CONGRESSMAN
COLLIN C. PETERSON
Minnesota - 7th District http://www.house.gov/collinpeterson/
FOR IMMEDIATE RELEASE: July 23,
2002
CONTACT: Robin Goracke/202-225-2165
Peterson Testifies On Behalf Of Rural Hospitals
WASHINGTON, DC - Congressman Collin C. Peterson (D-Minn) testified in front of the Ways and Means Subcommittee on Health during a hearing assessing Medicare’s geographic cost adjustments used for Medicare payments and the adequacy of the definition of labor market areas.
The hearing focused on the wage index and the reclassification process that facilities can go through to boost their Medicare reimbursements. While rural hospitals have a cost structure similar to their urban counterparts, they are paid 10-15 percent less for comparable services provided to Medicare beneficiaries.
“Not only are these facilities forced to pay higher wages in order to be competitive with other hospitals, they also receive significantly lower reimbursement from Medicare for services provided to Medicare patients,” Peterson said. “Congress is making it more and more difficult for these hospitals to get reclassified in order to receive a higher reimbursement and compete with the Twins Cities for workers.”
In Minnesota, worker shortages are felt in all areas, including direct caregivers and non-patient care professionals such as nurses, X-ray technologists, pharmacists, and medical lab technologists.
“The inadequacy of the wage index is one reason why we are experiencing a worker shortage in health professions,” Peterson said. “Facilities are now competing for workers not only across the state but also across the country and around the world. Rural areas are especially hurt by these shortages because these facilities lack competitive wages.”
Health profession vacancies mean patients wait longer before seeing a health practitioner, patients may be diverted to another facility that could be more than 60 miles away, or they may experience limited availability to care because there are no personnel to safely expand patient capacities. According to Peterson, facilities have to offer signing bonuses and other recruiting incentives that encourage employees to job-hop between employers, thus increasing turnover costs.
“The wage index needs to reflect only legitimate differences in area wage rates; and the reclassification system needs to be adjusted so that facilities can compete for workers on a level playing field with their urban counterparts,” Peterson said. “Rural hospitals are usually the largest employer in these small communities, and if the hospital goes under so does the community. We need to protect our rural health care providers and we need to do it today.”
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