McCaskill Aims to Repeal Problematic Provision of Health Reform Law

U.S. Senator Claire McCaskill today made good on a pledge to make reasonable improvements to the Affordable Care Act, joining Republican Senator Tom Coburn (R-Okla.) to introduce bipartisan legislation to strike a problematic provision of the law.

McCaskill’s legislation would repeal a provision of the law that is causing states, including Missouri, to subsidize high wages at hospitals through Medicare reimbursements.

“This provision unfairly benefits some states to the disadvantage of others, like Missouri—it’s inefficient, and I’m happy to work in a bipartisan way to improve the health care reform law by repealing the provision,” McCaskill said. “I’ve consistently said that, whether you supported or opposed the Affordable Care Act, we can work together to keep improving and strengthening it as it’s implemented.”

As reported in the Boston Globe, Medicare rules stipulate that a state’s urban hospitals must be reimbursed for wages paid to doctors and staff at least as much as rural hospitals. A provision in the health reform law required that Medicare reimbursements for hospital wages come from a national pool of money, instead of from each state’s allocation. As a result, any increase for one particular state means a decrease for other states. This new provision has proved problematic.

Massachusetts has only one rural hospital—Nantucket Cottage—which therefore sets the floor for wage reimbursements in the state. While rural hospitals typically have lower wages than urban ones, wages at Nantucket Cottage are high because of the hospital’s remote location and high cost of living. Therefore, the rural wage floor established on Nantucket has become a boon for hospitals in the rest of Massachusetts. Nantucket Cottage’s rural designation has allowed the state’s 81 other hospitals to collectively reap hundreds of millions of dollars in Medicare reimbursements—at the expense of other states, like Missouri. Missouri alone stands to lose $15 million this year.

Only nine states come out ahead under the current system, while the remaining 41 states—including Missouri—are losing out on Medicare reimbursement funds.

The McCaskill-Coburn legislation will eliminate that provision in the Affordable Care Act, meaning states like Massachusetts will be responsible for bearing the burden of their own increased rural wage floor costs, instead of draining reimbursements meant for other states.

As a strong supporter of the Affordable Care Act, McCaskill has consistently supported efforts to improve and strengthen the legislation. In 2011, McCaskill successfully helped pass legislation to repeal a burdensome tax reporting requirement included in the health care law.