WASHINGTON, D.C. – Congressman Chris Smith (R-Hamilton), Dean of the state’s 15-member Congressional Delegation, is leading a campaign to urge Medicare officials to fully implement a new Medicare-specific rule that would net New Jersey hospitals more than $110 million annually in increased Medicare payments.

In a letter to Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan, Smith and 13 members of the delegation laid out the very convincing case that the rule will help bring fairness to the reimbursement system that has unfairly impacted New Jersey hospitals for years.

“The bottom line is that hospitals in New York City and most of New Jersey are part of one labor pool and compete against one another for health care talent.  It is thus unfair to provide some hospitals in the same pool with a higher reimbursement rate, as they will have an undue advantage over their competitors when it comes to hiring qualified employees,” Smith said.

“As qualified employees form the backbone of a hospital’s ability to care for patients, New Jersey’s hospitals must not be placed at a disadvantage for recruiting and retaining health professionals to care for our seniors and disabled persons,” he added.

“The effects of adjusting the Medicare MSA to properly reflect the employment and commuting patterns in New Jersey – particularly northern New Jersey – will be felt throughout most of the state.

“Our letter urges CMS to finalize a rule that would revise the Metropolitan Statistical Areas (MSA) that Medicare uses to calculate hospital wage indexes.  The proposed rule would move three Northern New Jersey counties – Bergen, Hudson, and Passaic – into the New York City MSA for the sole purpose of determining Medicare hospital payments.  But moving just these three counties into the New York MSA will result in a recalculation of rates in all other counties; giving a boost to most of our state’s hospitals,” Smith said. 

“For instance, under a proper re-alignment of the county wage index area groupings, hospitals in Monmouth and Ocean Counties will be placed into the MSA for Middlesex County, which has a higher wage index.  The result is that these Monmouth and Ocean County hospitals will see higher federal Medicare payments when they treat patients, helping them to hire and retain quality doctors, nurses, and other health care aides,” he added. 

This issue is the central part of a longstanding Medicare payment battle our Delegation has fought for years to ensure that New Jersey hospitals – many of which compete with New York hospitals for the same labor pool of employees – are not unfairly shortchanged by Medicare payments. The proposed change will only affect Medicare reimbursement rates and will not impact other federal reimbursements.