Western PA Hospitals Laud New Medicare System

Local hospitals say they stand to gain from the recently passed health care reform legislation.

Patricia Raffaele of the Hospital Council of Western Pennsylvania says the new law changes the method by which the federal government allots Medicare reimbursement.

Raffaele says western Pennsylvania’s current Medicare wage index is inexplicably low and brings in little funding.

“It’s the same as say, for example, Laredo, Texas, or Lawton, Oklahoma, or sort of these smaller rural areas, when we have obviously large amounts of care being provided here,” says Raffaele.

She says the new Medicare wage index system would use data from the Bureau of Labor Statistics rather than information from individual hospitals. Raffaele says that would help bring equity to the reimbursement system.

“It creates what MedPAC likes to call a ‘smoothing effect,’ where it takes out the cliffs and valleys for reimbursement for Medicare under this formula,” says Raffaele.

Unfortunately for local hospitals, the new system takes effect in fiscal year 2013. Raffaele says until then, regional hospitals will continue to find ways of maintaining their financial health.