Alexander: New Trump Administration Rule Will Help Tennessee Rural Hospitals

Posted on July 16, 2019

“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, twelve have closed since 2010. …I hope the Trump Administration and CMS Administrator Verma will quickly finish this rule and give more Americans better health care choices and outcomes at lower costs.” – Senator Lamar Alexander

WASHINGTON, July 16, 2019 – United States Senator Lamar Alexander (R-Tenn.) today said on the Senate floor that a new Trump administration rule will help curb the trend of rural hospital closures in Tennessee by updating the formula that determines how much hospitals will be reimbursed by Medicare.

“Last month, Alan Levine, who leads Ballad Health, a health care system in East Tennessee, announced a $10 million investment in pay increases for nurses. Alan said this investment was, in part, because of a new rule proposed by the Trump Administration in April,” Alexander said. “This rule will update the formula that determines how much Medicare will reimburse hospitals for patient care. 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.

Alexander continued, “In recent years, too many rural Americans have seen the local hospital close and their doctors leave town. 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, twelve have closed since 2010. A recent survey by the Robert Wood Johnson Foundation and the Harvard School of Public Health found that one in four Americans in rural areas could not access health care when they needed it.

“This new rule will help rural hospitals keep up with the cost of providing care. …I hope the Trump Administration and CMS Administrator Verma will quickly finish this rule and give more Americans better health care choices and outcomes at lower costs,” Alexander concluded.

Craig Becker, who leads the Tennessee Hospital Association (THA), wrote in the Tennessean earlier this month that this rule, “is good news for our state’s hospitals and will provide much-needed relief to many of them, especially those in rural areas,” and that the rule, “finally will address the significant inequities in the Medicare area wage index – the first meaningful effort by any administration to address the flawed system.” THA wrote an op-ed thanking Alexander for his support of the rule.

Alexander, who serves as chairman of the Senate health committee, is working with his colleagues to lower health care costs, which will help rural Americans. His committee approved, by a vote of 20-3, a bipartisan package of 55 proposals from 65 senators that would ban 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 the care quality, the 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 will expand technology-based health care to help Americans in rural areas have access to specialty health care.

Click here to read more about how Alexander and the Trump Administration are working to improve health care for Tennesseans.

You can read a full transcript of Alexander’s prepared remarks here.

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