Specter, Casey Receive Assurances on Medicare Fix

Washington, DC- U.S. Senators Arlen Specter (R-PA) and Bob Casey (D-PA) received a commitment from Senate leaders that the Senate will pursue an extension of a program necessary for equitable payments for 13 Pennsylvania hospitals.  Senators Specter and Casey had filed an amendment to the Continuing Resolution to extend the program for two years.  When the amendment was not adopted, the Chairman and Ranking Member of the Senate Finance Committee assured the senators that an extension would be considered by the Senate later this year.

“I look forward to working with the Senate Finance Committee to provide a two-year extension of the Medicare Section 508 program.” Specter said.  “Northeastern Pennsylvania hospitals deserve fair and adequate Medicare reimbursement and immediate congressional action is necessary to address their financial distress and ensure Northeastern Pennsylvanians’ access to quality health care.”

“I want to thank my colleague Senator Specter for his important work over the years on this issue and I greatly appreciate our collaboration since I have taken office to find both an immediate and a long-term solution to the wage index problem,” said Casey.  “This issue is critical to ensuring that healthcare is available to Pennsylvanians and all Americans in areas that are being under-funded by the Medicare wage index reimbursement system.”

This extension would fix a glitch in Medicare that provides substantially smaller payments to certain hospitals, especially those in smaller communities.  Reclassification reimbursements under Section of 508 expired on September 30, 2007.  An extension of the program would seek to make the extension retroactive to avoid a gap in payments to the hospitals. 

“The Medicare wage index reimbursement is an ongoing and very serious problem for many Northeastern PA hospitals and its economy in general.  It will create a ripple effect that is beyond health care and as such will touch the lives of everyone in the community,” said Mercy Health Partners CEO Jacquelyn Gaines. “We are enormously grateful to Senator Casey and Senator Specter for their tireless and successful efforts in securing a commitment from Congress to address this issue.  Our economy, our employees and our families depend on a fair wage reimbursement system and we are grateful to have Senators Specter and Casey in our corner on this fight.”

The 2003 Medicare Modernization Act (MMA) contained a “Section 508” provision that allowed 120 hospitals nationwide, including 13 in Pennsylvania to reclassify to other wage index areas to get higher reimbursements for three years and to avoid losing key medical personnel to adjourning geographical areas with higher wage indexes.   Section 508 temporarily remedies the low reimbursement by taking into consideration the type of hospital and its geographical location. 

Last month, Senators Specter and Casey joined 21 other Senators in sending a letter to Senators Max Baucus (D-MT), the Chairman of the Senate Finance Committee and Chuck Grassley (R-NE), the Ranking member of the Senate Finance Committee asking that Congress extend the reclassifications for Section 508.  Senator Casey has also held discussions with the Majority Leader Senator Harry Reid (D-NV) as well Senator Baucus about the need for both a short term and a permanent solution to the wage index issue. 



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