Alexander: Trump Administration Rule Will Help Rural Tennessee Hospitals

Posted on August 8, 2019

NASHVILLE, August 2, 2019 — Senate health committee Chairman Lamar Alexander (R-Tenn.) said the new Trump administration rule made final today will help curb the trend of rural hospital closures in Tennessee.

“This final rule from the Trump Administration will help rural hospitals keep up with the cost of providing care by updating the formula that determines how much Medicare will reimburse hospitals for patient care,” Alexander said. “This formula takes into account, among other things, the cost of labor in that geographic area—called the area wage index. This new rule attempts to level the playing field between hospitals in areas that have higher wages and hospitals in areas with lower wages. Senators Isakson, Shelby, Jones, Perdue, Blackburn, and I asked CMS Administrator Seema Verma to address this problem, and I’m glad the Administration has now made final a solution.”


·         Since 2010, 107 rural hospitals have closed across 28 states, and another 637—about 34 percent of all rural hospitals—are at risk of closing.

·         In Tennessee alone, 12 have closed since 2010, and a recent survey by the Robert Wood Johnson Foundation and Harvard University found that one in four Americans in rural areas could not access health care when they needed it.

Additionally, the Senate health committee recently approved the Lower Health Care Costs Act, a bipartisan package of 55 proposals from 65 senators that will help rural Americans. The package bans anti-competitive terms that large hospital chains sometimes use in contracts with employers, such as “all-or-nothing” clauses. These increase prices for employers and patients and can block health plans from choosing hospitals based on care quality, patient experience, or one hospital’s competitive pricing. Banning all-or-nothing clauses will level the playing field for smaller, independent hospitals who are not part of a large corporate chain. Another provision in the bill expands technology-based health care to help Americans in rural areas have access to specialty health care.