Today, U.S. Senators Marsha Blackburn (R-Tenn.) and Mark R. Warner (D-Va.), joined by Senators Tim Kaine (D-Va.), John Cornyn (R-Texas), Rev. Raphael Warnock (D-Ga.), John Boozman (R-Ark.), Cindy Hyde-Smith (R-Miss.), and Roger Wicker (R-Miss.), reintroduced the Save Rural Hospitals Act - legislation to help curb the trend of hospital closures in rural communities by making sure hospitals are fairly reimbursed for their services by the federal government.

First introduced in 2020 as a response to the record number of rural hospitals that closed in the midst of the COVID-19 pandemic, 33 nationwide since 2020, the Save Rural Hospitals Act would amend the flawed Medicare Area Wage Index formula that has disproportionately harmed rural and low-income hospitals. Currently, many hospitals in rural areas lack the resources available to those in more populated areas to offer competitive salaries. Due to those salary differences, rural hospitals receive lower reimbursements from the federal government, which contributes to their lack of resources and perpetuates a harmful staffing crisis.  

The Save Rural Hospitals Act would establish a national minimum of 0.85 for the Medicare Area Wage Index, which is used to adjust a hospital’s overall payment from the Medicare program on the basis of geographic differences in labor costs, to ensure that rural hospitals receive fair payment for the care they provide. In Tennessee alone, 58 hospitals across the Volunteer state would benefit from this floor being put in place.

“As I speak with Tennessee leaders and medical professionals, rural health care is a top priority. By establishing an appropriate national minimum to the Medicare hospital area wage index, we can help ensure rural hospitals have the resources to recruit and retain quality health care professionals. I’m pleased to join Senator Warner in this bipartisan effort,” said Senator Blackburn.

“Rural hospitals across the country and the Commonwealth of Virginia are struggling to recruit and retain quality health care professionals,” said Senator Warner. “This legislation aims to ensure that all hospitals are able to deliver appropriate care by attracting employees and compensating them fairly for their lifesaving work – regardless of where they are located."

Earlier this year, Senators Blackburn, Warner, and a bipartisan group sent a letter to CMS Administrator Chiquita Brooks-LaSure requesting a four-year extension of the current Low Wage Index Hospital Policy, which serves as a temporary fix, raising the payments of hospitals in the bottom wage index quartile.

“As hospitals across Tennessee face unprecedented financial and workforce challenges, I applaud Senator Blackburn for her leadership on critical legislation to address the flawed area wage index that has strained Tennessee hospitals for decades. Currently 73 percent of Tennessee hospitals are below the floor the Save Rural Hospitals Act would establish. This legislation will help to level the playing field and ensure patients across Tennessee have access to the care they need,” said Dr. Wendy Long, President and CEO, Tennessee Hospital Association.

“Rural hospitals must have the capacity to recruit and retain high-quality professionals to serve their communities,” said Beth O’Connor, Executive Director of the Virginia Rural Health Association. “The Save Rural Hospitals Act by Senators Warner, Kaine, and Blackburn will help ensure the Commonwealth’s rural hospitals can continue to do just that."

“The unfortunate reality is that the survival of many rural hospitals is financially endangered – nearly 200 have closed across the U.S. since 2005, including two in Virginia. Protecting rural hospitals is vital to the health and well-being of people in less populated communities across the Commonwealth and the United States so they can access essential medical services whenever they need them,” said Sean T. Connaughton, President and CEO of the Virginia Hospital & Healthcare Association. “We applaud Senator Warner for sponsoring legislation, the Save Rural Hospitals Act, that recognizes the challenging conditions facing many rural hospitals and offers a common sense approach to appropriately adjust reimbursement rates so hospitals aren’t unfairly penalized under an outdated payment methodology that fails to account for current realities.”

“In the struggle to provide health care access, rural hospitals are on the front line nationwide for large numbers of our most vulnerable citizens,” said Alan Levine, Executive Chairman and CEO of Ballad Health, an integrated delivery system in the Appalachian Highlands of Northeast Tennessee and Southwest Virginia. “The Save Our Rural Hospitals Act will fix long-standing problems in Medicare payment policy which has underpaid rural hospitals year after year, leaving many struggling financially or at worst, closing. This bill recognizes that rural hospitals are increasingly having to recruit nationwide for nurses and other staff in short supply, and Medicare’s Area Wage Index adjustments must account for that.”

A copy of the bill text is available here.

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