(Washington, DC) — Congressman Chris Smith (R-Hamilton), who successfully led the delegation effort that convinced the federal government to implement a new Medicare rule that has begun steering more than $145 million annually to New Jersey hospitals, announced today that a New York legal attempt to block the rule’s implementation has been rejected in court.

     “This legal ruling caps a landmark victory for New Jersey’s hospitals,” Smith said, adding that for years, the Centers for Medicare and Medicaid Services (CMS), the agency that oversees Medicare, has mistreated the state’s hospitals by not properly reimbursing them for the costs of care they provide.  “I’m grateful that the courts have now joined Medicare officials in realizing that New Jersey hospitals have the same costs and deserve to be reimbursed fairly on par with those in New York,” the Congressman said.

     Smith remarked, “The overwhelming strength of New Jersey’s meritorious case – that our hospitals are competing with New York’s hospitals for the same labor pool of doctors, nurses, and health workers – has been vindicated for the second time in less than 12 months.”  The Congressman’s letters to CMS emphasized that the commuting distances and patterns, transportation infrastructure, as well as wages paid, showed strongly that the northern part of New Jersey was economically tied as tightly to New York City’s five Boroughs, if not more so, than some of  New York’s suburban outlying counties that were already included in the MSA boundary (such as Putnam and Rockland counties).

     The legal challenge was filed by Bellevue Hospital Center and 75 other public and not-for-profit hospitals located in or near New York City.  Their lawsuit tried to reverse new rules adopted in August 2004 by CMS that re-calculated Medicare payments to be made to hospitals for the treatment of Medicare beneficiaries.  Under the new rules, the wage index regions to compensate hospitals for their labor costs were merged between New York City and northern New Jersey.  The statistical boundary shift alone immediately boosted Medicare payment rates for dozens of New Jersey hospitals by well over $60 million per year.

     Smith, the dean of the state’s 15-person Congressional delegation, had organized the New Jersey effort – with all but one Member of the delegation supporting – that resulted in the movement of three Northern New Jersey Counties (Bergen, Hudson, and Passaic) into the New York City Metropolitan Statistical Area (MSA) for the purposes of computing Medicare reimbursement payments. The MSA boundary move, in combination with several other existing wage-index related reforms, resulted in a net increase in hospital funding of over $145 million each year to New Jersey.

     “Our primary concern in fighting for fairer Medicare reimbursement has always been the patient," Smith said, adding “It is wrong to tell hospitals that they must provide quality care for all seniors and disabled persons, and then not give them the necessary resources to actually implement these directives.  By treating our hospitals more fairly, we will help protect and improve the quality of medical care that is delivered to our most vulnerable citizens.”