Capito joins bipartisan effort to encourage CMS to finalize low wage index for FY 2023

U.S. Sen. Shelley Moore Capito (R-WV) recently joined a bipartisan contingent of lawmakers in urging the Centers for Medicare and Medicaid Services (CMS) to appeal and finalize its proposal to continue the Low Wage Index Hospital Policy in fiscal year 2023.

“There is clear evidence that CMS has the authority to implement the Low Wage Index Hospital Policy,” the 12 senators wrote in a June 17 letter sent to CMS Administrator Chiquita Brooks-LaSure. “If this policy were to end, the adverse impact on healthcare access would be dire and deal a tremendous blow to health care.”

The Low Wage Index Hospital Policy provides relief to hospitals in the bottom quartile of Medicare hospital area wage index (AWI) levels. The senators encouraged CMS to appeal a recent ruling by the U.S. District Court for the District of Columbia and finalize its proposal to continue the Low Wage Index Hospital Policy in the FY 2023 Inpatient Prospective Payment System (IPPS) to reduce the disparity in Medicare reimbursement. 

The District Court recently ruled that CMS exceeded its statutory authority when it finalized the Low Wage Index Hospital Policy in the FY 2020 IPPS final rule, but Sen. Capito and her colleagues “adamantly disagree” with that decision.

“The continuation of this critical policy will allow our hospitals, many of which are in rural and underserved areas, to recruit and retain desperately needed healthcare staff,” wrote Sen. Capito and her colleagues. “By continuing this policy for another year, you are putting patients first.”

Among the lawmakers who joined Sen. Capito in signing the letter were U.S. Sens. Marsha Blackburn (R-TN), Tim Scott (R-SC), and Rafael Warnock (D-GA).

They noted that in their states, “the flawed AWI methodology” has continued to negatively impact Medicare reimbursement, which for decades has not been sufficient to cover the cost of the care provided, according to their letter. 

“The compounded impact of this disparity has created financial pressures that are unsustainable,” Sen. Capito and the lawmakers wrote. “Our hospitals have survived as a result of reserves, cost-cutting measures, staff reductions, and the elimination of services, but these options have been exhausted. If nothing changes, more hospitals across our states will be forced to make difficult decisions about the services and jobs they provide, and with some potentially even closing.”

The senators pointed out that CMS has recognized the importance of the Low Wage Index Hospital Policy and the need to ensure that every American has equal access to care and is not to be disadvantaged for living in a majority rural state.

Discontinuing the Low Wage Index Hospital Policy would ultimately lead to more closures, reducing access to care for the most vulnerable patients, they wrote, noting that the COVID-19 pandemic created a skewed labor market that will only further disrupt the AWI.

“In fact, we have not had the opportunity to see the true impact of the Low Wage Index Hospital Policy envisioned by CMS because of disruptions to the marketplace caused by the pandemic,” wrote Sen. Capito and her colleagues. “Continuing the policy in FY 2023, and extending it for years beyond that will allow hospitals and the agency to understand the true impact in a somewhat more normal environment.”