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SCHUMER, CLINTON PROTEST PLAN TO SHIFT HUNDREDS OF MILLIONS FROM NY HOSPITALS

Senators Charles E. Schumer and Hillary Rodham Clinton continued the fight against a Bush Administration proposal to rob New York hospitals of millions of dollars over the next 10 years. In a letter sent to the Centers for Medicare and Medicaid Services, the Senators outlined their opposition to the proposal under which New York hospitals stand to lose $654M next year alone and more than $700M over the next ten years.

"Maybe someone in Washington punching addresses into Mapquest thinks that North Jersey hospitals are right down the road from New York, but everyone here knows there is a world of difference in medical costs on the far side of the Hudson River," Senator Schumer said. " It's not just hospitals and health care workers who lose under this proposal. Regular people who get help for nursing care for Mom or Dad lose too. We're not asking New Jersey to raise their prices to match ours, we're just asking to keep the kind of payments that New York and New Yorkers have been getting for years."

"New York's hospitals are already struggling - they should not be made to face further funding cuts, Senator Clinton said. "The data clearly makes the case against changing the payment to New York hospitals - they cost so much more to run and they serve millions more people each year. We cannot abandon New York's healthcare system like this. The current New York MSA boundaries must be maintained."

the Senators are concerned about a proposal by the Centers for Medicare and Medicaid Services to change the demographic boundaries for Medicare reimbursement areas. The changes as proposed would add three northern New Jersey counties to the geographic area, or "Metropolitan Statistical Area" (MSA), used to calculate average hospital wage costs that determine federal reimbursement rates and determine Medicare hospital inpatient payments. Because the new Jersey counties' wage costs are 14% lower than those in New York, the move would reduce the average reimbursement rate for the city.

Hospital wage index calculations are based o the average hourly wage )(AHW) for the hospitals in a wage index area. Data shows that hospitals in the New York MSA pay wages that are, on average, fourteen percent higher than those paid to workers in the three New Jersey counties, Bergen, Passaic, and Hudson, which would be added under this proposal. The change would shift about $700M in payments from New York hospitals to hospitals I New Jersey over the next decade.

The change to the way hospital funding is calculated would also have negative consequences for the entire health delivery system in new York, since the wage index is also used to determine payments to inpatient rehabilitation and skilled nursing facilities, as well as home health and hospice care payments.



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