A Republican and a Democrat teamed up Wednesday to announce a bill to dissolve part of President Obama’s health care law that critics say skews some of the benefits to hospitals in Massachusetts, at the expense of other states.
The legislation was written by Sens. Tom Coburn, Oklahoma Republican, and Claire McCaskill, Missouri Democrat. It’s the first in what is expected to be a host of bills designed to tweak rather than repeal the health care law, which the Supreme Court upheld last year and which voters have given Mr. Obama a chance to see into fruition.
This bill would eliminate a money-shifting “gimmick” that resulted from the use of rural hospitals as the wage floor for Medicare reimbursements — a system that went askew because the Bay State’s benchmark hospital happens to be on Nantucket, the well-to-do island off the Atlantic Coast.
Under the Patient Protection and Affordable Care Act, any state’s urban hospitals have to be reimbursed under Medicare for wages paid to doctors and staff at a level that is at least as much as in rural hospitals. Because the only hospital classified as “rural” in Massachusetts is located on the wealthy island, wage reimbursement rates are inflated for the state’s 81 other hospitals and would drain resources from the other states, Ms. McCaskill and Mr. Coburn said.
The senators arrived at the issue from opposing sides of the political aisle, a rarity when it comes to amending Obamacare. Nearly every attempt to kill or chip away at the law has come from conservative factions in Congress, even if the Democrat-controlled Senate and Mr. Obama’s re-election effectively eliminate any hopes of a repeal.
Ms. McCaskill reiterated her support for Mr. Obama’s law in a press release on the legislation, but said the reforms always could be strengthened.
The bipartisan bill would sunset the provision Oct. 1. Because the portion of the health care law in question requires Medicare reimbursements for hospital wages to come from a national pool of money, “any increase for one particular state means a decrease for other states,” her office said.
Ms. McCaskill’s office said nine states benefit from the system and 41 states lose out in the deal. Her state, Missouri, is slated to lose $15 million dollars this year, she said.
The Boston Globe highlighted the issue in a Jan. 14 article about the reimbursements for Nantucket Cottage Hospital and its resulting ripple effect.
The newspaper reported that Sen. John F. Kerry — the Massachusetts Democrat who bade farewell to his colleagues Wednesday to become secretary of state — had led the charge for the Medicare arrangement that drew from a national pool of funds.
“Obviously different states and regions see these issues differently,” a spokesman for the departing senator said Wednesday. “Medicare’s old discriminatory formula had robbed Massachusetts of as much as $500 million, and Sen. Kerry’s effort in the Affordable Care Act simply required that all states were treated the same. Sen. Kerry remains proud of the fight he led for Massachusetts.”
On Jan. 16, the National Rural Health Association and 20 state hospital associations urged Mr. Obama in a Jan. 16 letter to correct the situation through his fiscal 2014 budget proposal, arguing it has allowed Massachusetts “to manipulate the federal Medicare program, reaping an estimated $367 million annually from the other 49 states.”
The associations said the problem would reduce funding for hospitals in 49 states by $3.5 billion in the next decade.
“Scarce Medicare funding should reward value and efficiency in health care,” the letter said, “not be diverted based on manipulation of obscure payment formulas.”
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