March 8, 2021

RI Delegation Secures Change to Federal Funding Formula to Boost Local Hospitals

RI Delegation Secures Change to Federal Funding Formula to Boost Local Hospitals

Washington, DC – U.S. Senators Jack Reed and Sheldon Whitehouse and Congressmen Jim Langevin and David Cicilline today announced that they have secured a change to the federal reimbursement formula for hospitals that could provide around $28 million to Rhode Island health care institutions as they continue to battle the pandemic. The bill will reverse a Trump administration policy that unfairly disadvantaged Rhode Island hospitals beginning in 2018. The fix was included in the pandemic relief bill passed by the Senate on Saturday. The bill will be sent to President Biden’s desk after it is approved by the U.S. House of Representatives.

“The Trump Administration enacted a policy that hurt hospitals in Rhode Island and a few other states that are considered to be ‘all urban’ under a federal definition. I’m pleased we were able to lift this irrational policy that unjustly cut Medicare reimbursements for hospitals in Rhode Island. Getting this fix in the Senate bill wasn’t an easy lift. I commend Senator Whitehouse for making this a priority and using his seat on the Finance Committee to help improve the fiscal health of Rhode Island’s hospitals,” said Senator Reed.

“The previous administration dealt a deliberate financial blow to hospitals in a few Democratic states, creating 15-20% payment disadvantages against hospitals just over state lines. I’ve been pressing to fix this injustice at every opportunity,” said Senator Whitehouse, who made the issue a top priority after hearing from local hospitals. Whitehouse repeatedly advocated for the fix with Senate leadership and questioned administration officials about the issue in hearings. “I’m pleased that we got this done so early in the Biden administration; as it will restore tens of millions of dollars to our hospitals, which serve Rhode Islanders so well during this pandemic.”

“Now, more than ever, we cannot allow our hospitals to operate at a disadvantage that undercuts their ability to provide quality service and care to Rhode Islanders,” said Congressman Langevin. “I’m glad that my Congressional colleagues and I were able to fix this detrimental policy and clear a path for additional resources to help our hospitals protect public health and save lives.”

“Rhode Island hospitals have been on the frontlines of this pandemic with an arm tied behind their back,” Congressman Cicilline said. “This restored federal funding will help our hospitals get us out of the pandemic and help keep providing the quality care to Rhode Islanders at the our most urgent hour.”

The COVID reconciliation package contains a 10-year legislative fix that reinstates the “imputed rural floor,” an artificial benchmark on which hospital reimbursement levels are set. The change will result in a significant increase to Medicare reimbursement for Rhode Island’s hospitals.

In 2018, the Centers for Medicare and Medicaid Services abruptly changed the way the agency set Medicare reimbursement rates for some hospital services, resulting in a loss of approximately $28 million in Medicare reimbursements each year for Rhode Island’s hospitals. Under the Trump Administration’s policy, Rhode Island, along with Delaware and New Jersey, were designated as “all-urban” states under Medicare guidelines. Rhode Island hospitals faced competition from neighboring states that enjoyed higher Medicare reimbursement rates, leaving Rhode Island patients and providers at a disadvantage. This fix will ensure that Rhode Island hospitals remain competitive as they deliver high-quality, cost-effective care to patients across the region.

“The Hospital Association of Rhode Island is grateful for the leadership of the Rhode Island federal delegation on this important Medicare issue,” said Teresa Paiva Weed, President of the Hospital Association of Rhode Island. “Reinstatement of the imputed rural floor for all urban states restores critical funding necessary for hospitals to invest in their workforce, facilities, technology and most importantly the healthcare needs of our community.”

Press Contact

Meaghan McCabe, (202) 224-2921