This bill addresses how Medicare pays rural and small-town hospitals by setting a minimum payment floor based on local wage costs. Here's what's happening: Medicare adjusts hospital payments based on the area wage index—basically, how much workers earn in different regions. Some rural hospitals have been getting paid less because their areas have lower average wages, which can make it harder for them to stay open. This bill says that starting in October 2023, hospitals outside frontier states (the most remote areas) can't have their payments reduced below 85% of the national average, no matter how low local wages are. The same protection applies to hospital outpatient services starting in January 2024.

To keep the overall Medicare budget from ballooning, the bill also requires the government to set a maximum wage adjustment cap. This means while rural hospitals get a floor protecting them from the lowest payments, hospitals in high-wage areas won't see unlimited increases. The goal is to level the playing field so rural hospitals aren't unfairly disadvantaged just because they're located in lower-wage regions, helping them maintain operations and continue serving their communities. Hospitals that already fall between the new floor and ceiling won't be affected by these changes.

Save Rural Hospitals Act of 2023

Ferguson, A. Drew

Save Rural Hospitals Act of 2023This bill establishes an area wage adjustment floor for Medicare hospital payments in states that are not frontier states. The Centers for Medicare &amp; Medicaid Services must establish a maximum rate to preserve budget neutrality.