hospital systems across the Capital Region, which for years have received less than the national average in terms of Medicare reimbursement to cover wages. As proposed, the Capital Region stands to receive a 43 percent increase in the Medicare wage payments it receives The increase seen by the Capital Region represent the second largest increase of payments in the country under the proposed formula.

Schumer explained that the Medicare Wage Index rate is used to determine how much money the U.S. government pays hospitals for labor costs when they treat Medicare patients. Each metro area is assigned a rate that dictates whether they receive more or less than the national average for health care labor costs. Since the 1980s, hospitals in the Albany area have received only 86 percent of what the average hospital receives to account for wages, which not reflective of the true wages and labor market in Albany. The proposed rule would increase the Capital Region’s adjustment to 122 percent of what the average hospital receives in wage adjustments, finally acknowledging that the region needs much higher than averages wages to compete and bring in the best providers, thereby bringing hundreds of millions in federal funding to Capital Region hospitals each year.

Schumer has been advocating for this change for years, now doubling down to ensure that the proposal is finalized by CMS. In his personal letter to the CMS Administrator, Schumer outlined the transformation impact this would have for both the Capital Region and Upstate NY, and urged CMS “in the strongest possible way to finalize the proposed rule.” The proposal is now under review and will go through periods of public input and final approval.

A full breakdown on the estimated impact for hospitals across the Capital Region annually can be found below. A breakdown for the nearly $1 billion annual impact to hospitals across Upstate NY can be found linked here:

Screenshot 2023-05-24 140741

A copy of Schumer’s letter to CMS Administrator Brooks – LaSure, appears below:

Dear Administrator Brooks – LaSure,

Upstate New York hospitals provide world-class treatment and are a vital part of their communities. However, they are often forced to work with razor-thin budget margins and these hospitals need adequate funding to deliver the care their patients deserve.

Especially when operating in a region where multiple major cities are only a few hours away, there can be fierce competition to attract providers and offer competitive wages. The Medicare Wage Index has long been the way to way to accommodate situations like this and to adjust hospital reimbursement in order to account for geographic differences in labor costs. However, the payment adjustments to upstate New York have for years not reflected the true cost of doing business in the area. This has put these hospitals, especially those in New York’s Capital Region and the Southern Tier, at a major disadvantage, making it immensely challenging from them to recruit the best talent while also investing in expanded access to high-quality and innovative care.

CMS’ recent proposed rule to modify the Medicare Wage Index would result in upstate New York hospitals seeing substantial increases in their Medicare payments, finally remedying this fundamental problem. I have advocated for this change for years, recognizing how important it is to the future of health care in the state. I commend CMS for its proposal and urge you, in the strongest possible way, to finalize the proposed rule.

This change would be nothing less than transformational for health care in the region. It would finally result in the increased Medicare wage index payments upstate New York hospitals need and deserve, allowing them to invest in their workforces, their facilities and most importantly, their patients.

I stand ready to work with you in order to deliver this reform.