WASHINGTON, D.C. – Congressman Chris Smith (R-Hamilton) is pleased to announce that St. Francis Medical Center in Trenton will be receiving millions of dollars in additional federal aid under provisions included in the Medicare Prescription Drug and Modernization Act.

            The relief, which Smith worked to have included in the final bill, could net the hospital as much as $4.2 million in additional aid over the next three years. Smith voted for the act, which became law last year.

            “I’m very pleased that the new Medicare law is already paying off major dividends for St. Francis, which has provided compassionate, quality healthcare for Trenton and the Mercer County region for more than 125 years,” Smith said, noting the change will likely net the hospital over $1 million more in Medicare reimbursement each year for the next three years.

            The additional funds came about because the new law directed the Centers for Medicare and Medicaid Services (CMS) to review 543 applications by hospitals seeking to change their wage index to better reflect the real cost of doing business in their metropolitan statistical area (MSA).  The wage index is used to calculate federal Medicare reimbursements to hospitals.

Once reviewed by CMS, 121 of the hospitals – including St. Francis – met the criteria included in the law and were approved to receive additional funds over the next three years.  Congress specifically allocated $900 million for this purpose in the law, a provision Smith strongly supported and worked hard to include.  Seven New Jersey hospitals met the criteria, and could receive more than $70 million in additional federal funds over the next three years.

Gerry Jablonowski, President and CEO of St. Francis Medical Center, said, “These newly won funds will enable safety-net hospitals like St. Francis to continue their charitable mission of providing quality health care to all patients, regardless of their financial means.  We are extremely grateful for Congressman Smith’s longstanding advocacy efforts on behalf of our hospitals to make corrections to the wage index issue.”

Smith has fought for years to change the wage indexing criteria to more accurately reflect the actual cost of doing business in New Jersey and the Fourth District.

“Since 1995, my colleagues in the state’s Congressional Delegation and I have repeatedly met with Ways and Means Committee leadership to make our convincing case that the wage index used by Medicare places our state’s hospitals at a severe disadvantage. Last year, Committee Chairman Bill Thomas told us he had heard our concerns and was going to include a provision in his bill to help reform the wage index,” said Smith.

The index, which determines a significant portion of Medicare reimbursement rates, is calculated according to the metropolitan statistical area (MSA) in which a hospital operates.  The higher the wage index, the more funds a hospital receives from Medicare when it performs services on of beneficiaries – senior citizens and disabled persons. 

New York City currently has the highest Medicare wage index in the nation. Because New Jersey’s hospitals are not included in the New York wage index MSA, our hospitals receive dramatically lower reimbursements, even though New Jersey hospitals have similar expenses.  This significant disparity in funding makes it harder for New Jersey hospitals to offer competitive salaries for quality healthcare workers, like nurses, which are in high demand.

            “I’m pleased that after much hard work, officials are now working with us to fix years of financial damage the disproportionate wage index has inflicted on our hospitals, and are now working to provide real assistance,” Smith said.

St. Francis Medical Center will be reimbursed under the same wage index used for hospitals in the Bergen and Passaic County MSA.  The new rate took affect April 1, 2004.

For Immediate Release: April 21, 2004

Contact:  Nick Manetto (202) 225-3765