WASHINGTON – U.S. Senators Roger Wicker, R-Miss., and Cindy Hyde-Smith, R-Miss., are part of a bipartisan effort to secure a four-year extension of a Medicare policy that allows rural hospitals to continue delivering quality care to their communities.   

The Mississippi Senators and 12 of their colleagues signed a letter to Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure that formally requested an extension of the Low Wage Index Hospital Policy.  The policy allows rural hospitals to compete for and retain high-quality staff by increasing reimbursements to hospitals in rural areas with lower overall wages.  Without action, Medicare payments to these hospitals will decrease after Sept. 30, 2023.

In their letter, the lawmakers pointed out that CMS should extend the policy in order to adequately evaluate the Low Wage Index Hospital Policy and its effectiveness in helping rural hospitals recruit and retain health care staff.

“Unfortunately, due to disruptions in the marketplace caused by the COVID-19 pandemic, we have not had the opportunity to see the true impact of the Low Wage Index Hospital Policy envisioned by CMS,” the Senators wrote.  “Extending the Low Wage Index Hospital Policy for four additional years will allow hospitals and the agency to better understand the policy’s true impact in a more normal environment.”

U.S. Senators Mark R. Warner, D-Va., and Marsha Blackburn, R-Tenn., led the letter, which was also signed by U.S. Senators Tim Kaine, D-Va., Tommy Tuberville, R-Ala., Joe Manchin, D-W.Va., John Boozman, R-Ark., Shelley Moore Capito, R-W.Va., Bill Hagerty, R-Tenn., James Lankford, R-Okla., Tim Scott, R-S.C., Tom Cotton, R-Ark., and Katie Boyd Britt, R-Ala.

Wicker and Hyde-Smith in 2021 cosponsored the Save Rural Hospitals Act (S.999), which would establish an appropriate national minimum to the Medicare Area Wage Index to ensure that rural hospitals receive fair payment for the care they provide, while preserving the existing reimbursements for urban hospitals.  Warner and Blackburn expect to reintroduce the measure in the 118th Congress.

Read a copy of the letter to the CMS administrator here and below.

Dear Administrator Brooks-LaSure:

Thank you for your continued commitment to ensuring all health care providers have the resources they critically need to provide quality health care to Medicare beneficiaries.  We write to you regarding the Medicare hospital area wage index (AWI) in the Inpatient Prospective Payment System (IPPS).  Specifically, we urge you to include a four-year extension of the Low Wage Index Hospital Policy, also known as the Lowest Quartile Adjustment (LQA) policy, in the upcoming Fiscal Year (FY) 2024 IPPS rule.

In August 2019, the Centers for Medicare and Medicaid Services (CMS) first included a four-year AWI adjustment to bottom quartile hospitals as part of the FY2020 IPPS (CMS-1716-F).  At the time, CMS stated that the policy “reflected a common concern that the current wage index system perpetuates and exacerbates the disparities between high and low wage index hospitals.”  To address this concern, CMS increased the wage index for hospitals with a wage index value below the 25th percentile.  The additional assistance has been a valuable lifeline for more than 800 hospitals in 23 states throughout FY2020, FY2021, FY2022, and now FY2023.

Unfortunately, due to disruptions in the marketplace caused by the COVID-19 pandemic, we have not had the opportunity to see the true impact of the Low Wage Index Hospital Policy envisioned by CMS.  Extending the Low Wage Index Hospital Policy for four additional years will allow hospitals and the agency to better understand the policy’s true impact in a more normal environment.  In its original August 2019 rule, CMS appeared to acknowledge that more time may be needed to implement the policy when it stated, “this policy will be effective for at least 4 years.”  We applaud CMS for that foresight and encourage it to extend the policy for four additional years.

The continuation of this critical policy will allow hospitals to recruit and retain health care staff and protect access to care for millions of Americans.