Alabama hospitals struggling with Medicare reimbursement reductions
They won't be alone.
The federal health insurance program
"We had a little bit of a heads up, but the number came in higher than expected," Bass said. "They said it would be pretty close to last year ... we missed it by
The discrepancy means RMC must implement cost-cutting measures to make up for the extra loss. Bass said hospital officials are looking at cutting back on some expenses, such as overtime and use of outside vendors. Cutting services or employees will be a last resort, Bass said.
The hospital has also budgeted in some revenue growth for 2016 that could help make up some of the shortfall, Bass said.
"We're looking at growth in psychiatric services and on the outpatient side ... in surgical and imaging services," Bass said.
"Generally, the wage index value for a given area decreases or increases from one year to the next depending on how much its average hourly wage changed relative to how the national average hourly wage changed,"
According to CMS figures,
"The premise was to apply payments to hospitals that would represent differences in cost of living," Howard said. "Through the years, through manipulation and political fixes, it no longer is an adequate representation of the labor market."
Howard said hospitals getting higher
For hospitals in states receiving less
"Hospitals, because they don't have enough revenue to pay higher wages, they're handicapped," said
Howard said that because of the low wage index,
"It's a circular death spiral for
Guterman said the argument that
Guterman said the wage index has always been controversial, but there are ways some hospitals, particularly rural ones, can apply for greater payments if they can show they're competing against a nearby market with a much higher wage index.
Guterman added that there have been some proposals on the federal level to change how the wage index is calculated, but those have had little success.
"But the alternative is for
Bass said he'd like to see
"They need to put in some sort of wage index floor ... where the index won't get any lower," Bass said.
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