Alaska, Hawaii delegations seek Medicare reimbursement flex for rural hospitals

Alaska’s Senators Dan Sullivan and Lisa Murkowski, along with Senators Brian Schatz and Mazie Hirono from Hawaii, introduced legislation last week that would increase the amount that hospitals in Alaska and Hawaii can be reimbursed by Medicare to perform outpatient procedures for enrolled seniors.

This is significant because historically, rural states have faced significant cost disparities for Medicare reimbursement, driving up costs for both hospitals and patients. If passed, this legislation would recognize the unique cost-of-living challenges that hospitals in Alaska and Hawaii face, and would increase reimbursement for ultra-rural hospitals to ensure that they can continue to serve seniors in rural locations.

Known as the ‘‘Ensuring Outpatient Quality for Rural States Act,’’ the bill would amend title XVIII of the Social Security Act to provide for the application of a cost-of-living adjustment to the non-labor related portion for hospital outpatient department services furnished in Alaska and Hawaii.

The legislation follows a letter sent to the Department of Health and Human Services by Senators Sullivan and Murkowski requesting more reimbursement-rate flexibility for Medicare inpatient procedures in Alaska and Hawaii.

“The federal government’s one-size-fits-all Medicare formulas are simply not working for rural states—a challenge that has saddled health care providers and senior citizens in Alaska with outrageous costs relative to other states,” Senator Sullivan said, who said that without flexibility, hospitals and clinics across Alaska will struggle to maintain the level of healthcare that seniors need.

“Our priority must be ensuring seniors on Medicare across the state can continue to access the inpatient and outpatient health services they rely on.”

It is a sentiment that Senator Murkowski agrees with, saying that currently Medicare’s current cost formula falls short of addressing the challenges that rural states such as Alaska face.

“Alaska’s health care system relies on health care facilities to provide care in some of the most remote locations, contributing to increases in cost of care,” she said. “This legislation will offer greater flexibility for these Medicare formulas, so our facilities can provide critical care to our seniors and rural Alaskans.”