New York to Lead
States in Extra Medicare Payments
Published: May 30, 2010 - New York Times
WASHINGTON — Members of Congress from Iowa, Minnesota, Washington and
Wisconsin secured extra money in the new health care law to reward low-cost hospitals
in their states, which they said had long been underpaid by Medicare.
But it now turns out that New York will get more of the money than any other
state, and some of the chief proponents of the bonus payments will not receive
any.
The Obama administration recently disclosed how it planned to distribute the
money, $400 million over the next two years, and the result was not exactly what
Congress or hospital lobbyists had expected.
“I’m sure it’s a surprise to many of my colleagues in the Midwest,” said
Daniel Sisto, president of the Healthcare
Association of New York State.
An analysis of the data by The New York Times shows that New York hospitals
are in line to receive nearly 12 percent of the money ($46.3 million), which is
more than hospitals in any other state.
Virginia is expected to receive nearly 10 percent of the money, while Iowa
and Wisconsin are each expected to get about 8 percent. Oregon will get 6
percent, and Missouri 5 percent.
Geographic disparities in Medicare spending emerged as an explosive issue in
the Congressional debate on health care. More than 30 lawmakers, mostly from the
Midwest and the Northwest, complained that their doctors and hospitals had been
shortchanged by Medicare.
Representatives Bruce Braley of Iowa, Jay
Inslee of Washington and Betty McCollum of Minnesota, all Democrats, were
among the most vocal in demanding extra money to address what they described as
severe inequities in Medicare’s payment formula.
But a preliminary analysis of the new formula suggests that hospitals in
their districts will receive little if any of the $400 million being given out
by the Obama administration.
The money is going to 415 hospitals in 273 counties around the country. The
counties were selected because their average Medicare spending per beneficiary —
adjusted for the age, sex and race of patients — was low. Indeed, by this
measure, they rank among the lowest 25 percent of all counties in the country.
In New York, 50 upstate hospitals are scheduled to receive extra payments.
The hospitals are in rural areas, small towns and medium-size cities that run
west from Schenectady to Utica and Syracuse, south to Binghamton and Elmira and
north to Lake Placid and the Adirondacks.
“New York is supposed to be a very high-cost state, but it has low-cost
areas,” said Dr. Paul J. Kronenberg, president of Crouse Hospital in Syracuse, which is
scheduled to receive $3 million. “Health care providers and hospitals here have
made a concerted effort to improve the efficiency of our operations, prevent
complications, reduce the length of hospital stays and lower readmission rates.”
Among the states not receiving any money, according to federal data, are
Connecticut, Florida, Louisiana, New Jersey and Tennessee.
The federal government typically pays a flat amount for each Medicare patient
admitted to a hospital, depending on the diagnosis. Payments are adjusted to
reflect local wage levels. Extra payments go to hospitals that train doctors or
treat large numbers of low-income patients.
David G. Kruczlnicki, the president of Glens Falls Hospital in New York,
said he was surprised to learn that his hospital was to receive nearly $2
million in extra Medicare money.
But, he said, this sum is dwarfed by likely cuts in Medicare payments caused
by other provisions of the new law.
“Over the first 10 years of health
care reform,” Mr. Kruczlnicki said, “our hospital will see a reduction of
$56 million in Medicare payments. There’s an assumption that we will receive
additional payments on behalf of those who have been uninsured and unable to pay
us at all.”
Robert Kellar, a spokesman for Mr. Inslee, said no hospitals in his Puget
Sound district would receive money under the federal plan. But he added, “Jay
went into this effort knowing that Washington State as a whole had suffered
because of these historical formulas.”
Thirteen hospitals in other parts of Washington State are to receive a total
of $15.2 million.
Kathleen
Sebelius, the secretary of health and human services, said, “The current
geographic variation in Medicare reimbursement rates is inequitable.” To reduce
such inequities, she said, she intends to order changes in payments to doctors
and hospitals after the National
Academy of Sciences studies the issue and makes recommendations.