Black leads bipartisan legislation to address disparity in Medicare reimbursement rates for rural hospitals

Bipartisan legislation introduced by U.S. Rep. Diane Black (R-TN) on Friday would ensure that rural hospitals receive fair reimbursement rates for Medicare services.

Currently, the Centers for Medicare and Medicaid Services (CMS) reimbursement formula considers the area wage index (AWI) for hospitals when formulating reimbursement rates, which has disproportionately affected reimbursement payments to rural hospitals.

The Fair Medicare Hospital Payments Act, H.R. 1130, would establish a national minimum AWI of 0.874 for Medicare reimbursements to hospitals for both outpatient and inpatient services.

“As a registered nurse, I know that protecting our quality of life and public health in Tennessee goes hand-in-hand with ensuring that our hospitals get a fair deal from Washington,” Black, a member of the House Ways and Means Subcommittee on Health, said.

“The current area wage index formula unfairly tilts the scales against rural hospitals like those across my district while letting hospitals in the wealthiest neighborhoods of California and Massachusetts cash in on this flawed payment model,” she said. “Tennessee’s healthcare providers bring lifesaving care to neighbors across the state every day. It isn’t asking too much to insist that they receive a proper reimbursement for the services they perform.”

Under the current CMS reimbursement formula, hospitals in Oakland, California, are reimbursed based on an AWI of 1.74, while hospitals in rural areas of Tennessee and Alabama are reimbursed based on an AWI of 0.72.

“I am grateful for the strong, bipartisan showing of support for this legislation from my colleagues and will urge swift passage of this bill to ensure fairness and stability for every Tennessee hospital,” Black said.

Black introduced the bill with U.S. Rep. Terri Sewell (D-AL) and 13 additional cosponsors.