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Over the last five years, Nebraska hospitals have lost out on $18.3 million due to a one-sentence Obamacare loophole. Ensuring access to quality care in rural areas is challenging enough without the federal government erroneously diverting needed funds.

This week, I introduced a bill to undo this misguided Obamacare provision, dubbed the “Bay State Boondoggle,” and help hospitals continue to serve our seniors.

Medicare hospital wage reimbursements are adjusted by the Centers for Medicare and Medicaid Services (CMS) as required to reflect the geographic area where services are delivered. Prior to Obamacare, if a hospital transitioned from a critical access hospital, to which the CMS wage index does not apply, to an acute care facility in which it does, the necessary funding reallocation would take place within the state.

However, Obamacare included a provision requiring Medicare wage reimbursements to come from a national pool of money rather than state allocations.

So why is it called the “Bay State Boondoggle?” The issue centers on a 19-bed hospital in Nantucket, Massachusetts, which was purchased by a large health system soon after Obamacare was signed into law and redesignated from a critical access hospital to an acute care hospital. Because this facility transitioned from a program in which the wage index does not apply to one in which it does, its wages set a new floor for all 81 traditional fee-for-service hospitals in Massachusetts.

Allowing Massachusetts to artificially inflate labor costs based on a single hospital with unusually high wages drove up the wage floor on the CMS index. The result was far more Medicare dollars flowing to Massachusetts hospitals – and away from hospitals in most other states.

By now, more than $2 billion dollars has been diverted from hospitals nationwide. My bill would end this boondoggle and return financial responsibility to the states.

To bring further relief to Nebraska health care providers, I also continue to work on reducing arbitrary and burdensome regulations on rural hospitals. For example, the 96-hour rule requires physicians at critical access hospitals to certify at time of admission Medicare and Medicaid patients will not be there more than 96 hours. Otherwise, the hospital must transfer the patient or face non-reimbursement. I introduced the Critical Access Hospital Relief Act to remove this provision and ensure rural Americans are not placed at a further disadvantage.

This week, CMS announced it is beginning the process of updating its guidance on enforcement of the 96-hour rule. I am eager to hear from Nebraska hospitals and patients on the proposal but also pleased to see the Trump administration agreeing with the need for changes.

Too often when the federal bureaucracy gets involved, it makes situations worse rather than better. We are seeing prime examples of this problem in rural health care, and I am glad to have the opportunity to propose legislative solutions for patients and providers.


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